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Business leaders worldwide are grappling with transformative events that stretch their thinking well beyond the “rational” frameworks of business. The crisis in the eurozone is more than just financial – it has roots in politics, interwar German history and a clash of cultures between northern and southern Europe. Political upheavals on the Arab street have consequences on Wall Street and main streets everywhere.
To navigate successfully this new global reality, it is essential that business leaders understand how the multitude of non-business factors affect the strategic and operating choices for global businesses.
The most critical sources of disruptive change often lurk within these non-business areas. Executives must increasingly look beyond the business pages and follow the front-page headlines to anticipate how corporate decisions will be affected by factors such as geopolitics, demographics, international manoeuvring over food, energy and human security, international law, conflict, diplomacy and even national security and counter-terrorism. With three-quarters of the world’s growth potential in the less-known emerging and frontier markets, these issues are even more pressing.
Leadership is ultimately about integrative thinking and connecting the dots across multiple domains. For aspiring global business leaders, the dot-connecting is urgently needed between business issues and the business context. Yet there is a severe dearth of leaders who are deft at making such connections.
Much has been written about the distinction between the “technocrats” leading Italy and Greece and those who may be more politically astute. Why can’t we aspire to educate leaders (both of countries and of organisations) who can be both? The structure of business education is partly to blame for this contextual intelligence gap.
I have experienced the gap from many angles. As a partner at McKinsey responsible for advising clients on innovation and global forces, I needed analysis combined with non-linear thinking. We had to team associates with business degrees with those from policy, science and technology schools – as well as with designers, historians and sociologists. It was rare to come across individuals who could deftly cross the boundaries. I perennially wondered how we were going to turn these super-bright, super-specialists into truly integrative leaders. As a faculty member at Harvard Business School, I found our students remarkably well-prepared to analyse focused problems drawing upon deep functional knowledge. They were less prepared for ambiguity, especially of the kind found in foreign environments.
We were, indeed, training excellent analysts – optimised for their first and second jobs – but not for the jobs that lie beyond. Once these graduates progress to management roles, they have to be able to think laterally.
Despite the emphasis on leadership and globalisation in business schools, are we teaching these merely as additional functional skills? We should be embedding business questions within a richer framework, incorporating the nuances of international affairs, politics, law, history and security, among others.
To prepare students for leadership today, we must build not just content intelligence but contextual intelligence. Similar to the argument that is often made about the benefits of a broad liberal arts education early in life, a contextually rich postgraduate business education establishes an early foundation.
We need business leaders who can make the necessary lateral connections between the world and the world of business. The impact of business, its potential both to trigger global crises and to innovate and solve the most intractable of problems, is impossible to avoid. Business education is too important to be left only to business schools.
Bhaskar Chakravorti is senior associate dean of international business and finance at The Fletcher School, Tufts University and executive director of Fletcher’s Institute for Business in the Global Context. He is author of ‘The Slow Pace of Fast Change’