More from Davos

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From Colin Dyer
President and Chief Executive Officer
Jones Lang LaSalle

As things began to slow in Davos, I spent an educational day attending, among others, two sessions devoted to behavioral topics.

The first was on decision taking, with experts talking about the different sorts of decisions that companies take.

For example, there are ‘serial’ decisions, which rely on deep expertise, skills and learning. These are the sorts of decisions taken hourly by doctors, lawyers and pilots, and many areas of real estate execution fall into this area. Ideally such decisions are taken by highly skilled, highly trained people who are experts in their fields.

By contrast, there are completely different decisions, which are unstructured and complicated, where skills and expertise in a single area actually don’t help. Here, the idea is to rely on a mixed team of people with diverse backgrounds and skills, who view the problem by contributing all of their different styles of thinking. The key skill is to boil down an issue to a few really critical factors and choose between them.

Where these decisions move a company forward, they’re often best taken by mixed teams of people who are ‘controlled optimists’, individuals who can see possibilities, are optimistic about being able to achieve them, but are also suitably realistic about potential difficulties.

A final point that the presenters made was that, when you look back over the last two years, and when you think about all the problems the world has faced – from slowing business in China, to political stagnation in India, to the fiscal cliff in the U.S. and problems in the Eurozone – you begin to see that the business and investment world has been systematically too pessimistic. That has affected decision making and prevented progressive and growth-oriented decisions. We did see that in our global client base, and the feeling in the education session was that everyone feared the worst would happen and, surprisingly, it didn’t.

So lots to think about there!

A second session looked at the future of education and focused on new generations coming into the workforce, the people we will continue to need to build and grow our business through 2020 and beyond. The conclusions here dovetailed nicely with a discussion about why, almost worldwide, the current generation of 19 – 24 year olds is finding it so difficult to find work in line with their qualifications and expectations.

This could be ascribed to the recession, and the lack of business confidence it inspired. But there are probably more structural issues at play:

  • The disappearance of mid-level jobs in organizations, which were typically where young people learned their skills for operating in teams in a business environment.
  • The sudden and rapid demand by employers for people with fully finished, narrow skills coming into the work force: people with degrees in Accounting or Computing, not ‘Global Politics’.
  • The 60+ generation, whose members are staying in the workforce longer, because they need to fund their own, increasingly long lifespans. That in turn slows the progression of future generations through the workforce.
  • The structural approach of companies controlling their costs very tightly, leaving little room to accommodate new and inexperienced people.

These trends begin to explain why it’s hard for the current generation to find its way into the workforce. The solution for them is to grab experience in any form: serial internships, starting a small business, or staying in school longer to build credentials.

Moving on….

One lesson that I came back to throughout the week was to trust your instincts. As I said in my first note, my initial impression on arriving in Davos was that the confidence of business worldwide was definitely higher than two years ago. Everything I’ve learned this week has confirmed this. The euro is under control. The U.S. economy is ready to take off for 3% growth, absent any more political meltdowns. And Asia Pacific will have no trouble beating 2012 growth figures everywhere. So our world looks much “less worse,” to quote the famous gloomy economist, Nouriel Roubini. For JLL, it means we can be confident in our continued commitment to controlled growth

Enough theory and policy, back to clients. I spent time today with an Indian client who wants to sell projects in four Indian cities. I talked with a major Indian industrialist who is already a good client for our investment management and leasing businesses. Signing our major contract with HSBC on Wednesday led to my spending a half-hour at breakfast with Doug Flint, HSBC’s Chairman, cementing our relationship at that level. I had a long beer with the CEO of Heineken, with whom we’ve been looking to do business internationally. I had a very pleasant conversation with a Belgian industrialist and investor who is becoming a good client of our Brussels office. And in of those strange coincidences, I ran into the CEOs of three major HR staffing and consulting firms: Mercer, Manpower and Adecco.

I rounded out the evening with our principal banker, the Bank of Montreal. The guest of honor was Mark Carney, who was the head of the Bank of Canada when I met him at each of these dinners over the last five years. He has just been appointed head of the Bank of England, and is a good contact for the firm.

That’s it from Davos. Best wishes, and thanks for taking the time to read these notes.



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