Klaus Schwab

Denise Pelaguini on this weekend edition of Bloomberg Best. You have to be a decision maker. What it takes to get invited to the World Economic Forum. We can shape the future in a positive way if you have also new innovative ideas. The founder of the World Economic Forum says some slots get held open for young, unheard of innovators. I was one of the first visitors to see him when he came out of prison in ninety and claud

Schwab on inviting Nelson Mandela. All this and more coming up in the next hour of Bloomberg Best and going to Davos for the World Economic Forum. It's usually a huge deal. Yeah, but you know Denis says, you know, it's not happening in Davos, Switzerland this year though, because of the pandemic. Yeah, that's right. It'll be in Singapore this year in May instead of earlier in the year and partly virtual. But we did have a chance to hear from the founder and executive chairman of the Forum,

Claus Schwab. He spoke on the David Rubinstein Show, Pure to pure conversations, and David begins here by asking Schwab about traditions at Davos and how it all gets put together. Check it out. So, Klaus, let me ask you. Uh, in the end of January, for the last fifty years or so, the elites of the world, the most famous business people, the most famous heads of state gather in Davos UH to talk about various global issues. Uh. This January,

is that going to be possible? Yes, we come together again during the usual Davos week, but of course in the virtual form, it's so important to look at the aceenda of twenty one and two. Shape the agenda. Yeah, it's the cost roads. But sublitual meeting is not enough, so we combine it with a meeting where people really physically. We'll meet again later in May. Hopefully vaccines and podcasts and testing will allow us to do so. Now, last

year President Trump spoke, and you've had she ping. In recent years, you've had Vladimir Putin, President of France, uh, the Chancellor of Germany, leaders from all over the world. To get these leaders, do you have to call them and say you're personally invited or do they call you and say I want to come. No. Usually, as presidents is the result of longer um friendship in certain cases,

or at least relationship. Just look that. I take a case for example, Mrs Merkel when Chancellor Mrs Merkel at that time when there was the fall off the wall and why the way is able? The Convict film was very engaged and essential in the German reunification because Chancellor Cole and his East German counterpart met the first time in Davos and decided to go ahead with the unification.

But at that time there was a young member from Eastern Germany appointed to the cabinet as Environmental Minister, and we made her a young global leader, and she came regularly to Davos, and so out of let's say his first invitation, regular participation has developed over the last year's and I could go on and long. Um, usually the people who are coming to Doubles a part of this

what I would call Doubles community of regulus. So all the famous people that have come to make speeches, who was it that drew the biggest attention of all the people you had? I think it's difficult because it was always related to the specific timing when someone came. UM, for example, in President Trump came he was the first year in in the office. But for me, the most important,

also most memorable participant certainly was Nelson Mandela. So class, you've got a lot of prominent people coming, business people, government people. Do they call you sometime and say my hotel is not adequate, or I need more passes or what are the complaints of How do you shield yourself from all these complaints that people might make about they need a bigger hotel room, or they need more entourage

passes or something. Because most of most of those people I'm in touch more on an intellectual basis, on a political basis, on a conceptual basis. So fortunately, so you don't always there to call me if there are such matters but they call my stuff and really insist because Tamois is a place for skiing. As a hotel infrastructure is not like in a big city. But I think everybody over time now except what is important is a personal contact see Frank Exchange of ideas. So you make

some sacrifices in terms of your personal comfort. Why did you pick Davos? There are many great cities in Switzerland. Why didn't you not do it in Geneva, where you were living, or why not some other resort in Switzerland. I want to avoid the big city. I wanted to create a true global village where people meet on the streets. It's that was a village. Davos heads a necessary infrastructure in terms of hotels and also a great congress house. So for those who haven't been there, how do you

get invited to go to Davos? Every year? Who gets to go? You have to be a decision maker, is in politics or in business, but also in civil society. And in addition we invite always young people of course, the media scientists. So it's a true mirror of global stakeholdels, which means of all walks of society. If somebody is watching you and says I've never been invited to DeVos. I'd like to go. So I just send a letter

to Claus Schwab and say I'd like to come. I would read select of me because I'm always curious about new people and UM as an example, I just because the email I don't know where he has my email address from, from a young girl in sixty years old in India who has done extraordinary things to help the community. UM in terms of practical approaches, UM to deal with

environmental issues, particularly with plastics. So we have a certain open house for everybody who who has an innovative spirit, because we want to shape the future, and let's not forget we can shape the future in a positive way if you have also new innovative ideas. Now some people say, well, Davos is the is for the elites, and every year when Davos occurs the end of January you get articles in newspapers saying this is where the elites are gathering.

