Cultivating ‘smart growth’ leaders The perspectives of a CFO to outpace the global economy master class by Michael O’Callaghan and Chris Campbell By Peter Everaert, Scott Kingdom and Indranil Roy
November 2012 As a global economic slowdown provides a real-world stress test, the question of how to sustain business growth moves up on the agenda for many corporate boards, even in the emerging markets in Asia Pacific. Among the factors boards are re-evaluating is the type and quality of leadership and talent their businesses have on hand and how it will contribute to the short, medium and longer term success of their business.
With GDP growth stuck between 1 percent and 3 percent in mature markets and reduced to 5 to 7 percent in emerging markets (see Figure 1), many forecasts and business strategies are undergoing harsh revision. Although some industrial segments might have seemed, at first, immune to the slowdown, it is likely that a broad swath of the industrial landscape will be negatively affected this year and next. This pattern of market consolidation—where some firms founder and others seize their market share—following an economic decline is not a new phenomenon. But because downturns became less frequent or pronounced in the emerging markets during recent decades, many of
Figure 1
Slowing GDP growth in emerging markets 12%
China
10%
India
Other developing Asia
Latin America
Middle East
Africa
Central & Eastern Europe
Russia and other CIS***
8%
6%
4%
2%
0% 1996 - 2005
1
2006 - 2011
2011
2012
2012 - 2016
2017 - 2025