Frank Brown spent 26 years at PricewaterhouseCoopers, holding a number of top jobs, before becoming dean of Insead, the international business school south of Paris, in 2006. He spoke recently with Deputy Business Editor Rick Newman about the world’s business hot spots, fading American dominance, and what it takes to get ahead as a global executive.
Do you agree with people who think America is losing its competitive edge?
I firmly believe that the days of the United States as a global, dominant economy are waning. A lot of companies are reluctant to accept that. Americans are often looked down upon overseas, because they assume that people will capitulate toward their way of doing things–in somebody else’s country. That doesn’t cut it anymore.
What should a midcareer executive be doing to adapt to a global economy?
You’ve got to be open to not just traveling but experiencing other cultures. Go to cultural events, sporting events; go to somebody’s house for dinner. That can be a real trip. There’s a big difference between being global, which to me means you’ve been on a lot of planes and passed through a lot of airports, and being worldly. Don’t just go to China for a two-day business trip.
I’ll give you an example. My wife came with me to Vietnam and had an amazing experience in Ho Chi Minh City. She was shopping in a local market, and a cute little girl who spoke perfect English helped her. As my wife said, “She sort of adopted me and helped me shop.” Toward the end of the day, the girl tried to sell my wife some postcards. My wife didn’t really want them and declined, but she offered her a little money for all the help. The girl refused. It was a matter of pride. She didn’t want a handout. She wanted to sell her postcards. That tells you something about the Vietnamese.
In Japan, people in low jobs go to work in a business suit and change into overalls in their locker. But they want people on the train to see them in a business suit.
Food is another huge issue. You can’t be a hamburger kind of guy and expect to get along in most cultures.
So what should executives do to become more worldly?
If you’re already successful at a large company, chances are you’ve had some overseas travel. If your kids are old enough and it works for your family, try to extend that to a six-month overseas posting. People always insist on being home for the weekend, which is good for the family, but you miss a ton. Also, do it now, because this experience will pay huge dividends later on, when it really becomes a requirement. In some ways, it already is a requirement. If you want a leadership role in a multinational corporation, you’ve got to have this kind of experience.
Another thing I worry about: Why do Americans want to retire at 55? My kids are 26 and 23. I tell them, you might live to be 100. So do something you love and plan to do it for a long time. I look at Florida and wonder: Why is it now the American dream to retire at 55 or 60 and move to Florida? Over a period of 20 years or so, Social Security becomes a real problem–especially if we don’t have a productive working life that’s longer. We could end up like France, where everybody who’s working is supporting somebody else who’s not.
What about younger people just starting their careers?
Younger people should learn another language–it’s not too late and it’s not too hard, and it’s easier to do when you’re young. If you speak Chinese, you can live anywhere in Asia.
What about blue-collar workers? If you were a 50-year-old assembly-line worker who was worried about losing his job, what would you do?
First, I’d look around and ask, “What is the environment I’m in now?” If it’s the rust belt, and there’s nothing there, I’d consider moving. But if there’s a wafer fabrication plant down the street, or university research labs within 50 miles, I’d look for some kind of retraining.
We all know about China going gangbusters. Is there anybody who’s not getting into China as quickly as necessary?
I gave a speech recently to a group of paper industry executives. I told them, “I think you’re missing the boat in China. Most of their building is done with cement. There are 750 million literate people there… They need a lot of paper!” One executive came up to me afterwards and said, “We got burned in 1989 [after Tiananmen Square], and we haven’t gone back.” So they’re still fearful of radical change in China. My joke is, Well, I think you’re safe through 2008 at least. That’s when the Olympics take place in Beijing. Yeah, you’re going to pay a risk premium in China. But it’s too important a region to ignore.
What other parts of the world are you paying attention to?
We’re setting up some programs in the Middle East. Some governments there are pretty progressive. The [United Arab] Emirates, Abu Dhabi, they have a tremendous commitment to education. They see it as the way to wean themselves off of oil. The thing that’s impressive is that they still have 50 or 100 years of oil left. Yet they’re thinking about stuff like nanotechnology and biofuels.
Do you see anything like that in Saudi Arabia?
The Saudis can’t change their society to the degree where our people are comfortable working there. You can be an Israeli and be a woman and be comfortable in Abu Dhabi. Not in Saudi.
What should be done to make American companies more competitive?
If there were a more aggressive and vocal business lobby in this country, it would be a good thing.
What should businesses lobby for?
The mandate should be to come up with implementable ideas to reduce red tape, improve competitiveness, improve the attractiveness of U.S. markets, and retrain segments of the population.
Do you see anything like that happening?
Nothing solution-oriented. Nobody’s going to put a stake in the ground. A CEO’s average tenure is four years. Their main job becomes self-preservation.
What about the Council on Competitiveness?
It’s had zero impact.
Why isn’t there a stronger voice insisting on those things?
Business is a little scared to get close to [politicians and regulators]. We’re not sure we trust them.
There’s still this view that we ought to be able to do everything. But there are some industries we should just get out of. Like maybe auto manufacturing. The Koreans can come here and start from scratch and apply methods and technologies they’ve developed somewhere else. Computer assembly. I don’t think anybody has really looked industry by industry and said here’s where we are still competitive and here’s where we’re not.
Private equity has become a big factor in the U.S. economy. How far do you think that can go?
Until this year, it seemed that mostly what they were doing was selling businesses to each other. Now, you’ve got these club deals, and there’s some attractiveness to being private instead of public. The only thing that might turn that around is a rollback in all the regulations public companies face.
Filed under: Cool Articles, Mr. Ambassador by !YG
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