Indholdsfortegnelse for 4/2022 i I by IMD

Look around and it feels the speed of business – and of life in general – is ever-accelerating. It took the telephone 75 years to reach 100 million users, yet Facebook reached 10 times as many in onlya 10th of the time – a billion users in less than eight years. Or consider email. The first email was sent in 1971, traffic in the US eclipsed physical mail in 2000 at 200 billion per year, and experts estimate that 2022 saw an average of 333 billion emails per day. The acceleration in business may not be similarly exponential, but it is notable. According to a recent McKinsey study, in the early 1980s, S&P 500 companies had been part of the index for about 35 years on average. Today, the figure…

Founding decade of top 500 family-owned companies by region The data also includes 13 companies formed between 1610 (Japan's Takenaka Corporation) and 1829. Top 10 family-owned companies run by non-family members Women running family-owned businesses Percentages of top 500 family-owned companies globally and by region Source and methodology University of St. Gallen and EY Family Business Index 2021 (https://familybusinessindex.com/). A company qualifies if a family, its foundation or trust has substantial ownership and decision-making authority including members on the board of directors and/or executive leadership team and ownership of at least 32% of the voting rights if publicly listed and at least 50% if private. Only one company per family is included, either its holding company or the largest that qualifies. A new version of the Family Business Index will…

Adidas issued the following statement in October ending its deal with the controversial rap artist and businessman Ye (better known as Kanye West, pictured). “Adidas does not tolerate antisemitism and any other sort of hate speech. Ye's recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company's values of diversity and inclusion, mutual respect and fairness. “After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products and stop all payments to Ye and his companies. “Adidas will stop the adidas Yeezy business with Immediate effect. This is expected to have a shortterm negative impact of up to €250 million on the company's net income in 2022 given the high seasonality of the…

1. SUCESSION This Emmy award-winning TV series is a classic one for talking about the succession issue, of course. Often we talk in family business circles about successors feeling entitled to the CEO position, but we also see in the first episode that the founder feels entitled to stay on. Logan Roy, the lead character, is 80 years old, and he's thinking, “I can do what I want since I built this business.” Furthermore, he uses his power and wealth to manipulate his children. In my teaching I do an exercise after watching the episode where Logan appears to be on his deathbed. Students are asked to portray several key family members in the show and to create speeches to Logan. We then discuss them and how Logan would likely…

We live in a world of rapid transformation, a world where digital disruption and megatrends are affecting all industries. Successful family businesses are those that are willing to move away from traditional opportunities and react quickly and decisively to change. The story of Obeikan's success began in 1982 with a single commercial print shop in Riyadh. Over the past 40 years, OIG has diversified into new industries and markets and now has a diverse set of operations in manufacturing, packaging, education and healthcare. It is one of the leading business groups in the Middle East and North Africa and one of Saudi Arabia's top 100 largest companies, serving more than 80 markets globally. Since 2017, the company has increased its focus on digital transformation, and is supported by more than…

Emotions are not often talked about in most organizations and yet they are a significant factor in every decision made. Neuroscience and behavioral economics have clearly demonstrated that we are emotional beings who happen to think, rather than thinking beings who happen to have emotions. Many emotions – such as a fear of heights, darkness, or even spiders – are instinctive reflexes from our evolutionary past. Others are rooted in our past experiences, and many become positive or negative triggers throughout our lives. The brain has one fundamental goal: to survive. This means one has to be always on the lookout for danger and threat, as chronic worriers are prone to be. Some decisions are made from this survival state where there is an overemphasis on a negative risk assessment.…

Disorder Helen Thompson The war in Ukraine unveiled the inconvenient truth of Europe's dependence on Russian gas, as well as Russia's dependence on energy sales revenues. This book vividly illustrates how energy is heavily geopolitical. Thompson, a political economist at the University of Cambridge, describes three forces – of geopolitics, the global economy, and of western democracies – and how disruption in each became one big story in the years of political disorder even prior to the COVID-19 pandemic. It is a difficult book to read, but worth it if you are interested in reflecting on your leadership mission for driving innovation for a better world in which we must cope with the interplay of these three forces. Kazuo Ichijo, Professor of Innovation and Leadership The Man Who Broke Capitalism:…

If I told you a year ago that within three months, Russia was going to invade Ukraine, that massive land war would return to Europe forthe first time since the Second World War, and that a very large number of Western multinationals would leave the Russian market virtually overnight, I suspect few would have believed it. Neither would I. Yet, as we know, that's exactly what happened Why did companies react so quickly, effectively abandoning a market that they had spent many years developing? And what does it mean for the future, both with respect to the role of business in society and the role of communications professionals positioned at the interface? In my view, we have witnessed the confluence of two distinct trends: the rise of stakeholder capitalism on…

Around the world, “business” is almost synonymous with “family business”. The Tata family's commercial empire in India has lasted generations and spans industries from cotton and steel to IT consulting and solar grids, and Tata family members are still active in managing the enterprise. My favorite local restaurant in Menlo Park, California, is also i a family business, with a daughter waiting tables, a son in the kitchen, and a dad at the cash register taking phone-in orders. Family businesses are certainly pervasive. But what about family business dynasties – enterprises that are actively managed by the family for three or more generations, like the Tata family conglomerate? These are common in some places and rare in others. Why? And have the factors that support family business changed in ways…

