The Last Word: Wharton and The New Business Reality
Taking Stock of the Future

Like most of the world, we were all stunned and shocked by the terrorist attacks of September 11. After our initial concern about friends, family, alumni, and colleagues, we began to ask ourselves how we, as a business school, could respond. We decided that we could begin to offer resources to address the rising levels of uncertainty in our environment.

In early October, a group of distinguished faculty gathered to sketch out scenarios for the future and to develop a new program on "the new business reality," which was held for executives December 3-6. Following hours of discussion and hundreds of ideas, we decided that the scenarios (in general terms) revolve around two major dimensions: External Uncertainty and Company Responsiveness.

Despite the tragic impact of 9/11 on a personal basis, from a business standpoint it can be viewed as a very large and unexpected shock to the economic system. Unlike a recession, where we have experience and know it will happen again, the problem with unexpected shocks (e.g., 9/11 or the Asian financial crisis) is that conditions change rapidly while the events unfold and while we calibrate the expected impact, both short and long term.

We also decided that the major success factor in dealing with external shocks (expected or not) tends to be whether a company’s (or an entire economy's) reaction is primarily passive and reactive or aggressive and opportunistic.

These discussions and observations led to the following general scenarios:

• Paralysis/Survival
  The worst-case scenario in which continuing unknown and unexpected events combine with companies (or economies) acting in a passive and reactive mode — resulting in layoffs, reduced research and development, and lower foreign direct investment.
• Slow Growth
  In this view, companies would make modest investments at best, but consumer confidence would remain low.
• Thriving With Chaos
  Companies — and countries — would adapt a "can do" attitude toward the uncertainties and risks presented by a variety of external shocks and look for ways to succeed despite the obstacles.
• Global Growth
  The proverbial "happy ending" in which global events help to align governments, people, and philosophies to achieve common goals. This gives stimulus to economic growth, trade, and development.

These are just starting points for our discussion. The important questions are not merely what might happen going forward but what are the implications for your business. What capabilities do you need to succeed in the future? Do you have these capabilities now? How can you develop them? Every organization needs to answer this question in its own way.

The December program featured some of our top Wharton faculty in diverse areas, offering their perspectives on strategy, economics, marketing, decision making, and other topics.

We believe there are opportunities in times of turbulence and change, but you need to take fresh approaches to find them. You can’t keep doing what you’ve done in the past and expect the same result. Now is the time to creatively rethink your strategies and find new approaches. Wharton is committed to providing the knowledge and educational programs to help you in this important work.

Corporate attitude, or culture, has never had a more important role to play. Do you see your organization as nimble enough to adjust to rapid changes? Is your workforce committed to seeing the firm grow? Whether a company decides to "go full bore" with new growth ventures or protect its entrenched markets — how it approaches either path, with resignation or steadfastness, can make all the difference.

In future issues of this newsletter, we’ll publish updates from the December program and our progress together as we continue to explore initiatives and develop knowledge to face and manage the emerging new realities of business.

Robert E. Mittelstaedt, Jr.
Vice Dean and Director
Wharton Executive Education

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This month's articles:

• Thought Leaders: Leading Up
  Acting as If You Were in Charge: What do you do when your boss is making a bad decision? Wharton Professor Michael Useem examines the consequences of keeping quiet.
• Laughter From the Front Lines: We learn how important it is to pay attention to the little nuances of conversations — even if you think you’re speaking the same language.
• Wharton West: Vice Dean Helps A.L.S. Association: When a teaching sabbatical, a relative’s diagnosis with a crippling disease, and a passion for bicycling all came together for Len and Susan Lodish.
• Wharton Fellows: Fellows at Chicago Regional Forum Set New Program Design Transformation.
• In the Classroom: The Leadership Journey: What’s Your Story? Your own story can become your leadership map.
• Out of the Classroom: Wharton Leadership Ventures: A new Wharton program helps you to walk the walk — across mountains and valleys — in search of new perspectives on leadership.
• The Last Word: Wharton and The New Business Reality: Taking Stock of the Future. Vice Dean Bob Mittelstaedt discusses Wharton scenarios for the future and a new program on "the new business realities."