Category Archives: Leadership

Updates from Chicago Booth

By John Wasik – Finland sits at the top of the United Nations’ 2018 World Happiness Report, which ranked more than 150 countries by their happiness level. The country that gave the world the mobile game Angry Birds scored high on all six variables that the report deems pillars of happiness: income, healthy life expectancy, social support, freedom, trust, and generosity. News reports touted Finland’s stability, its free health care and higher education, and even the saunas and metal bands for which it’s famous.

Yet abundance does not equate to happiness, according to research—even on a longer time frame. In most developed countries, the average person is rich by the standards of a century ago. Millions more people have access to safe food, clean drinking water, and in most cases state-funded health care.

And in countries with a growing middle class, millions more are now finding themselves able to purchase big-screen televisions, smart phones, and cars.

But this growth in wealth hasn’t made people happier.

People gain more happiness when they satisfy their inherent rather than learned preferences—needs rather than wants. more>

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Towards The Disappearance Of Politics?

BOOK REVIEW

The Human Condition, Author: Hannah Arendt.

By Valerio Alfonso Bruno – Today, erosion of the public sphere is once more a harsh reality, as is particularly evident in the current weakness of “Western Democracies.”

The substantial risk of leaving democratic institutions only formally alive, but significantly lacking any content, is encouraging a deep reflexion on the reasons behind this erosion of the space for public debate and active political action.

However, some frequent arguments are employed by different people (belonging to political parties, policy-makers, academia, analysts, media) to justify the impossibility of developing a comprehensive political debate within contemporary democracies. At least four main orders of arguments can be identified that are used to justify the shrinking of the Vita Activa:

  1. technical complexity,
  2. global issues,
  3. trivialization of politics and
  4. ideological taboo.

Open, pluralistic, debate within democratic societies is unfortunately the first victim of the current political environment, as seen recently in the US and Italy.

The limitation of the public debate by reason of technical complexity and growingly global issues, or trivial generalization and ideological taboos, is dangerously forcing democracies’ citizens into political passivity, narrowing de facto the window of alternatives to an extreme degree, and resulting is an increased polarization. more>

How Japan could soon offer lessons for the Fourth Industrial Revolution

By Murat Sönmez – Leveraging fast-emerging technologies like self-driving cars, artificial intelligence and data-intensive precision medicine to address social challenges is a goal that many countries share. The most successful will have at least two things in common: a strong sense of mission across government, industry and civil society; and the right mix of intellectual and industrial assets to apply to the task.

Japan, I’m convinced, possesses both in abundance.

In recent months, I have worked closely with Japanese government, business and civil society leaders to establish the World Economic Forum Centre for the Fourth Industrial Revolution Japan — the first Centre in the Forum’s new global network to be established outside the United States.

Supported by the Japanese government and businesses, Centre for the Fourth Industrial Revolution Japan will co-design pilot projects to speed up Japan’s response to technological change. The goal is two-fold: First, to help Japan make the most of technology as it confronts critical issues like an aging and shrinking population — part of an ambitious program of social transformation that Japanese leaders are calling Society 5.0.

And second, to create new governance models for other countries to follow. more>

The Globalization Backlash: It’s Both Culture and the Economy, Stupid

BOOK REVIEW

Euroscepticism and the Future of European Integration, Author: Catherine De Vries.
Globalization represents a “trilemma” for societies, Author: Dani Rodrik.

By Catherine De Vries – While many thought the process of greater cross-border cooperation to be irreversible, in part because it was expected to lead to a universal acceptance of liberal and capitalist values, isolationism, nationalism and protectionism are back on the political scene with a vengeance.

While Donald Trump’s slogan to “Make America Great Again” is at the heart of his campaign and current administration, Nigel Farage’s mantra of taking back control (“we will win this war and take our country back”) dominated the Brexit campaign.

A fierce debate has developed about the origins of these developments. Are they the result of economic grievances of those who feel threatened by globalization (a term for increasing international cooperation and increasing interdependence), or do current developments represent a cultural backlash based on immigration fears and prejudice.

Opposition to globalization is gaining such a foothold in the political and public domain in advanced industrial democracies, precisely because processes of economic interdependence have coincided with increasing migration flows.

Although current societal and academic debates are mostly framed in either economic or cultural terms, it is important to realize that these types of explanations are not mutually exclusive. We should focus more of our efforts on trying to understand how cultural and economic fears interact and fuel the recent popular backlash against globalization. more>

The Overlapping Crises Of Democracy, Globalization And Global Governance

BOOK REVIEW

Gridlock: Why Global Cooperation is Failing when We Need It Most, Authors: Thomas Hale, David Held, Kevin Young.

By David Held – The crisis of contemporary democracy has become a major subject of political commentary. But the symptoms of this crisis, the vote for Brexit and Trump, among other things, were not foreseen. Nor were the underlying causes of this new constellation of politics.

The virtuous circle between deepening interdependence and expanding global governance could not last because it set in motion trends that ultimately undermined its effectiveness.

Why?

There are four reasons for this or four pathways to gridlock: rising multipolarity, harder problems, institutional inertia, and institutional fragmentation. Each pathway can be thought of as a growing trend that embodies a specific mix of causal mechanisms.

