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Let's work to protect the wealth of nations
March 2026 marks a milestone in the history of modern thought: the 250th anniversary of the publication of Adam Smith’s The Wealth of Nations. Smith’s “quiet miracle of coordination” remains the bedrock of our global economy, and the articles in this issue of I by IMD demonstrate that his insights are more relevant than ever.
Smith’s most famous concept, the “invisible hand,” describes how individuals pursuing their own interests promote the welfare of society as a whole. In our cover story, Mark Greeven explores the modern evolution of this coordination. Building a true business ecosystem, he argues, requires leaders to give up control – shifting from a monolithic center to a network of autonomous actors. Just as Smith’s baker does not bake out of benevolence, ecosystems succeed only when they empower independent actors to create value.
Smith was first and foremost a moral philosopher, reminding us that “efficiency without virtue endangers the very system it depends on.” This tension is at the heart of Goutam Challagalla and Frédéric Dalsace’s article, Sustainability 2.0. They argue that the next phase of sustainability must move past virtue signaling to focus on innovation and value creation – echoing Smith’s belief that profit must coexist with moral sentiments for capitalism to remain legitimate. Smith measured the success of a nation not by its gold reserves but by the “universal opulence” extended to ordinary people. In his column, Jerry Davis warns that the rise of “algorithmic corporations” and agentic AI could threaten this vision. He calls for courageous leadership to ensure technology serves humanity, not vice versa.
Marcus Burke and Trent Ross address the return of national identity as a “corporate passport” in a fracturing world. This recalls Smith’s fierce dismantling of mercantilism: closing borders rarely makes nations richer. Burke and Ross advocate for a new “corporate statecraft,” where leaders must cultivate trusted, transnational identities to protect the global coordination Smith described.
As a PhD student in marketing, I made the mistake of asking a professor of economics why economists looked down on us. Without missing a beat, he replied, “Because you are at the end of the intellectual food chain.” Many moons later, I recognize the kernel of truth in this statement. Once we understand that all economic activity is, in the end, social, we are all Adam Smith’s intellectual children.
Stefan Michel, Professor of Management, Dean of Faculty and Research
CONTENTS
COVERSTORY
04 Competitiveness
Building a true business ecosystem means devolving decision-making, and trust and good governance are more important than data and technology.
12 Sophisticated digital ecosystems are popping up in some unlikely places.
ACTS OF LEADERSHIP
20 Sustainability
Why value creation and performance should replace virtue-signaling.
26 Artificial Intelligence
Using humor in an interview is unlikely to go down well with an AI audience.
30 Strategy
Is making the first offer in a negotiation the best option?
36 CEO Dialogue
Rebuilding a bank on stronger foundations.
40 CEO questionnaire
Marco Arcelli of Acwa answers 15 leading questions.
OPERATING SYSTEMS
44 Performance
The drive for high performance is fueling the progress of a Formula 1 team.
50 Talent
Companies need to tap into the high potential of workers aged 50-plus.
54 Geopolitics
The reputation of your home country is affecting your business.
THE SANDBOX
60 Board’s eye view
How to prepare for the disruption caused by activist investors.
64 Economics
Why Adam Smith’s The Wealth of Nations is still essential reading 250 years later.
66 Brain circuits
Executives considering a career move must define their ‘competitive identity.’
70 Coaching corner
The importance of balancing empathy with authority.
FRESH THINKING
16 In good company
Jerry Davis warns of the billion-dollar corporation with no employees.
42 The human factor
Shelley Zalis extols the virtues of paying attention to every detail.
72 The forecaster
Howard Yu praises the quiet success of Samsung’s turnaround.
75 P.S. The president’s soliloquy
David Bach calls for leaders to empower human talent in the age of AI.
