André Schneider on what needs to be done
André Schneider Managing Director & COO, World Economic Forum
Over the course of its history, the World Economic Forum has achieved a proud record of accomplishments in advancing progress on key issues of global concern. In this, the 40th Annual Meeting, the World Economic Forum responds to new global priorities by defining as its organizing theme a call to action – “Improve the State of the World: Rethink, Redesign and Rebuild”.
Prior to the January 2010 Davos Meeting, Swiss Style met with André Schneider, Managing Director and COO at the World Economic Forum, to gain some insight into how he perceives the problems we face and what he thinks needs to be done.
He was forthright and adamant in insisting that certain steps must be taken in view of the lessons learned over the past year if the state of the world is to be improved.
The era of multistakeholders
The last 24 months have been turbulent to say the least. In these dire times, the World Economic Forum is trying to show people that there is light at the end of the tunnel, but getting out of the dark passage will involve recognizing and embracing the evolving new rules of the game.
“First we witnessed the emergence of the financial crisis. It then evolved into an economic crisis and as time goes on we are bearing witness to a rising social crisis. Governments are sinking deeper into debt and unemployment is reaching high levels,” Schneider comments.
This moment of upheaval is forcing leading figures in the business world to rethink how they do business. “If you are the CEO of a company, you have to realize that you are no longer only responsible to your shareholders, employees and consumers,” he adds. “We are entering the era of multistakeholders and corporations are now responsible to a much larger group. The World Economic Forum wants to help companies determine new problems and to come up with approaches to deal with these new challenges.”
Rethinking beyond national borders
Given the drastic circumstances, Schneider sees the need for drastic changes. “The models that have been the basis of business and global governance in the last century are not powerful enough, not inclusive enough, and most of all, they are not dynamic enough to withstand the challenges of the 21st century.”
The need to rethink how to do business is also the consequence of the massive government bailouts that were undertaken worldwide over the course of last year. “How can companies expect governments to bail them out when things go bad and when the situation gets better, they continue using the same flawed business models and basically continue down the same path as before?”
The current situation has raised many questions about how to proceed. “This is why the financial crisis was not just a bubble bursting, but much more.” Schneider firmly believes that we have to incorporate these lessons into dynamic new business models. ”People have been borrowing on the future. As with every borrowing scheme at some point you are pulling out of the system more than it can actually provide you with. There is a threshold on what can be borrowed and beyond that point it can become quite dangerous to do so.”
The global magnitude of the current economic crisis is not only a reason to rethink the predominant business model but also how to cooperate when facing truly international challenges. “Private as well as public decision-makers have to start looking beyond their national borders. We have to understand that it is almost impossible to deal with global challenges, when every leader is wearing his national- interest glasses.”
Approaching the problem from a national standpoint produces domestic solutions, yet this can lead to outcomes of questionable merit. As Schneider puts it, “If different countries adopt different approaches, at the end of the day, we are not solving the problem but merely displacing it.” As an example of this phenomenon, he posed the issue of taxing bonuses. “The UK and France will tax bonuses, Germany won’t and the US is making the distinction whether the company received government money or not. This will lead talent to move from one country to another and is thus something we need to rethink.”
The financial crisis is not the only case that must be addressed globally. Climate change is another issue that has to be dealt with on the international level. “Switzerland might have the most elaborate environmental regulations in the world, but if Switzerland is the only country to do something, than its efforts are almost in vain. The important question is how do we rethink and redesign global cooperation in a way that will allow us to deal with international challenges in the appropriate way?”
Enabling redesign
Having addressed the issue at hand, the COO and Managing Director explained what the Forum has to offer to help find solutions. “Since forty years, the Forum has been bringing people with very different backgrounds together. This way we make sure that when challenges are addressed, we have a variety of stakeholders involved who can contribute to seeing the bigger picture. We have always stated the importance of business to interact with various other stakeholders. In addition we try to address global problems in a global way, breaking with the segmented vision that currently dominates.”
While Schneider recognizes the fundamental need for change he is weary of adopting measures too quickly. “When redesigning regulations we cannot embrace approaches and regulations without taking into consideration potential side effects, otherwise we will just recreate past problems. In order to redesign the system we all have to sit together and think about the problems we face, not merely from the crisis but also from potential solutions. Although the problems are pressing, we have to avoid unintended consequences.”
Embracing responsibility
In Schneider’s view, all these proposals will result to nothing, however, if we do not address the most pressing of all problems. “We have to change the way we perceive what is actually successful. Today’s concept of success does not include the notion of sustainability. We have to rethink how we think and create a new framework of values. Of course we want more stakeholders to be empowered, but at the same time we have to define the rules of the game, so that inclusiveness does not result in chaos.”
A shift in perceptions also entails accepting responsibility and Schneider is adamant about this point. “We are all looking for some kind of other organization to address the challenges at our place. But at the end of the day, we are all part of this system. We all share responsibility and we all have something to contribute to the discussion. This is not a time for finger-pointing. Perhaps the time has come to paraphrase John F. Kennedy’s own 1961 call to action with: Ask not what the world can do for you. Ask what you can do for the world.”
Article by Michael Afenzar
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