I recently returned from South Africa, where I had the chance to hear scenario-planning expert Clem Sunter. Clem is the founder of Mind of a Fox, an organization focused on scenario planning, and he lectures around the world on related topics like megatrends and catastrophic risk management.
In listening to Clem, I was fascinated by two things: his own founder story and his perspective on job creation. Let me tell you about each one in turn.
Clem’s founder story starts in the 1980s in South Africa. Apartheid ruled, future hero Nelson Mandela was in jail and the future looked highly uncertain. Clem, then a senior executive at Anglo-American Corp, was charged with working out various scenarios of that uncertain future. The result was a “High Road/Low Road” analysis. The High Road scenario, which assumed the government would ultimately negotiate with the leaders of the African National Congress and successfully transition to black leadership, showed relatively bright prospects. The Low Road, which assumed the government would resist, led to economic stagnation and possibly civil war.
Clem went on to inspire many with the logical consequences of each pathway he had spelled out. The story goes like this, as it is told on Mind of a Fox’s website:
In 1987 Clem led a team on a road show that addressed tens of thousands of South Africans, including political and business leaders, academics, teachers, students, farmers, the military and the police… in fact anyone who would listen. He presented the two scenarios and encouraged audiences to make what was then not an obvious, but quite risky, choice. However, the team’s relentless pursuit of the High Road helped to create a shift in the mindset of South Africans which laid the firm foundation for negotiation and the peaceful transition into a respected democracy. The story turned from a remote possibility into reality even sooner than the team itself anticipated.
As successful as Clem’s scenario planning was, the tools he used to generate the analysis were still largely the purview of large multinationals. That began to change when Clem met a young executive MBA student named Chantell Ilbury. She had ideas for adapting scenario planning to make it more actionable, and more accessible to smaller businesses and even individuals. Thus was born Mind of a Fox, with the name coming from the ancient Greek saying that “The fox knows many things, but the hedgehog knows one big thing.” As Clem relates, “We felt the key to scenario planning was to keep a lot of little things in your head so you could adapt quickly in turbulence.”
I love the imagery of the “fox” who has to focus on many things and adapt quickly, rather than the “hedgehog” who focuses on one big thing and hopes he or she has anticipated the right thing. It’s a distinction that any business, large or small, would do well to consider.
Megatrends and job creation
Clem went on to talk about scenarios around the global economy, with a deep dive on China and South Africa. What really fascinated me during this discussion was that, of the three megatrends he highlighted, one was on the nature of work itself. Here’s Clem: “We talk frequently about three major megatrends that every business must address. The first and second are about aging populations and climate change. The third is about how the fundamental nature of work has changed. This will demand that society focus more on entrepreneurism if we’re going to create good jobs.”
He continued: “The sad fact is the large companies are not providing employment for life and are all experiencing jobless recoveries. To have employment, you will have to have more business owners starting up their own businesses. This is a massive and dramatic change because our current education structures are creating folks that can administer existing enterprises rather than create new ones. The single most important truth for a young person is: If you want a great job, you will have to create it.
“In China, this was Deng’s insight: Give the job creators the time and space to grow their businesses, and then let them challenge state enterprises. He took his country from No. 100 to No. 7—and now it’s the second-largest economy in the world.” Clem ended with this: “For South Africa I worry that rather than roll out the red carpet for entrepreneurs, we are rolling out red tape. It is so hard to start a company with employees that most of our small businesses have no employees—just the founder. Government has to embrace job creators. And the best embrace is simple—get out of the way.”
We’ve talked about the critical importance of founders and job creators to the global economy in other blog posts. Founder-led companies outperformed the market by more than three times in terms of total shareholder returns over the last decade. A recent Bain analysis found that between 2001 and 2011, young firms created about 18 million jobs in the US, while older firms experienced a net decrease in job creation. Young firms also contributed 70% of the jobs created in emerging markets, according to Bain’s analysis of World Bank data. And these firms have continued to create jobs even during recession.
The numbers speak to how important the Founder’s MentalitySM is, but I’ve never heard it stated quite so starkly, as a bold but frightening challenge to the next generation: If you want a great job, you’ll have to create it.