Summary of the breakout CEO Conversation at the 2009 Annual Members’ Conference.


Mr. Ralph Crosby,* Chairman and CEO, EADS North America; Member, Atlantic Council Strategic Advisors Group
Hon. Philip Lader,* Chairman, WPP plc; Senior Advisor, Morgan Stanley; Former U.S. Ambassador to the United Kingdom
Mr. Jay Walker,* Chairman, Walker Digital LLC; Founder,
Mr. Maciej Witucki,* Chief Executive, Polish Telecom
Moderated by Mr. Frederick Kempe, President & CEO, Atlantic Council


This session was held under Atlantic Council Rules, defined by President and CEO Frederick Kempe as “Chatham House Rules with military enforcement.”  Below is a general summary of the topics discussed.

The global financial crisis and the push towards recovery have presented a variety of new challenges for business leaders. Ranging from sharp declines in consumer demand to adapting to new regulation, these new obstacles have forced businesses to become dynamic and adaptive in order to survive. The panel, which included Chairman of Walker Digital LLC, Jay Walker; CEO of Polish Telecom, Maciej Witucki; Chairman of WPP Group PLC, Phillip Lader; and Chairman and CEO of EADS North America, Ralph Crosby; allowed for industry leaders to share their thoughts on the current business climate and its risks and opportunities.

Many new business challenges have been created. The global recession has placed a major strain on the ability of businesses to raise capital, thus stifling the ability for new, innovative ventures to be created. Additionally, the economic situation has required large cuts in expenditures, often meaning that valuable human assets are lost to cost-saving layoffs. For companies that are highly dependent on human capital as a major asset, this can have serious long-term consequences. Businesses that rely on both commercial and consumer consumption have been equally effected by the crisis.  For industries that are highly commoditized, with the attendant low profit-margins , the crisis has made passing on added costs to consumers increasingly hard.  New and stricter government regulation has also created new difficulties for some businesses by introducing red-tape and limiting adaptability. Dynamism is crucial.

However, many new business opportunities have also been created. Perhaps the greatest opportunity for business has been born of the necessary fight for survival. Executives have had to make creative decisions on how to maintain competitiveness while reducing expenditures. Businesses that have survived the financial crisis have done so by increasing their productivity and reducing costs, forcing them to be much more efficient companies.tHis efficiency must be carried forward post-crisis.  There is also the incentive to enter new markets, and to get more involved government and defense contracts. Finally, there appears to be a general consensus that post-crisis consumption will be driven by high-tech, internet based products, providing numerous opportunities for expansion in new, globally-integrated markets.

There are still risks that are inherent to these new opportunities. The importance of new consumers and enterprises, particularly in Asia, cannot be understated. For that reason, industry leaders must take into account the importance of the relationship and economic progress between China and the United States.  Additionally, for some countries with production abroad, dollar weakness presents a host of new challenges to business. There is also a major risk in terms of pricing for virtual products, as it is sometimes unclear what consumers are willing to pay for. Companies such as Google provide Internet service applications for free, essentially rendering the niche unprofitable for potential competitors. Finally, the environment for mergers and acquisitions in the public market has become very unforgiving, making horizontal expansion a complicated undertaking.

Some final thoughts on where business is headed. In order to remain competitive, especially in technology-heavy industries, encouraging innovation is essential. Collaboration must be increased while universities need to emphasize the creation of value services, as it is young entrepreneurs that have proven to be the most innovative. It is also important to ensure that business is not stifled through over-regulation. Responsible, economically smart regulations are needed, as protecting consumers is important, but protecting business and its ability to create jobs is necessary as well. Lastly, while technological innovation is crucial to maintaining a competitive edge, industry leaders should be wary of making their businesses too vulnerable to a reliance on technology, as there is an increased risk to being exposed to adverse systemic shocks.

Summary by James O’Connor, Assistant Director and Nathan Marrone, Intern, Global Business and Economics Program.