Four Global Crises Businesses Are Facing Today and How to Solve Them

Blair Sheppard is Head of Global Strategy and Leadership for PwC, a global network of firms delivering world-class assurance, tax, and consulting services for businesses. He is also the author of the new book, Ten Years to Midnight: Four Urgent Global Crises and Their Strategic Solutions, which came out on August 4th.    Prior to PwC, Blair spent the majority of his career as a professor at the Fuqua School of Business, Duke University. During his time there he also served as Founding CEO and Chairman of Duke Corporate Education and as Dean of the school. As Dean, Blair was the primary architect of Duke Kunshan University which opened in 2014.    Blair was the first recipient of faculty of the year at Fuqua, he received the Business Person of the Year award for Education in 2011 by Triangle Business Journal, and the Eminent Scholar Award from the Institute of Finance at Frankfurt University in 2007.    The concept behind Blair’s book, Ten Years to Midnight, started with a conversation he had with his boss at the time at PwC. They were discussing the fact that a lot of things in the world were looking dark and gray and they wanted to figure out what the major issues were and what causes were behind them. So they set out to interview people in around 60 countries around the world. They interviewed people from all walks of life--government leaders, heads of business, cab drivers, individuals in coffee shops, etc... And what they found was the whole world was worried about the exact same things.    So Blair and his team started to research these major issues and what they found was that there are four major crises the world as a whole is facing right now and we have about 10 years to fix them before it is too late.    The crisis of prosperity As Blair and his team were researching for the book, one thing they found is that due to economic disparity in the world and people put at a disadvantage because of that, a lot of parents feel that their children will be worse off than they are.    Blair says, “Think about 50% of the retirees in the United States are going to retire with basically no savings, kids graduating from college with a trillion and a half in debt, with a huge tax obligation we just created for them, right. And then people have a job and a mortgage and the kid in school who are likely to lose that job right and have to transition. That group is now collectively saying I'm really worried about the future. And when people stop believing in the future, they stopped dreaming, creating, developing, so we call that sort of a crisis of prosperity.”   The crisis of technology Another key element we are facing right now is disruption from technology. There are great things that come with advances in technology--medical advances, improved quality of life, availability of valuable information, etc… But there are also negative impacts as well.    One example Blair points out is social media. While the creators of social media intended their platforms for good, there are negative things that come from it, like increasing suicide rates. Technology also allowed us to create the Industrial Revolution which has brought about an improved quality of life in some aspects, but it has also harmed our environment.    Aside from these examples there are other growing unintended consequences of ubiquitous technology that we have to fix.    The crisis of institutional legitimacy As it is growing clearer by the day, people around the world have lost trust in our institutions. We don’t trust the police force, we don’t trust the tax systems, we don’t trust our education systems, we don’t trust our governments.    Blair says, “this is the one that worries me the most, by the way, because as soon as you stop trusting the institutions that make our life work, it's sort of like a fish not trusting water. It just doesn't work.”   The crisis of leadership The three previous crises combine to produce this fourth crisis, which is mainly caused by polarization. A lot of times when people lose hope and feel that things are getting worse they blame the people in power. There is just a sheer inability to lead when the world is so fractured and polarized. In order to lead effectively leaders need people to trust them.      About all four of the crises, Blair says, “The worry we have is that they're all pretty serious right now. But if we don't get our arms around them in a decade, they become really ugly, all four of them, all a sudden become really ugly.” So what can we do to start addressing these problems?   Conquering the four crises In his book, Blair says that what we really need in order to address these issues is new types of leaders to rework our institutions, culture, and our way of thinking. We need leaders who have ingenuity, vision, innovation, energy, focus, and empathy.    With the prosperity crisis we need to step back and figure out how to get everyone on a level playing field. Lack of access to technology shouldn’t hinder people around the world. But right now there are a lot of people being left behind in the world. And globalization stops working when you have enough places and people in the world that fall behind.    As Blair shares, “While we're focusing on being global competitors, we also have to help create thriving local communities. While we're measuring GDP, we have to look at economic dispersion, how well the whole economy is doing, how well everyone's doing, and other measures of social well-being, not just financial. And while we're driving technology, we've got to say, have we thought about the unintended consequences of the thing we're building? It's sort of like the way we do drug development, right, which is-- does it really do what it says, and what are the side effects?”   