From Business at Leeds 2022 |ÌęFull issue
The supply chain crisis has been joined by inflation and war as major concerns for business and consumers alike. But the interconnected nature of these challenges is what makes them so complex. Below right, Maggie Grout with a construction worker in Madagascar, where she built her first 3D-printed school, despite supply chain challenges.
The biggest challenges facing the world are interconnected. Leeds alumni are out there seeking solutions.
âI knew there would be uncertainties,â Maggie Grout said of starting her nonprofit business. âBut I didnât really expect most of the events that have unfolded since we started.âÌę
You could forgive Grout (Management, Strat, Entrâ21) for not predicting a war, increasing geopolitical conflict, a pandemic, surging inflation and tangled supply chains in 2015, when she first began pursuing Thinking Huts. The nonprofit, which builds 3D-printed schools in developing countries, opened its first school this spring, in Madagascarâand as you might expect, it was a learning experience.Ìę
âI may have been too optimistic in my planning,â she said. âThe main takeaway for me, as we look to the next schools, is to make sure Iâm giving myself enough room if things donât go right, especially on the supply chain and shipping side.â
Itâs a story that resonates with Leeds alumni, who are confronting seismic changes that have been uneven in their impact and hard to predict.
Making up for a late start
Ryan McMunn (Mktg, Mgtâ02), owner and CEO of Tricam Industries, said tension between the United States and China forced the company to pivot its production operations.Ìę
âWe got a late start on Southeast Asia,â said McMunn,Ìęwhose company designs and sells consumer products like ladders and landscaping equipment. Pre-tariffs and pandemic, all its manufacturing was done in China, âbut we opened upÌęfive factories in Southeast Asia, and weâll probably be doingÌęmore there in the future.âÌę
Ryan McMunn in his home office in Denver, which is filled with keepsakes from the years he spent living abroad. McMunn has diversified his companyâs manufacturing operations in response to escalating tension between the United States and China. Below, a closeup of some of the items in his office.
âAnd even if the tariffs are dropped, thereâs too much political turmoil within China,â he added. âWhen manufacturing comes back there, it wonât be the same.â
McMunn is hardly the only pessimist about U.S-China relations. Gurumurthi Ravishankar, faculty director of the masterâs in supply chain management at Leeds, said he expects to see more manufacturing move to Southeast Asia, India, Mexico and even the United Statesââbut itâs easier said than done.â
âIt makes for good press to say youâre moving manufacturing back to the U.S., but itâs not easy to accomplish,â he said. âYou canât abandon the investments and partnerships youâve made around the world, and even when you do make an announcement, youâre still five or six years away from creating productsânot to mention a $10 billion or $15 billion investment.â
And as the discussion around global operations expands into the policy arenaââPeople who didnât know what this was two years ago, now they stop you on the street to tell you about their supply-chain problems,â Ravishankar saidâitâs attracting attention from professionals who see this is an area ripe for innovation. Among them is Mike Cordano (Busâ87), who called himself âobsessed with technology as a catalyst to evolve companies, business, marketsâthe world.â
âWeâre in a period of what Iâd call accelerated evolution,â said Cordano, founder and partner of Prime Impact Capital. âThe rate and pace of tech-driven change is creating a steeper slope of broader disruption around how people workâand the ways they workâworldwide.âÌę
For the past 30 years, globalization was about driving down costs, he said. âBut globalization as we knew it is being challenged by the broader geo-political environment in Asia and Europe. Based on those dynamics, weâre seeing pressure to modify trade relations, potentially leading to some level of decoupling of certain parts of the global economy.â
ChipÌęaway at the problem
As an example, Cordano pointed to the worldwide semiconductor shortage. Federal legislation aimed at domestic manufacturing has generated plenty of chatter, even though itâs yet to bear fruit.
âMaking semiconductors here isnât the lowest cost, most efficient way to do it, but thereâs other concerns in play, from IP control to supply chains and continuing innovation,â he said.Ìę
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Anna Fatelnig enrolled in the masterâs program in supply chain management at Leeds because she saw the potential for innovation in the empty shelves of her local supermarket during quarantine.Ìę
âWe need people who can step in and find ways to make the world more agile for the next eventâbecause I donât believe this was the last pandemic in my lifetime,â said Fatelnig (MSSCMâ22), now a procurement coordinator at F. Schumacher & Co., in New York. âItâs an ever-changing world, and companies have to adapt and change as well.âÌę
She said what she most appreciated about her classesÌęwas how relevant the assignments and cases were in aÌętime of great disruption.Ìę
âEverything we talked about was presented with real examples that didnât happen 20 years ago,â she said. âIt was more like stuff from two weeks ago.âÌę
Two weeks, of course, now feels like long-term planning when it comes to real estate investment, said Cyndi Thomas (MBAâ01), managing director at RCLCO and a member of the advisory board to the CU Real Estate Center. The consulting and advisory firm, which serves clients around the world, revises its own guidance âprobably every other weekâ in response to the forces shaping real estate.Ìę
âWe need people who can step in and find ways to make the world more agile for the next eventâbecause I donât believe this was the last pandemic in my lifetimeâ.â
Anna Fatelnig (MSSCMâ22), procurement coordinator, F. Schumacher & Co.
