Weekly Business Insights Podcast
For week 203
Introduction
Welcome to the Weekly Business Insights from the Top Ten Business Magazines. This is week 202, July 23-29, 2021 issue of free weekly service. Extractive summaries curated from the top ten business magazines serve you in more than one way. In addition to contemporary business ideas, extractive summaries preserve the original writing styles of the magazines enabling you to appreciate the differences among these styles. You can also listen to the Weekly Business Insights podcast in addition to reading these summaries. Nevertheless, we shall encourage you to read the full article by visiting the respective magazine’s websites. Let us invite you to experience this week’s edition…
Shaping Introduction
For the shaping section of week 202, July 23-29, 2021, we curated and summarized articles from two business magazines. The first article selected from the Economist shared the increasing uncertainty global economic recovery carries. The second article selected from Bloomberg Businessweek explained why Saudi Arabia’s Shunning of Hardline Fatwas in Slow Religious Revolution carries risk. First from the Economist…
Leading & Managing Introduction
For the Leading & Managing section of week 202, July 23-29, 2021 we curated and summarized articles from three business magazines. The first article taken from HBR explained how the anomalies not the data analytics can help us to identify the less obvious patterns. The second article deduced from McK explained how the organizations can Ignite their next growth business. The third article selected from MIT Sloan Management Review described how to Overcome Obstacles to Successful Culture Change. First from HBR…
Entrepreneurship Introduction
For the entrepreneurship section of week 202, July 23-29, 2021 we curated and summarized articles from three business magazines. First article from Inc magazine described The ‘Five Fs’ of Successful Negotiations. The second article from Forbes magazine explained how can we use Evolutionary Thinking To Gain An Advantage In The Realm Of Startups. Third article from entrepreneur magazine shared Why our Creativity Is our Most Valuable Skill. First from the Inc magazine…
The anatomy of a growth scare
The Economist | July 24, 2021
So much is unfamiliar about the pandemic that it has never been easy to make sense of what is going on. Yet in recent days uncertainty has gone into overdrive. Stockmarkets are volatile; uncertainty about the path of inflation and labour markets is high. The fate of the economic recovery seems to hinge on the answers to a number of big questions. Will the spread of the Delta variant of the coronavirus derail the global recovery? Will underlying weaknesses be revealed as governments unwind stimulus? How enthusiastic are households and firms about spending? But the answers are unclear. And four gauges of the recovery—market prices, “high-frequency” activity indicators, hard data and economists’ forecasts—are all giving mixed signals.
Start with markets. America’s Treasuries are a haven in uncertain times. In March investors sold them off as they took fright at rising inflation, pushing the ten-year Treasury yield up to 1.7%. But it has slowly slipped back since, as doubts about the continued strength of the economic recovery have taken hold. The s&p 500, America’s main stock index, fell by 1.6%, with smaller companies hit hardest. Commodity prices also took a knock. That of Brent crude oil fell by 7% to $69 a barrel. The dollar strengthened against other rich-world currencies. Yet by the next day the growth scare had seemingly blown over. Stockmarkets reversed their fall. The oil price and bond yields recovered a little. High-frequency data present a similarly muddled picture. The hardest sort of data—releases from official statistical agencies—do not yet reflect the impact of rising covid-19 infections. But they also give contradictory signals. Owing in part to the movements in activity indicators, economists’ revisions to their expectations of gdp growth— the fourth measure—also send mixed messages.
Bring all this together and the picture is one of increasing uncertainty about whether or not the global economic recovery carries on at a rapid clip. There are growing fears that, as the Delta variant of the coronavirus spreads, the resurgence in cases could impinge on economic growth, especially in places with large unvaccinated populations.
2 key takeaways from the article
- So much is unfamiliar about the pandemic that it has never been easy to make sense of what is going on.
