Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

LAL: Global Shifts Shape Leadership

Demands placed on businesses are growing, perhaps faster than ever, putting stress on conventional leadership models and profiles. Gone are the days of the CEO who runs a command and control organization. In are the days of partnerships across companies, dynamic leadership teams and collaborative decision-making.

As your generation of college students moves into the world, it is important to contemplate the trends that may influence how things will unfold over the 40-some years of your upcoming professional careers.

 

Geographic Rebalancing

After almost 500 years, the center of gravity of world commerce is shifting to Asia and Africa. It is discontinuous, occurring over a decade or two versus the centuries it took to swing to the West. Rebalancing is compounded by the blistering pace of urbanization and the need to view cities and regions, rather than countries, as distinct markets and operations.

 

Technology

What is still changing is the use of information. It is not just ubiquitous; it is also massive. Companies manage a new Library of Congress worth of information every year, sort the useful from the noise and analyze it to drive business on the front line. In so doing they disrupt industries and change business models. This is the tip of the iceberg and adoption is just starting.

 

Labor & Talent

With the demographic trends and education mix, there is a growing shortage of talented labor in developed markets, which will increasingly rely on importing talent, retraining existing talent and delaying retirements. Increasingly, companies will compete for talent globally and be more flexible in locating jobs where the talent is.

 

Natural Resources

There is increasing volatility in commodity prices, driven in part by fewer new discoveries, creative substitution and market speculation. Furthermore, commodities that are now readily available — water, energy and food — will become choke points in the future. Expect geopolitical tensions and new alignments around these. Who controls the Himalayan watershed? How are lands in Siberia and Northern Canada deployed? Can we innovate to grow crops in the desert? Managing through the day-to-day uncertainty and the longer-term bets is critical.

 

Global networks

The almost costless flow of goods, talent and information has reduced the need to integrate businesses into monolithic enterprises, allowing for creative disaggregation and partnership. Companies that designed, made and sold may now just do one of those well and rely on partners to fulfill the others.

 

Stakeholder lens

Many of the above trends are combining business, societal and public sector needs. Ensuring talented labor pools, allocating scarce natural resources, dealing with increasing income disparity and smoothing international flows are all complex multi-stakeholder sector problems requiring collaboration.

 

What does this mean for leadership? Leaders will need to be even more dynamic – global citizens who are more cross-culturally and emotionally intelligent and technologically savvy, with an experienced understanding of business-social-public sectors and an ability to be calm in the face of increased market complexity.

Anyone aspiring to leadership must think through these consequences to master these needs.

 

Shyam Lal is an adviser to growth businesses and a senior partner emeritus at McKinsey & Company.

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