The challenges of business leadership today

3 january 2014

Based on an interview with Desso CEO Alexander Collot d’Escury by US Duke University business alumni magazine, Dialogue, September 2013.

Business leaders need to manage the very tough recessionary reality now while keeping a firm eye on the opportunities ahead and building the talent and infrastructure to be a winner in the long term. Business schools should continue to encourage students to have a global mindset and to plan to work in as many different markets as possible. But they must also be well versed in the way the global business environment has changed in the last decade. Great innovations and global companies are emerging out of China, Latin America and Asia and are challenging Western companies on every level from innovation and product leadership to cost leadership.

By 2025, McKinsey calculates the amount of goods and services consumed in these newly charged economies will go up from $12 trillion in 2010 to $30 trillion by 2025, nearly half of the world’s total.

Global leaders must know how to compete in this environment and how to hire the best talent to help take them forward. The importance of providing added value products and services in markets to customers remains the same, except now many of the customers are new to the market. One example is how ‘frugal innovation’ that has been developed in rising markets.

At Nestlé, for example, where I gained my earlier experience as a global manager, we developed new ways of producing and delivering products in countries like India. For instance, in the case of the branded chocolate product Kit Kat we developed ways to ensure it did not melt, made it smaller and therefore more affordable and ensured it was set up for transport on small bikes.

This kind of knowledge I took forward in my role at Desso to develop an extremely successful carpet product at Desso known as Essence which is made in a simpler way and is therefore more affordable, but with no compromise on great design. For instance, we reduced the number of colours available to reduce stock complexity and lessened the yarn weighting.

Fast track managers need to gain as much global experience as possible as I did when I worked across different markets for Nestlé. You gain a greater understanding of different cultures, languages, and ways of doing things. Having sensitivity to this helps business leaders place the right emphasis on hiring and developing managers who will be open minded and sensitive to other cultures.

Outside of that you need to ensure the organisation has a worldclass operational system so that you offer fast, flexible and flawlessly executed service to all markets. Plus, the ever important driver of innovation needs to be at the top of mind. Innovation is spurred on by connections between people from all markets. So, at Desso for example we have run Circles of Architects® for years to great effect; architects and designers from across the world join our people in discussing new prototypes. We get valuable feedback and innovation is enhanced.