- Yet in recent days uncertainty has gone into overdrive. Stockmarkets are volatile; uncertainty about the path of inflation and labour markets is high. The fate of the economic recovery seems to hinge on the answers to a number of big questions. And the answers are unclear.
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Topics: Global Economy, COVID-19, Risk
Saudi Arabia Shuns Hardline Fatwas in Slow Religious Revolution
By Donna Abu-Nasr | Bloomberg Businessweek | July 14, 2021
The kingdom’s de facto ruler, Crown Prince Mohammed bin Salman, is chipping away at the power of the doctrine known as Wahhabism that has underpinned his family’s rule in the birthplace of Islam. The shift from theocracy to autocracy is dividing Saudi liberals from those who complain it could undermine the kingdom’s status in the Muslim world.
Religion shaped Saudi Arabia into a place like no other. But it runs counter to Prince Mohammed’s now five-year-old plan to diversify the economy away from oil by 2030.
The crown prince wants to draw foreign investment and build the kingdom’s entertainment and tourism sectors, which face stiff competition from Saudi Arabia’s more permissive neighbors such as the United Arab Emirates. Fatwas (religious edicts) of the kind that Saudi clerics used to issue—inciting hatred against Westerners for example, are not in sync with the new goal.
“We cannot grow, we cannot attract capital, we cannot have tourism, we cannot progress with such extremist thinking in Saudi Arabia,” Prince Mohammed said in an interview with a local TV station in April. “If you want millions of jobs, if you want unemployment to decline, if you want the economy to grow, if you want your income to improve, you must eradicate these projects.”
In his quest to tighten his grip on power, Prince Mohammed muzzled opposition voices, jailing women who had lobbied for the freedoms he’s introduced, as well as activists who have been mildly critical of his plans and clerics such as the popular sheikh Salman Al-Odah. Most prominently, the 2018 murder of Washington Post columnist Jamal Khashoggi on the prince’s watch drew international condemnation, hobbling his Vision 2030 plan. But the changes continue.
That strategy has its risks. In May a directive ordered mosques to lower the volume of loudspeakers and switch them off after the call to prayer, instead of broadcasting the full service. Fridays and sermons during the Eid holiday are exempt, though that didn’t stop a storm of protest on social media. The Consultative Council, a body appointed by the king that serves as a quasi-parliament, was going to vote on a proposal to allow shops to remain open during prayers, again, except on Fridays. But the discussion was postponed two hours before it was scheduled to start. The question is whether the religious hardliners will regain their clout?
3 key takeaways from the article
- The kingdom’s de facto ruler, Crown Prince Mohammed bin Salman, is chipping away at the power of the doctrine known as Wahhabism that has underpinned his family’s rule in the birthplace of Islam.
- The shift from theocracy to autocracy is dividing Saudi liberals from those who complain it could undermine the kingdom’s status in the Muslim world.
- The changes continue but that strategy has its risks.
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Topics: Saudi Arabia, Change, Economy
The Power of Anomaly
By Reeves et al., | Harvard Business Review Magazine | July–August 2021 Issue
Identifying the next big thing is often treated as an exercise in analyzing trends. But that’s misleading. By the time a trend is established, any opportunities it presents have most likely already been captured by competitors. And although a company may need to reflect trends in its business plans, that can be more a matter of catching up with rivals than of gaining a competitive edge.
To take advantage of emerging trends, companies must identify them when they are embryonic—not purely speculative, but not yet named or widely known. At that stage the signs will be merely anomalies: weak signals that are in some way surprising but not entirely clear in scope or import. Most anomalies don’t become meaningful trends, of course, but some do—and the businesses that identify and interpret them early will steal a march on the competition.
The process involves an Open Mind. We usually can’t see what we aren’t looking for, so anomalies are often missed. If we do see them, we may ignore them, because people and organizations are predisposed to confirmation bias, focusing on what aligns with their mental models rather than what violates them. Indeed, the word “anomaly” is most often used to dismiss a data point as unrepresentative and irrelevant. And even if we don’t ignore anomalies, we may not try to interpret or explore them. So managers must be prepared to take an external perspective., challenge assumptions and mental models, and embrace ambiguity.
