Chair Martin Walker, a journalist, author and policy expert, was hotfoot from the annual IMF- World Bank Annual meeting in Washington DC, where policymakers were pondering another global recession. Walker introduced the JAC conference theme: "Better Business - Better World", and was excited to see Africa prominent on the day's agenda.
First up was Josef Ackermann, CEO of Deutsche Bank. With Swiss roots and a doctorate from elite St Gallen University, Ackermann has been at Deutsche bank for 15 years and Chairman of the Board for the last five. His talk focused on the various criticisms of investment banking following the financial crisis: lack of trust in the industry; inefficient passive investment strategies; flawed algorithmic trading models; price movements detached from reality and the unruly size of financial institutions. He acknowledged that financial markets are prone to imperfection and that further measures should be taken to reduce the risks in banking, but he fervently defended the importance of financial market signals, the liquidity provided by high-frequency trading and the benefits of M&A activity to the economy. In summary he said the world needs strong cross-border banks.
One member of the audience asked: "Why are bankers paid so much - don't other industries have the same brains as the banks?" to which Ackermann responded that compensation is determined by "supply and demand" and that experienced bankers (wherever they are in the world) have a high market value. Another question from the floor was "Can Switzerland be the financial capital of Europe" to which Ackermann replied "No, but Switzerland should focus on it's relative strengths" such as private wealth management, where the country has a long-standing reputation for excellence.
Switching from derivatives to drugs, the next big speaker of the morning was Joseph Jimenez, the CEO of Novartis. Jimenez is a Stanford grad with an MBA from Berkeley and a career running large corporates such as Heinz and Astra-Zeneca. Jimenez explained the Novartis strategy of growing by internal science-based research and listed three focus areas for his company: to innovate and bring new medicines to market, to offer a mixture of high-cost and low-cost generic medicines to governments and to build a broad product portfolio. He said the old pharma sales rep model must change and that the role of pharmaceutical companies should be to, "Help the payer or physician deliver a positive patient outcome". The global healthcare market is expected to grow from USD$1 trillion to $1.3 trillion in the next five years and Jimenez stressed that the world's ageing population needs medical breakthroughs from pharmaceutical firms.
Jimenez sparked some lively questions from the audience: Q) What about personalised medicine? A) Yes this will be a growth area - we need to reduce the number (currently 30%) of patients who don't respond to a medicine; Q) Will Novartis innovation include food products? A) No, just science-based healthcare, we'll leave food to Nestle; Q) How can we make people take responsibility for their own actions? A) Novartis is working with governments on preventative techniques, particularly in the US where 30% of GDP is spent on healthcare vs 3.5% in Singapore.
From a very different perspective Mo Ibrahim, telecommunications entrepreneur and philanthropist, provided an overview of African governance and what still needs to be done for 'Better Business' in the region. Ibrahim reflected back to the Cold War, which he believes was "worse for Africa than Colonisation", turning the continent into a chess board between the US and Russia and creating an local corrupt megalomaniacs. Africa has moved forward since 1990 and although corruption and criminality still persist, the bigger issue is actually "mispricing", notably the exploitation of African resources, often by well-known Western multinationals. This is "theft" from Africa, something which we cannot ignore. In an attempt to change the course of Africa, Ibrahim launched the Mo Ibrahim Foundation in 2006, which includes the Ibrahim Index to assess governance in Africa and the innovative Ibrahim Prize to recognise excellent African leaders.
Another speaker passionate about Africa was Anat Bar-Gera, an INSEAD MBA and co-founder of internet company 4G Africa who's vision is to close the digital divide across Africa. She said "what Mo Ibrahim has done for voice we want to do for data" and believe "you can't talk about a Better World and leave Africa behind". Similarly, Dr Akram Eltom of the The Global Fund to Fight Aids, Tuberculosis and Malaria, made the point that Africa represents 50% of the world's population but only 4% of global GDP and sees huge opportunity to improve public health and increase productivity for the African region.
Next up was Pamela Thomas-Graham, an HBS alumnus, who cut her teeth at McKinsey for 10 years and is now in charge of Talent, Communications and Branding for Credit Suisse and the only female on the executive board of the bank. Thomas-Graham said her goal was to build a winning culture with a "virtuous circle of external messages, internal talent and growth" for Credit Suisse. For their "human capital strategy" she said they were looking for people who are great listeners, persuasive and able to synthesise ideas, and were focusing on campus recruitment where they can get people early in their careers who can grow and develop internally.
Before lunch two charismatic professors shared fresh thinking from the business school world. Dipak Jain, the Dean of INSEAD, marketing academic and board director, declared that business schools should be about profits, people and the planet. He referred to the recent criticism of business schools producing greedy human talent but said "to forgive is good, to forget is better and to move forward is the best". There are fundamental global challenges that business schools can help to tackle - such as ageing populations and that China might get old before it gets rich. Jain engaged the audience with a splattering of personal anecdotes, such as surviving the Tsunami on December 26, 2004 and presenting his welcome address as new Dean of Kellogg on September 11, 2001 whilst two aeroplanes flew into New York's Twin Towers.
David Bach, strategy professor at IE Business School went further to summarise global trends such as population ageing, emerging market growth, urbanization, technological advancement, and how business is responding. One of Bach's specialisms, non-market stategies, looks beyond the traditional market of customers, suppliers and competitors to a wider group of stakeholders including governments, regulators, charities and the media. He talked us through four practical examples of well-known firms who have reached 'beyond the market' to grow their business: Toyota's negotiation with the Californian state to allow hybrid Prius cars in the speedy car-pool lanes; Avon's breast cancer awareness work; Walmart's various environmental efforts including leaner pizza boxes, natural in-store lighting and windmills in car parks; Prudential's financial literacy campaign for women in Asia. All of these companies have generated return on investment ('ROI') as well as societal benefit, through strategies beyond their traditional market.
Following an exotic lunch (with unique combinations such as popcorn salad and chestnut trifle) the delegates dispersed across various break-out rooms and a few ventured outside to network in the sunshine. Afternoon sessions included forums on leadership, sustainable investing, the next energy crisis, entrepreneurship, real estate, corporate governance, Asia, Russia and Africa.
With a packed audience still engaged, the final speakers of the day were Martin Kall, the Chairman of Swiss media company Tamedia, Alberto Grando, the Dean of SDA Bocconi and Bob Lutz, the former Vice-Chairman of General Motors (more on Lutz in a separate video story!) Kall, an HBS MBA, defended the future of journalism arguing that the role of publishing companies like Tamedia, is to produce "well-researched and profoundly analysed" information. Dean Grando drew on Renaissance values (Europe's 15th Century intellectual revolution) for modern-day managers: keep the human being central; maintain perspective on the outside world and respect the environment. Grando described some entrepreneurial successes in Italy - Luxotica (fashion), Cucinelli (cashmere), Ferrero (chocolate) - all family-run businesses rooted in social capital.
The next JAC conference will take place on 21 September 2012, with plenty of other activities in the interim, including the Joint Business School Ball in Zurich on 19th November 2011. For more info contact JAC organiser, Benno Marbach: benno.marbach@jac-conference.org
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