This coming year looks to be a tough one for many markets around the globe. Although GDP growth should be respectable this year for the US market, the IMF has revised its figures downward for Japan and EU countries. Emerging market economies like China and Russia tell a similar story, albeit based on different local conditions: market overreach now has China posting its lowest growth rates in a quarter-century and economic sanctions have crippled the Russian economy. At the other end of the globe, Argentina battles with inflation rates at 40%. Business managers in markets that were meant to drive global demand and economic expansion must come to terms with the reality of „follower economy“ status. They must work with their teams to find smart ways to generate new demand in developed markets and succeed in a global economy this is still partially overheated and still needs to deleverage.
Guidance during times of instability
A positive contribution that business leaders in emerging markets can make to their business is to keep calm and avoid causing economic panic. In recent months the concerns of financial institutions in developed markets about their exposure in emerging markets has led to noticeable weakening of many global currencies. We see this in parts of Eastern Europe, in South America and elsewhere. Moreover, the Institute of International Finance reported this month that capital inflows into emerging markets will fall again this year for the second time in a row. This is apparently fuelled by investors‘ worries over when the US Fed will raise interest rates along with political conflicts in parts of the world and fluctuating oil prices. All this uncertainty puts a new set of pressures on GMs in emerging countries, who increasingly have to do business while working with a broader set of unknowns.
Essentially, the key skill set that GMs in emerging markets have to continue to develop and refine, more than any time in the past, is contingency planning. For
many of them 2015 will likely be the year of strategic hedging against exchange rate/currency losses, smart HR planning that includes doing more with smaller
teams and new technologies and planning stable operations in politically volatile business environments. Watch out for shifts in tax structures, change in interest
rate policies and further slowdown in BRIC country markets.
The digital factor
Technology is one factor that can help GMs smooth out some of the bumps in the ride for this year’s global business cycle. Increasingly, mobile devices and broader internet connectivity have helped businesses meet the challenges of doing business in less-developed markets. Similarly, access to cloud-based computing solutions also provides more flexibility than classic office environments and cost less than investment in classic HW infrastructure. Focusing on digital/mobile schemes can benefit businesses in emerging markets in areas ranging from cost reduction (office space rental, SW licensing, paper supplies, etc.) to new market access (mobile sales apps, text message marketing and e-shop/online business models).
Focus on supply chain management Commentary from business leaders working out of Africa suggests that supply chain planning will be even more critical to success in emerging markets during 2015. The global economy, emerging markets included, increasingly faces cycles of positive disruption. We see the technologies mentioned above rapidly changing models for how businesses engage with consumers, how GMs manage their employees and how management teams plan for growth and avoiding risk. Seasoned GMs also point out that companies can benefit greatly from year-end reviews. As many of us start to roll out our business projects for 2015, it is important to look back and map key events that can help the business plan for possible contingencies. In standard business activity this may include anything from fuel price cost mapping (to plan shipping models) to monitoring sales trends and spikes (so as to plan for better staffing and marketing campaigns). Also, in line with supply chain planning, it is also wise for businesses and their leaders to think forward and anticipate potential market shocks: both economic and/or regulatory in nature. For example, if you know the market in which you operate will see elections in the coming year, why not plan for all possible business regulatory scenarios your business might face. The best way to survive revamped tax structures, interest rate hikes, etc. is being prepared that they might become reality.
Succession planning in environments captive to global politics
As mentioned above, one thing this year will likely teach a lot of us, particularly business leaders in developing markets, is to plan for all possibilities. Most of us running businesses in these markets are well versed in planning for shifting regulatory environments for business, for inflationary shocks and shortages of goods.
However, the increasingly tense atmosphere in global geopolitics has made a great number of business leaders concerned about what to expect in 2015. Take the findings of PwC’s CEO survey for this year, recently presented at the World Economic Forum in Davos: Russian CEOs, for example, went from being the most
confident in their economic outlook for 2014 to being least positive this year. This demonstrates how the specifics of regional economic struggles and political conflicts can impact business. It also underscores why business leaders need to have clearly-defined succession strategies for cases when management teams might need to change quickly, i.e. for reasons of conflict, decisions to return to home offices, unexpected family problems, etc. If 2015 appears to be a year of the unknown, then businesses need to know: who steps up to lead in case a GM has to leave, what does the centraloffice/advisory board do in such situations, which managers move to fill vacancies for colleagues that have been promoted. These are just a few aspects of succession planning that companies need to look at in constantly evolving regional economies.
