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Q:
What are the big concerns confronting business in the
next 10 years? Fatma Abdullah, Dubai, United Arab
Emirates
A:
Most mail we receive is about headline news—from the
credit crunch to food shortages—so your long-horizon
question came as a pleasant relief. It underscores an
important reality that’s all too easy to forget: In
business, you can never stop planning for the future, even
when it feels like the present requires all your
attention.
Indeed, imagine if loan-giddy banks had,
in recent years, planned for the day when the housing
market started to contract. Perhaps we’d be hearing more
about record earnings right now than about write-offs. Or
imagine if Americans had planned for energy independence.
Perhaps today we’d be seeing nuclear plants fulfilling a
significant percentage of our power needs, as in France,
Japan and Sweden.
But everyone knows hindsight is easy;
you’re asking about foresight. So let’s turn in that
direction. Simply put, in the next decade, the global
marketplace will continue to become increasingly
competitive, compelling managers to make their
organizations more agile, productive, innovative and
technologically advanced.
Old news, right? We agree. Most companies
have spent the past few years, if not longer, grappling
with the transformative impact of globalization.
So what’s actually new to add to your list
of “big concerns” for the future? With all due respect to
professional prognosticators, which we are not, we’d add
three items, based on a recent set of small-session
meetings with executives in the United States, Eastern
Europe, the Middle East and India.
The first item—and biggest by far—concerns
family businesses, which make up a major portion of many
economies. Such companies, of course, have distinct
strengths. They can give employees a sense of humanity and
belonging, creating engagement. And in hard times, their
cultures can be forgiving and resilient.
But we sense a growing fault line beneath
the foundation of many family businesses. The first reason
is linked to the traditional family company focus on the
preservation of wealth, rather than the accumulation of
it. That “protect-the-assets” approach may have worked in
less complex times, but it could prove devastating in a
global environment where risk-taking and growth are
essential to survival.
And then there’s succession, which has
never been easy within family firms. But today, increasing
longevity means that many patriarchs are staying in power
for years longer, essentially forcing a whole generation
of family members into other pursuits. “Kids” these days
do not want to wait until they are 50 to take charge and
have an impact. It’s awkward and stultifying.
At the same time, too many patriarchs
continue to hang on to the age-old practice of handing
their companies over to progeny, regardless of talent.
That tradition managed to work in the less competitive
world, before globalization. No more.
The second item we’d add to the
10-years-out list is the persistent dearth of, no, not
engineers and scientists, but professional managers in the
developing world. On our recent trip to your own country,
for instance, we heard CEOs of several local and Western
companies say that the only thing holding them back was
the ability to hire people to run their operations, from
human resources to finance.
Incidentally, this challenge (like all
challenges) presents an enormous opportunity for any
experienced manager who’s got the ambition, interest and
global mind-set to work abroad for several years.
Finally, we mention an item that has been
with business forever but stands to grow in importance
over the next decade in that it just makes people so much
less productive: corruption. We’re not talking about
large-scale corporate graft here—although that’s awful—but
the kind of ubiquitous “payoff culture” that’s the norm in
too many parts of the developing world.
We understand that such cultures grow up
where wages are so low that people seek other sources of
income. Thus, to get through the
New Delhi
airport, you have to slip something to the bag checkers,
and to get your taxi license in São Paulo, Brazil, you
have to “thank” local regulators. Every bureaucrat with a
stamp becomes an entrepreneur of a sort. But the existence
of such shadow economies drains the life out of real ones,
diverting cash, energy and hope.
Not to be pessimistic. Yes, the family
business situation worries us, as do the managerial
shortage and corruption. Still, business has always
overcome seemingly insurmountable challenges. Tomorrow
will be no different. n
*****
Jack and Suzy Welch are the authors of the international
bestseller Winning (Collins). Their latest book is
Winning: The Answers: Confronting 74 of the Toughest
Questions in Business Today (Collins). They are eager to
hear about your career dilemmas and challenges at work and
look forward to answering your questions in future
columns. You can e-mail them questions at winning@nytimes.com.
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