Good morning from Geneva.
Fortune 500 CEOs, like many political leaders, have been taking a “geopolitical nap,” BCG managing director and global partner Nikolaus Lang told me this week. But with the return of war in Europe, and the resurgence of trade wars, they are finally waking up.
For strategy consultants such as BCG, that observation presents an opportunity. The Boston-based group launched its Center for Geopolitics this week, which Lang will chair.
“Most people who are in leadership positions today always operated in an environment where geopolitics didn’t play a role,” Lang said. “[Those] who are in their 40s or 50s today have not known inflation for 20 years, or conflict for 60 to 70 years. But in the past five years, [they] experienced a series of exogenous shocks they were simply not prepared for… It puts a lot of pressure on leaders.”
In response, the consulting firm has already developed a model to game out future trade and investment scenarios. It considers a dizzying 500 million data points across 5,000 commodities, 200 countries, and 10 input factors. “There’s a white space” between deep geopolitical expertise and decision making on matters like outsourcing and foreign direct investment that’s usually determined by labor costs alone, Lang said.
The return of (geo)politics in business is one of three key strategic services that are most common at consulting firms these days. The other two are the green transition and the AI revolution. CEO Daily readers and consulting clients ignore them at their own risk.
On that note: Fortune and Meta organized a breakfast meeting on AI at the Cannes Lions conference this week, led by Fortune’s AI editor and author of Mastering AI, Jeremy Kahn. But the marketing crowd Jeremy met in Cannes has some waking up of their own to do, he wrote in Fortune’s Eye on AI newsletter:
“I couldn’t help thinking at Cannes this year that the ad industry has still not fully internalized the magnitude of the platform shift that is about to hit them,” Jeremy observed. “If AI chatbots and assistants become our primary means of accessing the internet, and of conducting e-commerce, how brands reach consumers is going to change profoundly.” At Cannes, he concluded, “the tide was turning. But it wasn’t clear those partying in the beach tents and on the yachts had noticed.”
More news below.
Peter Vanham
peter.vanham@fortune.com
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TOP NEWS
Golden Goose postpones its IPO
Luxury footwear brand Golden Goose is postponing its Milan IPO plans, citing political instability ahead of elections in Europe. The brand, owned by private equity firm Permira, had targeted a valuation of $3.3 billion. Golden Goose’s products have proved a hit with young consumers; CEO Silvio Campara previously claimed that 80% of its customers are Gen Z or millennial. Reuters
Foreigners in Japan may have to pay more
Japanese tourist hotspots are considering charging foreign tourists higher prices to manage a flood of visitors attracted by the weak yen. The mayor of Himeji, one such tourist hub, said Sunday that he wanted to charge foreign visitors six times more to visit its famed 400-year-old castle. Just over 3 million tourists arrived in Japan last month, 9.6% higher than the same month in 2019. Bloomberg
Does social media need warning labels?
On Monday, U.S. surgeon general Vivek Murthy called for warning labels on social media platforms to help protect children. But experts disagree as to whether warning labels will help, or are even needed. Stetson University psychology professor Chris Ferguson suggests that worries over social media are akin to a “moral panic” that misses the true issues facing children, like domestic violence. Fortune
AROUND THE WATERCOOLER
Shopify’s gains with big retailers is setting up a nearly $1 trillion opportunity, according to this legendary Wall St. analyst by Jason Del Rey
The secrets of success with Paul Hudson, CEO of Sanofi, the leader who’s channeling AI to find the next pharma wonder drug by Peter Vanham
Bank of America tells Detroit’s Big 3 they can’t make money in China and should just leave the hypercompetitive car market ‘as soon as they possibly can’ by Christiaan Hetzner
Nvidia’s CFO has been ‘instrumental’ in success and ‘key to Jensen’s vision,’ top analyst says by Sheryl Estrada
This edition of CEO Daily was curated by Nicholas Gordon.
