Architects of Change

Designing Strategies for a Turbulent Business Environment

Jeremy Ghez

• Publisher: Palgrave Macmillan
• Year: 2019
• ISBN:
  9783030206840
• Topic: Commerce
• Subtopic: Management

What is the difference between a fire fighter and an architect? One deals with crises as they arise while the other is capable of building something that can withstand all weathers.

Using this analogy, Architects of Change provides you with the tools to grasp, leverage and harness the dynamics that shape tomorrow's markets. It encourages you to nurture an entrepreneurial mind-set to transform the way a business – or even an entire industry – operates. Tackling crucial topics related to geopolitics, creative destruction, fake news, resilience and creativity, this book gives you the tools to analyse your environment and future trends in order to reinvent the way you do business. It teaches you how to:

· Identify actors of change

· Conduct simulations about the future

· Assess threats of political instability

· Build a strategy for a profitable and sustainable firm amid ongoing uncertainty

· Become an architect of change yourself.

Containing original interviews with industry insiders, including a world-famous expert on brands and luxury, the former CEO of a major think tank, a thought leader from CISCO, the former chairman of the US National Intelligence Council, and a former chief political scientist of a large Asian bank, this book helps you to understand the type of imagination and creativity this business environment requires not only to survive, but thrive.

© The Author(s) 2019

J. GhezArchitects of Changehttps://doi.org/10.1007/978-3-030-20684-0_1

Begin Abstract

1. A Tale of Two Professions

Jeremy Ghez¹

(1)

HEC Paris, Jouy-en-Josas, France

Jeremy Ghez

Email: [email protected]

End Abstract

Regardless of where you are from, the industry you work in (or) industry your work is in or your personal political beliefs, chances are that there are plenty of angry people around you. If you think this anger is justified but not unavoidable, if you believe this anger calls for deep transformations in the way we live and do business, and if you are looking for new and meaningful opportunities for change in this easily disrupted business environment, then this book is intended for you.

Reasons to Be Angry

This anger is fueled by legitimate anxieties about a changing world of people who feel they have lost their bearings. In this world, past political systems, that were once beacons of stability and peace, are not providing these people with the comfort about their status and guaranteeing their economic and social prospects anymore. Constant disruptions and challenges to what seemed yesterday’s natural order are leading to the advent of a scary, unknown and tempestuous world in which what you deem improbable is likely to happen and in which you thought was likely may actually never happen. The political processes and business models that we often took for granted in the past now appear dysfunctional at best, and obsolete at worse.

The sense that those in power, in business or in government, or those who influence those in power, are completely disconnected from the reality of the most vulnerable—or the ones who feel the most vulnerable—only compounds this anger. This disconnect often seems to be at the heart of demographic, racial, and generational divides that we observe across the globe. For instance, in the United States as well as in Europe, the opposition between a rural and conservative electorate and a more urban and progressive one may not be new but certainly everlasting and highly relevant when it comes to understanding recent electoral surprises and social tensions. Similarly, we can observe tensions across racial groups that result from differences in narratives about integration and meritocracy: disagreements about how well a society or a political system is working today for all of its citizens stem from opposing (and yet very authentic) views about a society’s reality. Last but not least, the generational divide between a relatively older age group that often feels more legitimate because of its experience and a relatively younger age group that feels victimized by the mistakes (and, at times, the recklessness) of its elders is no less significant in explaining this disconnect that can make power transitions between generations all the more complex to manage.

Ultimately, the combination of these anxieties and this disconnect leads public opinions across the globe to feel as if they are losing control of their fate, and perhaps more disturbingly, of that of their children. Anger is not only a natural response; it is, perhaps, the only response possible for those who feel powerless. In turn, in response to this anger, there are two types of influential actors: those looking to surf on that anger and that disconnect in order to obtain some personal gains and consolidate their influence in a broken system and those hoping to transform that anger into meaningful action and transformation, in particular by bridging the disconnects.

This book unapologetically ignores the first category of demagogues and looks to decisively empower the second, the architects of change, looking to bring meaningful and durable change to a business environment that so desperately needs it. Here is why.

The Paradox of Change

There is no dearth of reasons to feel powerless in this business environment.

The Crises of a System

Defining the key characteristics of the business environment we live in is no easy task. Some would use the free-market liberal democracy model that international organizations have promoted since the end of World War II. Yet, that definition excludes a significant part of the world population, not least of which are two major powers, namely China and Russia—the case of India being debatable.

