On Wednesday, the 6,000-plus attendees at the 2010 Million Dollar Round Table Annual Meeting, being held here June 13-17, heard from several speakers during the morning main platform session. The following are a recap of two of the presentations.
Transitioning from the First Curve to the Second Curve
The combination of three forces–demographic shifts, changes to the global, and technological advances–are forcing a transformation of businesses. That forced makeover represents what Ian Morrison, a futurist and the kick-off speaker of Wednesday’s Main Platform session, described as a “second curve.”
While on the first curve, said Morrison, companies initially perform well, but then experience a decline in revenue or profitability because of the economic, technological and demographic changes impacting their industries. To maintain their competitive position, they must transition to a second curve: a new way doing business that is “radically different” from that of the first curve.
“The problem,” said Morrison, “is that we tend to panic. We walk away from the old, first curve prematurely, and jump onto the second curve. In so doing, we risk losing business and profit on the of the first-curve business.
“But if don’t start building that second curve, we won’t be around later on in the 21st century,” he added. “So you have to manage well this process of change.”
Morrison said many companies now must revamp their business models because of the Internet and the rapid spread of mobile computing and communications.
He noted there are 1.6 billion Internet users globally, 60% of which are outside the U.S. and the European Union. Two-thirds of the world’s people now have a mobile phone, up from 15% in 2000.
These technology innovations, said Morrison, have given rise to more demanding and skeptical consumers who want “anytime, anyplace” access to products and services, and who want everything to happen “faster, better, and cheaper.”
“There is a natural human tendency to overestimate the impact of technology in the short run and to underestimate it in the long run,” he added. “We’ll see profound changes driven and amplified by technology, which is the source of value creation.”
Fueling changes to business processes, he added, is the emergence of new geographic markets, most especially in Asia, but also in Latin America and Eastern Europe–regions that have developed significantly during the past two decades. China, he noted, is now home to an increasing proportion of the world’s manufacturing output, while India has developed a comparative in advantage in outsourcing services.
Approximately 1 billion people in the world are comparatively “rich,” which Morrison defined as earning more than $25,000 annually. (He noted that 48% of the world’s population lives on less than $2 per day.)
As the global economy develops, differences between rich and poor will remain “profound.” Morrison characterized this chasm as “the long division.”
Developing countries, observed Morrison, will increasingly account for much of the world’s economic output, in part because of population trends.
“The developed world is flat in absolute terms and in terms of population,” he said. There is a 68-86 transformation taking place: In 1950, 68% of the world’s population was in developing countries. By 2050, it will be 86%.”
Morrison forecasted the world’s population will grow to 9 billion by 2050 from 6.5 billion today. Approximately one-third of all people under age 15 and 7% are over age 65.
The under-15 demographic is most highly concentrated in developing countries, including Afghanistan, Pakistan and Iran. The over 65 age group accounts for a small percentage of their populations.
Taiwan, South Korea and the U.S., he said, are in the middle of the age continuum. The most rapidly aging populations are in Japan, Russia and Italy.
The reason: a combination of increasing longevity and declining fertility rates. Italy, for example, has a fertility rate of just 1.4, below the 2.1 rate needed to replace that nation’s population.
Technological, demographic and geographic trends are buffeting insurance and financial service professionals as well, said Morrison, who foresees a shift in product sales.
“Everything I observe points to the need for new products,” said Morrison. “The second curve will entail more sales of long-term care, critical illness and [group] disability income insurance products as the world’s population ages,” said Morrison.
“I also see a world where we are progressively moving from goods to services, symbols and experiences as the currency of the future,” he added. “That translates to growth in things like insurance. So you’re all in the right business for the future.”
Emerging Victorious from a Rampage
Eleven years ago, Patrick Ireland could have ended up like so many of his fellow students. But he survived to tell the tale. And he credits his ability to persevere despite great odds for his good fortune.
On April 20, 1999, the world watched in horror the news reports of a shooting rampage that claimed the lives of 15 students at Columbine High School in Littleton, Colo. Ireland, a managing director for the Northwestern Mutual Financial Network in Denver, was severely wounded in the shooting spree.
During Wednesday’s main platform session, Ireland recounted his flight to safety through a second story window of the school–captured on cable news video and broadcasted worldwide–and his subsequent recovery. The long ordeal of April 20, he said, started normally.
“I was 17 years old, looking forward to the weekend,” said Ireland. “Just 5 minutes [before the shooting started], I was being shushed by a librarian for talking too loudly about my plans to go water skiing.
“Then a frantic teacher rushed in to warn my classmates and me about the two gunmen,” he added. “Within seconds, I was crouched under a library table, with gunshots and pipe bombs creating an unbearable ringing in my ears. The gunmen were screaming at us, and I began to pray.”
When a student seated close by was shot in the knee, Ireland rushed to his aid, applying pressure to wound. In the process, Ireland said, he raised his head just an inch or two above a library table–and was immediately shot, twice in the head, and once in the foot. The gunmen were standing just 15 feet away.
One of the bullets, said Ireland, traveled through the left hemisphere of his brain, paralyzing the right side of his body and impacting his ability think clearly. For a time, he blacked out.
“When I regained consciousness, I realized I didn’t have the ability to stand up,” he said. “Frantically, I wondered, ‘How am I supposed to get out?’ I realized at this moment that the only person I could rely on was myself; and that I needed to take control of the situation.”
Take control he did–in fits and starts.
Ireland related how, with great difficulty and while passing in an out of consciousness, he struggled over 3 hours to reach the second story window sill through which he would escape. When an armored vehicle holding a SWAT team raced to the window, Ireland made his move. Without waiting for assistance, he lowered himself from the window and plunged onto the vehicle’s roof.
Ireland said that he was rushed to the hospital to undergo immediate surgery. After the operation, he and his family were told the injury to his head would impact his ability to read, write, and remember. They also learned that he would not walk again and that he would have limited use of his right side.
“As you can imagine, it’s extremely frustrating to not make the connection between the brain and your hand or the brain and your mouth,” he said. “Only in my mind did I know how to put pen to paper, to complete a sentence. Yet I was unable to take action.”
The initial prognosis was a low point in Ireland’s long ordeal. Through intensive physical and speech therapy, Ireland said, he gradually recovered. By splitting his time between school work and therapy, he was able to graduate on time–and as his class Valedictorian.
Thereafter, said Ireland, he attended Colorado State University in Fort Collins, where he met his future wife, and where he graduated with honors in May of 2004.
He also met there a recruiter from Northwestern Mutual Financial Network, Milwaukee. That led to an internship at the insurer and, later, the launching of his career in financial services with the company.
The journey from that terrible day in 1999 to today, said Ireland, was not easy. But he said the lessons he learned along the way helped him through the many moments of despair, anguish and frustration.
“I’ve come to believe that people are good at heart and that with perseverance, we can all achieve greatness,” he said. “I’ve also learned that when bad things happen in life, as they surely will, we have a choice: of being a victor or a victim.”