Darden Dean Scott C. Beardsley recently sat down with Dominic Barton, global managing partner of consulting powerhouse McKinsey & Co. Barton leads the firm’s focus on the future of capitalism and the role of business leadership in creating social and economic value. The two discussed global business trends, the importance of a global mindset, and exciting and worrisome issues in the world today.
Insights from their conversation follow.
Global Business Trends
There are many global business trends right now, corresponding to big, underlying shifts in the world. In that range, four of significance are business model redesign, as organizations really rethink how they add value at a fundamental level; organization change, as companies de-layer and flatten; the introduction of advanced analytics and digital capabilities; and an emphasis on building resilience in business.
Geopolitical Uncertainty and Shifting Models of Society
This is one reason business resilience is a critical global business trend: Businesses need to be prepared for shifting scenarios and geography. If something goes pear-shaped in one area, you’ve got to be able to have a supply chain, for instance, that works somewhere else. For example, Ford has done an excellent job in South Korea, but if something happened with North Korea to affect its business there, the company could quickly shift its supply chain. Geopolitical risk has become a top issue, and societal issues are also preoccupying CEOs around the world. The Brexit vote was a pivot point; it shocked people. It’s a societal shift, and that’s happening in lots of places.
There are several key traits we need to nurture that are key to successful business leaders.
One is global mindset. Even when you’re dealing with localization, you have to understand what’s happening in different parts of the world. You also have to understand that in different cultures, people act and operate in different ways, as well as think and make decisions in different ways. You must be comfortable swimming in those different waters.
Second, it’s important to develop a global network. You need to build relationships with people in the places you do business. You don’t have to visit them all the time and they don’t necessarily represent you, but you keep in communication with them. You can also be global locally — get to know someone in your part of the world who comes from another.
And finally, the other part of being a global leader has to do with character. You need to be resilient, you need to have purpose, you need to be able to compartmentalize issues, you need to think in the short-term and the long-term at the same time. These are different types of leadership muscles that you need in this volatile world — the level of volatility we’re seeing is quite different than it has been in the past 20 years.
Sources of Optimism and Sources of Worry
Though there is a lot of volatility, there’s much to make us optimistic. Technology stands to unleash even more creativity in humans. Digitization will allow more people to gain financial inclusion and education and participate in the global economy. If you think about the potential of Indonesia alone: If we can educate another 30 million people, we may find seven Einsteins in that population. There’s a huge demographic boom from markets like Africa, Indonesia and India. We’re going to basically triple our human computing power, which is profoundly exciting.
As for what’s worrisome in the world, it is concerning that our institutions, globally, may not be fit for their purpose. And with the huge amount of opportunity we see, how do we share prosperity? In the context of democracy, are we able to pick leaders who can lead? It’s very difficult to be a politician, it’s hard to be long-term, so it takes really brave leaders to be able to really do something, and we don’t have a lot of those.
But overall, there’s every reason for optimism. We’re creative. The International Space Station is a great example that shows us that even with conflict, scientists can work together to do something for the future. Why can’t we do more of that? In fact, we can.