Sunday, January 31, 2010

A Lesson in Persuasion at the World Economic Forum

Persuasion is a key ingredient to success. It’s true whether you're a hollywood screen writer, corporate employee, or international diplomat. In each case, your objective is to influence your audience, your boss, or your enemy or ally to feel or act a certain way. Refugee Run, a one-hour simulation of terrifying refugee life at this year’s World Economic Forum, persuades in a way that is unique and particularly effective.

As we've previously written in this blog, Refugee Run places Forum delegates in the environment and mindset of what it’s like to be a refugee – bare tents, crying women, warring gunshots, barking soldiers, dark silence, and frightening unpredictability. We partook in the experience and realized that it was more intense and jolting than expected. Kudos to Refugee Run for re-creating such an experience so powerfully. But beyond the Run's ability to re-create an experience is its ability to influence the "rulers of the universe" who go through it.

The Run inspired Richard Branson to take over Mia Farrow's hunger strike in 2009. It compelled COO of Facebook, Sheryl Sandberg, to reach out to strategic business partners to explore more ways to help. And it's rumored that, at this year's Forum, it compelled Jeffrey Sachs, in concert with UN Global Impact, to bring the Refugee Run to their Leaders Summit in June 2010, a summit that, according to UN Global Impact Executive Director, Georg Kell, will host 1,000 international CEOs.

At the World Economic Forum, an environment in which who is saying something is sometimes more persuasive than what is being said, Refugee Run bucks the trend altogether in how the message is communicated – through experience, not simply discussion or Powerpoint presentation. It's a lesson in persuasion that we can all learn from and is applicable to numerous contexts, whether that context is solving the world's most pressing challenges or dealing with a problematic boss at work.

Saturday, January 30, 2010

Business Meets Goodwill at the World Economic Forum

At Davos this year, there is a lot of talk about humanitarian aid, particularly in light of the recent Haiti disaster. It’s not surprising then that many are applying business principles to the problem. What is surprising, or least interesting to us, is the consistency in applying one particular framework to humanitarian assistance. McKinsey is talking about it. Manpower is participating in it. Jeffrey Sachs is advising about it.

That is: Supply Chain Management. It might sound scary (that's many times what business jargon does: scares us) but it’s actually quite basic.

It starts with a simple question: How do we get aid from the Have’s to the Have Not’s? It’s best to use an example – let’s use the AIDS epidemic in Africa. On the one side, pharmaceutical companies make drugs to combat AIDS. On the other side, millions of Africans are infected with AIDS with no access to the right drugs. How do the right drugs get to the people who need it? Then, we identify what the supply is – either a product or service – in this case, pharmaceutical drugs. (We could even talk about people (that is, doctors) in the recent case of Haiti). Next, we break down, into discrete pieces, the points through which the supply is taken: (1) Pharmaceutical company, (2) Shipping company, (3) Port, (4) Village, (5) Individual. That is our “supply chain.” (The supply chain can look quite different than this – and get complicated pretty fast – depending on context). Finally, we determine how we get from one chain to the next, which is usually a question of who. Who is responsible for moving supply along the chain? The answer, in a lot of successful cases, is “Private-public partnerships.”

In the case of AIDS in Africa, for the most part, big US pharmaceutical companies (#1) have been responsible (sometimes with US government help) for committing a certain amount of drugs to ship (#2) to the appropriate African port (#3). At that point, the private companies’ expertise typcially ends. Another group must pick it up from there. NGO’s (sometimes with UN help), with their local expertise, are typically the best to distribute aid once it’s “on the ground.” From the port, they transport it to the right villages (#4), then get it to the right people (#5).

As a stark reminder of the importance of the supply chain as well as organizations’ roles along it, Jeffrey Sachs, at an intimate panel discussion, recanted that ten years ago, pharmaceutical companies started to realize that their drugs just sat in boxes at major African ports. They weren’t reaching those in need because there was no infrastructure in place to get the drugs to villages. Many died as a result. Some on the panel (which consisted of the CEO of Manpower, Executive Director of UN Global Compact, Deputy Chairman of KPMG, and President of Global Hand) nodded as Sachs mentioned that it was at Davos, that same year, that “Big Pharma” highlighted this challenge. They connected with the UN and international NGOs to link the last few supply chains together, ultimately ensuring that the drugs reached those in need.

It’s exciting to see business and humanitarian causes work handed-in-hand, not just “on the ground,” but also in concept. Transferring knowledge from one sphere to make the other better (in this case, the framework of supply chain management) is one of the World Economic Forum's biggest strengths. Where else do the "rulers of the universe" gather, in such quality and quantity, with so much focus and thought dedicated to combatting some of the world's greatest challenges? We have our criticisms of the World Economic Forum (many do), but it's worth highlighting the great good it serves as well.

