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Leadership in a Two-Speed Economy

Conversations with CEOs on Straddling Different Worlds
November 26, 2012 by Andrew Dyer, Grant Freeland, and David C. Michael
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In This Article
  • The length of the economic malaise in mature markets and the sustained growth of emerging markets have created an unprecedented leadership challenge for today’s CEOs.

  • To understand how companies are navigating this two-speed world, we have spoken with chief executives who will be judged on how well they manage this balancing act.

  • Five of the interviews are presented in video and transcript form; the other two are transcripts.

 

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Juggling on a Tightrope

Currently, most global companies are operating in a two-speed world, yet this scenario was not on the drawing board when today’s leaders were rising through the ranks. The length of the economic malaise in mature markets and the sustained growth of emerging markets have jumbled the deck for them. Emerging markets are no longer satellites circling far away from the center. Leaders now must figure out how to fold their emerging-market businesses into the core of their companies and generate predictable returns from their still sizable mature-market businesses.

Ultimately, today’s chief executives will be judged on how well they manage this balancing act of leading in a two-speed world. Half of the global GDP growth in this decade is expected to come from Asia. Brazil will deliver greater growth than Germany, France, or the U.K. And it is not just the speed of emerging markets that is different. Culture, talent, business models, and the role of the state all play out differently in these economies. The emerging markets are also producing global challengers, companies that rival traditional multinationals for industry leadership.

To understand how companies are navigating these two worlds—and the new competitive order—we have spoken with seven chief executives, who shared their perspectives in interviews

The gaze and orientation of these chief executives are shifting increasingly overseas, especially toward emerging markets. Across all the interviews, the leaders highlighted the same four critical capabilities, specifically the need to excel at:

  • Leading from the global field

  • Feeding two beasts

  • Managing the new rules of culture and engagement

  • Creating a global talent pool