How to lead the world (in eight easy steps)
University of California Berkeley professor Laura D'Andrea Tyson, Bharti Enterprises CEO Sunil Bharti Mittal, World Trade Organization director-general Pascal Lamy, Royal Dutch Shell CEO Peter Voser and New York Times columnist Tom Friedman discussed the challenges business leaders face in a global economic downtown -- as well as the bigger task of exacting coordinated change in the world when nations act as independent city-states.
Behind them, this quote was displayed on a massive screen:
"Leaders operate in the realm of bewildering uncertainty and staggering complexity. Today's problems are rarely simple and clear cut. if they were, they would likely have been solved by someone else." -- George E. Reed
Here are some highlights.
THE COMPLETE PICTURE
D'Andrea Tyson argued that the financial crash of 2008 demonstrated that central bankers could and did act together, in unconventional ways, using emergency powers and informed by historical precedent.
The problem? They had "rather terrible data" on which to base decisions.
"The most important aspect of [the] Dodd-Frank [bill] is to create an office of research to sit right at the top and basically provide real-time data," she said. That's why credit lines seized: poor or incomplete information.
Still, there must be a willingness to take on risk or even create something out of nothing, she said, as IT services firm WiPro did in India. And you can't do that without the very best talent.
"If you're going to create an innovation infrastructure, you have to have the very best people," she said -- and you have to reward them correctly.
There must be a sense of shared value. "You have to be a visionary," she said.
ATTITUDE ADJUSTMENT
Mittal argued that there was "no magic juice" to achieving a solution to the global economic crisis.
He outlined three concepts to build an effective and aligned team:
- One strategy, multiple biz models;
- One voice, multiple accents;
- One enterprise, multiple networks.
The problem is that it's tough to achieve that on the international stage, where world leaders clamor over the big topic of the day.
"There is no such thing as a free market," he said. "Countries are competing like companies, and cities are competing like countries."
Partnership and collaboration among the private sector and government is necessary.
"That's hard work," he admitted. "It's not easy."
One place to start: choosing the sectors that matter and getting the portfolio balanced in a risk-managed way, whether country or city.
"The triangle is business, government and civil society," he said. But it's got to work on a short-cycle model when the average tenure of a chief executive in the U.S. is only 3.2 years.
"Short-term decision capability within the long cycle," Mittal suggested. "Make choices. Database, educated, system choices."
A GLOBAL SCOPE
Lamy began by offering his succinct take on international cooperation: "You don't lead cats. You herd cats."
What he means by that is that leadership in the international system is challenging because there's no legitimization system to accompany it.
"Whether it's a country or a company, you have systems that work this out," he said. "The international system has nothing like that. It's a sort of permanent interaction."
Without an overarching global government, it's hard to get world leaders to act in concert. It's even hard to define what proper leadership should be, Lamy said.
"Is leadership a sort of top-down thing? Or is it a bottom-up thing? Or is it just something in the middle with the capacity to mobilize a bottom-up potential in a way that looks top-down?"
The international system is messy, Lamy said. Its fundamental principle has changed little since the Peace of Westphalia in 1648.
And national leaders inherently speak for themselves, he said.
"You need people with a vision. People who have a world vision," he said. "In this system of systems, you need people who speak for the world, for the global system to interact with people who speak for themselves, although they are part of the global system."
A FLATTER WORLD
Friedman chimed in on Lamy's points.
"As the world gets flatter, everything top-down becomes dumb and slow," he said. "Everything bottom-up becomes smart but chaotic. So the sweet spot is the middle. The job of the leader is to inspire, energize and edit things that come from below."
DRIVING CHANGE
The time is over to wait, Voser said. Businesses, governments and other organizations need to act -- now.
"You need to do things because then you will need to achieve things and actually get to the right discussions," he said. "Corporate leaders have that task."
Voser acknowledged that there is increased push from below in the new era.
"But the push can be driven in the right way if you have the right vision, the right strategy," he said.
THE AMERICAN PROBLEM
The problem in the United States is that business is not held in high regard by members of society, D'Andrea Tyson argued. Business is viewed as part of the problem, not the solution, and it's worrisome.
"A very powerful way that business plays a role is not by showing up, but by funding elections," she said. "Maybe you don't have to go to Washington anymore to make your case."
That may not be the best way to turn things around, D'Andrea Tyson said.
"We do need serious business leadership in the United States, but it needs to recognize that business leaders are not very popular right now so they have to articulate how their value [has a positive effect] on society," she said.
THE DEVELOPING SOLUTION
But America's problems aside, the developing world thinks highly of business because it brings them new technologies, Mittal said.
"Business is a partner in China," he said. "We're a neighbor, a helper, a collaborator."
With visits to 47 different countries last year, Mittal admitted: "I like red carpet, not red tape."
But in the U.S., "we've gone left and right and forgot what makes the country great, where business is a partner with government," he said.
We've lost our way in the United States, Mittal argued.
"Big business makes small business successful," he said. "Without big business there are no small businesses in the supply chain. We have to stop letting Hollywood define us."
"We're citizens in our country and we have to stand up for our citizenship."
LEARNING THE LANDSCAPE
But it's not all black and white. Lamy pointed out that countries don't trade with countries anymore, instead trading with each other at the local level.
Consider the U.S.-China trade deficit, he said. As measured by volume, the gap is huge -- but much of what China exports to the U.S. is actually U.S. made, he said, holding up his Apple iPad.
"This sort of thing is made in China," he said. "In this sort of thing you have four times more U.S. added value than Chinese value. Is that meaningful?"
Many people are convinced that the Chinese are drawing manufacturing jobs out of the U.S., Levy said. Despite stiff competition, it's not true.
"Change the way you see the world," he said. "Globally speaking, there's much more win-win."