Friday, January 29, 2010

Out and About at the World Economic Forum

The World Economic Forum, in Davos, Switzerland, hosts a dynamic, intelligent, and opinionated group of approximately 2,000 international business and political leaders, referred to, in some press accounts, as "rulers of the universe."

As we partake in the broader Davos Experience, we're talking to a large cross-section of participants - leaders of the world's most respected businesses to non-profit practioners at the world's most respected NGOs - for a unique take on this year's Forum. This is what we're hearing after just a couple days (most of this comes from off-the-record conversations with well-positioned Forum delegates, so we are unable to attribute most of it to specific individuals):

Problems and solutions. We spoke with an internationally renowned business leader and seasoned problem-solver, who provided some of his insight and perspective on this year’s Forum:
  • He bemoaned that too much focus at this year’s Forum is on problems and not enough is on solutions. He thinks the number and nature of agenda topics make sense, but the way they’re being discussed leaves something to be desired.
  • Continuing on the theme of solutions, he commented on the Goldman Sachs backlash that, as of late, has monopolized press coverage in the aftermath of the financial crisis. (That is, Goldman's profits are skyrocketting, and the company is on the verge of paying out huge bonuses. This, when many have claimed that their financial viability was salvaged by the government’s decision, in the eye of the financial storm, to pay Goldman 100 cents on the dollar for faulty AIG credit, as part of the AIG bailout). He said that Goldman’s is an emotional problem – it represents such a small piece of what’s going on and what needs to be solved in the broader financial crisis context – and as such needs an emotional solution, not a rational one. So we won’t be surprised if in the coming days, weeks, or months, Goldman responds, not with a numbers- or data-driven solution to address the public’s hostility and Congressional concern, but rather with a symbolic or feel-good solution, likely non-profit, or “common good,” in nature (which ironically won’t much touch their bottom line, but will address the hostility).
  • Of the tone at this year's Forum, this sought-after mind called it “somber.” Whereas last year, delegates were shell-shocked amidst the depths of the financial crisis, this year, delegates are keenly aware of the unprecedented nature of the recovery ahead and their responsibility in blazing a trail out of it.

Bill Clinton. Bill Clinton is to the World Economic Forum as Michael Jackson is to 80's pop music. So his presence is cause for great fervor, even among the Forum's elite class of participants.

  • One off-record-conversation he’s had this year was with a group of promising global talent that the Forum christens its “Young Global Leaders” (YGLs) – a young group of 200-300 promising thinkers, business managers, and political leaders, chosen annually by the World Economic Forum. Clinton spoke to the YGLs about current events including Afghanistan-Pakistan, US Healthcare, Haiti. When we asked one YGL whether the discussion was juicier than what we would read in the papers, this YGL responded, "It's Bill Clinton. He's not stupid. He knows everything he says is on the record.” But while Clinton didn’t vary much from what he’s said in the past, this YGL still thought it somewhat of a coup for him and about 50 other YGL's to get Clinton all to themselves for about an hour.
  • Bill Clinton is also spending a lot of his time raising funds for Haiti relief, most likely doing a lot of back-slapping and arm-twisting at his Clinton Global Initiative (CGI) party, during the Forum’s first night. “Nightcaps” as they’re officially called by the Forum, this nighttime party was one of the year’s most exclusive at Davos.

Refugee run. Outside the walls of the Forum’s main hall is something called the Refugee Run, a joint effort between UNHCR (The UN Refugee Agency) and Crossroads Foundation (a non-profit dedicated to raising awareness of (and support to combat) the plight of the world’s less fortunate through experiential learning) meant to provide Forum delegates with an intimate understanding of the global refugee problem. For one hour, it places delegates in the environment and mindset of what it’s like to be one of the world’s 42 million refugees – bare tents, crying women, warring gunshots, barking soldiers, dark silence, and frightening unpredictability. In only its second year at the Forum, the Refugee Run boasts delegate participation varying from Ban Ki-moon to Richard Branson. According to one of the Run’s organizers, it was Branson’s participation in last year’s Refugee Run that inspired him in May 2009 to finish Mia Farrow’s hunger strike (after Farrow's frail health prevented her from continuing) to protest Sudan's removal of several humanitarian agencies from Dafur, a region known to produce a large number of refugees living in terrifying conditions.

