Leadership, Vision, and Beating the Global Odds: An Interview with Paul Laudicina

By: Editor In Chief
Sun 26 April,2015

Paul Laudicina
An interview with Paul A. Laudicina, Chairman, Global Business Policy Council, Partner and Chairman Emeritus, A.T. Kearney

Filed Under: Leadership & Development

Paul A. Laudicina is chairman of the Global Business Policy Council (GBPC) and partner, chairman emeritus of A.T. Kearney. He served as A.T. Kearney's managing partner and chairman of the board from 2006 to 2012, taking on this role after the firm regained its independence through a management buyout. During his tenure, he guided A.T. Kearney through an extraordinary turnaround, recording consistent double-digit growth and expanding its global footprint by 30 percent to include offices in nearly 40 countries, including throughout the Middle East.

He is also the founder and chairman of the firm’s Global Business Policy Council, a forum of CEOs and thought leaders focused on assessing global strategic opportunities and risk management. With more than 30 years of global consulting experience, Paul has worked with leaders of corporations and governments across a broad range of strategic, corporate, and public policy issues. He has also managed many of the firm’s most important institutional relationships and was named to Consulting Magazine’s annual ranking of the Top 25 Most Influential Consultants in 2005 and again in 2007.

Paul is the author of a number of articles and books on global strategic issues, including Beating the Global Odds: Successful Decision Making in a Confused and Troubled World (Wiley, 2012) and World Out of Balance: Navigating Global Risks to Seize Competitive Advantage (McGraw-Hill, 2005). He also writes a regular column on leadership for Forbes.com.

A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, the firm has been trusted advisor to the world's foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues.

They currently work with more than two-thirds of the Fortune Global 500, the world's largest companies by revenues, as well as with the most influential governmental and non-profit organizations with about 3,500 employees worldwide.

A.T. Kearney’s Global Business Policy Council (GBPC) helps business and government leaders plan for the future. In 1991, Paul A. Laudicina launched the Council and served as its first director. The Council is currently led by Erik R. Peterson, who joined A.T. Kearney in 2010 from the Center for Strategic and International Studies (CSIS), where he served as senior vice president. The core GBPC team is based in Washington, D.C., and draws on the expertise of international experts. The GBPC has recently established a presence in the Middle East, headquartered in Dubai under the leadership of Rudolph Lohmeyer.

What is the Global Business Policy Council, and how did you start it?

A quarter century ago, we established the Global Business Policy Council because we were convinced that the rapid and rather dramatic changes that were taking place in the world at that time would require business leaders, thought leaders, and policy figures, on a regular basis, to pause and take stock of where the world was going. In so doing they could sharpen their strategic focus to take advantage of the opportunities and manage the risks that a rapidly changing world would present. Our retreats bring together CEOs, thought and policy leaders with challenging new ideas. We also publish our own thought leadership and work directly with clients to plan for different possible futures. In brief, the Global Business Policy Council is a window, a lens, through which business leaders can look, with the right kind of people around the table, to get out ahead of the changes that are taking place in the world, so that they can protect themselves against risks and take advantage of opportunities. This part of the world has done those things exceedingly well over the course of the last 25 years or so

What would you say is the reason behind that? Is it something to do with the governments are running this part of the world the way leadership is?

The simple answer to your question is “yes”. I think the leadership of the UAE in particular has been insightful and progressive in looking out over the horizon to understand the forces that will change the dynamics for this region and therefore to engineer a more favorable outcome. Certainly, the choices to diversify the economy, questioned by many at the time, now seem, in retrospect, brilliant. Indeed they were. It took dynamic, courageous, farsighted leadership to be able to effect those changes and to invest the resources to make the transition.

You mentioned that these days you've been analyzing some of the challenges that the region will face in terms of resource availability. What are your views on this subject?

This region will experience shifts. We've already seen it. Oil prices are much lower than anybody anticipated. The IMF forecasts oil prices will be below a hundred U.S. dollars a barrel through 2020. That means that there is, by definition, a shift in the locus of economic leverage between producers and consumers. The UAE will benefit from its diversified economy, but for those countries that haven’t yet diversified to the same extent, there’s also a question of how to diversify into other sources of economic attainment.

If you look back across the broad sweep of history, most of the fantastic failures in forecasting have been largely because of an inability to understand the impact of technologies that might develop. This is

particularly important with respect to resources, where there is tremendous investment in innovation happening around the world.

Are you saying that the challenges that the region, or in this case the world, would be facing are very difficult to predict?

They are difficult to predict. That's why it’s so important to develop a dynamic approach to strategic assessment, so that you can look out over the horizon to help anticipate change and enhance your ability to adapt to those changes.