ECO SYSTEM INC
Why relinquishing control can strengthen competitive advantage
Ecosystems promise a new way to compete, yet most squander the opportunity by bolting them onto old strategic logic. Mark Greeven makes the case for putting ecosystem thinking at the heart of how leaders set direction, govern value, and build advantage
Ping An, one of the largest and most digitally advanced financial services groups in the world, didn’t set out to build an ecosystem. It wanted to digitally transform an insurance business. It was only after more than a decade of that difficult process that the possibility of an ecosystem emerged. It gradually became a strategic necessity. Almost a quarter of a century ago, the Chinese insurance giant embarked on the unglamorous grind of digital transformation: centralizing siloed back offices into a shared “kitchen” to serve every business line, digitizing customer journeys, arming a vast front line with tools, and building the data and AI capabilities that would become Ping An Technology, serving more than 500 million users. As its former co-CEO Jessica Tan recalled, it was “difficult just building everything” in the early years. Platforms take time to reach scale.
But by the mid-2010s, those platforms started to gain momentum – and the logic of the firm changed. Ping An was no longer just an insurer, nor was it just an “integrated finance” group. Under Tan’s leadership, Ping An realized that its newfound reach had opened opportunities in adjacent arenas. Crucially, its newly adopted technology could now attract customers before they might traditionally buy its financial products. It expanded across healthcare, auto, property, and smart city services to create earlier entry points for engagement.
With this broader reach, however, there was inevitable pressure. Not the pressure of ambition, but of size and interdependence. Health decisions started to reshape risk models. Automated services rewired distribution. Smart city projects pulled in governments, hospitals, developers, and tech vendors: actors no organization chart could command. Value no longer came from optimizing each business as an isolated arm, but from orchestrating how they interacted, shared data, and mobilized partners at speed.
The Ping An ecosystem wasn’t designed from a blueprint; it crystallized as the company discovered what activities could be coordinated thanks to its new digital infrastructure. The company’s real innovation wasn’t “going digital” or “going broad.” It was learning to govern a system of autonomous businesses connected through shared digital infrastructure, where strategy has to shift from directing everything from the center to enabling interactions across a growing network.
Ping An is not an exception. It is an early signal of the changing nature of business and what is possible in an interconnected world. Across industries, leaders are discovering that scale,
once a source of strength, can become a source of friction and stagnation. They have more data, resources, and capabilities than ever – and yet decision-making slows, coordination frays, and the distance between the organization and its customers quietly grows.
In this environment, the concept of ecosystems has moved from the margins to the center of strategic and boardroom conversations. A KPMG study published in December 2024 found that 83% of senior leaders at large organizations planned to expand their partner ecosystems to accelerate growth, and 94% believed such networks would be a key enabler of future growth and competitive advantage.
Why? Ecosystems promise a way to regain speed, access capabilities beyond the firm, and respond to markets that no longer respect industry boundaries. However, and this is where many stumble, they are easy to misunderstand, and deceptively hard to lead. Most will fail. Fewer than 15% of business ecosystems are sustainable in the long term, according to research by the BCG Henderson Institute.
So, are ecosystems just another business model to try from the corporate toolkit, or do they represent a more fundamental shift in how corporate strategy itself must be designed and led? Are we witnessing a game-changing evolution in the way companies compete, not just how they function? And, if so, how can executives avoid the common pitfalls to build ecosystems that will transform their businesses?
Ecosystem thinking is on the rise
The renewed interest in ecosystems has been attributed to external disruption. Trade fragmentation, geopolitical uncertainty, and regulatory pressure have weakened long-standing assumptions about global integration. Digital technologies and data are dissolving industry boundaries. But external pressure alone cannot explain why ecosystem thinking is gaining traction. Across many large organizations, internal coordination has become one of the biggest constraints on performance. McKinsey research has found that more than 70% of senior executives see slow decision-making and organizational silos as major barriers to speed. As companies grow, the cost of aligning people, processes, and decisions inside the firm often rises faster than the cost of working across its boundaries. What once looked like control now feels like a burden.
Traditional responses are proving inadequate. Vertical integration, the strategy where firms seek to control more of their supply chains, is time-consuming and capital-intensive. Purely transactional partnerships lack the depth or flexibility required to solve complex, interdependent problems. Platform investments may improve efficiency without changing how decisions are made.