I ADMIT IT, I'm a fan of public radio and one of its most frequent pundits, economist Robert Reich. So I was excited to hear the former Secretary of Labor speak at the annual LIMRA International conference in Boston in late October. He didn't disappoint. Reich is a tiny, dapper man with a droll sense of humor and a big message: Like it or not, corporate America can't turn back the clock.
The mood at this gathering of life insuranceexecutives was almost as somber as their dark suits when they listened to Reich's take on the conference theme: What Matters Most? Unlike an earlier who predicted a quick war with Iraq followed by a surging stock market, Reich foresaw at best a continuation of the anemic economic recovery, predicated by the level of consumer confidence. But the core of his message to corporate America was a warning: Don't let your long-term strategies be driven by business economic cycles. There are far more profound and long-term “structural changes” going on in the world, said Reich, and companies that respond to these changes with bold visions and quick action will be the next real success stories.
If this sounds like rhetoric, think about the three trends Reich cites as the catalysts for fundamental change: globalization, technology, and shifting demographics. These aren't new ideas, but they continue to affect every kind of business in profound ways that are changing the world we live in. Those that continue to be reactive to the current economic cycle instead of proactive to worldwide structural change won't survive, said Reich.
Another LIMRA speaker, Peter Capelli, director of the Center for Human Resources at The Wharton School, spoke on changing demographics and echoed Reich's theme: “The biggest challenge is to pick your head up and see what's going on in the world around you,” he said. The greatest test facing insurance and financial services companies, Capelli added, is knowing how to recruit and retain the next breed of top producers, who are also being wooed by the competition.