Global Tilt

Greetings and welcome to my new Leadership Outlook newsletter.

I value your time, which is why this monthly newsletter will focus on providing ideas, resources and information that you can put to use on Monday morning to improve and grow your business.

Each issue of my Leadership Outlook will focus on a trend I am seeing through my work with CEOs, leading companies and boards around the world. My goal is to expand your capabilities through this monthly dialogue.

Leading Your Business Through the Global Tilt

It is quite obvious the business world is in a state of flux. We have plummeted from the highs of the last economic boom to the most troubled economy of the past fifty years – an economy that is now globally interconnected and immensely complex. Businesses are struggling to find their way in the newly reworked landscape, where the rules of the game seem unclear and sometimes unfair.

There is a profound shift underway – a tilt – in economic power from the northern hemisphere to the fast-developing markets and economies of the South (nations roughly below the 31st parallel) – not only China, India and Brazil but also the Middle East and parts of Africa. Although this shift is happening on a scale that we have never seen before, many business leaders seem unable or unwilling to recognize it.  How, then, can they respond to it, or better yet, take advantage of it?

I urge you to take the time to understand this tilt.  It is the result of unstoppable forces, including the interconnectedness of the global financial system, digitization, the rise of state capitalism, a new global middle class that is both youthful and urban, and importantly, the drive and ambition of business leaders in the South who are seizing opportunities and scaling up quickly.  These forces are changing the playing field for many businesses worldwide.

I suspect that the tilt will have its wobbles along the way, more like a see-saw than a playground slide, as events send ripples from one country to another. For example, the post-crisis woes of the European financial system that brought Europe’s growth rate close to zero also slowed exports from the U.S. and China. The result has been more downward pressure on the U.S. and a significant deceleration in China’s growth rate.  I am convinced, however, that the overall direction of the tilt is irreversible.

If you accept that the tilt is underway, you’ll need to change the way you run your business.  Conventional approaches to strategy, for example, might cause you to miss some of the best opportunities the tilt presents.  Here are a few of the changes that I encourage you to make:

  • Rethink your reliance on core competence.  Successful leaders of the future will not necessarily build on their core competencies or stick to their knitting. They are willing to identify long-term, large-scale opportunities and grow the capabilities they need to turn them into reality.
  • Get ready for strategic bets. Succeeding in a tilted world requires that you know when it’s the right time to make a big shift in direction or resources  for offensive or defensive reasons. You’ll need courage to make the call amid ambiguous information and toughness to withstand the pushback you’re likely to get for such decisions.
  • Fight the short-term beast.  The biggest challenge for publicly traded companies in the North is to think long-term while keeping Wall Street happy in the short-term.  It can be done, provided you communicate well with the board and the investment community and deliver on the short-term commitments that build toward the future.

As you think about the changes I recommend above, I would like for you to consider this question – what are you doing to expand your business vantage point beyond your current market? In other words, how are you working to abandon old business assumptions and explore opportunities outside what we think of as traditional business markets of the United States & Europe?

A big part of good leadership is preparation and I encourage you to prepare yourself and your company for one of the greatest leadership opportunities in modern business history.

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Global Tilt

Global Tilt

Leading Your Business Through the Great Economic Power Shift

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The greatest change in business history is happening now. Are you prepared to lead in it?