Indholdsfortegnelse for 09. March 2023 i I by IMD

The theorist Karl Weick contends that a fundamental task of organizing is to "make sense" of the environments that we are embedded in. How then to make sense when we are suspended in, as my colleague David Bach calls it, "vectors of turbulence" - wars, pandemics, climate crisis, and large-scale discontent? One answer, as we examine in this of issue I by IMD, is for leaders to cultivate a diverse set of what I would call "environmental sensors" as they deal with what is sometimes called the polycrisis around us. The renowned American futurist Peter Schwartz advises us to connect to people who have "their fingers on the pulse of change". Simone Menne and Sunnie Groeneveld recommend that boards - which currently have an average age of just over 57…

1. NEGOTIATE WITH AUTHORITY There’s nothing more frustrating for NGOs than sitting across the negotiating table from young staffers lacking any real authority. It slows down the whole process of engagement as they need to take things up the corporate hierarchy and seek approval on everything. The temptation for us in such a situation is to end the negotiation and make our findings public in ever more aggressive ways. So, for things to be decided quickly, my advice to companies is to delegate to executives who actually have the power to negotiate. 2. BRING EXPERTISE TO THE TABLE It is equally important to bring people to the table who have a strong grasp of the issues that need to be addressed – people who have some knowledge of sustainability in…

1975 Andrew Ritchie was a young engineer who believed in a better way to move around the city. In the bedroom of his flat overlooking the Brompton Oratory, he invented a bike with an ingenious three-part fold: a vehicle that transformed into a small package and could go anywhere. Over the next decade, Ritchie obsessively honed his invention. He worked in a small, rented workshop at a local engineering company and made each bike to order. 1987 After years struggling to find financial backing, Julian Vereker, a Brompton owner and founder of Naim Audio, steps in to help. The Brompton folding bike wins the coveted Best Product Award at the Cyclex Bike Show in London. Bikes are built at the rate of 60 a month at the first Brompton factory…

The Power of Now Eckhart Tolle Published nearly 20 years ago, The Power of Now remains one of the most important books for helping people to deal with stress in highly uncertain times. It was a life-changing book for me. The premise is that dwelling on the past or being preoccupied with the future is a form of mental insanity as all that’s real is “now”. The past has gone and cannot be changed, so dwelling on it is a waste of resources. And the future is a fantasy as we cannot predict with any certainty what’s going to happen. The here and now is our only reality, and if we are in the now all is usually fine. Most anxieties and fears come from ruminating on the past and/or…

Poul Weihrauch, the new CEO of Mars Incorporated, served as the global President of Mars Petcare from 2014 to 2022. During his tenure, the Petcare business more than doubled in size and more than tripled its annual organic growth rate. Petcare also became the largest, and fastest-growing business within Mars, a company more traditionally associated with its confectionery business. Under Weihrauch’s leadership, the company transformed its Petcare division from being largely a traditional pet food business into being a leader in the much broader areas of pet health and pet care. At the core of this transformation was a focus on putting Mars Petcare’s purpose at the core of its strategy and decision making. This was the starting point for this interview, an abridged and edited version of transcripts of…

CEO dialogue Antoine de Saint-Affrique is a man who doesn’t let himself, his employees, or his investors get too comfortable. Since taking the helm at French food and nutrition company Danone in September 2021, the 58-year-old executive has delivered some uncomfortable truths, clearly calling out the company’s underperformance compared to peers in the past, while being confident that Danone is operating in the right categories and has what it takes to win. “We took stock of where the company was; we were very open to the market and quite uncompromising on the good, the bad, and the ugly,” said Saint-Affrique. “Was it comfortable for everyone? Certainly not. Was it freeing for the organization? Certainly, yes.” Speaking the truth is an integral part of Saint-Affrique's leadership style. His direct approach paid…

To optimize your voice, it’s important to allow every part of the breathing mechanism to move, including the individual muscles in the rib cage. You need to focus on exhaling comfortably and completely in order to maintain the mobility of the breathing apparatus and calm the nervous system. While we might all be tempted to take a big breath before launching into a speech, paradoxically breathing in calmly when you speak leads to a better sound. What executives should be aiming for is “minimum effort, maximum efficiency”. Here are a couple of things to try: Before taking the stage or beginning a difficult conversation, lie on your back and focus on a complete exhale, without unduly tensing any muscle group. Do this for as long as is comfortable and follow…

In its most simplified form, ESG can be seen as negative screening, which means not investing in so-called sin stocks, the shares of companies involved in the production of weapons, alcohol, tobacco, gaming, and fossil fuels such as coal, gas or oil It can also take the form of norms-based screening, the exclusion of companies that violate some set of norms, such as the 10 Principles of the UN Global Compact. Investors may alternatively adopt a “best-in-class” or positive screening approach by selecting companies with an especially strong ESG performance compared with their industry peers. Or finally, they might apply an ESG integration strategy in which all ESG risks and opportunities are included in the investment analysis and decision-making process.…

