Business leaders must now confront a mammoth trend that’s just as significant for them as the quickening march of technology. It’s the global turn away from socialism in its many forms, away even from classical liberalism, and toward populism. The trend gained momentum over the weekend and could now become one of those epochal turning points, analogous to what happened when John Paul II became pope in 1978, Margaret Thatcher became Britain’s prime minister in 1979, and Ronald Reagan was elected president in 1980, together setting the world in a new direction.
Fidel Castro’s death on Friday was heavily symbolic but not just that. While he lived, he cast a broad shadow over his brother Raul’s modest efforts to begin reforming the island’s pathetic communist economy. He didn’t publicly condemn the restoration of relations with the U.S., but he was known to oppose it. No one should expect rapid reforms now; dictatorships don’t give up power easily. But the way is finally clear for Cuba, part of the nearly extinct species of truly communist countries, to evolve.
Ecuadoran president Nicolas Maduro declared three days of mourning for Castro’s death – anything to distract attention from his own economic disaster. An eye-opening report in the New York Times details how over 150,000 Venezuelans have fled the country in just the past year. Their objective: food. Venezuela was one of Latin America’s richest countries until Maduro’s predecessor, Hugo Chavez, turned it sharply toward socialism. Now it’s on the brink of starvation, insurrection, and collapse.
In a starkly different environment, Francois Fillon yesterday astoundingly won his center-right party’s runoff election in advance of next year’s French presidential election. Here’s a country where government accounts for a higher proportion of GDP than in any other European nation but Finland and where the merest threat of rolling back worker protections sparks violent rioting. Yet Fillon won by promising he will slash government spending, end early pension rights for many in the vast state sector, and raise the retirement age to 65 for everyone. His victory sent France’s Socialist party into a panic. The great question now is whether the far-right populist Marine Le Pen will be even stronger in the general election next spring; polling suggests she may well be.
Combine the past weekend’s news with Brexit, the election of Donald Trump, and rising nationalism in Russia, China, Turkey, and elsewhere, and this looks increasingly like one of those world-historical moments that historians will be studying decades from now. The challenge for leaders will be to assess it coolly, to see the long-term implications, and to reallocate their resources shrewdly.
The big idea to keep in mind is the magnitude of this opportunity. History shows that times of tumult are when the competitive order gets recast, when winners become losers and new leaders emerge. How will your organization make the most of this moment?
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What We’re Reading Today
Samsung considers splitting
Oh-Hyun Kwon‘s company is considering a proposal by activist hedge fund Elliott Management that would split Samsung into a holding company and an operating company. The setup would give more control to the founding Lee family while sending shareholders a special $26-billion dividend. Samsung will respond to the proposal tomorrow. Business Insider
Macy’s website struggles on Black Friday
The site couldn’t handle Black Friday traffic; it’s unclear how many sales (if any) were lost. The problem was especially unwelcome for Terry Lundgren‘s company, which needed a huge Black Friday to improve lagging sales. Fortune
Lufthansa strikes continue
The pilot’s union promised more labor stoppages Tuesday and Wednesday. Last week, 2,800 flights were canceled in the standoff between the pilots and Carsten Spohr‘s company over pay increases. BBC News
Building Better Leaders
CEOs must counter the fear of losing
It’s stronger than the urge to win. To overcome our psychological wiring, frame the issue as what would happen if the organization does nothing. Harvard Business Review
Job candidates can gauge cultural fit…
…while interviewing for a job by asking what hiring managers like to do outside of work and what the busiest time of year is like around the office. Fortune
Succeeding as a power couple
Power couples strive for their goals together and look for small gestures to keep the spark alive. Stanford Insights
Team Trump in Action
Trump says millions voted illegally
President-elect Donald Trump claimed on Twitter that he would have won the popular vote if not for “millions” of illegal ballots. He offered no evidence of illegal voting; Hillary Clinton won the popular vote by over two million according to the latest tally. Green Party candidate Jill Stein has filed for a recount in Wisconsin, which Trump carried. Fortune
Romney splits Trump team
Advisers disagree sharply on whether to name Mitt Romney secretary of state. Senior adviser Kellyanne Conway said she doesn’t believe Trump needs to “pay” for party unity with the State Department position. The other leading candidate is former New York City Mayor Rudy Giuliani. The Guardian
Trump aide tells Cuba to change or lose U.S. support
Following the death of Fidel Castro, incoming chief of staff Reince Priebus said Cuba must make major changes — including opening markets and ending human rights violations — if the normalizing of relations begun by President Obama is to continue. USA Today
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Losing to computers didn’t hurt chess grand masters
The best of them learned from the machines, using databases of past matches. Fortune
It’s not just Russians creating fake news
The “CNN porn” story shows how quickly media companies will jump at a story that’s a hoax or an isolated event. Fortune
Ellevest CEO Sallie Krawcheck turns 52 today. Forbes