Business: Success in an Imperfect World

by Margery Kraus, President and CEO, APCO Worldwide

As featured in Foreign Policy Magazine
January/February 2005

Corporate leaders tell us business does not do well in parts of the world riven by political discord, corruption, famine or disease. Nothing puts a bigger damper on business climate than pervasive poverty, and war is a complete non-starter.

I was struck by the phrase "business cannot succeed in a failed world" the first time I heard it. At a time when the world is smaller and more connected than ever, it does seem obvious that business can no longer stand on the sidelines and depend on someone or something else to create a positive business climate. Business needs to create, or at least nurture, the conditions for its own success.

Globalization is the new status quo. Technology ties disparate cultures and regions together like the cow paths of the old country village. Supply lines ignore most geographic boundaries. Yet business is still trying to figure out its role in this new tightly wired landscape.

For generations, business kept to its private sector paths and lived within self-imposed boundaries, leaving social and public policy matters to government. The rationale was that the business of business was making money, and government or non-profit charity took care of the rest. But these groups have shown they cannot solve all problems alone.

Business needs a healthy, stable and prosperous world to succeed. Those who produce and sell goods and services have a vested interest in a world that respects human rights and social justice, honors free trade and rule of law, and protects the environment. No company can expect to sell much of anything, least of all luxury items like personal computers and DVD players, in a world where nearly half the population lives on less than two U.S. dollars a day. The common sense philosophy that led Henry Ford to make his sturdy black car affordable for the assembly line workers who built it is the same reasoning business needs to adopt if they expect to sell software, automobiles and other consumer goods.

The old business model that kept business in its narrow confines cannot work in this brave new world. Corporate leaders are under tremendous pressure to find new markets, grow their businesses and make more money. The demographics of the world suggest they are closing in on a saturation point in the countries that are prosperous and stable.

Many, of course, are now targeting the People’s Republic of China for the future. The country of 1.3 billion people represents one-fifth of the world's population. Until recently, it was a completely untouched market for outsiders. It is a challenging place to conduct business. The obstacles are legion. Growth can be rapid but uneven. The legal and government regulations are a work in progress. The regional market differences within the country are as sharp as those among European countries. And the environmental problems are serious.

It is an enormous untapped market for all kinds of consumer goods. Those businesses beginning to make inroads into the market are moving slowly but practically ahead with deeply researched and knowledgeable strategies aimed at carefully targeted audiences. They are succeeding by getting to know and understand the culture and conditions.

China is a unique place but the challenge it represents as a largely untapped market can act as a metaphor of sorts for the rest of the world where the challenges to business are different. The message is the same: business – with determination, flexibility, creativity and initiative – can overcome obstacles to commerce anywhere, and improve the greater good in the process.

If business cannot succeed in a failed world, then business needs to figure out how to help make the world a success.

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