To manage the global economy, reign in global finance, or confront other global challenges, we must cooperate. But many of our tools for global policy making are breaking down or prove inadequate – chiefly, state-to-state negotiations over treaties and international institutions – at a time when our fates are acutely interwoven.

The result is a dangerous drift in global politics punctuated by surges of violence and the desperate movement of peoples looking for stability and security. more>

Against metrics: how measuring performance by numbers backfires

BOOK REVIEW

The Tyranny of Metrics, Author: Jerry Z Muller.

By Jerry Z Muller – More and more companies, government agencies, educational institutions and philanthropic organisations are today in the grip of a new phenomenon. I’ve termed it ‘metric fixation’.

The key components of metric fixation are the belief that it is possible – and desirable – to replace professional judgment (acquired through personal experience and talent) with numerical indicators of comparative performance based upon standardized data (metrics); and that the best way to motivate people within these organizations is by attaching rewards and penalties to their measured performance.

The rewards can be monetary, in the form of pay for performance, say, or reputational, in the form of college rankings, hospital ratings, surgical report cards and so on. But the most dramatic negative effect of metric fixation is its propensity to incentivize gaming: that is, encouraging professionals to maximize the metrics in ways that are at odds with the larger purpose of the organization. more>

Six Lessons That Society Must Learn About Agile

By Steve Denning – The article isn’t suggesting that firms embracing Agile are either angels or devils. I have yet to see a firm espousing Agile that has no flaws: those flaws must be seen for what they are and they need to be addressed.

If not addressed, they will cause serious financial, economic or social problems. Some of the flaws need to be addressed by the firms themselves and will be reinforced by the marketplace. Others may require government intervention.

Among the flaws for which the marketplace will by itself tend to generate corrective action are:

  1. Failure to continue innovating
  2. Sweat-shop workplaces
  3. Short-termism
  4. Share buybacks
  5. Rethink “maximizing shareholder value”
  6. Abuse of monopoly power and privacy

We need to see Agile by the clear light of day, neither through rose-colored spectacles in which everything is kumbaya, nor through a glass darkly in which everything is evil.

The saying “you can’t have it both ways” doesn’t mean that we can’t walk and chew gum at the same time. more>

The Western Crack-Up

By Javier Solana – After the recent G7 summit in Quebec, there can no longer be any doubt that the West is in crisis.

Yes, “Western” countries have often pursued divergent foreign policies (as illustrated by the Iraq War), and “the West” is itself a vague concept. But it is one that rests on a set of common ideological pillars, which are now crumbling under the weight of US President Donald Trump’s “America First” agenda.

Trump and his co-religionists’ incessant slandering of allies – “we cannot let our friends take advantage of us” – is leaving its mark.

Just a few years ago, it would have been unthinkable for the US to refuse to sign a joint G7 communiqué. Nor would anyone have thought that an American administration could attack a Canadian leader using the language that Trump and his trade adviser, Peter Navarro, recently directed at Canadian Prime Minister Justin Trudeau.

If bad manners were the only issue with the Trump administration, we could all rest easier. But that administration is also pursuing concrete policies that are undercutting America’s most important alliances. more>

Why the Red Hen incident so troubles us as Americans

By Mark Penn – The United States of America is creeping toward creating a more imperfect union, one dominated by the power of the online mob that is threatening to disassemble more than 200 years of learning.

It was in “Federalist 10” that James Madison, the father of the Constitution, discussed the human tendency to divide into factions, which he defined as groups of people “who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens” and to the community. He warned how the zeal for certain government policies, for passionate leaders and for different religions could lead us to a society inflamed “with mutual animosities.”

Welcome to America 2018. Madison’s solution then was to tame the forces of the moment through a republic as opposed to a pure democracy.

This is done by electing the people’s representatives from across the country who would be more sensible and objective. They would face periodic elections, but were to be freed from the easily inflamed mobs that would be quick to trample the rights of others.

But in the modern age, as I document in “Microtrends Squared,” people are increasingly divided into factions, and whether it is through their news channels or their Twitter feeds, the ability to whip up crowds quickly and with slanted information has never been easier, or more dangerous. Forget about the Russians dividing us, we have to worry about us Americans doing the job of tearing the nation apart. more>

American power at stake in great innovation race


By Peter Engelke – Americans like to think of themselves as the most innovative people in the world. At least since 1945, they have had good reason to believe so. During the Cold War, the United States built the most formidable technology-producing innovation system the world has ever seen.

Coordinated action by the U.S. government, the private sector and academia, combined with America’s unique postwar culture, crafted this system.

But the American system has seen better days. America’s leaders, at federal and state levels, have failed to maintain this system much less upgrade it.

As a result, America’s long list of difficulties includes falling public investment in research and development (R&D, a critical and under-appreciated factor in national innovativeness), an under-skilled workforce, flagging support for public higher education, decaying infrastructure and much more.

The global tech-innovation economy therefore is more than a just crowded place. It is also crowded where it counts: at the very top, where it no longer can be said that the U.S. stands alone. Several of the countries listed here, plus others, routinely score higher than the United States in global innovation rankings.

The U.S. will not long remain the global leader in innovation unless it takes decisive action across several fronts. more>