Managing Reward in Our Uncertain World
Commentators have been talking and writing about the “Uncertainty” of our world for years, especially in books aimed at business executives. When it comes to geopolitical upheaval and radical economic shifts, though, the 2020s will put recent times in the shade. This decade is barely two years in and already we have chalked up a global pandemic and a brutal invasion of one European country by another. One of our speakers for our forthcoming event, Philip Stephens of the FT, describes the Ukraine conflict as “a game-changer in terms of the alignment of geopolitical forces in the world”.
Political volatility and economic stagnation are compounded by demographic change, technological developments, more frequent climate events and the mind-boggling task of shifting to Carbon Net Zero, making it likely that the decade will continue to spring surprises. The increasing speed and intensity of these forces will inevitably lead to unanticipated and disruptive change. 2030 will look very different from 2019.
In comparison, recent decades have been relatively business-friendly, as former Eastern Bloc countries joined an increasingly globalised market system. This created what former MPC member Charles Goodhart described as a massive one-off positive supply shock, as these countries brought substantial resources and millions of new workers and consumers into the capitalist world. A global consensus evolved in which trade barriers were reduced, regulations removed and, by-and-large, a global rules-based order prevailed. Governments were, on the whole, pro-business. For the most part, they sought to remove the obstacles to international trade and business. While there were military conflicts, they were usually isolated and rarely threatened anything more than temporary and localised disruption. There was little sign of a threat to global trade and its increasingly finely balanced supply chains.
That ‘positive supply shock’ is now being thrown into reverse with a number of potential perfect storms. Simultaneous skills and supply shortages, as countries push for Carbon Net Zero within a narrow timeframe, could be aggravated by geopolitical volatility. The Covid pandemic and the Ukraine conflict have demonstrated the fragility of supply chains. We are already seeing labour and materials shortages and the re-appearance of trade barriers. It would be wise to plan for more of the same.
Inevitably, this means that companies will have to up their game. The ability of senior executives to scan and understand their operating environment, to anticipate changes and to strike the balance between responding and over-reacting will be crucial. An organisation’s capacity to develop and pursue a long-term strategy, while being able to swerve and adapt in the light of sudden events, could make the difference between those who prosper, those who merely survive, and those who go under. These strategic abilities will need to be built into the entire organisation. Senior executives will take the lead, but they must also build organisations capable of resilience in the face of unfamiliar challenges.
Our PARC half-day conference will bring together five distinguished speakers to help us understand and develop a broader insight into the challenges and possible responses to the challenges of the next decade through to a more granular perspective on how this might play out in different markets – and how it is likely to affect senior HR and Reward professionals.
- Philip Stephens of The Financial Times, will give his assessment of the geopolitical and economic environment and the longer-term trends which will shape the 2020s.
- London Business School’s Rebecca Homkes will look at what this radical uncertainty means for businesses – how can firms navigate ‘perfect storms’ in the short term, whilst still keeping an eye on the horizon.
- Three acknowledged Reward specialists will then give different perspectives on how reward can drive the necessary step change within organisations:
- Tom Gosling, former reward specialist at PwC, now thought leader at London Business School, will examine the tensions that companies face between the flexibility to make rapid shifts in strategy and direction, and the increased scrutiny and expectations to benefit wider stakeholders.
- Recognising the global pivot to Asia, Jason Shaw will provide insight into the varied reactions to performance-based pay comparing ‘Asia’ with the ’West – drawing on a recently completed global study.
- Peter Boreham, Mercer’s Practice Leader for reward in Europe, will examine how a previously stable continent, now rocked by war, populism, and potential splintering of the EU, might develop during the 2020s. How will this impact the firms doing business in this diverse continent?
Our event chairs, Independent Advisor Peter Blausten and RemCo chair Celia Baxter, will draw together the main strands and summarise the key points, after which there will be a drinks reception and opportunity for more informal networking.
We look forward to our PARC members and friends joining us to add their perspective to what will be an informative and thought-provoking guide to the coming decade.
Managing Reward in Our Uncertain World
15 June, Central London