Larson CEO Summit Highlights Global Leadership Challenges

At the third annual CEO Summit, held at the 2011 ULI Fall Meeting in Los Angeles and sponsored by the ULI Robert C. Larson Leadership Initiative and Ferguson Partners, a select group of CEOs gathered to discuss what it will take to lead a real estate firm in the future. The three-hour, invitation-only event was limited to 50 CEOs and other heads of real estate–related companies.

The goal was to bring together leaders of firms from all over the world both to discuss global issues as they relate to the enterprises of ULI members and to look outside the industry for best practices as a guide to dealing with the challenges of the C-suite.

The highly interactive session began with a presentation by Elizabeth Stephenson, a partner in McKinsey & Company, titled “Global Forces: The Five Crucibles for Change.” In the next decade, innovation will come from five areas, Stephenson said, which she dubbed “crucibles":

• “The Great Rebalancing” focuses on the dynamic growth of the developing world. Stephenson pointed out that over 50 percent of growth in gross domestic product over the next ten years will come from developing countries that do not belong to the Organization for Economic Cooperation and Development (OECD). For the chief executive, paying attention to such emerging markets is vital and potentially lucrative.
• “The Productivity Imperative” dictates that the best companies will learn to maximize returns from people who think for a living. Stephenson noted that 85 percent of American jobs created in the past decade require abstract thinking, problem solving, and judgment. And the great majority of job growth in developed countries will come from the service sector. Having great data about customers will be the key to success.
• “The Global Grid” describes the transformation of information exchange. Today, there are 5.2 billion cellphone users, 2 billion people online, 1.2 billion smartphone users, 700 million people on Facebook, and 500 billion connected devices, according to McKinsey & Company."Pricing the Planet” involves accounting for the consumption of resources as global population rises. McKinsey predicts that by 2020 there will be an over 30 percent increase in consumption of resources—not just oil, but all commodities, including metal, water, and food. The enterprises that develop sophisticated sustainable practices will improve profitability. For example, by reducing the number of left turns by their delivery trucks, UPS saved 2.5 million (4 million km) delivery route miles, 3.0 million gallons (11.3 million liters) of gasoline, and 31,000 metric tons of carbon dioxide emissions. This resulted in an overall fuel cost savings of 2 percent.
• “The Market State” looks at local and national governments as major players and partners in the global economy. Some of the most agile businesses will see opportunities to help governments be more efficient. For example, in Spain a health insurance provider is partnering with the state to run hospitals and clinics more effectively.

Hank Nothhaft, CEO of telecom company Danger Inc. and a self-proclaimed “serial entrepreneur,” spoke about the leadership lessons in his book Great Again: Revitalizing America’s Entrepreneurial Leadership. He pleaded for the creation of more jobs in the United States, noting that it is easier to create a startup in China than in the United States, and criticizing the lack of a national strategy for business development. Technical training is a particular challenge, he said, noting that 60 percent of foreign students return to their home countries. “We’re not producing enough engineers,” he said.

One highlight of the summit was a challenge to the audience at various intervals to “Stump the CEO,” in which each participant submitted a question and another was randomly chosen to answer. To the question of how to recruit the best talent, one CEO responded, “Look for those comfortable in chaos.”

Kathleen Carey, GE Capital Real Estate chief operations officer for global investment management and a ULI Robert C. Larson Advisory Board member, said she is much more aware now of the critical importance of staying current with new technologies, particularly social networking. “Technology gets old quickly,” she said. “If you and your organization are not cutting edge, you’ll miss out and quickly become irrelevant and ignored.”

Michael H. Lowe, president and chief investment officer of Lowe Enterprises, said the best part of the session “was certainly having the opportunity to debate big-picture issues and ideas with peers across the industry.”