We refer to the family enterprise ecosystem as all of the stakeholders, relationships and assets within the sphere of influence of the family and its various activities. This includes, but is not restricted to, family members, from core to distant relatives, employees, the board, investors, suppliers, customers, policymakers, NGOs, and local communities. It also refers to the family's tangible business activities and assets, investments, real estate, philanthropic interests, and family governance structures. In short, the ecosystem represents “total family wealth” – every aspect of a family's financial, human, and social capital. Many families do not fully understand the breadth and depth of this ecosystem and, therefore, can tend to make sub-optimal decisions. Decision making through the ecosystem lens, on the other hand, can harmonize the family and its stakeholders, spark…

Family firms may receive less attention, particularly in the financial media, than their non-family counterparts. But that doesn't mean that they are any less important or impactful. On the contrary, the heft of family firms in the global economy can be seen in the fact that they account for two thirds of all businesses worldwide and employ around 60% of the global workforce. Moreover, family firms have a well-deserved reputation for having generally survived tough economic times and for doing well over very long periods. Much of this can be attributed to the long-term orientation of family firms, rooted in their commitment to maintaining the business across generations. This is what has led many studies to show that family firms are more resilient than their non-family counterparts in normal economic…

Chief executives are sometimes portrayed as the rock stars of the business community: individuals with extreme confidence and power who believe they can conquer the world. While this may be true for a few leaders, the majority of CEOs I've met are human beings who also have their doubts. And this humility is a good thing, particularly if you are working for a family firm. When I decided to jump ship from Maersk and join rival MSC Mediterranean Shipping Company in December 2020 as the first non-family CEO, I was careful to not act like an elephant in a glasshouse. A good friend of mine gave me some sound advice: “Remember: when you start, you may be the prime minister but you're not the Queen.” I think this is a…

For any family enterprise that's handing control from one generation to the next, finding ways to engage the heirs at an early stage and prepare them for their future roles in the family business are keys to long-term success. Carvajal SA, one of the world's largest paper notebook makers, based in Colombia, has ensured those two qualities define how the eponymous controlling family has approached its development of the next generation of the company's leaders through its 118-year history. Initially a newspaper publisher, Cali-headquartered Carvajal has over the past century expanded into the paper and packaging, technology, and real-estate industries across and beyond Latin America. The family adopted a novel approach to developing the next generation known as the “social dividend” – a benefit which was established in 1990 to…

Most management writers have their preferred gurus. For some it's Peter Drucker, while others might lookto Michael Porter or Charles Handy. When I come across a new business fad, I turn to the words of Leonard Cohen: “Baby, I've been here before, I know this room, I've walked this floor.” I quoted Cohen's lines from his much-covered song Hallelujah in the Financial Times in 2019 when I wrote about the companies, from JP Morgan Chase to Glencore, that had committed themselves to acting with purpose, recognizing that they had a responsibility that went beyond Milton Friedman's instruction to focus purely on shareholders’ desires, “which generally will be to make as much money as possible”. The reason for my resort to Cohen was that, in more than 30 years of covering…

In recent years, we have witnessed a transformation in diplomacy. Government attaches are no longer first among equals. Instead, there has been a diversification to include more actors – from corporate leaders to civil society groups and members of communities – who now engage on a broader set of issues ranging from the environment to health, sport, equality, and peace building. This decentralization of diplomacy arguably has made the field more democratic by catering to a wider set of views and issues. At the same time, it has raised questions around accountability – particularly if unelected officials seek to shape foreign affairs through unregulated channels. There is a further risk of asymmetry in diplomatic relations with the power going to those who have the biggest megaphones rather than those with…

When former Sanofi Pasteur Vaccines head David Loew became CEO of mid-sized biopharma firm Ipsen in 2020, he felt like he was standing on not one, but two burning platforms. The year before, Ipsen acquired a business developing palovarotene, a medicine for a rare genetic disorder that triggers abnormal bone growth. Postacquisition, palovarotene faced an unexpected regulatory setback, leading Ipsen to withdraw its US application for the drug – a bitter outcome in pharma where medicines are developed at great cost and risk. The challenge for Loew didn't end there. The global French-based firm was also staring into the abyss of a “patent cliff”, with its blockbuster cancer drug Somatuline facing the drop in sales that comes with post-patent generic competition. “People knew that the biggest product … which was…

Being “future-ready” is always a work in progress. There is a need to constantly improve or risk sliding backwards. And it's hard not to worry when confronted with inflation, an energy crisis, US and China decoupling, and a war in Europe, Future-ready companies are the ones capable of delivering today while building for tomorrow. The economic challenges are very real, and the uncertainty of the macro-environment is scary. But curtailing all corporate development is what smart companies carefully avoid. Easy money is no longer around, and so companies need to prioritize where to invest. Spending must be disciplined, but this doesn't mean blindly scaling back every innovation. As Andy Grove, former CEO of the US technology giant Intel, said: “Bad companies are destroyed by crises; good companies survive; great companies…

