This entry in the Faculty Spotlight feature comes from Bhaskar Chakravorti, Fletcher’s Senior Associate Dean of International Business and Finance, and the founding Executive Director of Fletcher’s Institute for Business in the Global Context. He is the author of The Slow Pace of Fast Change. He currently teaches Strategy and Innovation in the Evolving Context of International Business and Strategic Management, a module offered during the August pre-session attended by all students in the Master of International Business program. Dean Chakravorti here describes his real-world business education and his perspective on contextual intelligence that resulted.
From 1994 to 1995, I was traveling across Africa, exploring interest among various governments and telecommunications service companies in investment in the continent’s first undersea fiber-optic network. This would be a breakthrough communication technology, with the power of connecting an excluded and fragmented continent with itself, with the world, and to this newly emerging phenomenon — that none of us quite understood at the time — called the Internet.
Given its economic heft, South Africa was among my first ports of call. Those were exciting times for the country. The ANC had just assumed power and Nelson Mandela had made history as the country’s first black president. The world was suddenly considering how to connect to this hitherto isolated country and embracing a potential economic and political powerhouse.
I made what I thought was a brilliant presentation to senior bureaucrats and technologists. In my view, I had quite convincingly made the case for South Africa to be the key anchor for a fiber-optic ring that would encircle the continent with branches taking off toward other continents.
Turns out, my case wasn’t as rock solid as I had imagined. A senior minister took me aside the next day and asked if we could scrap the plans for a ring around Africa and just do a single cable that linked South Africa to …. Malaysia. That’s it. Just Malaysia. But that makes no business sense whatsoever, I protested. The minister explained that Mandela had visited Malaysia the previous year and had struck up a close friendship with Prime Minister Mahathir. The two had agreed on cooperation on many fronts. Most significantly, Malaysia had pledged help in providing voter education to South Africa, a country where nearly 18 million out of the 20 million citizens would cast their ballots for the first time, with half of the 18 million illiterate. And now, post-election, it was critical that the bonds be strengthened further.
“But consider the economics,” I continued. “A single link to Malaysia would be frightfully expensive and would not have the traffic to justify it. You would forgo the chance to connect with the rest of Africa.”
The minister politely, but firmly, let me know that while I seemed smart enough, I was not as clever as I thought I was. “You do not argue with Nelson Mandela,” he said.
Trained as an economist, this was my first small step toward an appreciation for contextual intelligence. The linear logic of business and all its analysis could not — and should not — ignore the momentum of emerging geopolitical alliances. Malaysia was already among the first of South Africa’s allies; there was a stronger relationship to be built. Mandela had personally asked for this cable as a symbol and a conduit.
Still frustrated, I walked the corridors of South Africa Telkom and ran into the old guard. These were engineers and network planners; surely, they understood economics and net present value analysis. I told them my story. They agreed that the Mandela proposal was nonsense. What was needed was a fiber-optic link directly connecting South Africa to Northern Europe. “What about connectivity to the rest of Africa?” I asked.
“Who cares about the rest of Africa?” was the universal opinion.
This was my second lesson in contextual intelligence. The old guard was all white. They were frightened about what was going to come next as their secluded reality had come to an end. While their argument was couched in business terms (after all, Northern Europe was where the business would be), their real reason was history: They desperately wanted a conduit back to the old days and to some semblance of a world that they had known all their lives. They were ready to make a “business” argument that was, in reality, an agenda that harkened back to a colonial legacy.
Yes, I was there at a true inflection point, armed with the finest analysis possible, elaborate layers of spreadsheets, and well-crafted presentations. However, real decisions are based on myriad other factors. In this case, there was, first, a big future envisioned by a master politician — and already a living legend — who could imagine the unimaginable. And second, there was a past that, while it had become politically irrelevant, still had the technocratic expertise to exert a pull in an opposite direction. If South Africa was to develop, it could not afford to ignore the technocrats entirely.
I redid the analysis. We modeled-in the geo-political assumptions, accounted for different connectivity scenarios and their socio-political ramifications as well as economic impact. We resumed the debate in a more holistic manner. Context is, indeed, king. You should embrace it, understand it, and make it central to your business model analysis; most importantly, you should not ignore or fight it.
I have taken this lesson to heart, so much so that I now run Fletcher’s Institute for Business in the Global Context. Many students arrive at Fletcher with deep life experience that guides their understanding of centrality of context, but they aim to strengthen their business skills. Others have rich business and technical skills, and they seek to develop their contextual intelligence. Together, we are building a new approach to international business, one that factors in how business decisions connect with non-business factors, such as politics, history, and the human condition.