Executives in a rapidly changing world (1)

1. Introduction

　A crucial issue for many companies in the world is developing high-level executives.
  A survey reveals that large US companies spend more than 1,000 US dollars per person per year. According to Japan’s Nikkei Shimbun newspaper, in the past few years, the expenditure of Japanese companies on training has increased.
However, such massive spending does not always result in the successful development of executives.
 I, Toshiyuki Yamanaka, am a business consultant in global social innovation and leadership. I have established a training company and I am a professor of the Graduate School of Kobe Institute of Computing, where I teach innovation and leadership to African and Asian entrepreneurs.
I have visited more than 90 countries and discussed various business issues, such as leadership development, in a rapidly changing world.
 In this article, I would like to focus on our rapidly changing world and several proposals to nurture executives.

2. State of Problem

　I believe that global companies face five primary challenges. In this article, by global companies, I mean companies that sell their products and services in several countries.

  First, people across the globe are now living in Volatility, Uncertainty, Complexity, and Ambiguity (VUCA).
This forces companies to become more flexible and surrender traditional methods, despite being successful. For example, Kodak, an American camera film company, reached a record high in about 2000. However, since then, the camera film market shrank very rapidly and Kodak went bankrupt in 2012 (before recovering). To the Kodak case is an old one. VUCA trends have accelerated since then and management understands this reality. To nurture executives, it is necessary for companies to change their ways.
  Second, in a global society, there is increasing need for global common goods. Currently, global common goods have the objective of “Sustainable Development Goals” (SDGs), which were adopted by the 193 Member States of the United Nations at the UN Sustainable Development Summit in September 2015. Every executive in the world needs to consider SDGs when confronting management issues.
　Third, the borderless economy has become a reality. Products, funds, and information cross borders easily, despite national boundaries. In addition, the boundaries between industries will eventually disappear. For example, twenty years ago, Toyota never thought that Google would build a car. However, automobile companies and IT giants are now rivals.
  Fourth, technological advancement plays a much bigger role in society. Artificial Intelligence (AI), Robotics, Internet of Things (IoT), and biochemistry have huge impacts on human life. Upgradable intelligence agency enters a self-improvement cycle era. Human society may change completely in a few decades.
　Fifth, “winner takes all” has become a reality. In a rapidly changing digital era, an IT company that builds a digital platform easily dominates a market. The corporate world may soon divide into IT giants and other small-sized companies.
 
3. Ideal executives

  Companies have developed executives by training promising prospects and recruiting individuals with high potential, who have achieved great results. Many executives are MBAs or executives with equivalent achievements. At an MBA school, students learn business theories or cases.
I believe that it is important for future executives to study MBA subjects. However, it is possible that some theories or cases may not be useful and may even be harmful in this rapidly changing world.
  Therefore, it is clear that requirements for executives have changed significantly in the past decade.
　First, executives must understand the reality of VUCA, as they face a swiftly changing world and have to analyze various business issues in uncertain conditions. Although the executive may have learned business strategy at a business school, such strategies may not be very useful. Therefore, executives should not hesitate in abandoning former strategies. Their training should enable them to analyze severe situations in a VUCA world. Essentially, executives require more diverse experiences than before. In the next article, I would like to discuss training executives.
  Second, executives in global companies must examine not only their own organizations (and customers, suppliers, society, and so on) but also the earth, as SDGs have become targets for all governments and companies.
“Sanpou Yoshi” or “Good for three” is a traditional Japanese proverb, which means that a merchant should consider benefits to customers, society, and vendors, simultaneously. However, we must now change this to “Shihou Yoshi,” or “Good for four,” that is, benefits to customers, society, vendors, and the earth.
  Third, executives should continue learning to adjust to this rapidly changing world. This makes “unlearning” a critical task for leaders. In addition, executives must constantly study and learn to implement technological advancements into business, even lacking technological expertise themselves.