Meet the Duke of Davos

Interview by Carlye AdlerJanuary 28, 2010: 8:56 AM ET

COLOGNY, Switzerland (Fortune) -- I was born in 1938 in Germany, but I was very fortunate. My father was the managing director of a Swiss machinery company, and during the war I spent time in Switzerland.

After the war I became active in efforts to bring French and German youth together. In 1969, after two Ph.D.s and a year at Harvard's Kennedy School, I started writing a book about American management.

I said that in order to achieve long-term growth and prosperity, management must serve all stakeholders. The idea of the first Davos symposium was to create a platform that would allow stakeholders to exchange concerns and knowledge.

Bet big. [In order to fund Davos] in 1970 I took a 50,000 Swiss franc ($11,434) loan from a German industrialist. The condition was either to pay him back or join his company, so I was nervous.

We sent out invitations with response cards. Every morning the mail came, and I didn't want to spend time opening it so I put it under a very strong desk lamp where I could immediately see the response. Some 440 people came from 31 countries to the first meeting in 1971, including John Kenneth Galbraith.

The success of the conference let me repay the debt and gave me a surplus, which I used to create the European Management Forum (now the WEF) as a not-for-profit foundation.

Expand your vision but control the brand. In the beginning [Davos] was a two-week course focused on Europe and management. In the 1970s the oil crisis triggered a more global approach. There are now 2,500 participants.

Some years ago we invited Hollywood celebrities who were involved in the issues we were addressing, believing that they might contribute. The media focused on them. This provided the wrong impression. We have not invited them since; we are afraid the brand would be hijacked.

Break the rules. I wanted to spend only one year studying business, so I went to Harvard's Kennedy School and cross-registered for courses in the business school.

One day I was invited by dean George Baker to have tea; he wanted to meet the person who circumvented the rules. We developed a close relationship, and I invited him to be the chairman of the first Davos meeting. This helped guarantee its success

Maintain exclusivity. We have a strict philosophy: If someone retires, he is no longer invited. We want to make sure everyone who comes is really an active decision-maker.

Keep it simple. You can manage today's complex world best by keeping your life as simple as possible. I do sports every day and have been happily married for nearly 40 years. People feel I'm the biggest networker, but I don't go unnecessarily to parties. If I have to, I go for five to 10 minutes to show respect.

Schedule your days, but leave time for chance meetings. They're the most interesting. Don't miss the opening session, for overall context. And if you go to only one party, go to the one on the last night co-hosted by the Forum and a government. This is the one party I always attend; this year it's with South Africa, in its international kickoff to the 2010 World Cup.