Short audio preview

What's the point of strategic thinking? Ask a business-person and you're likely to get the same answer as you would from a military officer: "Winning." When a business devises a strategy its principal aim is to create competitive advantage. By extension, it also creates a "loser" among its rivals.

This principle is central to free-market capitalism. It makes markets more efficient, it stimulates international trade and, in countries where it is embraced wholeheartedly, helps to deliver people from poverty. Yet Ketan Patel, the former head of a strategy think-tank at Goldman Sachs, the investment bank, believes it is rapidly becoming self-defeating. "We have plenty of academic bodies focusing on the art of war, but none on peace," he told the London Business Forum (LBF). In other words, too many people are strategising for their own interests rather than the common good. This situation must change, he argued, if we are to prevent the necessary competition of the business world from generating major political conflicts. At the same time, it makes certain global business challenges inevitable over the coming decades.

Patel was speaking at a lecture hall beneath the covered courtyard of the British Museum. He confronted the 100-strong audience with some unsettling truths, but did so with a look of total serenity throughout his hour-long presentation and seminar. Each time he crossed the stage it was with immaculate poise and focus, like a cat treading around broken glass. It transpired Patel is a master of Tai Chi, Qigong and yoga, as well as strategy. He is the archetypal over-achiever - a second-generation immigrant from India who studied his way out of a deprived part of East London into the London School of Economics and a stellar career in corporate finance. Still, it is hard to comprehend how he kept his head while working for Goldman Sachs. From 2000 to 2005, they had him circling the globe continuously, leading a team of researchers around the offices of the world's most powerful political and business leaders, to gather information that would help clients formulate global strategies.

Patel said he was surprised during this journey to find highly "divergent views on what the future looks like," even within the same institutions. He concluded there were several major dichotomies facing society, each requiring a strategic response. After leaving Goldman Sachs to set up his own consultancy, he wrote a book called "The Master Strategist: Power, Purpose and Principle in Action," to describe these dichotomies, and suggest how they might be resolved. Accordingly, he asked the LBF audience to consider how they would prepare themselves and their organisations to resolve issues such as:

• the growing potential of the human body versus the growing tendency for human beings to harm themselves through excess;
• the growing potential for science and technology to be applied positively versus its traditional application to warfare;
• the growing amount of information becoming freely available versus the growing amount of propaganda produced by governments and businesses;
• the growing ease with which people can "create their own networks, build their own content libraries and educate themselves" versus their growing disloyalty to incumbent suppliers;
• the contradictory (yet sometimes simultaneous) moves towards free trade and protectionism by major countries and trading blocs; and
• the growing tolerance towards cultural and religious diversity in some parts of the world versus growing intolerance in others.

Amid the confusion, Patel also pointed out a few trends that are certain to challenge every businessperson and politician in the world in the near future. For example, the potentially dangerous increase in competition for natural resources: "We are witnessing the emergence of a worldwide middle-income class of four to five billion people... all in a race to consume the last drop of oil, with no clear and accepted rules of engagement."

This problem is being compounded by "the subversion of traded world markets through bilateral deals," he said, adding we should look beyond oil as soon as possible and start a "race for alternatives".

Equally significant will be the "shifting epicentre" of world finance towards India and China (in Patel's view, the G6 will consist of the US, Japan, China, India, Russia and Brazil by 2050). "The impact on parts of world who do not know how to do business with them will be enormous," he suggested.

China is obviously Asia's number-one success story at present with "ten times the foreign direct investment of India". However, he added, "India is building a much broader base of smaller financial institutions and they're learning very fast. Over the next 5-10 years, India - with its democracy - will fare better than China and will start to take over the mantle of world growth."

Patel was pushed to comment further on Asia as he concluded his presentation with a question-and-answer session. In particular, the audience wanted to hear more about his experiences meeting the upper echelons of the Chinese government. What could their strategy possibly be, someone asked, if they wished to carry on exerting control over their population while it demanded more income, independence and individuality?

"China has one of the most professional management teams among any government with whom [Goldman Sachs has] contact today," Patel replied. "They know that with control there hasn't been great progress. They know that as they liberalise they will lose control. So this generation of Chinese leaders has a two-decade plan for relinquishing its grip. They believe fundamentally that now is not the right time for full democracy because of the Russian experience."

A similarly hopeful note was sounded by a question from the audience about coupling ethical behaviour to financial performance. "There is a growing appetite today among consumers for ethical companies in which to invest," Patel said. We need businesses to be more principled but what we need more is for businesses to be transparent, he argued. With transparency, "it's possible for us all to start making judgement calls - to show we're willing to take a small hit on the grounds of ethics."