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Bill George

Harvard Business School Professor, former Medtronic CEO

America’s Hidden Asset: Leadership of Global Capitalism

For the past seven years America´s political leaders have been trumpeting the spread of American-style democracy, with decidedly mixed results. Developing countries aren´t eager for America to impose its form of democracy on their fledgling – and often fragile – governments. In fact, many of them resent America´s attempt to tell them how to run their governments, especially when threats of “regime change” are not-so-subtlety mentioned.

It is American-style capitalism – not democracy – that is spreading like wildfire around the globe.

Every government leader and business executive I have met in developing countries is eager for one thing: American-style capitalism to build their economies, create jobs and wealth for their people, and bring their countries fully into the global trading network. From Kazakhstan to the United Arab Emirates to Vietnam, people are hungry for capitalism. They want to study it in the U.S., learn how to create local capital markets, acquire American technology and know-how, and build up companies that can export their goods around the world, especially to the U.S.

But most of all they want America´s hidden asset: global capitalism leadership.

Let me emphasize that this is not the old-style business leadership of the 20th century which thought U.S.-based companies had superior products and management processes and could simply export them to the less sophisticated markets around the world, eager for American goods and know-how. That day passed by twenty years ago.

In recent years America´s new competitive advantage has emerged: the ability to train and develop global leaders, capable of leading global organizations. These new leaders, who are mostly in their thirties and forties, have lived all over the world and are as comfortable doing business in the Ukraine or Indonesia as they are in Des Moines, perhaps more so. Many of them have attended America´s best graduate business schools, where they interact with a vast array of foreign nationals and newly immigrated Americans with similar leadership abilities and like ambitions.

Attending my class at Harvard Business School, my wife remarked, “I feel like I am in the United Nations.” In fact, more than one-third of Harvard´s MBAs at HBS and two-thirds of participants in its executive programs come from outside the U.S. to learn the latest leadership approaches in global business. These percentages do not include the substantial number of newly-immigrated Americans from all over the world attending these programs.

This new generation of American business leaders – as well as foreign nationals trained in America´s leading academic institutions – is very different than the previous generation: they are authentic leaders – collaborative, not imperial, in their relationships. They genuinely respect and appreciate the comparative advantages that people of other nations bring to their global companies, from manufacturing skills to ingenuity. Most importantly, they know how to bring together and motivate people of very different backgrounds to build high performing organizations.

America´s competitive advantage is seen most vividly in financial markets, where governments and business people around the world are eager to have America´s investment banks help them restructure their financial institutions and industrial companies to become competitive in global markets. Serving on the board of Goldman Sachs, I have had the opportunity to witness first-hand just how important this leadership is to countries like China, Saudi Arabia and the United Arab Emirates. In building financial institutions in these countries, America is developing the relationships with business leaders that will sustain this competitive advantage in global leadership for the next several decades.

For all the xenophobia about immigration and widespread panic over outsourcing, the reality is that America is the world´s melting pot. We are more accepting of people of diverse national origins and ethnic backgrounds than any country on earth. Progressive business leaders like IBM´s Sam Palmisano, Andrea Jung of Avon Products, GE´s Jeff Immelt, and PepsiCo´s Indra Nooyi recognize that diversity is not a challenge to be overcome, but a source of sustainable competitive advantage.

Whatever issues diversity may create – both real and perceived – America´s hidden competitive advantage is the ability of our leaders to operate effectively in integrated global organizations and to deploy the principles of capitalism throughout the world.

Our political leaders would be well advised to recognize this strength and use it to build America´s relationships with countries around the world, while helping them build their economies through capitalism, irrespective of their form of government.