2015 looks to be a challenging year for businesses around the globe. However, if you plan well and accept the new reality of having to work with sluggish growth and market volatility, good strategic planning should get you through relatively unscathed.
The SpenglerFox Group is delighted to announce the appointment of Filip Lerno as Non-Executive Chairman, effective 1st February 2020. Filip brings over 20 years of experience within the Premier Search sector. He has worked as a Senior Executive at both Spencer Stuart and Heidrick & Struggles, specializing in the Private Equity and Industrial Practices where he successfully conducted a multitude of senior searches across EMEA. Born in Ghent, Belgium, Filip graduated in Law, Applied Economics as well as Port and Maritime Sciences from Ghent University. He studied for his post graduate MBA at the Vlerick School of Management. He is also an Alumni of Insead I.E.P. Program. As Chairman of the SpenglerFox Group Board Filip will work closely with the CEO and the SpenglerFox Group Management Team to support the future strategic direction of the business as the Group grows both organically and through well placed acquisitions. Jens Friedrich, CEO at the SpenglerFox Group said “I am delighted to welcome Filip Lerno onto the Board of the SpenglerFox Group. His experience in the world of Senior Search and Human Capital Solutions will act as an added impetus to our overall business offering to our Clients around the globe. He has a proven track record in connecting the best senior talents with the world's top companies and I am convinced he will be equally successful in helping us at SpenglerFox to implement our strategy and further grow our business. SpenglerFox is a global Executive Search and Human Capital Solutions consultancy with a coverage in 35 countries.
We are delighted to announce the appointment of Marta Skalska, Head of Research. It is with great pleasure that I announce our latest addition to the SpengerFox Group, Marta Skalska, who will assume the role of Head of Research. Marta will be based in Warsaw, one of our firms strategic hub locations and will be responsible for developing cutting edge and best practice research capabilities within the SpenglerFox Group. She will lead the initiative to ensure consistency in approach and systems usage across the group as we invest in best practice and research trainings, assuring delivery of best in class services. She will work closely with our Senior Management team to advise on recruitment strategy, sourcing tools and continuous improvement initiatives. Marta has over 14 years of experience in recruitment, specialized in automotive, industrial manufacturing, aerospace and defence, oil&gas and temporary assignments, gained from recruitmentcompanies in Poland and the UnitedKingdom. Started her career in temporary recruitment, then moved to sales and business development functions, working as 360 consultant, selling and working as an Account Manager on own projects, large accounts, also leading a team of recruiters. After returning from the UK to Poland she has worked for management consulting company within HR sector, supporting big outplacement project for steelwork factory and state-owned coal minery in Poland. Worked on HR strategy, trainings and workshops, organisational transformation, talent management, market mappings, job evaluation, assessment and development centres, audits, HR functions effectiveness, labour issues, took part in negotiations with trade unions. Last, almost 4,5 years she has spent working at Korn Ferry, where she was supporting executive searches across EMEA (mainly in Scandinavia, Benelux, Switzerland and Balkans) withinindustrialmanufacturing,aerospace, defence and automotivesectors. She has studied Law at Warsaw University. Marta speaks native Polish and fluent English. She livesby the motto ‚Do not overanalyze, lifeis simple.’
The Governance Revolution: What Every Board Member Needs to Know, Now! SpenglerFox CEO, Jens Friedrich, invites Deborah Hicks Midanek to discuss her recently published book 'The Governance Revolution: What Every Board Member Needs to Know, Now!' Deborah is a veteran independent director, a pioneer in the corporate restructuring industry, and a serial entrepreneur. Widely respected for her turnaround skills, she has diagnosed and remedied problems for over 60 corporations and facilitated the growth of nearly 30 other ventures, including her own. Described by the late Fletcher Byrom, CEO of a Fortune 25 company, as a “pure thinker” – quickly gaining a deep understanding of complex problems and demonstrating an extraordinary ability to assimilate information and craft resilient solutions. More_on_Deborah_Hcks_Midnek.pdf Size: 161 KB Deborah_Hicks_Midanek_Slide Deck.pdf Size: 920 KB