After a turbulent year, Peter Baumgartner, chief strategic advisor at Etihad Airways, below discusses what might follow in 2019 as challenges mount to the global order
The transportation industry is a major enabler and facilitator of economic activity and trade.
Often, it’s even a leading cyclical indicator.
This doesn’t necessarily make industry professionals good at giving predictions on future trends, of course, particularly under the current dynamics and volatility of the environment and the disruption of the ‘new normal’.
Still, 2018 has been an interesting year for me personally, as well as for our company and industry as a whole.
So, allow me to try and draw some humble conclusions for 2019 that may be interesting or even helpful for others, too.
Etihad has adopted a new organisational structure a few months back, and I have switched to a strategic advisory role on group level on global partnerships and innovation.
This was, among other reasons, triggered to react to the increasing complexity of the world we all live in.
Questions around how best to innovate are being asked in companies around the globe and in every industry, not just ours.
That most of us cannot do this on our own has also become increasingly obvious – thus, the focus on partnerships.
In summary, this is a reaction to global macro trends that have emerged over the last one or two years.
Around the globe, volatility, uncertainty, complexity and ambiguity have increased.
‘VUCA’, as some have called this, is not a new phenomenon at all.
Yet, I believe we have seen truly unprecedented levels of VUCA in the last months.
The US’s trade policies, Brexit, Italy’s governmental crisis and the most recent socio-political issues in France are the obvious examples, but they are just one part of it.
We have also witnessed the rise of alleged ‘fake news’, which is, in part, a symptom of generally diminishing trust in the media and other established institutions – including universities.
All of this is being mixed with increasingly divisive party politics and public (online) debates around the world.
Our lives have certainly not become easier to navigate.
Unpredictability will further dominate agenda
For one, ambiguity will certainly continue.
Developments in the political landscape are difficult to predict.
Not only, but especially the relations between the US and China could potentially have a very significant impact on many of us.
This ties closely into the rise of new, dominant players in Asia that will further gain in global relevance, and China as a powerful economic force in general.
It’s not difficult to foresee that stock markets will be volatile next year, too.
Even worse, voices are heard that predict a recession sometime in 2019 or 2020 .
More specifically, for “my” industry, oil prices have a huge impact on success or failure – and the US and China play an important role in their development.
Times are very uncertain in this regard, especially as the issue has the potential to reach even broader relevance.
While the oil price has direct relevance here, the current “yellow-vest protests” in France open our eyes to the effects economic wealth can have on the wider community – and it looks as if political decision making is already being influenced by these developments as well.
Give orientation by taking a stand
Not just trust in the media and other institutions has suffered, also corporate reputation has been challenged around the globe (with a few exceptions in small countries) because of this all-encompassing general uncertainty.
It has become obvious that companies can no longer hide behind the catchphrase “the business of business is business”.
The opposite is true.
Companies must act as “compasses” in the VUCA world to navigate through the new normal that the transformational processes of globalisation have created.
One of the biggest, and quite frankly most promising, trends I see is that commercial success will be closely tied to purpose and ethics in the future: The ‘why’, not the ‘what.
At the same time, it is probably also our single biggest chance to regain sustainability in a world disrupted by VUCA.
If you want to lead a successful business in 2019, you must ensure the company you manage or work for takes a stand on societal issues.
If nothing else, your stakeholders – and this includes your own employees in the first place – expect you to be vocal on topics people care for.
The recent Nike campaign is a good example for how you do this without losing focus on the actual products you manufacture.
Companies are well-advised to think about (and communicate) their contributions to society.
It goes without saying that this also means that trust is king.
It is no longer enough to deliver the expected service to gain customers’ trust, you must ensure they can trust you in a wider sense.
With their data, with their identity even.
It also becomes clear that the management team, particularly the chief executive, must have a strong voice in all of this.
A business must be accessible, approachable, authentic at all times and consistent across all channels – to the inside and the outside – whether expressed through corporate values and behaviours, a chief executive’s voice or the corporate tweet of the day.
One other factor, and one I have been very passionate about in an earlier opinion piece, that is fuelling uncertainty is the fact that any industry may be disrupted by the macro trend digitisation at almost any time.
Even if they are not directly under threat, many sectors will have to change fundamentally in order to survive the rapidly changing trading environment, consumer behaviour and expectations.
However, we must not forget what digitisation also implies: this is a disruption that puts people at the heart of the business.
It changes the way companies and brands interact with their audiences.
From a purely business-related perspective, this is clearly an opportunity – if you are up for it.
New technologies such as augmented reality, virtual reality, artificial intelligence, machine learning, the internet of things or voice as an interface will shape the relationships between businesses and their clients more and more.
AI alone will massively impact the ties between businesses and their target audiences – finally, we can approach our clients with what really matters to them at every step in their journey!
Brands will have the opportunity to be appreciated conversation partners.
The channels to reach out to your audiences are the many – and readily available.
In summary, I think it only fair to say that more than ever top management should put a clear focus on giving direction and orientation in 2019.
It can do so most effectively by being reliable and trustworthy, by defining and following a comprehensible purpose – and by taking a clear stand on burning societal issues.
I wish you a successful 2019 full of challenges turned into opportunities.
Peter Baumgartner was earlier this year appointed to the role of senior strategic advisor to Tony Douglas, chief executive of Etihad Airways, and is part of the executive leadership team.