I spent a splendid five days last week in St. Gallen, Switzerland participating in the 38th St. Gallen Symposium, a conference where 200 students interact with 600 business and political leaders from around the world. This year’s theme was "Global Capitalism – Local Values."
Students must write an essay on the theme and the 200 best are invited to attend, all expenses paid. This ensures not only high quality students (majority grad students, some undergrads) but also a stunning level of diversity. This year, there were students from 50 different countries studying business, economics, philosophy, psychology, and more.
The first two days the students spent alone to mingle, chat, and participate in a couple workshops facilitated by UBS and PwC. The second day was set in the alps at Santis mountain. It was wonderful to have a conversation with smart, young people from every point of the globe with catered food and the backdrop of huge Swiss, snowy alps. I came away from these conversations feeling incredibly optimistic about things — if you ever feel down on the state of the world, go talk to motivated students!
My time in St. Gallen reaffirmed for me my interest in internationalism, travel, business, and people. And youth. It was terrific to spend time with people around my own age (all under 30). For me, there’s still no more exciting moment than hearing about someone’s culture, or someone’s funny travel experience abroad. One night, at a four-course dinner sponsored by a Swiss watch maker, everyone at the seven person table went around and shared tidbits on their country, their thoughts on current affairs, educational system, or funny experiences from third world (or first world) countries. The wine was flowing — but so was the mutual understanding and cultural exchange. I know what I just said sounds cliche, but as I’ve said before, to me, all the cliches about travel are true.
Here were some of my key insights / notes from my conversations and the various speakers and sessions:
- Martin Wolf, of the Financial Times, is not only an impressive columnist, but also dynamic and humorous speaker. He was probably the most impressive speaker of the bunch (out of two country presidents and numerous company CEOs). The FT, by the way, was the most cited news source throughout the conference. Some Wolf quotes:
- "Success breeds excess, and excess breeds panic."
- "The new financial system was supposed to allocate risk to those best able to take it. Instead, it got allocated to those least able to understand it."
- "Revolutions tend to eat its children."
- "For CEOs, we are living in the era of ‘mea culpa.’"
- "Telling yourself, ‘This time is different’ is hard-wired into the human psyche. During every bubble people tell themselves this."
- Private oil companies produce only 5% of world oil; national oil companies produce the rest.
- Credit Suisse risk management guy: "We have great risk-management models. The problem is when we start believing them. The key is to only do things you understand, and when in doubt, assume you don’t understand."
- World is getting more unpredictable. Quick decision making is key. Decide, iterate, decide, iterate.
- Food security is helped by interdependence in global food markets. On rising food prices, we can’t ignore basic fact that China and others are increasing demand.
- Al Jazeera anchor: "One day we woke up and, Oh my God!, there’s a food crisis. What about the lead up? Why suddenly a food crisis? Is this "crisis" going to just be flavor of the month?" True. Also, how does the media decide which "crisis" to focus on? Malaria continues to kill in record numbers, and yet, when was the last time you heard a story about the malaria "crisis"?
- "Made in X" is no longer an appropriate tag to place on products. Even if something is "Made in China," the distribution, assembly, creativity thought, etc all likely happened in various countries. "Made in the World" is a better label. Globalization is no longer centered around a city.
- The Swiss airlines CEO – Christoph Franz – was super impressive and I was lucky to be able to participate in a long workshop with him and others on the aviation industry. Among other nuggets, he noted that while Southwest Airlines is heralded in the U.S. as the most successful airline, most of their profits are due to a fuel price hedge made seven years ago. They haven’t been operationally profitable for years. Swiss airlines, on the other hand, has done quite well, thanks mostly to new ownership under Lufthansa and elimination of non-premium routes (they focus on routes from Zurich that cater to business fliers). Franz also noted the insanity of Chapter 11 bankruptcy in the States — it allows airlines to float in and out of bankruptcy without facing the hard truths. Unlikely US air travel will improve anytime soon thanks to an aging fleet.
I can safely say that this conference was the most well organized event I’ve been to. I suppose it helps when you can draft hundreds of students of a university (St. Gallen) to help produce the event and manage logistics. But it’s also a testament to the Swiss culture of organization and precision. Needless to say, if you have the opportunity to go to an event put on by the Swiss, go!
I am very grateful to the St. Gallen Symposium for including me in this event.
I’m guilty!!!!