New leadership. We ran into Bill George on the streets of Davos. (He's fast becoming the de facto, resident expert on leadership for The Popped Kernel). In our ten minute walk through the crisp air and snowy sidewalks, he made clear his optimism for the new generation of leaders, slowly taking over key positions in business and politics internationally. He thinks this new group of leaders brings with it an unprecedented consciousness of and for the common good. Remember, this is the man who, in our interview with him in November 2009, told us that the financial crisis of '08-'09 was driven not by sub-prime mortgages, so much as by “sub-prime leadership.”

Banking regulation. Bankers and financiers are uneasy, if not outright worried, about the banking regulation that the Obama Administration proposed a few weeks ago.

  • The regulatory curbs aim to prevent the "too big to fail" mentality of the recent economic crisis that, in retrospect, incented big banks to take disproportionate risk, whereby if they're right, they reap huge rewards and if they're wrong, taxpayers pick up the tab. There's also an element of disentangling investment activities, whereby banks would not be able to run hedge funds, nor would they be able to trade on their own behalf.
  • Congressman Barney Frank, Chairman of the House Financial Services Committee, is omnipresent at the Forum (We saw him outside his hotel, inside the Newsweek luncheon, and of course, he's a power center inside the main hall). Congressman Frank is in a position to shape Obama's banking regulation in the House, and as such, participants are clamoring to hear what he has to say as well as influence his committee's ultimate direction on regulation. Of the influence that financiers and their lobbyists are trying to exert, he says, "I don't pay any attention to it. It has no effect on public policy. We have been glad to discuss things with them. They have information, but we have decided to go ahead with this (regulation)." (as quoted in the International Herald Tribune)
  • Larry Summers, Obama's chief economic adviser, is also at the Forum. In the Forum's main hall, he clarified and defended the Obama regulation with moderator Charlie Rose.

What has become clear, since Obama's announcement two weeks ago, is that there will be regulation - everyone has accepted that as fact (which is a feat in and of itself). What is less clear is what exactly the regulation should or will be.

China. Much hay has been made of the fact that China represents the largest delegation at this year's Forum.

  • People are starting to talk about the "China consensus" as opposed to the "Washington consensus" - the notion that what comes out of Bejing is more influential to world affairs than what comes out of D.C. Additionally, bets are being made on when exactly China's economy will over-take America's (2020 appears to be a safe bet).
  • Some Western delegates have been overheard calling China’s presence here "arrogant," not so much for its size as for its attitude. One delegate framed it relative to India’s presence and tone: “India is begging; China’s just being. China's here. They’re listening. But there’s an air that they can manage it all better. But that’s not necessarily true. And that concerns me.”
  • A seismic shift is happening both politically and economically as the Sleeping Giant awakens from slumber and rises to power. Its ascent is highly controversial in that the implications are far from certain. Where there is uncertainty, there is discomfort. And where there is discomfort, there is a desperate effort to control the situation to regain lost comfort.

This is partially what's happening at the 2010 World Economic Forum. From China to banking regulation, countries and companies, among the chaos of uncertainty, are sizing each other up, both partnering and undermining, at the whim of self-interest, to solve their problems and hopefully, at the same time, the world’s ills. In parallel, from Bill Clinton's fundraising to the Refugee Run's awareness building, the energy and effort behind humanitarian aid is strong and resilient. The question isn't so much about which forces will beat out the rest (financiers vs regulators, self-interest vs public good), but rather how these forces will work harmoniously together.

That is what the World Economic Forum is all about. For an organization that values thought over action, we might end up with more questions than answers by the end of the week, but those questions will hopefully be the right ones, which of course, is the first step to any effective solution.

Wednesday, January 27, 2010

Live from Davos: The World Economic Forum

Nestled in the snow-capped Alps of eastern Switzerland, Davos is home to one of the most high-powered events of the year: The World Economic Forum. Attendees are the world's most influential business and political leaders. French President, Nicolas Sarkozy (pictured at right), opened the meeting with a call for international banking regulation.

The feel here is exclusive, yet the Forum's aim is rather inclusive. That is, how to solve the most pressing concerns of our time, chief among them, health and education challenges facing the world's most needy. Also on the agenda: the direction of the global economy, climate change, and international security & coexistence.

We will be covering the Forum through its close on Sunday, Jan 31. And, as is now typical, we will finalize our coverage with a post mortem analysis.

You can also follow real-time action on Twitter, either by using the #WEF hashtag or following the Forum tweeter @Davos.

Additionally, we recommend checking out:
- Live streaming video of the World Economic Forum
- YouTube's World Economic Forum channel
- Wall Street Journal's World Economic Forum coverage hub