‘Nothing comes to my desk that is perfectly solvable. Otherwise, someone else would have solved it’, explained US President Barack Obama to a journalist in 2012. He said this in a moment of candour before the presidential election campaign got underway in earnest, before such frank insights are replaced by the blunt certainties required by campaigning. He went on to explain that to be president you need to feel comfortable about making decisions when there is a 30% to 40% chance that the decision will be the wrong one.
Of all the millions of words spoken by politicians around the world, these remarks are probably the most instructive in describing the nature of modern leadership. As the world’s two main powers – the US and China – go through the process of renewing their leadership, Obama’s comments succinctly highlight the main theme of Business Intelligence Map 2013: being powerful has never been more difficult.
The last two years have shown how susceptible a highly interconnected world is to rapid political change (the Arab spring), economic crisis (turmoil in the Eurozone) and natural disasters (the earthquake/tsunami/reactor meltdown in Japan). These types of disturbances are not new – the world has long suffered from political, economic and natural upheaval – but the taut connectivity of supply chains and communication networks means that the velocity with which local problems become global issues has changed profoundly.
The coming year promises to compound the sense in which the best laid plans get thrown off track by both a series of major economic and political challenges, and by clusters of seemingly unforeseeable events.
In this year’s Business Intelligence Map we describe some of the fault lines that are likely to run through the world in 2013. In doing so, it is easy to sink into a trough of despondency at the number of major political, security and economic challenges we face. Seeing risk is easier than finding opportunity, and that is what consumes business leaders confronted by the sheer volume of conflicting opinion and confused data about what is happening in the world and in their business.
Add in the demands of tighter but sometimes contradictory regulation and a rise in aggravated shareholder activism, and you can see why global CEOs often talk of being caught in a maelstrom. This sense of unease is only heightened by the asymmetric threat from cyber-attacks and the vulnerability of data-dependent organisations unable to patrol their virtual perimeters effectively.
Many companies find themselves managing their affairs on twin tracks. On the one hand, they have teams of their best people aggressively seeking new opportunities in complex and opaque new markets, while separately they are devoting ever greater resources to avoiding reputational or governance crises. The result can be paralysis by risk management, whereby the organisation – gripped by existential angst – fails to find the right degree of creative tension between the two imperatives of risk reduction and risk taking.
However, contrary to the pessimistic tone of much news reporting, there are numerous examples of markets abundant with opportunity: Colombia, Myanmar, Indonesia and much of sub-Saharan Africa, for example.
It is hard to imagine that the Chinese and US leaders taking office in 2013 do not occasionally wake up in the middle of the night and wish they were doing something else. Maybe not: it is probably in the nature of political ambition to eradicate those agitated moments of self-doubt. But even if they sleep soundly in their beds at night, the challenges they face are significant, not because the world is more at risk than ever before, but because the pace of events and the speed with which the local becomes global is unprecedented.
An extended version of this article is included in this year’s Business Intelligence Map, AnnaPurna Consulting’ annual analysis of key political and security risk trends for the year ahead. The full report and map are available to download from the AnnaPurna Consulting website.