Author: admin_poj
The Transformation Imperative Series: World View: Macro Economics in Turbulent Times
It’s building trust even when it’s being undermined
This month has been about macro framing. I took a step back and leaned into a conversation with a world economics professor to get a view on how the transformations we are seeing across the corporate world are being impacted by wider transformations in society.
This is a huge subject. It takes in everything from the deterioration of trust in institutions; globalisation and the role of business in society. It was also a conversation that took place before bombs started falling across even more Middle Eastern nations and a world that was already turbulent became a maelstrom.
Comfort in continuity
What I took away was comfort that there will be some continuity; but it needs to be a choice. You might now be rolling your eyes in disbelief but bear with me.
One of the central tenets of transformation for me has been that if you focus on the Four I’s of Economic Transformation – Investment, Institutions, Infrastructure and Innovation – and get them embedded into the ground, you can build sustainably.
“…The pillars of fiscal consolidation, and renewed macroeconomic credibility are setting the stage for a more stable and attractive investment landscape.”
Only this month, I delved into PwC’s West African Economic Outlook report and I circled in red comments by partner George Arhinwho had honed in on Ghana. He wrote that the country is charting a path to recovery and as it does so, “…the pillars of fiscal consolidation, and renewed macroeconomic credibility are setting the stage for a more stable and attractive investment landscape.” This is economic theory seen in action; and it is working.
The challenges of the past
There’s no denying, though, that it was a very different world when INSEAD Professors Antonio Fatás and Ilian Mihov wrote the paper on this in 2009. However, it wasn’t a world without problems. In fact, we were in the grip of the Global Financial Crisis. As Bank Underground succinctly described it: “…the GFC was by far the deepest global downturn that has occurred in the post-war period. Indeed, so far, 2009 has been the only year since World War II in which world activity contracted relative to the previous year.” So is it still relevant?
Who better to ask than Professor Fatás himself and he offered hope. “I think to a large extent that model is still valid. Like any framework, it is obviously a large simplification of lots of things which are very complex. When you talk about growth of a country or a company, there are lots of issues that one cannot summarise in a slide”, he shared. However, he adds: “…the idea was to highlight factors, which are fundamental and which sometimes we ignore. If we go through a list of bullet points of what matters, the list gets longer and longer. We then don’t see clearly what blocks truly matter.”
Changing consensus
What has changed, he acknowledges, is consensus on what each of the Four I’s actually are. We still have institutions, for example, but the past few years have tested their relevance or revealed gaping chasms in the views of which are relevant at all. Look at the Trump Administration’s battering of the United Nations; and at a corporate level, the move away by some businesses from DEI initiatives that many of us believed were completely embedded. The very nature of governance has been questioned.
“Africa is paying too much to borrow. Calls to end the “Africa premium” – the gap between how Africa is assessed and the reality of its economies – can no longer be ignored.”
It’s not all negative though. It might force positive transformation. In an op-ed in the Financial Times, Bola Tinubu, President of the Federal Republic of Nigeria, called for the establishment of an Africa-owned credit rating agency. “Africa is paying too much to borrow. Calls to end the “Africa premium” – the gap between how Africa is assessed and the reality of its economies – can no longer be ignored,” he declared.
The current model is not working – it is opaque and subjective – and the institutions that have held sway for decades are not fit for purpose, he said, stating: “Fitch, Moody’s and S&P Global Ratings, the three dominant global credit rating agencies, wield outsized influence over Africa’s access to international capital. Their judgments shape investor behaviour, yet they consistently misjudge African risk.”
Africa owning Africa’s narrative
Transformation is needed and this would mean a move away from the “Big Three” for the continent, which would instead have its own credit rating agency. He writes: “When prices fall or markets tighten, African nations are downgraded swiftly and broadly – even when their reserves are strong, fiscal buffers are intact and debt profiles remain manageable. Downgrades then become self-fulfilling, raising borrowing costs and straining public finances.”
The “Big Three”, he added, would still be used by international investors for validation but the new agency could change investor perceptions of the continent. It would, as I have called for before, let the continent control its own narrative.
There will be many who disagree. However, everyone must acknowledge that the value of certain institutions is being questioned. There are discordant views now. As Professor Fatás surmised, it may have been that these views have always been held but now business (and political) leaders are not holding back (for better or worse).
In spite of all of this turbulence, business leaders can choose to steer a steady path. I don’t mean refuse to acknowledge that transformation is necessary. That is a path to destruction. But they can choose to remain true to their values, cultivate trust and set an example to their employees and clients alike.
“Surely now is the time for business leaders to proudly model behaviour that will trickle down; and hopefully even defy gravity to flood up too.”
I wrote earlier this week that business don’t exist in a vacuum. They play a key societal role – and not just financially or structurally. As a business leader, I want people to know what I stand for. I am guided by my desire to connect people and bring about remarkable but sustainable transformation; but I am also steadfastly guided by my faith and my compass as a father, husband and global citizen.
