Daniel Thorniley – A man who walks the talk
Daniel Thorniley belongs to that rare breed of individuals who can function as a consultant, an economist and an analyst and at the same time be a sought-after speaker whom business people can enjoy and respect.
Daniel Thorniley,senior vice-president of the Economist Group, manages 200 company client groups and makes regular briefings and in-house presentations to CEOs of top multinationals and prominent decision makers. At the same time he is a prolific writer of reports, articles and books. He is a full-blooded professional, refreshingly straightforward and outspoken, who will not refrain from putting his money where his mouth is.
His approach involves lacing his speeches with wry humour, case studies and stories so that man-agers, normally bombarded with meaningless phrases, will relax and absorb his content.
A few Thorniley titbits: How to grow the European population and deal with the United States’ edge in working hours? “Europeans need more work and sex.” Germany? “The Brazil of Europe without the football team.” The European Central Bank: “It wasted four years fighting non-existent inflation,” he exclaims.
The secret of Thorniley’s success? “Humour and no PowerPoint,” he says. “If you want to look at pictures, go to an art gallery.” He also has the British flair for being mildly self-effacing. “One reason among 100 why my speeches are not as good as Abe Lincoln’s is that the Gettysburg address lasted about nine minutes, whereas I drone on longer than that,” he says.
Also, Thorniley incorporates real-life experiences executives can identify with. “I have seen trends and fashions in the business world come and go,” he says, “and together we can share the gallows humour and enjoy the failings and weakness of senior management.”
One such mistakeis dealing with emerging markets. Managers do not effectively manage expectations at corporate headquarters, Thorniley says, adding, “The big bosses have experience in volume markets but often don’t have a clue about emerging ones.”
In recent years, says Thorniley, companies have been unable to achieve top-line revenue growth in the saturated US and Western European markets. Gaining extra market share or building brands is expensive. Cost-cutting headcount reductions have become the vision. Selling to consumers has become increasingly insecure. American consumers often spend on credit and Western Europe has gone through “six years of economic hell.”
Major Western firmsare making good profit by outsourcing production and increasingly selling to the more dynamic and high-growth Central and Eastern European countries, along with India, China and other emerging markets. However, they do not reinvest profits in their home markets to build new factories nor do they do extra hiring or carry out future-oriented R&D and innovation. “Workers are insecure and do not spend, business is crap on the domestic markets, and the business community is pessimistic and looks abroad even more intensely, reinvigorating the vicious circle,” says Thorniley.
Compared with low, single-digit growth in the West, annual sales growth in China, Russia, India, Turkey and south-eastern Europe has been as high as 30 percent, Thorniley says. Emerging markets are better off in fiscal terms than at any time since World War II.
“The strategy in the West has become overly conservative, defensive and designed to protect market shares,” says Thorniley. In contrast, emerging markets have been characterized by flexibility, adaptiveness and intuitiveness.” The key to success in emerging markets is not only logistics or brands, but also building relationships and trust with partners, he says, adding: “No market grows 30 percent or 40 percent forever.”
China is the No. 1growth market. Despite difficulties in obtaining profits, WTO membership means that profitability “is much more on the radar screen,” says Thorniley. However, the country has become “oversexed,” with many firms putting too many eggs in the China basket. Multinationals have done well in major metropolitan areas, but to expand, they will have to make the costlier and riskier push into inland regions. The high-growth markets of Central and Eastern Europe have also become very alluring, not only as sales markets but as production locations. China always wins on labour costs, but the CEE region has a competitive edge in terms of value added, human resources, transport time, just-in-time delivery and closeness to markets.
Companies in China, Russia, India and other emer-ging markets are dynamically expanding abroad, making the US and European Union increasingly nervous. The Chinese have bought heavily into Africa, and Chinese and Indian competition in the Middle East is expanding. They have become more sophisticated, with products and services improving rapidly.
Challenged at their own game, Western businesses are not so gung-ho in favour of a level playing field, according to Thorniley. They seem to be saying, “Globalization is great when we dominate, but if you want to do the same, go to hell.” Though no one wants trade wars, there is a real threat of a global trade implosion of trade featuring more regional and bilateral agreements. In addition to oil prices, other serious threats include the high US budget deficit and debts. US dollar assets of Asian central banks total close to 3 trillion. If Asian economies collapse, they could start repatriating money, and the dollar could crumble. Western Europe cannot take up the slack, and the outlook for Japan is not rosy.
Thorniley’s styleand expertise overwhelmingly evoke laudatory evaluations from top managers. “No one writes with such vigour, cutting out all the ‘blah, blah’ we so often get,” says Jean-François van Boxmeer, CEO of Heineken. “I have never read any business papers that are so serious in content and such fun to read.”