How do you respond to people say it's just for the elites of the world. Yes, of course all the top decision makers are in Davos, but it's only half of the twos you have. In addition, many people not very well known, particularly not known to the media. I just give you were some examples. I invited Mrs Arhund when she still was a member of the parliament. UM.

We invited people like Mandela. I was one of the first visitors to see him when he came out of prison in ninety so I taught him ninety two to Davos. It was a remarkable historical event because it was the first time he came together with at that time President Clerk, and it was demonstrations and apartheid as the in in South Africa. So there many of those people young um, not very well known, but so is also people who

shape the future. Let's talk about your background first and then how you came to create what's known as Davos. So where did you grow up. I grew up in a middle size town just north of Switzerland in Germany, and I actually experienced still the halls of World War Two. I remember how I was sitting with my teddy bear

in our shelter um. But we were actually fortunate because my father was working for a Swiss company and was also active for the International Red Course, so we could cross the border at any time between Germany and France and Switzerland. And what stroke me and what probably influenced my whole life, was to cause a kind of line and artificial lines in Boldo between Switzerland and Germany. And on the one side so was peace and on the

other side there was the war. I think it was a very important element for me and a trival to devote my life to dialogue, to reconciliation, to working together in order to solve issues. And so you went to school then in Germany and and in high school in Germany. Yes, I went to high school in Germany, but some studied in Switzerland. I did, at the same time a studies in mechanical engineering, but at the same time I studied economics. And I concluded both with a master's degree, of course,

and afterwards with a doctorate. And some of my father felt, in order to do real a career in in business, you have to go to Harvard Business School. So I applied to Harvard Business School, was accepted. But son I wrote to Harvard Business School and said, look to Dean Baker, look, I have two doctor grads. I want to come to the second year immediately, and he wrote back, no way. So what happened. Afterwards, I found a school in the At that time we didn't have the Internet yet. It

was a big catalog. I found a center which was called Littower Center on today is the Kennedy School. And I discovered if you do, if you accepted at the Littower Center, you can cause register everywhere in the Harvard system. So that's what I did. I uh registered with the Kennedy School, went to all the classes of the Harvard Business School second year, and suddenly I got an invitation from Dean Baker to have tea with him in this little president's house, and he said, you are the first

one who out foxed our system. From now on, cross registering will only be possible for two courses, so for two classes. But for me Cincy at Harvard it changed my life because I met also people like Henry Kissing Jaw, John Canders, Call Brays, and I became much more interested in political, general, economic, societal problems. So after you've finished

at Harvard, you came back to Germany or Switzerland. I got the phone call from a famous smiss industrialist, Mr schmid Heini, and he told me, look, you have the Harvard experience. I just watched two companies. What ten thousand people company with another big industrial groups suits the group which still exists, Why don't you come and you are responsible for the merchant. So I went through a hearts

cool because I had to lay off people. Um. But after two years, let's say, the job was more or less finished, and I asked myself what to do now? And I got an offer from the University of Geneva to do teaching, and I felt, with all the academic experience I have accumulated business experience, I should spend one or two years teaching. At the same time, I got an offer from a from the German Machine Building Association.

You have been at Howard, you have business experience, why don't you write a book for our members on modern management. So I sat down and asked myself what is actually the purpose of a company? And that's when I came up with the stakeholder concept, which means that a company is not just an economic unit, but a social organism and it has to serve all those who depend on the company, who have a stake in the company, like

the people working in the company. Is the community that is active in So that was the big let's say beginning actually of Sdabo's idea, because the Dabo's idea is the stakeholder capitalism, the stakehold of responsibility. Okay, so you're back at the University of Geneva. You're teaching economics. Is that what you're teaching? I was teaching actually leadership corporate management, and son, as a professor of US, I should say, frankly,

a little bit bald. After all the previous experience I had written this book, Son, I felt why not to create the platform where business leaders could meet the stakeholders, which means political leaders but also um outstanding voices of society. So um I got I had made some savings and I got some money from my parents and that's how

