Three trends that will change how you manage

To confront three emerging challenges — Globalization, Digitization and Politicization — corporate leaders will have to become Arbitrageurs; adopt the mind-set of Experimenters; and be Orchestrators of hybrid organizational models.

By Fabrizio Ferraro & Bruno Cassiman

Over the course of the 20th century, gross domestic product (GDP) became the standard barometer of macroeconomic performance. This was due to a unique set of sociopolitical conditions of the 1930s and ’40s related to Depression-era economics and wartime spending. Now, in the 21st century, CEOs face a new set of conditions related to three significant trends: Globalization, Digitization and Politicization. Think of these as “GDP” of an entirely different order.

Building on research in the field of strategic management, this article develops a framework to think about these three emerging challenges. We discuss how these challenges generate not only more uncertainty for decision-makers, but also more opportunity for changing the competitive rules of the game.

How can corporate leaders confront 21st century “GDP”? The strategic management framework on value creation and value capture that we employ at IESE is a good starting point to address the changing role of the CEO. If we apply it to the new “GDP” challenges, we realize that the key drivers of value creation and value capture are changing: emerging market multinationals are moving to the fore; competing digital business models are reconfiguring the landscape; customer and innovation communities are transforming the way businesses interact with consumers and suppliers; and the role of governments, regulators and other stakeholders is having an ever greater impact on the bottom line.

In light of this, CEOs will have to develop novel skills, changing how they allocate resources by becoming Arbitrageurs; adopting the mind-set of strategic Experimenters; and finally becoming Orchestrators of Hybrid Organizations, by harnessing diversity and ambiguity as a source of competitive advantage.

This article is published in IESE Insight magazine (Issue 23, Q4 2014).

This content is exclusively for personal use. If you wish to use any of this material for academic or teaching purposes, please go to IESE Publishing where you can purchase a special PDF version of “Three trends that will change how you manage” (ART-2640-E), as well as the full magazine in which it appears, in English or in Spanish.