The Big Idea: Charter Magazine interviews Wolfgang Grulke

1. The Big Idea
Seeing
tomorrow,
today When the Global China Dialogue conference rolls
into town this month, Kevin Rudd will hope to
strengthen business ties between Australia and
the Asian powerhouse. But should we be more
wary of the future direction of China’s growth?
A
great many people believe with a sense of business that has existed nesses that react positively to change can
the next few decades will be since the Victorian age,” Grulke says. prosper. Traditional businesses can’t at-
a golden age for the Austral- Grulke’s reasoning is that established tract the brightest young people using the
ian economy, shielded from businesses usually react to new market methods of old. At a meeting with a Big 4
volatile global markets by the seemingly forces by treating them as threats to their management team in the United States,
insatiable Chinese demand for Austral- established business. By comparison, new Grulke asked about an advertisement
ian resources. Is our future insulated from entrants, without the drag of historic bag- they had taken in The New York Times
harm by this export buffer? If you listen gage, see every new change as an oppor- as part of a recruitment drive to find 100
to a respected futurist from FutureWorld, tunity to be capitalised on. By dedicating new employees.
a global business and technology think some executive time to actively thinking He pointed to the ad and said ‘tell me
tank, it almost certainly is not. about the future (Grulke recommends 10 about this’. The management responded
Wolfgang Grulke has spent the better per cent of executive time), and new mar- how great the ad looked, or how well it
part of 20 years encouraging big business ket forces, the executive team becomes was positioned. He then pointed out that
to change its thinking, helping it realise that better equipped to capitalise on these new reports showed that the age of the aver-
inevitable changes to a business model, in- market opportunities, as well as protecting age newspaper reader in the US was now
cluding external pressures on the market their current business against unseen new over 60. They were trying to recruit savvy
or business plan, do not necessarily need competitors. “We typically see companies young people from a readership that was
to equate to problems. With a different double their strategic outlook after a short twice that age.
attitude and a willingness to adapt, every series of interventions” says Grulke. It took some work, but Grulke con-
change can represent a new opportunity. vinced them to proceed with a Youtube
“It is not an easy thing for executives to Generational shift campaign, where the company asked
change their way of thinking, to view the The generational shift that has occurred KEITH young staff members who had been with
arrival of unforeseen events as a positive, over the past 10 years has perhaps made
BARRETT the organisation less than two years to
Managing Editor
because they have been programmed it easier for Grulke to illustrate how busi- create short video clips explaining how
22 Charter | February 2012

2. they felt about working within the or- that if you abuse it they can remove you zon, not the one with the biggest market- Above: Tesco’s Homeplus
ganisation. Almost 1000 clips quickly from their lives with just one click of a ing budget). The same thinking – being brand turned the daily
appeared on YouTube. While there were mouse,” Grulke says. functional as well as good value – has commute of millions into an
opportunity for growth.
some negative ones, the company quickly “They don’t want to fill out forms to seen retailer Tesco achieve remarkable
found that the positive ones attracted take leave, or to work defined hours. success in South Korea.
100 new recruits – without the use of the They don’t understand the thinking be- “Young Koreans are super busy and
recruitment advertising budget. hind turning off your phone going into a don’t have much time available for gro-
“Understanding how young people in- meeting. They think, ‘What’s wrong with cery shopping. Some even find the trip
teract with information through technol- these people? Can they really only do to the supermarket a traumatising expe-
ogy is vital. It’s all about one-click access one thing at a time?’ The next generation rience. When Tesco entered the market
to products and services. Music today is a have gone beyond multitasking – this is with its Homeplus brand, it quickly grew
service, not a physical product. The plat- hypertasking – and this is the next gen- to be the number two supermarket, but
form increasingly is the phone and not eration of business leaders. Business it wanted to move beyond this to number
the internet. This is critical for future plan- needs to get ready to attract these peo- one. It looked at the ‘busyness’ problem
ning for a business. ple, and keep them.” as something it could turn into a positive.
“Young people can’t understand why It advertised on subway billboards, using
they need to fill out so many forms in a Adapting business actual pictures of the shelves of its stores.
bank; they don’t understand why the bank That generational shift is having signifi- People could use their smartphone to
doesn’t ‘trust’ its customers. Today, kids cant effects on economies. People have scan the QR codes on the image, fill an
have a totally new understanding of what already started spending money based online basket with produce, purchase it
trust is. We grew up in a world where you on reputation, and not just the brand. with one click, and Homeplus guaranteed
had to prove that we could be trusted. (Grulke points out that when he pur- that the groceries would be delivered
They give their trust to almost anyone on chased a garden strimmer, he bought the within one hour of the customer getting
social networking, safe in the knowledge one with the best user reviews on Ama- home. Just think about how much that
Charter | February 2012 23