We're no better at predicting the future today than we were 50 years ago. In fact, we’re probably worse because things are changing so rapidly. That’s why we don’t predict the future: We look ahead through scenario-based strategic planning, not to forecast events but to forecast the forces that are likely to shape the future, to enhance our ability to deal with the present.

I like to quote Peter Drucker, one of the fathers of modern management science. He used to say, “Strategy is a sense of direction around which one needs to improvise.” Essentially, scenario-based strategic planning, which this region has adopted so well to its advantage, gives you the resiliency, the adaptive capacity, the ability to be able to shift direction when conditions compel you to shift direction.

Good leadership requires this kind of planning, having a vision which is compelling to the community around you. Leaders with vision are able to inspire people to reach beyond themselves and to do what behavioral economists tell us is the most difficult thing to do. The only way you get people to loosen their grip on what they have now, however inadequate, is by inspiring them with a vision of what is to come if they do loosen their grip and they are prepared to do what's necessary to invest in the future. Here in this region, leaders have done that effectively.

In order for leaders to be effective, they also have to be authentic, capable, and reliable. First, of course, they need to be authentic. People need to believe that their motivation is in the best interest of the public. They need to trust that individual. We use this word “trust” as if there's only one dimension to it. But trust is more than that. Two dimensions that I think we often overlook are capability and reliability. Is a leader capable of delivering on what he/she promises, either because he himself has the ability or because others may permit or not permit him to deliver on it? Has the leader reliably delivered on what he's promised? I think in this region, we see leaders that are judged to be authentic, interested in the welfare of the public, that they have been capable in delivering on what they promise, and reliable in demonstrating that over time, they've gotten it right. That's the right formula.

You led a turnaround at A.T. Kearney nine years ago. How can organizations approach a fundamental change of direction?

Peter Drucker used to say that companies fail, not because they do the wrong things, not even because they do the right things poorly, but because they fail to perceive a change in the theory of business. By “theory of business,” he meant the forces that shape the environment in which business operates. If you look at the roster of the Fortune 500 and you realize that two-thirds of them from the original 1958 list no longer appear, many of them are gone largely because they failed to see a change in the theory of business, changes in fundamental technology which upend their business model, changes in demographics and consumer taste and preferences, changes in geopolitics and macroeconomics.

A new book by some of my A.T. Kearney partners, The Future of Strategy, capitalizes on these insights. It's really about the notion, very importantly, that strategic planning is not a top-down process. Strategic planning, if it's going to be effective, has to be a process that engages all of the stakeholders in a common view of the future so that everyone involved understands that they're working toward the achievement of a common vision which ignites the passion and purpose that drive performance.

No one ever succeeds by just striving to perform. You have to understand what value you are adding. What purpose is motivating you? What passion ignites you and gets you across that finish line? The development of vision is part of that process. That's what's so exciting about this region.

You are regarded as one of the top 25 most influential consultants worldwide. What took you to do this? I mean how did this whole thing get started?

I think it's about purpose. It's really understanding why you do what you do and motivating other people to find their own purpose in what they do. No one ever got wealthy by pursuing wealth. You get wealthy by pursuing your passion, the things that really drive value creation. For me, I have a very interesting history. I started studying for the priesthood early on in life. Then I worked with the United Nations. Then I worked as a strategic planner with a major oil company. I subsequently led a United States Senate staff, after which time I went to SRI International (the former Stanford Research Institute), and I’ve been the last 25 years with A.T. Kearney.

I have been very privileged to have had the extraordinary opportunity to see the world through multiple lenses and vantage points. That has given me the ability to integrate the best of what I see everywhere and cross-fertilize. It's that wonderful opportunity to move from different environment to different environment that enables me to build my own grounding, purpose, and direction about what we need to do to unlock the power of private sector development, leveraged by enlightened government leadership with a clear vision of the future. That motivates me – and I hope can motivate others – to do the right thing.

Across the variety of perspectives that you see, what are the most common challenges that leaders are facing?

I think enlightened leaders realize that they can't do it alone, that leadership is really a team sport. A leader has vision, and is capable, reliable and authentic, but then also must engage others in the task. Business leaders need to work closely with government leaders and with the public.

We need a new social compact, because no one of these actors can succeed on its own. Business, without the enabling environment of government, is finished. Government, without sustainable growth which business can generate, ends up sharing the poverty rather than the wealth. The public, not engaged and employable and with reasonable hope of realizing rising expectations and incomes, can't buy the products that business produces, nor will they vote for and support the governments that try to lead them. So leadership has to be a team sport.

In Beating the Global Odds, I make three points. Value creation has to drive wealth creation. We need to think longer-term and cross-border, yet our economic and political cycles often constrain us and force us to think short-term and intra-border. And there is now, for the first time in history, the perfect intersection between doing good and doing well. It is no longer possible, if ever it was, for business

leaders to do well by their shareholders if they do so at the expense of the broader community of stakeholders.