Campus for Finance - WHU New Year's Conference 2022

The 22^nd Campus for Finance WHU New Year's Conference, named "The Cleansing Effect of Crises – A Change in Global Economy," took place on January 19^th and 20^th, 2022. Organized by students of WHU – Otto Beisheim School of Management, this year's conference gathered 15 international financial experts and speakers, as well as representatives from both the corporate and academic worlds, who addressed the future of a financial world in a state of transformation.

"This year, we come together once more in a completely digital setting," said Professor Markus Rudolf, dean of WHU, in his opening speech. As was the case last year, the two-day conference could not be held on campus. What has become clear over the course of 2021 is that the COVID-19 pandemic will not come to an end after only a few difficult months; it could potentially drag on for years to come. For the German economy, 2021 was a year of transformation and recovery after the severe slump in 2020.

What should companies focus on during the crisis?

Referring to adidad's impressive balance sheet in 2021, CFO Harm Ohlmeyer quoted Intel co-founder Andy Grove: "Bad companies are destroyed by crises. Good companies survive them. Great companies are improved by them." Ohlmeyer provided interesting insights into the challenges the pandemic had created and the decisions adidas, and he in particular, had to make over the last year. He mentioned that the profit and loss statements for most companies may not be decisive enough on their own, and the free cash flow could represent a bottleneck. Flexibility, a focus on e-commerce, and a globally oriented mindset are helpful in such a crisis, he said, and that they had played a crucial role for adidas last year.

A “future-proof mindset” is crucial in our world of rapid technological progress

Sandra Navidi, CEO and founder of Beyond Global LLC, sees a bright future for the ways artificial intelligence (AI) can be applied. Her optimism is founded on the developments in the automation of production and business processes to date, which will, in her opinion, continue to accelerate. She said that it was impossible to know which tasks machines could take over in the future, but that it would probably be easy to algorithmize calculations in the financial industry. Moreover, the developments in this field would create new professions, for example in the fintech industry. According to her, it is most important to have the mental tools to adapt to change, which includes staying up to date, curious, and willing to learn.

Dr. Markus Habbel, Senior Partner at Bain & Company, on the other hand, sees AI as a tool to make companies and employees more productive and to increase revenues. He said that, for human resources development, AI was of secondary importance and that the future lay in a hybrid model, one in which humans and AI complement each other.

Environmental, social and corporate governance - still the standard of sustainable investments?

Furthermore, Habbel considers the ESG standards (environment, social, corporate governance) to be increasingly important. According to him, they will likely become more and more standardized in the future. Sustainable management will increasingly determine the competitiveness of a company, as the topic is becoming more important to business partners, investors, and customers. Due to the growing public awareness of good corporate governance structures, more emphasis will be given to corporate and social governance in general. In practice, ESG standards belong in every company portfolio by default, as their relevance is also growing macroeconomically.

Are blockchain technology and cryptocurrencies here to stay?

Markus Habbel and the Bain clients see blockchain technology as a suitable diversification for any investment portfolio, claiming that it will remain important in asset management for years to come. An important argument in favor of this, they say, is so-called 'smart money', meaning capital invested by experts in a specific industry. "If smart money is an indicator of how durable an asset class is, then cryptocurrencies are definitely here to stay," the expert explained. According to a Bain & Company survey, on average four percent of U.S. investors' portfolios are made up of cryptocurrencies.

"I met someone at the bar..."

This is how Dr. Paul Achleitner, Chairman of the Supervisory Board of Deutsche Bank, started to answer the question why he had not pursued an academic career. He said that in 1983, he met someone while playing the slot machines, and this person convinced him to take a job at Bain & Company. That is why he advises anyone who wants to be successful in today's business world to look beyond the obvious.

He said that a thirst for knowledge, complemented by an academic education, made it possible to become a better manager, entrepreneur, or politician. Instead of being narrow-minded, one should always deal with new topics, facts, and problems. In addition, one should always be prepared when an opportunity arises. Fittingly, he quoted the Roman philosopher Seneca: "Luck is what happens when preparation meets opportunity." Achleitner also admitted to having made mistakes in his career, like everyone who didn’t lie to themselves. "The important thing is to learn from your mistakes and make the right decision next time," he concluded.