I started. See that was m platform, which is now called the World econvict form and actually um I incorporated it immediately as a not for profit foundation because I recognize if I wanted to attract governments, it cannot be for profit, profit making venture. So so had you made it a for profit venture, you think it would not have become as big as it has become. No, certainly not, because now we have su trust of everybody, because people know we are serving a purpose and we are not

serving how own interests? What year was it that you had your first conference? It was seventy one, and so we're four hundred forty four people. And actually I hired one employee because I needed some experience in UM in how to run a confluence. That's how I met my wife. She was my first hitt and my first collaborator. So you've now been married for how many years? Next year it will be fifty years, David? Fifty years? Okay, So we canna have a big party at DeVos to celebrate

the fiftieth wedding anniversary. No, we are more, uh, let's say a pirate family. I think we will do it. We married in a very little church in a mountain valley, which cannot let's say, give whom to mores and probably twenty thirty people. So we will go back, certainly to the church if if COVID allows us to do so. What was it that propelled Davos as we're calling it now or word economic forum to go from a four

forty four person event to a global phenomenon? What was it that actually changed things that made it so popular and so important to people to attend? I think if I look over the last fifty years. It is the conviction, UH said the big issues in the world need a collaborative approach. UM. Business has to interact with government leaders. But also if you want to plan long term, you have to know how customers feel, how the young generation feels,

what experts are thinking. So doubles it became a place where you really could absolve what the future will bring you. I think UH, intellectual or contextual intelligence as I would, to know what's going on, not only now, that what will happen in the future. To connect the dots became more and more important for business leaders when they looked

at the long term strategies. Over the years the fifty years or so, have there been one or two or three events that have happened at thats where a global leader of one country met with a global leader of another country and actually as a result of peace, agreement broke out or something like that happened. Is that happened very much? It happens UM. For example, UM, we at a very critical moment thirty years ago, we prevented probably a war between tokey increase, even if unfortunately we didn't

or any monst city. UM. We were the only platform for many years, which part is really leadership and see that leadership together in Davos. As you know, David, we try UM always to be a platform of good services. I would even say in bis Pestiss tradition, because like Switzerland's the world econry form is independent, impartial and non political. So many people that build organizations like yours has been over fifty years now, they want them to continue forever.

What do you hope will happen subsequently you're not being the executive chair? Will I continue or can it not continue without you? I have built a very strong government structural not only with the board of trustees, but also with the managing world. The foom UM is now an organization with offices around the world in China, Tokyo, US twice and also we have our center for the f

Sincesty Revolution in San Francisco. UM. I think many capable people, and if something happened to me, I think the spirit would survive. What is it you're most proud of having created over the fifty year period of time. It's a gathering place or a network of our community. What is it that makes you most proud of what you've done? I think many many examples where we took an initiative

for we pro wided solution. I'm personally very proud, maybe as an academic, that stakehold of capitalism is now broadly accepted and has been even um in sicna Kais is shown as being involved more robust model for the business compared to one company which is only aiming at short term profits. Class. Now, when you call somebody, any head of state in the world, or you email anybody, does it take more than five minutes or two minutes or

a minute for you to get a call back? Because you know everybody knows you, everybody wants to talk to you. How hard is it for you to get anybody on the phone? I assume not too hard. I would say it's not too hot, but certainly not if it's in a minute, or sometimes it takes a week, but certainly most people see I have met every leader probably around

the world. We see exception of the last pope I tried to take out of all those meetings, um the very best and um David, if I may, um, when you meet those people who ask your self what is actually what? What what makes the leader? Today? I have a very simple definition it takes brains, soul, heart, and muscles. Now supremes stands for professionalism. You have to know what you are dealing with. Uh See. Soul stands for having a compass which gives your direction. It may be a vision,

it's your values. And the heart is for passion. You have to be passionate about what you are doing. And the muscles is for being able to implement um your ideas, your vision, to translate your values. And I have to say when I look around in the world all the leaders I have met, so actually the only way if you who respond to all four citeria. But again, the person who is out standing sevest lower model is certainly

knows of Mandela Well. I may just conclude by saying I've met a lot of great leaders as well, but I would also say one that I know who has brains, soul, heart and muscle is Klaus Schwab. So congratulations on what you have done, Klauss. I hope you're very proud of what you've built and I look forward to seeing you not too too long for now. Thank you way how

much Stavord and you've been listening to Klaus Schwab. He's founder and executive chairman of the World Economic Forum on the David Rubinstein Show Peer to peer conversations, and that's it for this hour of Bloomberg Best And I'm Denise Pere. This is