By John Caslione in Chaotics, Globalization, Rise of the Rest at July 13th, 2009
The annual Fortune 500 list of top global companies has recently been released and as the South China Morning Post reports the number of US companies featured has fallen to the lowest levels ever. Meanwhile more Chinese companies and other new entrants have risen to record levels. This is what we’re referred to in Chaotics as “The Rise of the Rest,” a term coined by CNN and Newsweek’s Fareed Zakaria in his 2008 book of the same name.
A new chapter in global economic history has begun, one in which the United States, and to a lesser extent Europe, will no longer play its former dominant roles. A process of redistributing money and power around the world—away from the U.S. and Europe—and toward the resource-rich countries and rising industrialized nations in Asia and the rest of the emerging world has been underway for years. The financial crises of 2008 only accelerated the process.
For domestic Chinese companies, China’s continued growth has helped to propel them to new highs with a Chinese corporation reaching the top ten of the Fortune 500 for the first time ever. Sinopec (China Petroleum & Chemical Corp) came in ninth this year. There were a total of 37 firms in the Top 500 this year including 9 new entrants. The changing landscape is undeniable. Overall, Walmart was replaced at the top spot by Anglo-Dutch energy giant Royal Dutch Shell, the first time in more than 10 years that a non-US firm ranked first on the list.
By Chaotics in Chaotic Strategies, Chaotics Early Warning System, Globalization, Turbulence, Uncategorized at April 13th, 2009
Addressing world leaders at the G20 Summit, British prime minister, Gordon Brown, said:
“The world lacks a proper early warning system…we have never given anybody sufficient teeth so that their views are treated so seriously that people will immediately have to act when that early warning is given.” Mr. Geithner agrees: “I am skeptical about the ability of central banks and regulators to provide early warnings of crises. We need to build a system that is safe against uncertainty, against ignorance, against the failure to identify the future source of crisis.” Look no further chaps.
By Chaotics in Chaotic Strategies, Globalization at March 31st, 2009
The Financial Times recently wrote ‘Robust and stable’ system is goal of US, paraphrasing US Treasury Secretary Tim Geithner. In this new Age of Uncertainty, it is absolutely necessary to prepare for a future that will be very different from today with new risks and challenges. Governments need to follow similar Chaotics strategies as companies in developing contingency plans in preparing for future turbulence.
Mr. Geithner: “I am sceptical about the ability of central banks and regulators to provide early warnings of crises. We need to build a system that is safe against uncertainty, against ignorance, against the failure to identify the future source of crisis.”
The Treasury Department’s “Robust and Stable” is very similar to the “3 R’s” of Chaotics: Responsive, Robust and Resilient. Suppose in a live interview today on CNBC today, your biggest competitor’s president makes a new product announcement with new industry-shattering breakthrough technology that the industry has been dreaming about for the last five years that all but makes obsolete your most profitable and biggest product line. The question is: How did you miss seeing how close your company’s biggest competitor—or any competitor for that matter—was to reaching such game-changing success in your industry?
Turbulence may alternatively open up new opportunities for your business that can be exploited with your present business model or with a revised model. Suddenly you get an urgent call from your CFO who’s attending a credit-swap and derivative symposium in Chicago informing you that he just learned that your biggest competitor is planning to file for bankruptcy protection later that day. The competitor’s main plant burned down and the competitor lacked insurance coverage. Bankers are demanding the competitor repay pending defaulting senior debt. Your CFO tells you that the competitor’s CEO is holding for you on the other telephone line, prepared to offer you the deal of a lifetime. And you never saw it coming. You must prepare for both the best and worse case scenarios.
Again, Mr Geithner: “[The] US has a huge interest in acting quickly and comprehensively to use this opportunity to develop an international consensus on how to make the system more robust and stable”.
Chaotic situations like this will occur time and again, creating opportunities and/or crises. Organizations will have to learn how to seize the extraordinary opportunities that arise during periods of immense uncertainty. Business leaders must now begin to evaluate a broad set of macroeconomic outcomes, construct an equally broad set of scenarios with appropriate strategic responses, and then take actions to make their companies more responsive, robust and resilient.
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