The years since the 2008 financial crisis have seen two paradoxical trends in the American stock market. On the one hand, index fund managers BlackRock, Vanguard, and State Street have rapidly grown to become the largest shareholders in corporate America, collectively owning roughly 22% of the S&P 500. These "permanent universal owners" could be a potent force for enabling corporations to take a long-term perspective, investing in their workers, aggressively reducing their carbon emissions, and building enterprises to last. Yet the mid-2000s also saw a spike in hedge fund activism aimed at maximizing share price immediately. Activism leapt just in time for the 2008 financial crisis and has not ebbed since, reaching such stalwarts as Coca-Cola and Procter & Gamble. In any given year, 200 companies face a hedge fund…

Scenario planning is a valuable tool for strategy development and strategy testing. Peter Schwartz's groundbreaking book The Art of the Long View remains the go-to guide on how to do it. The classic text, filled with practical advice and piercing insight, remains as relevant today as it was when first published in 1991. Scenario planning is not about predicting the future but rather challenging yourself and your organization to develop a point of view about which external factors truly matter and how they could impact you. In these turbulent times, it can feel like we need entirely new approaches; that everything is new. Yet, The Art of the Long View reminds us that companies and their leaders have always had to contend with uncertainty, and that the amount of uncertainty…

If you've ever attended an annual general meeting, the likelihood is that the supervisory board sitting on the stage was made up of older men in suits. Yet as investors' calls for greater board diversity grow louder, one overlooked aspect is now coming under the spotlight: age. Over the past 20 years, boards have increasingly had to handle new topics - from ESG to cybersecurity and digitalization - and are expected to have more controversial discussions that could lead to constructive solutions. If everybody on the board looks - and thinks - the same, it won't be able to fulfill its mandate to confront the challenges of the future. There are some positive trends. The 2022 US Spencer Stuart Board Index found that many boards were considering how to achieve…

In his monumental 1,344-page book The World: A Family History, the British historian Simon Sebag Montefiore records the mortality rates from the bubonic plague in the 14th century. In England, half the population died. In Venice, 75% perished. In parts of Egypt, the figure reached 98%. The survivors were in demand. "The wool-processing workshops of Italy and Flanders, England, and France were short of workers," Sebag Montefiore writes. Wages went up. "Workers formed guilds. The new confidence felt by ordinary people empowered them to launch a spate of peasant revolts." The COVID-19 pandemic through which we have lived - and are still living - has brought its own destruction. By the beginning of 2023, 6.8 million people worldwide had died of the virus, according to the World Health Organization. That…

When preparing for crises, it is instructive to recall that Noah started building the Ark before it started to rain. Norman Augustine, former President and CEO of Lockheed Martin (Augustine’s Laws, 1986) Bad companies are destroyed by crisis. Good companies survive them. Great companies are improved by them. Andrew Grove, founder of Intel (Esquire, 2000) The greatest danger in times of turbulence is not the turbulence. It is to act with yesterday’s logic. Peter Drucker, educator and business philosopher (Managing in Turbulent Times, 1980) A ship in a harbor is safe, but this is not what ships are for. Unknown In the moment of crisis, the wise build bridges and the foolish build dams. Nigerian proverb Every crisis has both its dangers and its opportunities. Each can spell either salvation…

When Marillyn Hewson took over as chief executive of Lockheed Martin, the world's largest aerospace and defense company, in January 2013 she faced multiple crises at the same time. Cash-strapped governments were cutting defense spending while newer competitors were going after the company's market share. Yet Hewson was unfazed. She focused on streamlining operations, investing in new technology, and expanding into international markets to maintain the company's position as a leading industry player. During her seven-year tenure,the company's stock price increased three-fold and she left a record backlog of business upon stepping down. With the world grappling with increasingly interconnected crises, it can be hard for leaders to know where to focus their time and effort. In such situations it can be all too easy to slip into a "headless…

Have you ever found yourself in critical meetings that suddenly got stuck and, despite the many communication tools that you have learned over time, you felt unable to restore the flow? Have you experienced an important video call that got heated and led to poor decisions and yet it was only afterwards that you realized what you could have said to avert this outcome? Perhaps you led a meeting that you thought was going well, but where people hesitated to come to an agreement on a way forward until, exasperated, you pushed them to fruitlessly commit? What these situations have in common is a sense of confusion, a difficulty in making sense of what is happening and, therefore, an inability to take appropriate actions. Why is this? Very often, important…

Sustainability – as usually packaged by regulators, the media, and business schools – combines environmental, social, and economic objectives. The complex interplay of all three is seen to be both achievable and desirable. But this is based on three questionable beliefs. The first is that being sustainable can go hand in hand with being profitable. But it is hard, if not impossible, to find a sound business model that does not transfer the costs of sustainability to external stakeholders, be they customers or shareholders. The second is that stock markets reward sustainability and environmental friendliness. However, there is ongoing debate about what’s behind the observable premium at which sustainable companies trade, and a sustainability bubble exists in which returns are driven by investor demand, not by fundamental changes in company…

