A Wild Ride Ahead for Corporate America
Fortune Magazine’s 2011 ranking of the world’s largest corporations lists these top ten: Wal-Mart Stores, Royal Dutch Shell, Exxon Mobil, BP, Sinopec Group, China National Petroleum, State Grid, Toyota Motor, Japan Post Holdings and Chevron. Of these corporate giants, only Wal-Mart, Exxon Mobil and Chevron are American companies.
The U.S. still dominates the list of 500, with 133 companies, but that number is down from 185 just a decade ago. Japan occupies the number two spot, and China, with 61 companies (versus just 12 in 2001) is on the march. Brazil, India and the Middle East are also quickly becoming global corporate contenders.
A few decades ago America was the undisputed global economic powerhouse. Americans enjoyed the highest income levels, highest rates of employment and highest standards of living of any citizens in the world. The phrase, “Made in America,” was a symbol of honor and prestige. This is no longer the case.
In fact, today many of America’s iconic brands, including beers such as Budweiser, Coors and Miller, are owned by foreign companies. And numerous quintessentially American products, including Rawlings baseballs, Converse shoes, Mattel toys and Levi jeans, are no longer made in America.
What does all this mean for us as corporate leaders? First off, it calls for us to recognize the massive underlying shifts that are occurring in the global economy. Globalization has reached a critical point that is impossible for any business leader to ignore or avoid. What’s more, it’s time for us to face up the fact that in many areas of our economy, we are uncompetitive, unprepared and incoherent about this tectonic shift.
Secondly, it is clear that economic cycles are contracting, with booms and busts arriving more frequently and more broadly. The markets are mercurial and will likely continue to be volatile.
As business leaders, we will be compelled to adjust to an evermore uncertain world. We must ensure that our companies are agile and able to respond to constantly changing markets and conditions. Differentiation is more important to our success than ever.
Above all, those at the C-level need to provide real leadership, and by this I mean ability to see changes approaching and drive meaningful response quickly.
It’s going to be a wild ride ahead for those in the C-suite. Deny it at your peril. Ignore it, and your company will surely be left behind. The good old days are gone, and what lies ahead is uncharted territory.