In December 2022, Juvencio Maeztu, Ingka Group Deputy CEO and CFO, spoke to graduating MBA students at The San Telmo Business School. In a summarized version below, and to mark the beginning of The World Economic Forum’s (WEF) Annual Meeting, Juvencio outlines his leadership vision for a new era ahead of his attendance at the meeting.
One phrase which I will never forget is: “What has been seen cannot be unseen. You cannot change the past, but you can learn from it”. We live in critical times due to the complexities in which we are immersed. We have to learn from today’s challenges and there are five I wish to highlight.
Climate change. We are the last generation that has created the problem and the last that can solve it. The Paris agreement requires that we do not exceed the limit of 1.5°C of warming compared to pre-industrial levels. 1.5°C should not be regarded as an objective but simply as a limit. I can’t imagine a business leader who doesn’t know balance sheets and income statements. From today we must not imagine leaders who do not know about climate change, science-based targets to reduce emissions and concrete action plans to decarbonise the impact.
Inequalities. In general, we are better now than they were decades or centuries ago. Step by step, if we look at the last 100 years, the world has improved. However, the added problem of climate change is that inequalities will increase as those who have the least are the ones who suffer the consequences. We are responsible for global warming, but we are not the ones who suffer the greatest consequences of such climate change. For some people in the Western world, climate change will mean spending more money on electricity or food and struggling to make ends meet at the end of the month. For billions, it will mean the loss of their crops, floods or having to abandon your loved ones and look for a better life.
Increasingly polarized society. The great development of humanity has taken place in periods of peace, stability, cooperation and consensus. Both internationally and in each nation. This is not the case today and these four dimensions – peace, stability, cooperation and consensus – are compromised. And this situation does not only depend on geopolitics and governments. It’s not just about wars and diplomacy. It also happens on a day-to-day basis in conversations, on social media and general misinformation.
Economic situation. We are rewriting the books on macroeconomics and microeconomics. We are children of a generation that grew up with the axiom that globalization and free trade created low prices, economic development, and peace. There has been a succession of events since Covid began, the ship Ever Given stranded in March 2021 in the Suez Canal (and blocking more than USD 9 billion of trade every day), the lack of supply caused by high demand incentivized by high levels of savings after Covid, the high dependence on raw materials in strategic sectors and the consequences of the War in Ukraine, among other factors, have made the axiom of globalization and free trade questioned and we have returned to inflation levels of the 1980s.
We can choose to analyze the situation from the macro perspective, from the perspective of companies, or we can analyze it from the reality of most people. And I think this last perspective should be the beginning of the analysis. For most families, the rise in car fuel, electricity bill, monthly mortgage or food payments, to all at once, has an undeniable impact on monthly income. That’s why, as business leaders, our obligation is not only the success of the company, but also to contribute to a better everyday life for the many people.
Mental health. We have all navigated in the dark these last few years, navigating in the unknown of the consequences of Covid, geopolitics, war, the economy. Due to the intensity of all the events of the last three years, the pressure and fears with which many people live have increased. The fear of losing one’s health, the fear of the unknown, the fear of personal safety, the fear of not having enough money, and the fear of an uncertain future. Mental health has risen in the ranking of problems affecting our society in Europe and in much of the world.
Just as there are challenges, we also have great opportunities to change and improve. These are critical times, but they are also times that define future generations and demand responsibility to turn these challenges into opportunities to make a better world. There are three skills that I see today as much more necessary, which I consider critical to make a better future.
Transforming dilemmas into polarities. The future requires a double approach: short and long term, saving the planet and the bottom line, people and business, individual rights and collective rights, quality and low price, purpose and profit. We can choose to see it as a dilemma, as a problem from which we do not get out, because one involves another, and we feel victims of the situation. Or we can see it as polarities, as two opposing forces that both need each other, and both help us improve. It is here, not only in the acceptance of polarity but in the excitement of living in them, that we find our strength as leaders and our ability to transform things.
New rule for measuring performance. How do we know how well or badly we are doing? We must have a clear reference of what it means to do it right. And traditional performance appraisals are no longer valid. We must measure a value driven leadership and be much more holistic in definition. We have decided to create value in four dimensions: better homes for consumers, better lives for people, better planet for all and a better company to ensure the long-term and continue contributing in the four dimensions. Only in the complete lies the constant and lasting transformation.
Humility and willpower. Never before have I felt these two extremes so much. Now I know that it is a polarity and that, in the times we live in, we have to develop them to the fullest, both at the same time. Humility to listen more – especially to people I don’t surround myself with – to give more thanks and give less instructions, to complain less and help more, to accept being influenced and complete our way of thinking. And willpower to enhance our belief, to transform, to go faster, not to be disappointed with the innumerable problems we encounter, to overcome resistance, to believe and execute, to jump and not just walk.
I finish with the quote that I will never forget: “What has been seen cannot be unseen. You cannot change the past, but you can learn from it.” That’s why we need to evolve our leadership, to be leaders for a new era!
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