Sam Lakha, Manager, Volans Outreach.
Fortune Global 500 in the eye of storm
Took part today in a so-called Roundtable for the Fortune Global 500 in the BT Tower, though the event was mainly held in a small auditorium. Theme was global innovation, but, understandably, this was somewhat side-swiped by the turmoil in the financial markets. Kicking off, BT CEO Ian Livingston noted that the evening’s cocktail party would be held at the top of the Tower, from which people would get the best view in London, but not necessarily be able to see much further into the murky future of capitalism. He noted that much of business could be scapegoated for the crisis - and argued that corporate social responsibility and sustainability initiatives are likely to be even more important in such circumstances.
Something that Wipro co-CEO Girish Paranjpe said will stay with me, that countries like India that have benefitted from the outsourcing and offshoring trends (something SustainAbility covered a while back in a report on the social impact of offshoring, commissioned by BT) are having to move up the learning curve very fast. They started off doing things cheaper, then aimed to do things better - and the next stage will be to do things differently.
Focusing on innovation, Bob Corcoran, GE’s Vice President for Corporate Citizenship, quoted GE founder Thomas Edison’s well-known saying to the effect that innovation is 1% inspiration and 99% perspiration, but then went on to describe how the company is learning powerful lessons on how to do new things by working in ‘bottom of the pyramid’ markets. For example, a water treatment technology developed to cope with the aftermath of the Asian tsunami has now sold 4,000 units to the Russian oil industry, if I remember correctly.
GE has just been backed to the tune of $3 billion by investor Warren Buffett, who is now being suggested as a possible Treasury Secretary in the US. Corcoran’s co-panellist Ann Moore, Chairman & CEO at Time, Inc., recalled that she had been playing cards with Buffett when he took the call from GE and decided to invest. She also noted that the huge pressure on the media world to provide content for free is squeezing budgets and, particularly worrying, hitting fact-checking. She instanced a recent case where Google carried the ‘news’ that United Airlines had gone bankrupt, apparently filed by a news-gathering ‘robot’, with devastating effects for UA, whose shares had to be suspended.
Clearly, we’re stuck with turbulence, to put it mildly. Against this backdrop, five key messages stick in my mind. One is that it is time to accelerate, not rein in, innovation. Second, many of the breakthrough ideas, technologies and business models will be discovered in emerging and developing economies rather than in rich world R&D centres - an idea that is central to our work at Volans. Third, in design terms we need to radically simplify things again. (The economy is collapsing around our heads because no-one really understood derivatives and all the other complex instruments the financial institutions have become addicted to in recent years. There has been a “contagion of complexity”. But, as one of the panellists put it, it is much easier to design a complex tool or process than an effective simple one.) Fourth, as Ian Livingston stressed, this is a time to keep our eyes on opportunities - and hold our nerve. And, fifth, I was reminded just how much I enjoy reading magazines like Time (and arch-competitor Newsweek, too, I confess) and Fortune (BusinessWeek, too).
The address for this blog entry is: http://www.volans.com/2008/10/fortune-global-500-in-the-eye-of-storm/.
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