People need to trust me as we work together to transform businesses. I need to earn and maintain that trust, which I do by constantly learning, developing my EQ and questioning my decisions. Surely now is the time for business leaders to proudly model behaviour that will trickle down; and hopefully even defy gravity to flood up too.
Dig in and you’ll die. This is a moment of opportunity for those who can keep talking
“So much has been blown up. You can’t put the genie back in the bottle,” said the Guardian’s economics editor, Heather Stewart, after her week in Davos. She also described the week as “unusually alive”.
As the delegates start to leave the Swiss Alps, I want to emphasise another point she made: that the World Economic Forum isn’t just about world leaders. Although geopolitics has dominated this year — not least because there were some huge egos in the room – it is also a place “…to exchange ideas, business cards and do deals,” she says.
Nervous but focussed
While many are feeling understandably jittery – some probably feel like they’ve been walloped with a sledgehammer – there will also be many who come away from Davos with a renewed sense of purpose.
The transformation of the world order is well under way, and for those of us who take a people-centric approach, this is a moment of opportunity: a chance to raise up businesses – and countries and continents – that have too often sat on the periphery.
“…A hard interrogation of what has worked and what hasn’t is not just healthy, but essential.”
I don’t want the genie back in its bottle. In fact, I think a hard interrogation of what has worked and what hasn’t is not just healthy, but essential. This is true of any meaningful transformation. You can’t set a path and then doggedly stick to it when evidence, context and lived experience tell you there are better alternatives.
Keeping conversations going
Over the years, I’ve seen strategies fail not because they were wrong at the outset, but because leaders refused to revisit them. The organisations that thrive are the ones that keep talking – with their teams, with their partners, and with themselves.
We’ve seen this before. When Microsoft began its cultural reset a decade ago, the real shift wasn’t a product launch or a rebrand, but a change in how the organisation communicated. Leadership made space for learning, challenge and feedback – internally and externally – and, crucially, allowed strategy to evolve rather than be defended. That willingness to keep the conversation going, and to change course without ego, proved transformational.
Rupture or redirection?
Five or ten years from now, I suspect we’ll look back on this period less as a moment of rupture and more as a moment of redirection. In a world where certainty is increasingly scarce, agility will have
become the most important currency of all – more valuable than scale, dominance or even capital. The institutions and businesses that emerge stronger won’t be the loudest or the most forceful, but the most adaptive: those that learned quickly, listened constantly, and invested in trust, capability and long-term resilience rather than clinging to rigid plans and short-term advantage.
“In a world where certainty is increasingly scarce, agility will have become the most important currency of all – more valuable than scale, dominance or even capital.”
Those who stay on an increasingly narrow path, even as far more viable options open up to the left and right, often do so out of ego (perhaps rooted in fear) and nothing else. Instead, we need a more organic approach to transformation.
Speaking specifically about trade, the head of the International Monetary Fund, Kristalina Georgieva, said something at Davos that really resonated with me: “We have always traded and we will always trade. Trade is like a river, water. You put obstacle, it goes around it.” The clashes at Davos are not ruptures, but boulders fallen into a river that perhaps had become too shallow, too wide and choked with weeds. It won’t be the shouty strongmen who reshape the riverbed with their shovels, but those who have spent the week meeting, talking, sharing ideas and making plans. They will start the digging – and others will join.
Why transformation is a human problem and not a logic problem
Transformation is not driven by data, processes and technology roll-outs, it is driven by people. I have read countless articles about the realities of transformation; and each one underplays the role of the human element.
A few days ago, I shared a quote from a McKinsey article that promised to unveil the truth about transformation. In it, the authors shared six questions that executives should be asking themselves when driving change. They touched on the flow of value; the huge leadership challenge ahead and the importance of setting high aspirations. All of this, I agree on.
Asking the right questions
However, one question stood out for me: “What’s it going to take to get the organisation to take the change seriously?” This should be the first question. It is where strategy lives or dies, because this is where human reality collides with ambition. However, it also needs rewording. Let me explain.
In May, Deloitte published an interview with Patrick Jany, the CFO of Maersk, a venerable shipping giant, which has embarked on an ambitious digital transformation to become a “global logistics integrator”. In it, Jany spoke about how one of the key learnings has been that it is essential to thoroughly understand business processes before you start building systems to manage workflows. This quote crystallises my argument. Jany says: “It is easy to build a nice system, but if it is based only on theory and not grounded in reality, people will quickly stop using it after rollout.”
“It is easy to build a nice system, but if it is based only on theory and not grounded in reality, people will quickly stop using it after rollout.”
He adds that he has seen first-hand the impact of the resultant ‘unhappy flow’ and saw that “80-90% of users end up focusing on problem-solving and making exceptions to the intended workflow”. This resulted in reduced productivity and bad service delivery; but, I would add, possibly also led to confused employees who felt that the transformation had been foisted upon them without any understanding of how they actually work.
Observation and agency
Jany says that the company’s ELT have ensured that this doesn’t happen by observing operations first hand to see what challenges their employees are facing and to ask for constant feedback. This then, he says, “…guide[s] decisions and set priorities”. Maersk’s team has given the employees agency in the transformation.