Others would rely on the term “globalization” which describes the gradual process of integration of national and regional economies that accelerated in the nineteenth century before taking a full stop in 1914, before starting again, gradually in 1945 and accelerating once again in the aftermath of the Cold War. This process of integration has significantly increased the degree of interdependence between different players. It has lifted huge chunks of the global population out of poverty and has become part of a global reality that no real serious influencer, including a non-western one, can ignore.

Yesterday, globalization was about the promise of a wealthier, a more efficient, and a more transparent world. Today, it faces the risk of losing its momentum, on at least three levels.

First, some of the major actors of globalization, namely the states, may be far more constrained in their ability to act than they ever were. In fact, in the wake of the 2008 Recession, western governments in particular carried out substantial efforts to preserve the global economy. This effort resulted in high levels of public debt, meaning that states do not have the same firepower to influence the global business environment as in the past, at a time at which challenges are no less significant—quite to the contrary. Technological disruptions like automation and artificial intelligence are putting a wide array of workers at risk of losing their jobs if they do not upgrade their skills. Perhaps even more fundamentally, the lack of productivity gains and our inability to retrain those displaced by automation, may have well undermined our ability to bounce back durably in a landscape that is not getting any easier to navigate in—with the growing cost associated to climate change-related crises in particular. The constraints on these governments’ ability to act may limit their efforts in tackling these challenges.

The model is undergoing a financial crisis as a result (Fig. 1.1).

Fig. 1.1

Central government debt: total (% of GDP). Source: World Bank

Second, low levels of economic growth and increasing political polarization across the globe suggest that the model is not as efficient as it used to be in generating wealth and stability. This is fueling fears about the long-term prospects of economic growth which some economists are describing as a parenthesis of human history. Low or no growth would be the new normal in a system that desperately needs to adapt to the changing political, social, technological and environmental landscape—especially in the new age of social discontent and climate change. This would undermine the system’s ability to continue to integrate all populations, in particular the most modest and least skilled ones. It would also undermine humanity’s ability as a whole to survive in a world characterized by deep climate instability.

The model is undergoing a crisis of efficiency as a result (Table 1.1).

Table 1.1

Real GDP growth rate by decade (in %)

	1960s	1970s	1980s	1990s	2000s	2010–2017
United States	50	37	36	35	15	16
Japan	144	51	49	11	2	8
European Union	56	35	24	20	13	10
Brazil	67	106	22	24	33	3
China	22	69	134	149	146	67
India	41	26	63	66	87	59

Growth rates have slowed down in OECD (Organisation for Economic Cooperation and Development) economies since the 1960s in a substantial and undeniable way. Recent data suggests emerging economies may be experiencing the same trend, but it is far more recent and on the question of whether it will last, the jury is still out.

Last, in yesterday’s world, wealthier countries could act as if they were models of transparency, political stability, and economic dynamism that other countries could emulate in an increasingly interdependent world. The world has not become any less interdependent—but the model to emulate seems to be increasingly less attractive. In fact, high levels of discontent across western countries are putting into question the traditional mandate of the state. An increasing chunk of public opinions appear disenchanted with the democratic system which is not necessarily the political aspiration it was in the aftermath of the Cold War, a quarter of a century ago. The prospect of durably low growth is also fueling fears of social demotion in populations that once believed in the promise that the prospects of their descendants would always be better than theirs. If that promise in broken, it may be hard for them to consent to the efforts their elders made when in terms of taxes and respect for generally accepted societal norms. As one study has shown, “the proportion of younger citizens who believe it is essential to live in a democracy” is now falling in the minority in countries like the United States, Great Britain, the Netherlands, Sweden, Australia, and New Zealand. The authors add:

this disaffection with the democratic form of government is accompanied by a wider skepticism toward liberal institutions. Citizens are growing more disaffected with established political parties, representative institutions, and minority rights. Tellingly, they are also increasingly open to authoritarian interpretations of democracy.

The study concludes that public attitudes towards democr...

Table of contents

• Cover
• Front Matter
• 1. A Tale of Two Professions
• 2. Case Study: When James Bond Met Q
• 3. The World We Live In
• 4. Case Study: The Change-Maker Game
• 5. The Road to Reinvention
• 6. Case Study: Founding a Popular Pizza Place in Paris
• 7. The Power of Analysis
• 8. Case Study: Strategizing at Amazon When Globalization Comes Under Pressure
• 9. The Significance of Anticipation
• 10. Case Study: Getting Ready for the World in Five Years
• 11. The Purpose of Imagination
• 12. Case Study: Conducting a Pre-Mortem
• 13. The Meaning of Creativity
• 14. Case Study: Looking for Talent in a Chaotic World
• 15. A Tribute to My Kids (the Ultimate Architects of Change)
• Back Matter