This week, I am traveling Asia for client work and have had the opportunity to spend time in Japan, Singapore, and now Vietnam. During my stay, I’ve been working on five different global projects with five different companies each with unique challenges and opportunities. One of the most interesting aspects of this trip were the number of custom scenarios or “disruptors” that our clients asked us to integrate into the delivery of our business simulation workshops. A disruptor is an extraneous event that is a leadership challenge which potentially disrupts a market. I took some time to reflect on hours of meetings, design work, and conversations and discovered some interesting leadership perspectives on what’s happening in our fractured global business world. The summary of some of these insights are presented below.
Different Company and Country Value Systems Are a Big Issue
Most great business leaders are successful because they are able to create, nurture, and support a unique and believable company value system that sets the tone for their strategy and execution. But according to the leaders I spoke with, something has changed; “Country-based value systems” are becoming increasingly important and the foundational roots of “nationalism” are starting to become more apparent in the business. By way of example, twice this week I was running different Leadership Simulations for high potential leaders. In the simulation, small teams are responsible for setting and executing a global strategy across multiple regions (which are made up of countries). I saw something in both sessions that I’ve never seen before; intense and sometimes uncomfortable conversations about how countries are losing their identities and therefore customer segments are also losing their identities which makes it harder to differentiate solutions to customers. I was surprised to see the concept of Nationalism show up in conversations about business acumen.
My take-away observation is that this is an issue that business leaders should put on their radars as my sense is that different value systems by country and market are going to be disruptive forces.
Generational Disparities are Real
The next generation of leaders are knocking on the door and their perspectives are different which is truly bothering the current leaders, but apparently not the stock markets. The next generation of leader wants their companies to do something important and meaningful and are very adept at building strong cultures quickly around values. Legacy companies that don’t make “new and cool stuff” are losing key talent and the war on talent is actually showing up in a way that is much different than anyway ever expected.
My take-away observation is that the big disruptions aren’t going to come directly from new technologies, but from new types of employees that want more value in in their business lives and if they don’t get it, will close once-thriving businesses.
Laws and Regulations are Going to Matter More
Political nationalism and in some cases political isolationism has direct impacts on business specifically when it comes to new laws and regulations. We can only all pray that physical wars don’t erupt between nations because of increased global fractionalization but one big challenge is going to be wars fought through regulations on business. It’s not a matter of if, but when. Increased tariffs and taxes, increased regulations, and a general mindset of localism versus “importism” is going to fractionalize markets even further and present unprecedented challenges to leaders around the world.
My take-away observation is new skills and tools in this area are desperately needed. There are endless strategic issues and specific issues that current leaders are simply not prepared for. For example, if Market Valuation is driven by free-cash flow, but profits and the cost of doing business are unfairly impacted within all countries, performance is going to go down and so will value causing losses of jobs and a slowing of all markets. I don’t think many leaders have the business acumen and leadership skills needed to circumvent these challenges.