In regards to the technology crisis, Blair says one thing we have to be mindful of is how technology is impacting work. Will there be more jobs or less jobs in the future? Just like in the Industrial Revolution, the transition will be hard, but what problems can we think through ahead of time?    There is also a lot to figure out around AI. It can violate privacy and put control in too few hands as well as make decisions that we can’t understand. How can we make sure that we keep it in check? Jobs, AI at scale, and technology making us dumber are all serious negative side effects of technology that we have to navigate as we continue advancing forward.    When thinking about the technology crisis as individuals it is important to be aware of disruptions that are happening in your industry and be prepared to move if you see signs your job could be eliminated. Be curious and keep on learning new skills and surround yourself with people who are different than you are. Don’t just associate with people who work in your department, branch out and spend time with people in different roles, industries, and parts of the world.    When addressing the leadership crisis it is important for leaders to understand the main underlying causes of this crisis, which are polarization and distrust in leaders. So they need to find ways to help people come together, to find solutions or compromises and they need to rebuild trust with employees, customers, and communities. It is also crucial that leaders know what the purpose of the company is. Because if you want to innovate inside of your organization you have to know what matters at the core of your business, otherwise it is easy to get lost.    Blair’s advice for leaders who want to build trust is to be consistent, know what your values are and stay true to them. And in every decision you make, be transparent about what you are doing and explain what you are doing and why. Be very self reflective and self aware and know the impact you are having on people.    Climate change and small business creation Along with the four major crises, there are also other issues that are so urgent we can’t wait for them to be fixed. Two of those issues that Blair points out are climate change and creating small business at scale really fast.    So why should leaders and organizations care about these two issues? With climate change it will impact everyone eventually, including your organization. But if we wait to be personally affected by it, it may be too late. It is also most likely that organizations will be forced to go net zero soon with new policies. So why wait to be forced into it.    But this will impact your business eventually. Blair says, “There are physical risks associated with climate. So let's imagine you hold real estate in downtown Miami and the first floor is underwater. You kind of care about it now. Right? Let's imagine you're in California and your property sits in front of a mudslide, let's imagine you own timber, and it's under fire. And so every business in the world has physical risks associated with climate, and every year they're going to get worse.”   As for small business creation, a lot of small businesses have been impacted by current events. And every organization, whether they realize it or not, depends on small businesses to thrive. Small business, for a lot of companies, is the first step in the supply chain. So you depend on it. But the owners of these small businesses are also customers of larger companies and if they don’t come back, your revenue stream is going to go down. Small business is a crucial part of our economy. So every leader should be concerned about these two more urgent issues.    What can leaders do now? Blair gives a few tips that any leader out there can implement now to start making change. Part one: Look at the direct implications of climate risk on your company and figure out what you can do to get to net zero Take a look at your organization and assess your ability to compete in a platform based world Figure out if you are prepared for the pressures toward localization that we’re going to see Part two: Look at yourself and your leadership team. Are you ready for the three points above and have you invested in those things?  Make sure you have a diverse team with people who are different than you are Part three: Pick a place (a city, a town, a village, etc...) you care about and make it better   “If you are working on making something in the world that's physical geography better. It will force you to think about all the things you're not thinking about today that are important for your business. And then when someone comes back and says you're the bad guy, you're not. Because you're actually working the issue. And so it has two positive benefits you actually are helping. And so if I go back to your question, you know, one of our leaders who said, I'm going to worry about Black Lives Matters and diversity. And they did it before it was a big issue. And I think that taught a lot to us as a firm. And it actually puts us in a position where we're kind of on the right side of the balance sheet when people start judging how you're doing. And everyone should do that. But really make it better. Don't fake it. Right? Go after it.”