Cites International Mindset, Judgment and Flexibility—Ambiguity and Global Transformation Form the Backdrop

The 2008 U.S. presidential election has been the most dramatic in recent history by any measure. Converging economic, cultural and political issues are increasing the level of discomfort among voters and raising the stakes. In endorsing Barack Obama, I have considered the candidates in several dimensions, but my primary perspective has been that of a management consultant. The United States is a client in crisis, and I have asked myself, "What kind of leader does the country need, given the challenges it faces?" Barack Obama is my prescription, although there may be unwelcome side effects. If circumstances were different, I might well have favored John McCain.

Real-time Case Study Holds Lessons for G7 Knowledge Economy Transition—"Courage" to the Rats—A New French Realism?

Illinois leaders were addressed by Her Excellency Christine Lagarde, Economy, Industry and Employment Minister, Republic of France at the special luncheon held in her honor by the Executives' Club of Chicago at the Westin on 23 May 2008. Attending were Chicago Mayor Richard M. and Maggie Daley, a French delegation that included the Ambassador of France to the U.S. Pierre Vimont, the Head of Cabinet Christian Dufour, David Appia, Minister Counselor for Economic and Commercial Affairs, and numerous executives of Chicago Fortune 500 firms.

If one were not listening attentively and willing to question stereotypes, it would have been too easy miss this intriguing story. However, as in all things "2.0," profound change manifests slowly at first, and I detected a glimmer of disruption in France's status quo. Having lived in West Berlin surrounded by the concrete reality of a wall that subsequently, unbelievably, came down, I ask myself, "What if France were to vanquish some of the sacred cows and become, gasp, pragmatic and entrepreneurial?" Lagarde's message was precisely that, and she delivered it with the aplomb that reflected extensive business and policy success at the boardroom table.

A New Synthesis in the Knowledge Economy—Fast Forward to the Past—Plus, The Fire

Noodles are largely driven by intuition and holistic mental doodling, and this one has been simmering a long time*. I believe that there is profound meaning in virtual and literal "mobility," and I'll explore its significance in terms geography and human relationships. Geography has always had a profound impact on how humans have lived and the organizations in which we have lived, and when its meaning shifts, our lives are transformed. This is of paramount importance because human relationships are currently transitioning from geography-based to interest-based. Many governments and businesses harbor business rules that assume geography-based relationships, and, unless they appreciate the shift to interest-based relationships, they will experience disruption's spin cycle. Lose a turn. Don't pass go ,^)

Before exploring how these things will unfold in Part II, let's review three geographies and four economies here in Part I...

"Yes," Says Team of Healthcare Experts, Employer CEOs and Patient Representative at the Executives' Club of Chicago, "But You Must Change Your Ways"

Honestly Assessing Quality—Engaging Consumer Empowerment—Trading in the Ferrari for a Chevy

The Executives' Club of Chicago convened its healthcare reform summit at the Hilton Chicago on 20 February 2008, drawing on diverse expertise. Ian Morrison, Ph.D., healthcare futurist, gave the keynote and moderated two panels: first, the healthcare expertise panel with Dean Harrison, CEO Northwestern Memorial Healthcare; William Novelli, CEO AARP; Scott P. Serota, CEO BlueCross BlueShield Association; and second, the business executive panel with Andrew M. Appel, Chairman AON Consulting; John A. Edwardson, CEO, CDW; John B. Menzer, Vice Chairman and Administrative Officer, Wal-Mart Stores. Robert L. Parkinson, CEO, Baxter Healthcare gave an insightful point of view on recommended actions to close the event.

There was broad agreement that the U.S. healthcare system was broken, and speakers offered excellent insights and perspectives about how to fix the system. However, what they didn't say was as interesting as what they did, and I will address two key issues in Analysis and Conclusions: the pervasive lack of trust among all parties and the emerging consumer empowerment trend: what do Web 2.0-enabled consumers have to bring to the party?

"What? I can't go to the grocery store! My bank's automated teller machine refuses to dispense cash, and I'm planning a big cook-out tonight!" What's an avatar to do?

It turns out that an inworld bank failure this summer cost residents about $750,000 USD and led to a run on Second Life banks, which eventually precipitated intervention by the highest authority available, the virtual world's creator, Linden Labs. But the root cause may well have been LL's earlier intervention in the economy by banning gambling on the site. According to Second Thoughts, gambling was a very lucrative business that offered jobs to newbies, Second Life's version of immigrants who are a vital part of the economy. Read more about this engaging story, "Cheer Up, Ben: Your Economy Isn't As Bad as This One," (23 January 2008, The Wall Street Journal).

U.S. Economy Due for Sideways Year—Special Effects by Presidential Election—Uncomfortable Long-term Questions Waiting in Wings

The Executives' Club of Chicago assembled an all-star panel to give Midwest business leaders their guidance for various aspects of the U.S. economy in 2008. Diane Swonk, Chief Economist of Mesirow Financial and Robert "Bob" Froehlich, Chairman of the Investment Strategy Committee, Deutsche Asset Management returned, and the mystery panelist was Jack Ablin, Chief Investment Officer, Harris Private Bank. They broke out their respective crystal balls for 2008, along with comedic effects. The session was brilliantly moderated by Terry Savage, Financial Columnist of the Chicago Sun-Times who didn't miss a beat and extracted specific predictions from panelists.