3. The Big Idea
Above: FutureWorld’s will change the nature of being a Korean of Australia’s economy could come under moment, but they are innovative and are
Wolfgang Grulke. consumer.” nanotechnology’s fatal spell?” creating a massive new pool of patents
As Grulke moves from one topic to and products – more than 1000 new ide-
another, his discussion crosses diverse A change is coming as for the use of 3D printing for example.
subject matter, and as his hands skim “FutureWorld [the global think-tank Grul- China will move from being a low-wage
across his notebook, up pops a 150-year ke founded] puts out a weekly publication economy to being a high-tech economy. It
overview of global commodity prices. called Mindbullets: News from the Future. took the West 50 years to do this – it will
While there have been spikes – most no- It’s in the style of news reports from the take China less than a decade.”
ticeably during WWII – the overall picture future, as they happen. “In 2005, we ran His point is that the mining companies
is undoubtedly one of declining prices. one on the collapse of the US property can’t use the data from the previous two
With a click he overlays another layer – and debt bubble. I showed that at a lunch years to effectively project what demands
an upward trend representing the uptake with several thousand US real estate will be like for the next 10 years. If the
of technology that moves in the opposite professionals on the west coast of the Chinese market contracts, then there will
direction of declining commodity prices. US that year. Together, their association be instant consequences for the Austral-
“You have to have real courage to bet represented 80 per cent of the American ian mining industry, and in particular its
against a 150-year decline of commodity commercial property market. exports. FutureWorld is working with many
prices – and technology is commoditising “They laughed, taking another drink. global mining companies on these issues
more and more products and services, ‘This time it’s different’, they said, ‘It can’t and the alternatives for their businesses.
from cars to auditing – technology is driv- happen. How could it?’ I replied, “Yes, it As for the accounting profession?
ing down the prices of almost everything. may be seem unlikely, but what if it did Grulke points out that, as more Chartered
Take gold for example – India traditionally happen?” Accountants secure c-suite roles within
bought the most retail gold in the world, There are lessons too for Australia, if it organisations, a tantalising opportunity
but they no longer purchase it like they takes the time to listen. Falling commodity presents itself. By dedicating time to un-
used to, for dowries and so on. Now young prices, coupled with Grulke’s prediction of derstand the future, Chartered Account-
people use their disposable income on a Chinese property bubble collapse and ants can become the leading lights of
iPads and similar fashionable technology. its shift to more technological industries the corporate world – steering business
Also, as technology advances, it will be- (China is now shipping manufacturing to through volatile times.
come possible to synthesise many things Laos and Cambodia for even lower pay He emphasises that this can’t happen
that are currently very scarce. Platinum rates, he says), could see up to 100 mil- unless Chartered Accountants take a
can already be synthesised, albeit in tiny lion Chinese out of work in the next five to flexible approach, discover new and bet-
quantities, at one per cent of the current 10 years. How the Chinese government ter ways of working, and continue to ap-
price of platinum. But in five or 10 years, will handle this new unemployment will be ply their ethical integrity to tackle busi-
when they can refine that process, what crucial to their future. ness realities. If they do that, then they
will happen to the commodity price? It’s “China is producing more than 300,000 will be able to evolve with the changing
‘natural’ may be less than $15 an ounce. engineering graduates every year. There demands of clients and employers today
What other commodities that are the core are simply not enough jobs for them at the – and tomorrow.
24 Charter | February 2012