Blog article

To see the future more clearly, find your blind spots

It was the year we saw it all. And 2020 was also the year we didn’t see it all coming. Wildfires. Floods. So many storms in the Atlantic that meteorologists had to resort to the Greek alphabet to name them. Global protests over racial and economic inequality. And, of course, the pandemic.

What is surprising is that we were surprised. In a recent PwC study, 69 percent of responding organizations had experienced a crisis in the past five years and 95 percent expected to face one. We all watched Australia aflame in the months before the pandemic. California, too. It was only three years ago that multiple storms rattled the Gulf Coast in the United States in rapid succession. And climate watchers had been predicting that there will be more of these severe weather events in the future.

And the pandemic? Severe Acute Respiratory Syndrome (SARS) in 2003, H1N1

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A Malaysian conglomerate charts a course to stay ahead

Sime Darby, one of Malaysia’s leading and oldest conglomerates, underwent a major restructuring in 2017. The agricultural plantations business, which is more than 100 years old, and the property divisions were spun off into separate entities. Sime Darby Berhad was left with the high-profile automotive assembly and distribution businesses (it holds the rights to sell for BMW and Rolls-Royce across Asia), industrial heavy equipment, logistics (it runs ports in China), and a smaller healthcare operation.

This mix of businesses and their geographic spread have helped the company face the challenges of 2020, according to Jeffri Salim Davidson, who has led the realigned entity since December 2017. Revenues increased 2 percent for the year ending June 30, 2020, to US$9 billion, even as the impact of COVID-19 saw net profits decrease by 14 percent to $200 million. (The government of Malaysia holds a majority stake in the company, through state-owned fund

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How board directors can advance racial justice

In 1977, Rev. Leon Sullivan, an American Baptist minister, civil rights leader, and corporate board director, created a set of guidelines to engage U.S. corporations in resisting and eliminating legalized systemic racism under apartheid in South Africa. Known as the Sullivan Principles, these guidelines urged company leaders to promote racial integration in company facilities; equal pay for equal work; the advancement of more Black and “nonwhite” employees to supervisory positions; improved housing, schooling, and recreation and health facilities for all employees; and other targeted measures.

More than 40 years later, we are witnessing a similar call to action. The killings of multiple Black Americans by police and the disproportionately negative effects of COVID-19 on Black and brown communities have heightened social consciousness, spawned worldwide protests, and catapulted strategies to end systemic racism to the forefront of corporate agendas. There is growing recognition of the need to transform this moment

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The stakeholder–shareholder debate is over

The coronavirus pandemic has created significant distortions in our sense of time. But let’s rewind to August 2019, a safer, long-ago era, when arguments about masks were more focused on costume parties than scientific data.

That is when the Business Roundtable published its opinion about the purpose of a corporation, proclaiming that companies should no longer act only in the interests of shareholders. Instead, the group of CEOs said, companies should also invest in their employees, protect the environment, and deal fairly with their suppliers.

“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders,” read the statement by the Roundtable, which represents and lobbies for many of America’s largest companies. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

The pronouncement was widely seen as

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USAA’s critical mission

USAA, an insurance company known for its devoted customer service, is a quiet giant in the industry. Based in San Antonio, USAA has a unique business model: It serves members of the military and their spouses and children, insuring their lives, homes, and autos. From its humble origins in 1922, the company has grown into one of the largest in the United States — number 94 on the Fortune 500 list, with more than 13 million members and US$207 billion in assets. Wayne Peacock, a 32-year veteran of the company, rose through the ranks to run its property and casualty insurance group. Peacock, the first CEO of USAA not to have served in the military, assumed the top

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Stop trusting your gut

A company leader’s existence is a long series of decisions, yet many executives don’t have a systematic approach to making those decisions. They rely on intuition; they don’t have an accurate understanding of their track record over time; and they fall prey to biases, cherry-picking new information to reinforce existing beliefs rather than looking at data objectively. These are challenges that Annie Duke has experienced firsthand.

Duke studied cognitive science at the University of Pennsylvania and was a few months from completing her Ph.D. when she had to take time off for health reasons. She started playing poker, thinking initially that it would just be something with flexible hours that she could do until returning to her studies. But she turned out to be very, very good at the game. Duke played professionally for 18 years, winning a World Series of Poker championship (one of the game’s biggest prizes) in

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