When the going gets tough, the tough get going. The world is in trouble and the corporate world equally so, and it has compelled people to bet on the force of one personality to get it out of difficult times.
In politics, the rise of assertive nations led by forceful personalities is challenging the post-World War II bosses.
In business, the post-2008 crises have coincided with the rise of emerging economies as strong “producer nations”, and technology disruptions have hit several corporations. As a result, many have appointed forceful personalities to keep them running in business.
In politics, strong people have always existed. What makes it different now is that today most are democratically elected, not dictators. The common citizen is now voting for the personality, not for the party.
Countries led by the force of one personality today show some common traits, which give a clue.
The bane of fragmented coalition politics where there is no barrier to entry for new parties, the failure of many established governments to bring in order and prosperity, corruption between existing parties for vested interests, failure to improve the quality of people’s daily lives and continued interference by foreign powers into a country’s internal affairs at the cost of its welfare, are a few reasons for opting for strong personalities in politics.
The degree may vary from nation to nation. But the personalities of some leaders have replaced party programmes and ideologies in several countries around the world.
The rise of far-right
Another reason is the growing sense of nationalism, in a world where non-physical boundaries have blurred and diluted national identities.
Each nation was once known for something distinct. But over the past few decades those heterogeneous identities have blurred, as similar production processes were set up everywhere, people’s mobility has increased all around the world, and trade and technology have made everything available everywhere. Therefore, distinctive qualities that any nation was once known for became available in other places too, and the uniqueness of nations was lost.
There is a tendency to reclaim national identities. Citizens seem to think that a forceful personality will bring back those national identities.
While this is debatable, several strong leaders today in Asian or European nations belong to the far-right ideology, which has generally prioritised an identity-based discourse to appeal to their nations and communities.
Competition and offshoring
In business, a small number of corporations from the developed world were the largest producers of most products until 1980s. The situation created a brain-drain from the developing and least developed nations towards the developed countries.
But as those corporations kept on selling their products to developing and least developed countries, a need for increased household income in recipient countries emerged to sustain the consumption cycle.
This situation has also created a high wage rise in home countries. As an outcome of the increasing operating costs of the corporations in host countries, offshoring production facilities has become the only viable option to ensure companies’ competitiveness.
Emerging corporations in developing countries, coupled with the need to reinvent and innovate in the age of technology-led production, has intensified competition.
Established corporations were faced with too many cooks spoiling the broth. Then came the 2008 financial crisis and the ensuing economic slowdown.
Profit margins of established behemoths suffered, market shares were eroded, capital sources dried out as better credit ratings moved globally south, and many had to shut their doors or were bought out in the ensuing market consolidation.
Now, many companies are controlled by managers who were brought in to reinvent their business models – by the force of their personalities – more so in sectors witnessing hyper-competition such as software, hardware, automobiles, banking, steel, media, fast-moving consumer goods and consumer packaged goods.
Enter the CEOs
One often knows the names of CEOs in these sectors more than those in others, as media gives them more coverage. Their brand often overshadows the brand of the companies.
In quarterly financial results, analysts often question new appointments or succession plans, like in Infosys. Companies suffering from a continued leadership vacuum were punished badly in the stock markets, like in SpiceJet.
Methods employed by CEOs are dissected to see if they justify their performance, like in the case of United States banks. Launch ceremonies in new markets and products are led by CEOs themselves, such as Amazon’s Jeff Bezos. CEOs host news conferences after acquisitions, not just the mergers and acquisition directors. The focus now is as much on the leader as it is on the business.
Free market economics creates a business environment for the less competitive ones to shut down – be they companies facing losses or political parties losing seats.
But as of now, the threat of technology disruptions in business means a new set of competitors, and the threat of voter disillusionment in politics means a new set of ideological messages. That also means continued troubled waters and a demand for strong leaders.