Panelists agreed that the U.S. economy would struggle in 2008, but it would move mostly sideways, probably eking out a 1-2% gain for the year after an unsatisfying first half. All panelists predicted that the Dow would touch 14,000 sometime during the year. Froehlich again emphasized the importance of looking beyond the U.S. for investments. Swonk and Ablin were less outspoken but had high non-U.S. allocations in their recommended investments for 2008.

After reportage on the panelists conversation, I will add my analysis and points to ponder, about the economy, opportunities and the election.

2007 Pockets of Opportunity Revealed—Plus Political Handicapping

The Executives' Club of Chicago assembled an all-star panel to give Midwest business leaders their guidance for various aspects of the U.S. economy in 2007. Diane Swonk, Chief Economist of Mesirow Financial, Alan Murray, Assistant Managing Editor of The Wall Street Journal and Robert "Bob" Froehlich, Chairman of the Investment Strategy Committee, Deutsche Asset Management broke out their respective crystal balls for 2007, and the audience was not disappointed for lack of insight or wit. The session was scintillatingly moderated by Terry Savage, Financial Columnist of the Chicago Sun-Times.

The consensus was that the U.S. economy would have a relatively benign year in 2007. All panelists predicted a higher Dow, and their predictions concurred with Wall Street's most accurate ,^) indicator, the Super Bowl Predictor. Little of import will happen on the political front, the U.S. economy will grow at a slower pace, and investment returns will be generally highest outside the U.S. Elsewhere, consumer empowerment reared its head in the executive pay issue, Apple will remain an enigma for investors who don't understand customer experience, and the U.S. will have to get over itself in order to realize its potential in the Knowledge Economy.

Economic Insight Behind the Global Knowledge Market

The Strategic Management Association, the Harvard Business School and the CDMA sponsored the 2007 Economic Forecast featuring David Hale, Chairman of Prince Street Capital Management and Lyric Hughes-Hale, Founder China Online. David has international renown as an international economist, and he presented his encyclopedic knowledge and perspective on global economic trends in Chicago on 9 January 2007. Afterward, Lyric shared her insights on China in Part II of the evening. The Global Human Capital Journal also covered the 2006 Economic Forecast.

David's forecast was global in scope but adapted to his U.S. audience. It reflected many of the numbers behind the global shift to the Knowledge Economy, and how this is driving global prosperity:

In 2006, we saw all-encompassing prosperity with no major globally significant financial shock since the 2001 Argentina crisis. Prosperity has been broadly based, which has partially been due to the end of the Cold War, and high commodity prices have extended prosperity to developing countries in Latin America, Africa and Central Asia. Stock market capitalization reflects the prosperity. For example, in 2000, Microsoft's market capitalization was triple that of all commodities of the world: $600 billion versus $200 billion. In 2006, Microsoft market capitalization $250 billion, that of global commodities $800 billion.

Here are his specific remarks, from my notes. All references to "dollars" are U.S. Dollars unless noted:

Welcome to the Post-Industrial World

The Knowledge Economy is a post-industrial economy characterized by a highly developed information technology industry along with overproduction and commoditization in industrial and agricultural sectors. Widespread information technology (IT) adoption among producers and consumers enables all market participants to create and share information about all aspects of economic transactions. The creation, packaging and sharing of information is termed "knowledge." In the Knowledge Economy, information about an underlying good creates most of the good's differentiated value.

Consumer mobilization and engagement in the Knowledge Economy renders many of the Industrial Economy's rules invalid. In the Industrial Economy, consumers had little information relative to producers, they were isolated from each other, and they had no collective voice. They were at a disadvantage as market participants. The "second stage" of the Internet, "Web 2.0," facilitates P2P (peer to peer) information sharing, and its tools are free to use and accessible to anyone with an Internet connection. Producers have been accustomed to controlling information about their companies, products and services, but they will increasingly have to share this influence with Web 2.0-enabled consumers.

Talking with the Ambassadors of the World's Largest Trading Relationship—and the CEOs of Four Global Enterprises

Three eminent diplomatic leaders and CEOs from Baxter, Financial Dynamics, ITW and Philips briefed Midwest executives on the current status and future directions of the world's largest trading relationship at the Executives' Club of Chicago's International Conference November 15. The half-day program featured several presentations, a CEO panel and a media round table. All speakers sought to impress upon the audience the pivotal importance of the transatlantic alliance for the United States and Europe, and most warned chief executives neither to take it for granted nor to be passive in the face of rising protectionism.

The fact that the importance of the E.U.—U.S. alliance had to be emphasized brought into sharp relief the relatively sudden rise of Asia as well as the shift from the Industrial Economy to the Knowledge Economy. Both megatrends pose opportunities and threats for the world's largest economies and enterprises, and the concomitant uncertainty emanated from the assembly hall. I will summarize speakers' remarks and question and answer sessions before adding conclusions.