Why Businesses Should Now Take A Long Term View?

Those feeling rather unnerved by recent world events, especially in the US and Europe, should take the long term view and bring in a sense of purpose into their business, according to prominent business leaders from across the world who met in Barcelona.

More than 30 business leaders had attended the recent meeting of the University of Navarre IESE Business school’s International Advisory Board.

The Board assesses the evolving socio-economic global context for business, as well as needs, emerging trends and innovation in the fields of management and leadership education. Comprised of prominent global business and public sector leaders, the IAB is appointed by the Dean of IESE.

Dean Franz Heukamp, during the meeting, referred to a new-found “sense of fragility in the world due to factors such as unpredictable elections in Europe, Brexit, and a new U.S. presidential administration. There is also an ongoing, broader debate about what economic and social policies are best, he added.

The meeting noted that the uncertainty in the U.S. and Europe has had an unexpected and rather positive impact on the developing world.

Several African countries have come to realise that given the problems elsewhere, they need to tackle their own problems by themselves. “We need to solve our own problems. We’ve come to that reality,” Ibukun Awosika, founder and CEO of Nigeria’s The Chair Centre Group said. “I think Africa has gotten to the point where it realises it has to fight for itself,” she added.

Part of that realisation is that Africa is becoming more than a source of raw materials for the rest of the world to look at issues such as how to develop its human resources and how to take advantage of the continent’s own substantial buying power. “Ultimately the solutions will come from how we rethink the continent,” Awosika said.

Latin America seems to be charting a new path with less dependence on the U.S. “I also believe that the era of waiting for the U.S. to solve my problems is over,” noted Stanley Motta, president of Panama’s Motta International.

it would be a mistake for Europe to take a short-sighted view and retreat from trade, allowing the current wave of protectionism to make countries more insular, said Hans-Jacob Bonnier, deputy chief executive officer of Swedish media group Bonnier Business Press. Doing so will undermine economic prosperity now and in the future. “Trade is the mother of wealth,” he said.

He said that rather than focus on the glass half-empty, “In today’s world we have to begin to have some appreciation for what’s full.” The half-full glass in Latin America would include accomplishments such as a continent generally at peace, progress toward currency stability in many countries, and a lower tolerance for corruption, he added.

With the notable exception of Venezuela, most of the Latin American countries are advancing economically and socially.

Asia too is somewhat removed from the angst gripping Europe and the U.S. “Wherever you go in Asia, there is an air of positivism, of can-do things,” said Narayana Murthy, co-founder of Infosys Technologies.

While China is a major engine powering economic expansion, several other countries are enjoying export-led growth.

In India, where exports contribute slightly less to GDP than in other Asian countries, Murthy recognises the determination of Prime Minister Narendra Modi to support the economy and businesses, especially startups, besides fighting corruption and to modernise the country technologically and digitally.

For George Yeo, chairman of Kerry Logistics and a former Singaporean minister, the strength of China and the re-emergence of Asia are unstoppable global currents. “There is a tidal change. And that tidal change is the rise of China,” he said.

Europe, however, is seen as the main source of concern on the global geopolitical scene, as it struggles to deal with surging nationalism, questions about the solidity of the European Union, the technological revolution and absorbing immigrants from strife-torn countries.

But it would be a mistake for Europe to take a short-sighted view and retreat from trade, allowing the current wave of protectionism to make countries more insular, said Hans-Jacob Bonnier, deputy chief executive officer of Swedish media group Bonnier Business Press. Doing so will undermine economic prosperity now and in the future. “Trade is the mother of wealth,” he said.

Franz Haniel of Germany’s Haniel group said that he views with dismay the focus on the short-term – among politicians as well as investors – and worries about the sort of decisions that short-term vision will engender.

He said his company is encouraging leaders to think across generations, to have a long-term vision and to view the future not only through a technological lens. “Think about moral evolution. Think about values,” he added.

Business opportunities abound around the globe – as long as investors and companies take a long-term view, understand how markets differ and become engaged in the development of the countries where they operate.

This sort of attitude can also lead to investment opportunities that might otherwise be overlooked, whether it is education in Africa or airlines in Latin America.

“You cannot isolate your business from society, from education aspects, from the geopolitical,” said Janina Kugel, a member of the managing board at Siemens. For a company like Siemens, with operations in many developing countries, that has meant investing heavily in education and training of its workers – which benefits both the company and the countries in the long-term.

Hans Ulrich Maerki, a member of the board of Mettler-Toledo International, also stressed the long-term, wherever you do business. “You need to have a vision and a business vision by definition has to be long-term,” he said. That vision must be turned into a strategy, which incorporates different scenarios because things don’t always go as planned. A good compensation system is also essential, he added.

For Paul Polman, CEO of Unilever, the focus on short-term gains threatens not only companies, which have a shorter and shorter lifespan, but also the well-being of the society and the planet.

Unilever has taken a number of measures to focus on the long term, even when those have temporarily displeased financial markets or short-term investors. All Unilever brands have a mission, in order to solve some sort of social issue, Polman said claiming that sustainable growth was at the centre of his corporate strategy.

“Bring into your business a purpose-driven model,” he said. “My philosophy is very simple. If you want to be in business you should have a reason to be in business,” he added.(Image Source: Google.com)