Telling yourself, ‘This time is different’ is hard-wired into the human psyche. During every bubble people tell themselves this.”
So, so true.
@ “Made in X” is no longer an appropriate tag to place on products.”
I very much disagree. We need MORE information about a product’s physical origins, not less.
No matter where the product was conceived or developed– if it’s a toy assembled in China, or pet food packaged there, I want to know.
“Made in China” imprinted on a toy soldier’s shoe sole alerts the consumer to be wary of possible lead-contaminated paint, for example, but we also have the case of poisoned dog food that was manufactured by one Chinese company and distributed under different labels in the U.S., none of which, to my knowledge, indicated the country of origin.
I don’t understand this part: “Success breeds excess, and excess breeds panic.”
Can u elaborate a bit?
“Success breeds excess, and excess breeds panic.”
I think hes talking about something growing out of control but it could really be applied to anything.
The remark on Southwest Airlines by Mr.Franz, Swiss Airlines CEO is a bit embarrassing.
As a competitor of a previously bankrupt airline, I would expect him to appreciate the prescience and visionary thinking by Southwest management to enter into long term fuel hedges that is seeing it through these difficult times for aviation business. Why didn’t any other Airline have it? Even Lufthansa, the Airline that he extols never bothered about it and is now picking up $130 per barrel tab (for crude, could be higher for aviation oil).
The funniest part is Southwest was pretty much open about its fuel hedges. It is printed in its Annual Reports. It’s employees sing and laugh, a rarity in other airlines these days. Other airlines can say many things. Ideally they should just match Southwest’s operational model. Not difficult to match …just fairly priced, on-time, safe, cheerful.
Now it’s ok to do some sales talk before a bunch of students on a sponsored dinner. But when you discredit a competitor that had demonstrated vision and leadership, you go so low in the eyes of many others that are in the know.
The success breeds excess, excess breeds panic quote related to the idea of bubbles in a market economy.
Krishna – it wasn’t a “sales talk before a bunch of students.” It was a keynote in front of 200 students and 600 businesspeople, on the aviation industry.
I don’t think he would deny that Southwest was smart/visionary in its fuel hedge — his point was that THIS is why they’ve been successful past few years. People often talk about happy employees, and culture, and vision, etc etc. But operationally speaking, they’ve done just as poorly as any other American airline. It’s the fuel hedge — he wasn’t discrediting it. His point was that Southwest doesn’t necessarily represent a new business model in airline travel in the US. It represents the good fortune that can come from an accurate prediction of oil prices down the road. And – my own opinion – guesses about future prices can be as much a crapshoot as anything else.
Thanks Ben for clearing the mist. I am a fan of all things low cost, high value (just need to move from A to B types) carriers that strive to excel – in ways that are ingenious. Southwest wins by a mile in that race. Its sworn customers love the $299 fare cap even for a coast to coast travel – helping many small businesses in a country that is slowly coming to terms with harsh realities of having to make do with austere lifestyles.
Are they an operational laggard? I doubt. Check this out. They only fly Boeing 737s for lower training, maintenance and other efficiencies. A gutsy call that, just like their oil hedges. Had the FAA grounded that plane in case of a design flaw, the company would be out of business in a few weeks. They primarily fly to secondary airports – Baltimore, Fort Lauderdale, Oakland, Chicago Midway – all near major cities, but much cheaper to operate from.
They also accept the fact that travelers that call it “cattle car” or “milk-run” will never embrace it. If they still manage to take off day after day with 80% passenger load, then I would rather recognize that as a bit of operational brownie points as well.
Wow. It sounds as though the St. Gallen Symposium is the place to be when one wishes to be uplifted rather than put down by the state of affairs in the world. Which is why when I want the news, I use the websites of various new industries rather than watch it on television, because they typically focus on the bad.
I hope that one day I will be able to go to such a place of positive interaction and ideas for the future.
As for “Franz also noted the insanity of Chapter 11 bankruptcy in the States — it allows airlines to float in and out of bankruptcy without facing the hard truths.”
I tend to agree with him. Actions have reactions, and by allowing airlines to constantly bail out and go right back into business without a consequence is a problem that we have and need to deal with.
This is one more reason why the customer deserves a better shake from the airlines– he or she pays for their bailouts.
Hello Ben, it was really interesting to read about how this experience was for you.
Today I received an e-mail confirming that I was selected for this years Symposium, so I was wondering if you could give me some tips on how to get the most out of it.
Regards.
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