Davos Man’s dirty secrets

By Lance Knobel
January 27, 2012

It’s the time of year when everywhere I turn, I read tweets and posts about Davos, which was a huge part of my life for 10 years. I’m a long way from the mountaintop these days, but I find that too many people don’t understand some basic truths about the Annual Meeting of the World Economic Forum.

The Forum’s mission

The Forum’s often-stated mission is: “Committed to Improving the State of the World.” There were moments that a few other subversives and I used to say that it was a bit like the signs you see entering a London borough: Croydon: The Brighter Borough. Sounds nice, but it’s meaningless.

I don’t think — and, in the day, I didn’t think — that’s quite fair. The Forum is truly committed to improving the state of the world, and some of the corporations that are members are wholly on board with that mission. The problem is that, for all the good intentions, and plenty of good actions, an organization that is at heart a grouping of the world’s largest corporations isn’t necessarily in the best position to improve the state of the world, particularly in an era of the Arab Spring and Occupy.

The Forum does its best to mitigate this, inviting a decent share of civil society leaders and trade unionists. But just as the academics and Nobel laureates that grace the Forum are, as one of those distinguished attendees once told me, the dancing bears at the circus, the non-corporate leaders in Davos are on the fringe, not at the center of action.

When I first went to Davos in 1993, then-Viscount Rothermere (who was the ultimate owner of Euromoney PLC, the joint venture partner with WEF in World Link, the magazine I ran) told me that the real mission of the Forum was much simpler. Don’t Offend Anyone.

What it means for the program

If your goal is to offend no one, you have a host of problems. Some are obvious. Taiwan and Tibet shall never pass your lips (WEF is hardly alone in this constraint). Plenty of rotten presidents and prime ministers get welcomed with open arms.

That comes with the territory. More difficult is the need to put corporate leaders on panels with relatively little regard to whether they have any original ideas, or any ability to talk about them. The dark, dirty secret you learn when you run the program at Davos is that the vast majority of CEOs have nothing to say. That doesn’t mean they are bad CEOs. It’s just that there is no correlation between being a successful business leader and having interesting ideas and the ability to express them.

It isn’t just people. Offending no one also constricts the range of things you can talk about. After I left the Forum, I was still persona grata for about two years. My successors running the program would solicit ideas from me. I remember developing, with considerable enthusiasm, the idea of a session called “How Much is Too Much?” It would look at whether a cap on CEO salaries, or perhaps on the multiple of those salaries to average wages, would create healthier organizations. My contention was most CEOs were more interested in power than money. Perhaps you could posit significant salaries for top executives, but taking the CEO post would mean a reduction in salary in return for power. I think most would take that deal. The session could also examine broader issues that are big for people researching the economics of happiness. Does more money mean more happiness (after a certain point, the answer seems to be no)? Is there a point that is really too much? And so on. Lots to talk about, and it’s the kind of thing that would have created a stir. That session idea didn’t go anywhere.

Not too far ahead

It isn’t just about ruffling feathers. Part of the genius of Klaus Schwab, the founder of WEF, is to recognize that his market is actually very middle of the road. There was a lot of enthusiasm in my day for having Phil Collins come to perform. If the WEF gets too far ahead of its crowd, it falls flat. The secret is to be five minutes ahead, not five months or five years.

So fast-moving events, like the beginnings of the Arab Spring one year ago, leave the Forum flat-footed. So, too, do the kinds of faint rumblings that might just turn into something significant, but could also be a bust. The Forum isn’t about weak signals or the long tail. It navigates skillfully along the tides of conventional wisdom, but with just slight deviances in the course so that there is the appearance of freshness and discovery.

I was fortunate enough to be involved with Davos in years of plenty, when we invited around 300 so-called Forum Fellows — the academics and other experts — and really tried to push the boundaries of the program (with plenty of encouragement from Klaus). After I left, with the dotcom crash and then 9/11, the Forum decided that more sobriety was needed in the program. CEOs needed to be able to show that they were coming to Davos to discuss important things, not frivolity.

I argued unsuccessfully with my ex-colleagues that it was precisely the off-the-track ideas and sessions that were most valuable in Davos. Another session on financial architecture, the Doha round, China’s rise, or networked societies would probably add very little to the discussion. But Davos had carved out a place where CEOs were suddenly tossed into a discussion on death (my all-time favorite session), the meaning of history, or endangered languages. Perhaps those could fire some disused synapses and spark something new.

Prosperity has returned to Davos and the Forum. The staff of the Forum has grown at least threefold. There’s a decidedly engineering-like approach to building the program now, with a cascade of agenda councils and meetings. I was, and am, more attuned to artisanal production. To my eyes, all the additional resources and grand processes has just pressed the program flatter and flatter. Davos continues to attract absolutely extraordinary people. But they are forced into discussions where the unremarkable is the norm.

Outside the Congress Center

When I first became involved with Davos, Maria Livanos Cattaui was the power behind the scenes, the ferocious number two to Klaus. Maria had the licence, or so it seemed, to be tough with the corporate members. The number of events and the scale of events outside the Congress Center were strictly controlled. WEF had the conviction that once you let outside events grow, it would diminish what happened inside the Congress Center.

Maria was brutally removed in 1996 and replaced by Claude Smadja (who was brutally removed himself five years later). That tough line on outside events remained largely intact. But the tenor of the age — the go-go years of the late 1990s — began to erode that policy. Big outside parties began to proliferate. More and more started to happen outside the Congress Center. Part of the core philosophy of the Forum — that if you had a white badge, you were equal and welcome to attend everything — began to crumble.

I’m ancient history, and I haven’t been to the Annual Meeting since 2002. But friends that continue to go tell me the corporate takeover has accelerated dramatically in recent years. Bigger, more elaborate events happen outside the Congress Center. There are more and more class distinctions, even if you have a white badge.

All that said, Davos remains a wonderful privilege. If I were ever invited again, I’d be on the next plane to Zurich (fat chance, I know). I had some of the best experiences of my life working on Davos, fighting against the constraints and trying to make something out of the fantastic raw materials at hand. I recognize the limitations, but I continue to wish that WEF aimed higher.

This post originally ran on DavosNewbies.com.

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