Pillar Trends

The Greek Philosopher Heraclitus originated the concept that “the only constant is change.” True then, true since, true now. Though I’d argue that change comes much quicker today than when Heraclitus was ruminating on the cosmos.

Think for yourself how different your world is today versus 20 years ago. Or 10 years ago. Or even last year!

For most of my career I’ve been involved with headhunting and leadership development. Wading through the bookshelves of learning on “leadership” one is constantly challenged to think about what makes effective leaders, and what will distinguish the next great leaders of tomorrow. Looking backward doesn’t always help because – as we adapt and change – what worked in the past my not be what we need for the future (in fact, my father’s favorite quote “History is Bunk”)

While thinking about “change” and “leadership” I had an illuminating conversation with Eric McNulty, a thought leadership strategist and former executive at Harvard Business School Publishing. We talked about how society had changed and, in particular, what success means in the marketplace.

In addition to being a good friend, Eric’s also a smart guy. He has conceived a unique way of thinking about societal change and how it relates to leadership. It’s what we call the “Pillar Trends” of successful global leadership:

Kelvin: Eric, what are your four Pillar Trends and how do they relate to successful global leadership?

Eric: Beginning last summer I took a serious look at what the world will look like 10 to 20 years from now. I quickly realized that any predictions I might make about the size of your smart phone or what products we might buy would only be wrong. Predictions are difficult, it has been said, especially ones about the future. What I did see, however were four currents of change that I call Pillar Trends. These are trends that are global, that will affect every global organization, and of which no single organization can change the direction. In short, these are trends for which you must prepare and adapt. I think that they make great lenses for looking at leadership and other critical issues for organizations. The four are: the urbanization of the planet, the aging of the population in the developed world, climate change, and the continued exponential increase in both knowledge and computing power. I could go into each of these in depth – in fact I’m working on a book – but this is a blog after all.

Kelvin: What do these trends mean for leaders today?

Eric: I think that leaders and their organizations have to realize that we are at one of those inflection points at which the world will likely change in dramatic ways. Take urbanization. We have passed the point where more than 50% of the world lives in urban areas and it is expected that we’ll hit 75% by 2050. Yes, that means that New York, London, and Shanghai will grow but much of the growth will happen in the developing world. There will be many newly large cities – cities not on the radar of most executives today – rising up in Asia, South America, and Africa. You need to be thinking about how you will serve these markets, how you will find or grow the talent to lead your operations in these places. It is reported that a million people spend each night sleeping in the cemeteries of Cairo. What opportunities and challenges might they represent for your business? That’s the kind of thing tomorrow’s leaders are going to confront.

You are going to need people who can build infrastructure, not just optimize it. You will likely need more local talent because the ex-pat model doesn’t work at this scale. You will need a new level of cultural dexterity.

Kelvin: What are the risks of not taking action?

Eric: First and foremost, you may find yourself too late in the game to play catch up. As India and China continue to grow, you are going to see more Indian and Chinese companies break into the Global 1000 – and do it by serving their domestic populations as well as through export. They will be smart, aggressive, and have an advantage in local knowledge. They’ll be built for these challenges, while many legacy companies may find themselves slowed by the baggage of having come of age in a very different time and place. Gary Hamel taught me the importance of challenging your industry’s orthodoxies in order to find new sources of competitive advantage. Do it now before someone else beats you to it.

Kelvin: Do you have examples of companies who are doing it right today?

Eric: I have to say that I don’t know of a lot that are thinking this way in terms of leadership development. But Coca-Cola is one. They happen to be headquartered in Atlanta for historic reasons but they operate as a truly global company. Their current CEO comes from Turkey. You’ll find a broad mix of geographic and cultural backgrounds in their leadership ranks. They are used to thinking globally about branding, and now sustainability, while being used to operating locally because of the structure of their relationships with their bottlers.

Phillips went through a major transformation. One part of their business became focused on home health care to serve the aging population; their lighting business has moved aggressively toward energy efficiency. I have not yet seen if these moves have transformed their traditionally fairly conservative corporate culture.

I want to see what some of the “leadership factories” like GE and IBM are doing in this regard. A typical stop for a rising star at GE was their locomotive engine business. It wasn’t a fast-growth market; in fact just the opposite. It was a pretty safe way to see if you could run a major unit. I want to see if they are putting those same people into a sustainability role on the way up because those skills and that knowledge is going to be critical as we look forward.

Kelvin: Let’s be honest. Is it skill or is it luck that’s the real secret to their success today?

Eric: In Coke’s case, they have the right global legacy – that’s luck – but they also have forward-looking leaders who understand that these changes are underway. They have committed to a water-neutrality goal because climate change could cripple their business. They experiment a lot and talk about reinventing the core businesses.

I think we’ve yet to see if a Google or a Siemens or a FedEx, to pick three at random, can adapt.

Kelvin: Thanks, Eric.

This was just an introduction to the Pillar Trend concept. We’ll have much more to say in the days and weeks ahead. In the meantime, please share your thoughts with us.

Kelvin

photo credit: cote