“We often frame business transformation in terms of ‘people, process, technology’. We put ‘people’ first for a reason.”
It is so important for leaders to design transformations with this in mind because change is hard. As John Chambers from the Japanese multinational imaging and electronics company, Ricoh, wrote: “We often frame business transformation in terms of ‘people, process, technology’. We put ‘people’ first for a reason.” He continues: “It starts with a mindset shift – a shift away from what has always been done and towards what could be. And when employees feel like they are actively involved in the change process (as opposed to it being done to them), this could even help to embed the changes quicker and bring about lasting change.”
There it is – sustainable change or a true transformation can only happen if people are at the heart of it. This is where EQ comes in and is the key tool in a leader’s pocket to negotiate a time of upheaval. So coming back to the question posed by McKinsey, it may be directionally right but it feels transactional. It implies effort and not belief. What we really need to be getting at is: “What must be true for our people to feel safe enough, motivated enough, and confident enough to truly change?”
From New York to Gaborone: Why Africa can’t grow without resilient infrastructure
It always amazes me when conversations started in one room in one country on one continent seem to seamlessly carry on in another room, in another country and, in this case, on another continent.
At Elevate Africa Convening, I was privileged to chair a high-level panel that felt both timely and poignant. I was joined by the CEO of BNETD, Kinapara Coulibaly, Zurina Saban, General Counsel and Partner at Africa50, Kuso Kamwambi, Head of the Presidential Delivery Unit of Zambia, and Elizabeth Jack-Rich, CEO of Elin Group – all very accomplished leaders in their professional spheres.
As at Concordia in New York, which ran alongside the UN General Assembly, we explored a fundamental pillar of the economic growth theory – sustainable infrastructure as a catalyst for economic transformation.
The foundations to build transformation upon
Infrastructure is often called the backbone of economic transformation because it provides the physical and organisational foundations that let economies shift from low-productivity to high-productivity activities.
“Infrastructure is often called the backbone of economic transformation”
Africa has gargantuan task ahead of it. As Coulibaly said in his keynote speech, nearly 70% of the infrastructure the continent will need by 2040 has not yet been built. He further highlighted during our plenary discussion that infrastructure development is not just a physical or economic imperative – it is the enabling foundation for human capital, innovation, and productivity growth.
The net benefit of investing in more resilient infrastructure is clear – the economics make sense – with $4 in benefit for each $1 invested. Yet as Saban highlighted, despite a global funding allocation of nearly $3 trillion to the infrastructure agenda, a mere 3% was currently allocated to Africa.
The African finance gap
I underscored this point during our plenary session, referencing The African Economic Outlook (AEO) 2024 report published by AfDB (PDF), which estimates that to accelerate Africa’s structural transformation, the continent needs to close an annual financing gap of $402.2 billion (about 13.7% of its projected 2024 GDP) by 2030.
Coulibaly and Saban challenged financiers and institutional capital to do more, highlighting the need for smarter de-risking mechanisms, greater transparency, or more innovative blended finance models.
Interrogating standards and governance
But financing is only one of the bottlenecks in Africa’s infrastructure story: execution and governance also need to be examined. The panellists noted that while many projects have been completed, execution often falls short of the scale, quality, or resilience needed to deliver lasting impact.
Kamwambi argued that there was also a need for reforms and agility in governance to ensure that policies were enabling rather than limiting – to drive the continent’s transformation agenda. This was further echoed by Jack-Rich – a pioneer and titan of industry rewriting the narrative of Africa’s capability and competency. Elin Air hit the history books in June by completing the first 7,800 landing check for a Bombardier Challenger CL604 aircraft entirely in Nigeria. It was the first time this level of maintenance had been achieved anywhere in Africa.
“There is a need for reforms and agility in governance to ensure that policies were enabling rather than limiting.”
For Jack-Rich, it was a moment that countered the stigma that anything done in Nigeria is not professionally done. As she told the press: “Completing this check is not just a technical achievement, it is a statement of endless possibility.”
Encouraging more innovation
Jack-Rich acknowledged the strong collaboration her organisation has enjoyed with regulators and policymakers, but highlighted that simplifying regulatory processes and directing funding more strategically could further unlock infrastructure growth across the continent. This would encourage more innovation if policies were infrastructure-enabling and unleash even more entrepreneurial spirits on the continent.
The continent must address all three issues with a matter of urgency not least because it is this infrastructure that will support growth even as Africa bears the brunt of global climate change. These impacts are projected to erode 2–4% of Africa’s GDP each year by 2040. Inaction on the continent and beyond is not an option as it will lock Africa into a low-growth, high-vulnerability trap, where the cost of recovery continually outweighs the benefits of prevention.
While there will never be enough time for these necessary discussions, each panellist left with a single continental commitment – taking ownership and accountability in their role in the ecosystem, either as policymakers, financial partners, technical partners and leaders of industry. The power of the words shared was evident – we need to increase collaboration and it starts with dialogues like this. And dialogue must be followed by action.
