SEMBA: Hope For A Runaway World

Paul Laudicina, 2016 SEMBA Inauguration Speaker

On August 12, 2016, Paul Laudicina, partner and chairman emeritus of A.T. Kearney, addressed SEMBA’s 2016 graduating class. In a wide-ranging speech with a broad historical arc, Laudicina made a powerful case for the “SEMBA Movement,” where businesses and business leaders committed to sustainability will leading us through this significant and challenging period of history.

Below are excerpts from that address. The full text of Laudicina’s speech can be read here.

“There is simply too much riding on your shoulders as the next generation of leaders for you to unplug. We desperately need your know-how, vision, passion, courage, and purpose to lead us through these challenging times. You could not be going out into the world to apply what you have learned at a more critical time—in many ways a “best of times, worst of times” interlude in world history.

“We stand at the threshold of the most incredible advances ever—in medicine, in life expectancy, in educational attainment, in extraordinary technological advances. Yet, we also live today in a world more troubled and challenged than at any time in modern history—surely than at any time in my history…people are feeling uneasy, apprehensive, insecure, and unhappy with the present, and fearful of the future.

“You will be challenged to lead in a world more complex and difficult than at any time in the past couple of decades.

“What is the precise nature of the challenge that you will face as you return to this ever more troubled and conflicted world…? What role can—what role must— business leaders play in helping to move our world toward greater economic opportunity, social harmony, and global tranquility? In many ways today’s troubled world is the logical outcome of a system left to its own excesses, economic and political. We perhaps should not be so shocked to see the world seemingly veering out of control…. In a recent brilliant piece of analysis, writer and political commentator Andrew Sullivan notes that:

This is an age in which a woman might succeed a black man as president, but also one in which a member of the white working class has declining options to make a decent living. This is a time when gay people can be married in 50 states, even as working-class families are hanging by a thread. […] And so, late-stage capitalism is creating a righteous, revolutionary anger that late-stage democracy has precious little ability to moderate or constrain—and has actually helped exacerbate.

“So small wonder that our politics have become so tortuous as ambitious politicians often fail to understand the complexity of today’s challenges and how to stay politically viable while exercising the appropriate and effective policy responses. Many of those seeking to lead us today do understand that these are issues which need to be addressed. As EU President Jean Claude Juncker has said, “We all know what to do, we just don’t know how to get re-elected after we’ve done it.”

“Well, the simple fact is that neither government nor business can do it alone. And business hasn’t for some time worked effectively with government to get things done in the public interest. GE’s Jeff Immelt recently characterized today’s relationship between business and government as the “worst I have ever seen.”

“Your own Stu Hart has written that “tragically, government preoccupation with the ‘national interest’ makes government less and less relevant in a world characterized by trans-boundary challenges such as climate change, loss of biodiversity, and international terrorism.”

“That’s where we, you, as business leaders need to come in. Only business can create sustainable economic growth. Only business can create well-paying jobs enabling working men and women to provide for their families with dignity. And workers responsibly engaged and vested in their communities provide the ballast and can-do optimism that has fueled this country since its inception almost 250 years ago. But only government can create the enabling environment for business to grow sustainably, providing opportunity and hope for a vibrant and growing middle class. So government and business together must roll up their proverbial sleeves to get the job done.

“Without business creating value by generating sustainable economic growth and jobs, government will be relegated to reallocating a shrinking pie, a prescription for more social tension and decline. So business—we—simply cannot sit this one out. And frankly, too many business leaders have been content to do just that for too long.

“…Many of us have benefited disproportionately from the largesse of a peaceful, globally integrated, and technologically enabled world.

“And so many others have not. Beginning in the 1970s, income growth for middle- and lower- income families slowed sharply, while income for those of us at the very top of the ladder rose to levels not seen since the Roaring Twenties. While economists (and ideologues) will debate the validity of one set of statistics over another, any reasonable analysis concludes that we have had widening income inequality and even greater wealth concentration over the course of the past 40 years.

“This is not sustainable. And this gaping inequality, which will continue to sap the strength of both our polity and economy, cannot be closed by government redistributing the wealth through simple progressive policies. Rather, we need an enlightened and engaged private sector that gets it, and helps build a robust economic platform that can reignite the confidence and optimism of a growing middle class.

“…We have constructed what Pope Francis has called a ‘wall between the economy and the common good of society.’ This is the new wall which your generation must tear down, much as the generation of whose shoulders we stand advanced and witnessed the fall of the Berlin Wall in 1989.

“This is the world you must lead. As you get ready to head back out into this world, understand that it is only by being grounded in principle and in purpose that you can drive your own performance and that of the institutions that you will lead.

“Your generation—now the 76-million-strong, dominant US “Millennial” generation—must get control of this runaway world and ensure that it yields to principle.

I’m sure you came here as pioneers to this SEMBA program because you understand fundamen- tally that business can only sustainably do well by doing good. And this is at the heart of the mission of this noble experiment you celebrate today. The stakes are high, the challenges great, but the rewards are immense. Future generations will look back on this inflection point in history and thank you, as do I today, for putting your hands to this noble plow.”