Big Potential Thinking surrounded by growing opportunity
Companies must make trade-offs when investing in capabilities to prioritize building long-term value.
Today’s era is one of divergent acceleration, with unprecedented opportunity amidst seismic shifts. New markets are not only opening but are also growing in size. New funds are unlocking capital at unprecedented levels. New technologies are leading to new operating models for entire industries. Adjacent to this is a never-ending stream of players and competition.
Most companies react to trends, pursuing low-hanging fruit without a coherent long-term plan. Chasing quick gains disregards alternative approaches that could deliver more in the long run. Imaginative thinking is left behind, and homogenization across institutions in a sector becomes the norm.
Big potential thinking requires going against the grain to imagine a different future and invest accordingly. The approach to building services, markets, and partnerships means going beyond the standard offering to develop unique value. This is paired with an internalized approach that searches for unorthodoxies that could upend today’s ecosystems. Ultimately, the leadership builds the vision for exploring new technologies and structures and guiding institutions on a pathway to bring that to fruition.
Adopting such an approach results in an adaptive institution that is able to capture future gains by being ahead of the curve. This leads to exponential returns while hedging against disruption.
Big potential thinking sees the world for what it can be rather than what it is.
Global Staging in endless noise
Leaders have an obligation to show up and be the best advocates for their institutions.
Today, as the world becomes more interconnected, there is no shortage of confabs and convenings where the most salient issues are discussed: the United Nations General Assembly, Davos, TED, Aspen, Milken, the G7, and G20. Where should leaders be present? What should they be discussing? And should they even be showing up at all?
Most gatherings appear to be high-level and relevant. The full calendar leads to a corporate merry-go-round of the same players. Talking points appear similar, and leaders sing along to get along. The cost to attend to all these engagements, however, is high. It requires large travel footprints, extensive teams, and media operations. The return is less clear as executives focus on faraway forums rather than core operations. Focusing on the pageantry of returns is easier than on actual returns.
The critical question, front and center, should be: What will maximize value for shareholders, and how? Ubiquity leads to the dilution of an institution’s brand and message. Global staging today requires a more intentional focus to enhance visibility only when and where needed. The first step is having a clear understanding of the global staging landscape. It then includes targeting the right audience and crafting on-message engagement.
This approach leads to lower costs, more consistency, and a deep alignment with business strategy, which ultimately leads to institutions cutting through the noise for higher impact.
Sovereign Engagement in a multi-stakeholder reality
Corporate institutions are responsible to shareholders but must also monitor the broader stakeholder environment in which they operate.
There has never been a time when governments have been more powerful than today. In addition to a traditional oversight role, governments have become the largest players in private markets. Public budgets outweigh anything brought by private companies and include substantial procurement opportunities. Public financing dwarfs private lending. And public wealth stores – from pension funds to sovereign wealth – are today’s biggest investors.
The line between the public and private sectors dissipates outside the West. State-owned enterprises (SOEs) dominate. The CEO of a leading company may be the national security advisor of the country in which it operates. Many significant institutions and critical partners are closely intertwined with the official leadership of the state.
Global corporations have taken notice and regularly pursue high-level sovereign engagement. The Davosification of networks has meant that accessibility is no longer the issue it once was. As such, meetings and approaches are often made with haste. Many institutions follow a transactional approach. Yet, sovereign entities in both East and West have much wider interest sets and longer timelines. This mismatch leads to missed opportunities.
Sovereign engagement requires building the right relationships at the right levels, in the right ways, and at the right times. It is an art that also requires strategic depth and tactical deftness. Both informal and formal relationships are critical, encompassing not just the named counterparts but, more importantly, other stakeholders in the ecosystem. Overall, separating both sides of the ledger is essential. Deals do not always follow a linear path.
Effective sovereign engagement is the difference between having a one-off transaction and a multi-year, multi-faceted investment relationship.
Geopolitical Readiness in an uncertain world
Companies must be viable irrespective of changes in the macro environment.
As the world moves from crisis to crisis, leaders scramble to respond in real-time. Over the past several years, notable geopolitical events have included the COVID-19 pandemic, the 2017 Gulf crisis, the Russian-Ukraine War, the Gaza War, and the China-U.S. stalemate.
In response, institutions are caught unaware, flat-footed, and stranded, physically and substantively. Rapid and seemingly irreversible decisions often have lasting implications: closing operations within countries, permanently evacuating staff, and adopting untenable political positions (intentionally or by accident). A never-ending series of geopolitical shocks means that urgency levels are continually high.
How can leaders anticipate events that unfold without any warning? Is there a way to prepare? Institutions can regularly measure and enhance their organizations' geopolitical readiness through an established framework. A readiness framework should also be matched by an infrastructure that allows for proactive investment before shocks come. Scenarios can then be planned and prepared for.
With this approach in place, leaders and institutions can reduce risk and improve resiliency. They will also be able to pursue markets in stormy geopolitical seas and achieve separation from competitors.
Jurisdictional Dexterity amidst global shifts
Global institutions must have stable access to markets, supply chains, and finance.
The world operates in geopolitical spheres encompassing politics, economics, and cultural mores. This dynamic leads to integrated ecosystems across geographies. Where do supply chains and markets start, and where do they stop? Tectonic shifts in the world order also mean that countries can become toxic overnight.
It has become clear that divergent spheres are emerging, covering jurisdictions within the orbits of the United States, China, and Russia, respectively. Yet, sub-regional spheres also exist, as seen in the Middle East. Unprepared, many institutions have been slow to prepare and quick to settle into new dynamics. This makes the same institutions susceptible to the next wave of shifts in the future while operating sub-optimally in the present.
Global corporations must successfully navigate dynamic environments and multiple spheres that may conflict. Institutions must understand their spheres – and build operations accordingly. This means having synchronicity in functions, from communications marketing to recruitment, across and within geographies where appropriate. It means developing the parallel circuitry of operations that can be legally domiciled and withstand shifts and global conflict. Decentralized technology, as it grows, will further enable parallel operating theatres.
This functioning beyond growing divides will allow for stable operations and reduced risk. The footprint of parallel circuitry requires up-front investment and, at times, inefficiency. However, it leads to considerable gains over time and protection against devastating losses.
Today’s world has moved beyond globalization, but that does not mean leaving global operations in the past.
Mission First in a time of polarization
A company is tasked with creating and maximizing value profitably in its domain over time, within the bounds of the law, while following a code of ethics.
The last two decades have witnessed intense politicization and polarization in the public square. Norms and positions shift overnight. New mantras appear suddenly, and everyone – individuals and institutions – is expected to adopt them. In some ways, these become litmus tests. Depending on a company's prominence, its leaders are expected to pass these tests in various forums and the media.
Most executives have chosen the path of least public resistance and adhered to whatever the prevailing cause may be. This has included public statements of support and re-orientation of core operations. It has occurred on issues of social and cultural concern and geopolitical conflicts. There are, however, never-ending requests to take a side, and as certain issues have demonstrated, there is a lack of clarity on what side to take.
In a changing world, companies should instead adopt a mission-first orientation and return to first principles of maximizing value. This means being apolitical and not adopting public positions unrelated to the core business. Being mission-first does not mean violating the law, acting unethically, or avoiding community engagement. It does mean staying in the lane of an institution’s mission.
The impact of this approach leads to internal clarity, external consistency, and deep focus on a company's core. This increases productivity, efficiency, and profitability.
Ultimately, more high-performing companies also mean more value for society.