Leadership Challenges for the Third Millenium
Pellet, Jennifer, Chief Executive (U.S.)
In an era where technologies, economies, and even corporations are converging, the same old leadership model won't cut it. CE gathered leading-edge CEOs at the home of Castle Harlan's John Castle to explore the challenges facing business leaders in the 21st century.
THE FUTURE'S SO BRIGHT Dana Mead (Tenneco): I'm reminded of what the famous baseball philosopher saidpredictions are very difficult, especially when they involve the future. We're now beginning to enter a new commercial century, where commercial forces may dominate. And we're already seeing evidence that the speed, size, and general impact of commercial events will overwhelm the ability of our social, political, and economic institutions to cope with them.
The huge and rapid capital flows in the last few years-where you could transfer the entire GDP of a small country with two keystrokes-and the communications revolution, are creating a set of opportunities for us, but also a set of problems, because the very capacity of those technologies creates instability.
Capital is a great example. In '83, there was about $1 of capital turnover for every $3 of major bank reserves in the world. That ratio has flipped. The turnover in capital is about three times for every dollar of bank reserves. And it can be done very rapidly and without a lot of controls.
One of the things business leaders have to try to find is institutions that can deal with this transition, many of which are outside governmental channels. The transatlantic business dialogue was an effort to put the commercial interests across the Atlantic talking face to face outside of the government institutions that govern trade. If you think about the incursion of NATO into the Eastern Bloc, it has more to do with economics than defense. Even the Russians have started to figure out that if Poland becomes part of NATO, it isn't as much a security threat as it is a commercial threat.
What's the bottom line? First, business leaders are going to have to learn how to operate in this vastly different environment. Second, they will have to establish and manage international relationships that are much broader and more challenging. We're going to have to play a role in building the institutions to handle this change, otherwise someone else is going to build them for us, and I can guarantee we'll be unhappy.
Arnie Pollard (CE): How might these new institutions play out? Will we have IBM printing currency and having ambassadors to countries? Will the EU evolve into the world union, because we need global rules?
Mead: I think you will begin to see more off-the-system type relationships. There's a movement afoot right now, among serious bankers in the world, to develop a substitute to the IMF, and for Russia, to build some kind of an investment fund, which would be much more private. Obviously, it would not have the firepower that the government funds do, but it's the kind of start you might see. Also, in certifications, regulations, and standards-which are a huge impediment to us right now, and to the development of technology worldwidewe could see businesses develop agreements and then lobby their own governments as third parties. That's what we've got to start building.
Marilyn Carlson Nelson (Carlson): I agree that there needs to be some supra-governmental or non-governmental agency. But where do the checks and balances come in, accepting or presuming to take responsibility outside of the systems?
Mead: Good question. As business agreements like this have developed, we've had to drag our governments into this, sometimes kicking and screaming. Sometimes they jump in, because they realize they're losing control.
Many issues are arising because of the commercial issues globally, rather than through the political process. The whole banking system, whether it be the deregulation of banking or whatever, created crossnational, cross-continental boundaries problems that just blew by the governments. …