Like leadership jobs in regular businesses, the football manager's role has grown more complex over time. Tenures have shortened, staffing levels have mushroomed, and footballers – like younger employees everywhere – have gained power. Over the decades I've interviewed many football managers, read extensively about them, and tried to understand how the best ones handle these constraints. Here, I've distilled some of those leadership lessons. HIRE THE BEST SPECIALISTS AND DELEGATE Until early this century, especially in Britain, the typical football manager was a solo leader. But since then, he has lost power. Today a manager might oversee dozens of staffers ranging from defensive coaches to physiotherapists to data analysts. Often a transfer committee handles recruitment. More and more, the manager's job is to marshal a staff of specialists. Perhaps…

Many family businesses were proactive during the pandemic. Ford and Dyson, for example, adjusted production to produce ventilators, while LVMH and Ralph Lauren among others manufactured masks and gowns. Patagonia, the outdoor clothing company, paid salaries even when stores were forced to close, and Walmart increased employees’ wages to help them through the crisis. Around 80% of the largest family enterprises are philanthropic, LVMH and Agnelli among them, and their generosity continued despitethe economic downturn.…

A front-page apology issued in February by the board of the 185-year-old Baltimore Sun newspaper read in part: “Instead of using its platforms, which at times included both a morning and evening newspaper, to question and strike down racism, The Baltimore Sun frequently employed prejudice as a tool of the times. “It fed the fear and anxiety of white readers with stereotypes and caricatures that reinforced their erroneous beliefs about Black Americans. “Through its news coverage and editorial opinions, The Sun sharpened, preserved and furthered the structural racism that still subjugates Black Marylanders in our communities today. African Americans systematically have been denied equal opportunity and access in every sector of life – including healthcare, employment, education, housing, personal wealth, the justice system and civic participation They have been refused…

Family business My family's a business family. My father Anthony Gaw was born in Burma and educated in the US. In the late 1960s and early 1970s he set up and ran a textile business in Thailand and Indonesia before moving to Hong Kong to start Pioneer Global, a real estate investment firm. He died in 1999, but that business, which has a Hong Kong Stock Exchange listing, is still run by my mother Rosanna. My two elder brothers, Goodwin and Kenneth, along with Humbert Pang, a friend of Goodwin's from high school, started Gaw Capital, a real estate investment firm, in 2005. Humbert was appointed as advisory consultant to Gaw Capital Partners in July 2005 and joined as Managing Principal and Head of China in 2006. That was Goodwin's…

Maria Ahlström-Bondestam, a descendant of the Ahlström industrial dynasty, has always held a keen desire to contribute to society – even in small ways. Aged nine, she wrote a letter to Finland's president asking him to repair a dangerous slide in a playground. To her family's astonishment, she received a reply and the slide was fixed. Years later, these values would go on to shape how the 171-year-old family enterprise approaches philanthropy – in a way that not only inspires greater impact but builds a stronger family. That approach brings together the efforts of businesses, investments, and philanthropy by creating a “collective impact” strategy, an approach that other family businesses are now emulating. Those values have been inspired by her forebear Antti Ahlström, a 19thcentury Finnish industrialist who founded the…

Digital transformation Digital transformation has been a company-wide exercise for many large companies for years. But at Bayer, the German life science company, the approach it's taking is unique to each of the company's three main divisions of pharma, crop science and consumer health. That's because the needs of the end customers in each of the three divisions is different. CROP SCIENCE Farmers who were previously sold seeds, fertilizers and pesticides now need data-driven insights to help them plant and grow more efficiently. This means moving into software and data. “Ultimately, if you think about what science tries to do, it's really driving much better efficiency, much better precision, and also convenience for our farmers and eventually for the consumers,” said Sarena Lin, Bayer's Chief Transformation and Talent Officer, in…

Asking good questions is a vital part of being a business leader. But how can you be sure the answers someone gives accurately reflect their real thoughts? The solution we recommend is to use the principles of clean language interviewing (CLI) – an approach to asking questions aimed at eliciting authentic answers about a person's thoughts and experiences. In business, CLI is a useful tool for improving the quality of information in both formal and less structured situations. CLI involves three principles. First, minimizing the use of the questioner's own terms and assumptions. Second, using the exact language of the person being questioned to enquire about their thoughts and experiences. And third, asking questions that give the person maximum freedom to express their answers. You may think, “I already do…

In many ways, 2022 was a pivotal year for global trade, and not in a good way. Nowhere was this more evident than the effects from Russia's invasion of Ukraine in February. Beyond the human cost and devastation on the ground, the conflict brought surging into public consciousness how easily and quickly trading ties between nations, once the measure and symbol of their comity, can be undone and weaponized. Its impact gummed up some of the world's most basic supply chains, from energy to food. As shortages loomed, governments elsewhere raced to ban exports of their own food and food-related products in turn. The conflict came just as inflation was increasing worldwide, growth was slowing, and new tariffs were rising among the world's biggest economies. Beyond the war's immediate impact…