Surviving the future - Perspectives: Globalization - Column

Chief Executive, The, May, 2002 by Patrick Dixon

Originally published in 1998, Patrick Dixon's Futurewise: Six Faces of Global Change outlined the dynamics that would affect business -- and the world -- in the years to come. Recent events have made his insights even more telling.

Many CEOs I know are feeling battered and bruised right now. Hit by one event after another, they have little time to regroup or reflect. Profit warnings, share price pressures, painful layoffs, and great uncertainties can sweep away even the most comprehensive strategies. It's easy to lose sight of the bigger picture in the rush to cut costs and conserve cash. Hopefully, you succeed in protecting the business and satisfying shareholders and analysts. But what about the morale and momentum of the senior team?

To be a winner in the next three years, you need to use the downturn to reshape for growth, propelled by an unshakable conviction that your mission is still important, that more prosperous times lie ahead, and that in some way your company is helping to build a better kind of world. Your own passion for running the race matters most of all in a downturn, when people are insecure and loyalty is tested.

Your corporation's future will be dominated by six factors, or faces of a cube, spelling F U T U R E. So if you are going to cur, then cut carefully for healthy, fresh growth, and take the rest of the work force with you with a renewed sense of direction.

FAST

The world is changing faster than boards can think, so survival means scenario planning before events happen. Market research can't predict the future in a rapidly changing world; it just shows what consumers think. We need bifocal leadership -- clear, short-range thinking and sharp action -- to steer through the downturn, as well as accurate board-level vision and steady nerves. Look out for the next big wave of techno-change. We are still in the first days of the digital age, and many corporations are distracted by other pressures. Who's watching your radar screen? Where does your board get fresh insights? Who's bringing external perspectives to protect you from institutional blindness? Who's watching your own back?

URBAN

Big demographic and social lifestyle shifts will impact your business in this new decade, century, and millennium: fickle fashions, ageing but wealthy populations, retired people inheriting trillions of dollars, an aggressive war for top talent, female consumer influence, human cloning, medical breakthroughs, and a host of other factors, including the huge untapped challenge of megacity markets in emerging economies. These changes are fundamental to the shape of your business because they will alter how people think and feel. Soft factors may create your greatest new business opportunities. But are your teams gearing up to exploit them?

TRIBAL

Although the world is increasingly globalized, tribalism is the most powerful force on earth, when a group of people identify only with each other. It's more powerful than nuclear bombs or the combined might of the U.S., Russian, and Chinese military. We see it around the world in hundreds of tribal conflicts and tensions, and in recent events, fueled by growing global inequality and anger at perceived injustice. Terrorism will continue, but it will not win. Individuals will respond by sacrificing personal liberties for increased security, and by resolving that normal life must go on.

Yet tribalism is a huge positive force. It's the basis of every family and every neighborhood. Tribalism makes us proud to be who we are and gives us national identity. It also affects us through niche branding and product loyalty -- every one of your successful products creates a tribe, and every successful organization is one. Tribalism is the secret of your strongest teams, corporate character, people movements, and product lines. Are you making tribalism work for you?

UNIVERSAL

The opposite of Tribal is Universal. Globalization reflects the emergence of the global super-brand and huge pressures to manage global operations more effectively, using new technologies and the emergence of virtual teams and companies.

The future of Europe will be dominated by conflict between two equal and opposite forces: tribalism is causing many European countries to fragment, and universalism is welding these same fragile nations into one super-state. It is strange that countries are rushing into total oneness while at the same time neighbors kill each other for speaking with the wrong accent or language. Tread carefully in pan-European business deals. It may all look Euro-ized from the outside, but beneath may be pure tribalism.

Globalization will dominate the shape of all large corporations as competitors realign through rapid mergers, acquisitions, disposals, or new partnerships. However, reactions to globalization will grow and require careful handling. Powerful global structures will emerge and affect your international interests. Are you being radical enough in globalizing your management style and structures?