Shared Values vs. Paid Friends
The third theme is an interesting one because it comes from an executive coaching client in Australia who is the chief operating officer for a very large services company. He runs a very prestigious firm, and most of their offices are in Australia, Singapore, Japan and the United States. They have to make a critical decision now: How far should they expand outside of these four core markets? He made the following argument to me: “For a long time, Singapore, Japan and the United States have been close allies of Australia. Therefore, over the next 5-10 years, no matter what other economies rise in this part of the world, I’m expecting these three countries to constantly come to us for work, give us the benefit of the doubt and grow with us.” I asked him why he made this assumption. He said, “It’s always been this way. When I was young, it was this way. When I joined the firm, it was this way. When I worked my way up the ranks until I became a senior partner and then a chief operating officer, it was this way.”
Then I asked, “So, why has it always been this way?” Why do these four countries share the same culture and support each other? We kept going back and forth about why, but after pushing him, the reason these four countries have stuck together for so long is that it leads to co-prosperity. That means that by working together, the GDP per capita, the GDP, the security, the safety, and dare I say, the prestige of these four nations has risen in lockstep together. It made sense for them to work together because they benefit together.
I asked him, “If co-prosperity is what’s keeping you together, don’t you have to ask yourself what other countries in the future would be able to create a co-prosperity alliance with Australia? Because those are the countries that are going to want to work with Australian companies and will want to support you the way the Japanese, Singaporeans and Americans have done so for the last 50 or so years.” I’m not saying those countries aren’t going to do that in the future because I don’t know, that’s about projecting global geopolitical trends. But that’s the question he has to ask himself.
If it’s about co-prosperity, which it is, the Australians are going to align themselves with countries that allow them to continue this path towards prosperity. That’s just common sense. Other countries who see an alliance with Australia as part of their co-prosperity path, up to middle-income status, upper-income status, high-net-worth status and so on, are going to ally themselves with Australia.
In terms of the way he’s thinking through where he needs to open offices and where he needs to make investments, it’s not about how much you’ve done for these other countries or for these other offices in the past. It’s about where they think the future of their prosperity is going to come from, and that’s where they will align themselves. That’s just basic economics.
Whenever I talk to executives about how they’re going to make investment decisions in different countries, they always speak to me about shared values, shared alliances and shared history. All of that is very important, but at the end of the day, countries—like people and companies—make decisions based on where their future prosperity will come from. It doesn’t matter what your shared history is. It matters where their security is going to come from.
A book I read quite often is about the founding of Singapore. It’s an excellent book about strategy. It has a chapter about a time in the 1950s, I think, when the then prime minister of Singapore told his senior people in government that they had to change their focus. He said to them that the future of the world was the United States of America, even though they couldn’t see it at the time. His message to them was something along the following lines, “Over the next few decades, as Britain recedes from the East, America is going to take their place, so we need to anchor ourselves to America, and we’re going to do that by sending our senior civil servants to get their graduate degrees in American colleges. We won’t forbid them from going to British colleges, obviously, but we’re going to encourage American education. We’re going to spend more time with Americans, and we’re going to open our economy to encourage Americans to invest here.”
In the 1940s and 1950s, you could not have seen the rise of the US. It would have been impossible to see that because the world was different then. The British still had bases around the world.
As you make decisions for your career, your business, or—for some of you in government reading this—your country, you have to look at where your co-prosperity is going to come from. That’s where you need to go.
This is an excerpt from Monday Morning 8 a.m. newsletter, issue #15.