There is seemingly endless speculation about ChatGPT and how it's "destroying" writing. If you haven't tried it, you should. It's basically an AI-based writing assistant that can help you to generate content on any topic. Ask any question, and you'll receive a composed answer - whether it be a short paragraph or a long essay, the choice is yours. Alphabet, the parent company of Google, must be thinking that it can't let this become its "Kodak moment": ChatGPT must not be allowed to replace the money-making machine that is the Google search engine. Meanwhile, Microsoft must be thinking that ChatGPT - in which it has invested billions of dollars better not go the way of Siri, a cute invention that the public seemed at first to love but which ultimately…

We are being poisoned, the Indigenous communities told me upon my arrival at the huge Sudcam rubber plantations in Cameroon, central Africa. "Our forests are gone," they said. "Everything we used to live off is gone. What will we do now?" The plantations belong to Singapore-based Halcyon Agri, the world's largest natural rubber supplier. The 2019 visit was part of my investigation into the company's supply chain for my former employer, Mighty Earth, a global advocacy organization working to defend the environment. As I crossed back roads and hiked forest trails in Cameroon, I observed extensive deforestation, loss of biodiversity, and the destruction of culturally significant indigenous land - all caused by the plantations. But I also saw an opportunity: to go beyond naming and shaming Halcyon to help the…

As organizations face the pressing challenge of navigating multiple interconnected and interdependent crises, the positive value of diversity in the boardroom is becoming increasingly evident. However, while companies have made progress in promoting gender diversity on their boards – or have at least made earnest statements of intent – appointing more youthful board members remains an underutilized opportunity. The average age of a non-executive director in the FTSE 100 last year was 59.9, according to executive search firm Spencer Stuart. The average age of a chairperson was 65. In today’s volatile, uncertain, complex, and ambiguous business climate, I believe those companies are missing a trick. With the velocity of change in business and society increasing at an exponential rate, boards need to spend less time looking backwards, and more time…

No plan survives first contact with the enemy, or so the military maxim goes. The same is increasingly true in business. If the past three years of turmoil have taught us leaders anything, it’s that business success isn’t necessarily about having a fantastic plan: it’s about how you respond when things don’t go according to plan. Facing the combined threat of economic pressures and geopolitical tensions, what counts today is your ability to set up a business that may have marginally greater costs yet is able to respond very quickly to things that you didn’t anticipate, like a pandemic, a war, or Brexit. I’ve been writing business plans for 20 years at Brompton, and I can tell you that we have never once delivered what we planned to. But pressure…

Strategic thinking has long been viewed as essential for leaders of organizations. The ability to anticipate and plan for the future, to think critically and creatively about complex problems, and make effective decisions in the face of uncertainty and change is more necessary than ever. These capabilities will be dramatically augmented and magnified by artificial intelligence systems such as ChatGPT. With the ability to process large amounts of data, identify patterns, and make predictions, AI will provide fresh insights and perspectives that were previously unavailable to company executives. This will enable them to make more informed and accurate decisions - and to anticipate and plan for the future more effectively. But it won't replace the human element in strategic thinking, which remains critical. In the near future, I expect to…

Business transformation has become commonplace in the corporate world, especially for incumbents. Pick up an annual report of any large, well-established business and you are bound to see some sort of a transformation underway – be it BMW and Toyota trying to adapt to the collaborative economy by shaping mobility solutions, or shipping companies such as Maersk and MSC shifting their business model from selling capacity to providing end-to-end logistics. But do these incumbents have “the right to win” in the new arena? Our research has shown that while incumbents believe that the answer is a solid yes, it is rarely so straightforward. Incumbents simply assume that they have a right to win based on their historic success, brand strength, high quality products and services, and deep pockets. They feel…

Born with a cleft palate, Robin De Haas had a speech impediment so severe that he could pronounce neither consonants nor vowels. Bullied and beaten at school, by the tender age of eight he thought about ending his life. Thirty years later, he is a vocal coach to the stars. He works all over the world training singers, both classical and pop, and senior executives on how to better coordinate their breathing muscles to create optimal sounds. So how did he get there? The game changer for De Haas came when he realized that overcoming his own challenges could be a way to help others. “This research into my voice became a sense of, ‘How can I help others shine?’ And when I do that, whether it be with an…

The climate challenge should be viewed as an opportunity for the financial industry. After being on the wrong side of history in the financial crisis, it can now redeem itself by being a force for good, and even prospering, in the face of the energy transition. To be sure, this is a tall order. When sustainability is in the frame, public opinion tends to depict investors and financiers as accomplices and authors of greenwashing rather than allies of the energy transition. What is needed for this to change and for the opportunity to be seized? First, it is important to reassess the power of finance. It can be a force for good but is not omnipotent. The financial sector can provide important funding, but capital markets can often be bypassed,…