âTraditionally, real estate is viewed as an inflation hedge, because itâs repriced on a somewhat regular basis,â especially asset classes like apartments, hotels and self-storage facilities with shorter-term leases, she said. âCurrently, institutional investment activity for assets with longer-term leases, without the ability to increase revenue, is muted because of higher interest rates, resulting in the potential for negative leverage.â The bid-ask spread between sellers and buyers, she said, has widened.
The development side of the industry, meanwhile, has fallen victim to supply shortages, a labor crisis and high operations costs for projects like hotels, apartment communities or senior housing. Thatâs created a lot of scrambling so that Thomas can provide the right advice to the institutional investors she works with.Ìę
'We're in unknown territory'
âThe pace of change over the past 90 to 120 days, in terms of what weâre seeing and how weâre advising people, has been shocking,â she said in summer, 2022. âWeâre in unknown territory.â
It may sound bleak, but Thomas is optimistic about the caliber of young professionals coming up in real estate and business.Ìę
âWhat makes them special is their curiosity, which is so important in an interconnected world,â she said. âBeing able to connect the dots from understanding what is happening over here, and what that means for my business and my personal life, is the big-picture perspective that the business world is going to need going forward.â
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An Eye to the Future
With all the changes driven by how interconnected the business world is, how can alumni and aspiring leaders manage to stay nimble?Ìę
Mike Cordano says an ability to be adaptive will help set people apart.Ìę
âWhat is effective today, at whatever level you enter the workforce, will change as time and methodology changes,â he said. âMore than particular skills, be willing to learn and persevere. Those are the things the environment will dictate will be required. Those attributes will serve you well.âÌę
A few other future-focused ideas he shared:Ìę
- Hybrid is here to stay. âFully remote work is going to lack some of the creativity and culture building that humans strive for,â he said. But he said he likes the balance hybrid work offers and expects it to remain a long-term trend.
- Global talent war. Related, of course, isÌęhow talent searches can now extend far beyond traditional boundaries. Interestingly, normalization of pay is going along with that, so Silicon Valley salaries may not translate for an engineer working out of state.Ìę
- A.I. at work. Cordano said A.I.âs impact on work will look like the transition from an agrarian society after the Industrial Revolution. âItâs really going to drive adaptation to what kinds of work people do, and some work is very ripe for automation,â he said. âBut at some point, there will be a dislocation in how people earn their living.âÌęÌę
A World Apart
Ryan McMunn knows the challenges of global business better than most: He lived in China for eight years, until 2012, with the goal of truly immersing himself in the language and culture of its people.Ìę
That helped him forge incredible relationships, and is a main reason he supports scholarships that create opportunities to have global experiences, such as studying abroad or pursuing a certificate in international business.
âWhile we do a lot right in our country, thereâs opportunity to take some of the knowledge gained from overseas and bring that back to the U.S.,â he said. âI want people to get that experienceâto give students opportunities to see what weâre missing in the States, and to understand that just because we do something a certain way doesnât mean itâs the best way or the right way.â Ìę
At Leeds, that starts early. Beyond a goal of giving every student an international experience, the school offers the First-Year Global Experience course, giving freshmen exposure to global topics, case and consulting projects with foreign companies, and a visit to another country.Ìę
Quynh-Thi Nguyen said the First-Year Global Experience was a major selling point in choosing Leeds.Ìę
âEven coming from a diverse background, studying abroad gave me so much perspective,â said Nguyen (Fin, Econâ25), whose parents immigrated to the United States from Vietnam. This spring, Nguyen visited business and cultural sites in Iceland, which offered a chance to do case studies and meet leaders at companies working in the geothermal energy industry.Ìę
âIt was one thing to learn about geothermal in class, and another thing to talk to businesses and see how much the country relies on it, and how creatively people have used it,â she said.ÌęÌę
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