Managers can best leverage their open-mindedness by pursuing the Anomaly-Driven Process. This involves four steps: analyze and visualize granular data; identify the anomalies that matter (should be evaluated against momentum, robustness and impact to identify not-yet-existent); give them a narrative and a name; and finally probe, shape, and commit.
3 key takeaways from the article
- Anomalies inspire us to test and improve and perhaps change our theories and models of how the world works.
- People often argue that the power of data analytics lies in its ability to help us identify new patterns in the reams of data we now have access to. That’s true. But we should not forget that those new patterns often start as anomalies in the patterns we’ve already seen.
- Anomaly-driven innovation can help companies spot them and shape the nascent patterns forming around them.
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Topics: Strategy, Competitive Advantage, Business Model
Igniting your next growth business
By Bradley et al., | McKinsey & Company | July 23, 2021
As accelerating trends widen the gaps between the best- and worst-performing industries and companies, your company’s future performance may well depend on your ability to position the corporate portfolio ahead of these trends. One way to do that is by expanding into new business areas. But how do you determine how far to venture from your core business, and in what direction?
According to the authors’ research, it is the similarity of the industries in the corporate portfolio that most strongly correlates with performance. Contrary to the widely held belief that focused portfolios produce better returns than diversified ones, companies whose portfolios span multiple similar industries can perform as well as their focused peers. What matters is the nature, not the number, of industries. The similarity is a proximate measure of whether a company is operating in business areas where it is likely to be the natural (or best) owner. The natural owner of an asset is the organization able to create the most value from owning or operating it. This value could derive from synergies with other businesses the company owns, privileged access to capital or talent, or a competitive advantage from distinctive capabilities, processes, and assets.
Higher portfolio similarity positively correlates with shareholder returns in developed markets but the opposite is true in emerging markets. This may be the result of different sources of natural-ownership advantage in different types of economies. In developed markets, advantages usually stem from synergies between businesses or sector-specific assets and capabilities. In emerging markets, on the other hand, advantages often derive from better access to capital (especially in regions where capital markets are less developed) and senior managerial talent (who are attracted to larger companies because of the better career opportunities they offer).
Companies seeking to expand into new business areas need to identify both the specific investment opportunities and the right approach to operating and staffing the new business.
2 key takeaways from the article
- As accelerating trends widen the gaps between the best- and worst-performing industries and companies, your company’s future performance may well depend on your ability to position the corporate portfolio ahead of these trends. One way to do that is by expanding into new business areas. But how do you determine how far to venture from your core business, and in what direction?
- There are some regional differences, those prioritizing growth opportunities in business areas where they are “natural owners,” able to bring unique advantages or capabilities to the business, generate the best shareholder returns. These growth outperformers use advanced analytics to identify hidden investable growth opportunities, select the operating model and governance structure best suited to the new business, and then appoint senior leaders with competencies most needed in the new business.
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Topics: Business Model, Competitive Advantage, Organizational Performance
Overcoming Obstacles to Successful Culture Change
Kotter et al., | MIT Sloan Management Review | July 26, 2021
Driving intentional culture is a critical element of an adaptable organization that can respond to emerging challenges and opportunities at today’s fast pace. But despite shared recognition of the importance and role of culture, there is very little consensus on how to effectively change it. Typical approaches to culture change rarely produce real results.
The authors’ observations of successful cultural change efforts suggest that organizations should take an approach that starts with new actions, not with leaders identifying or articulating a desired culture. Rather than merely stating a desire for a culture with greater collaboration, for example, you would encourage collaboration through actions: seeking input from others, including junior or new colleagues on the team; including end-users in the solution design process from the outset rather than waiting until a new product is ready to beta test.
These new actions, when consistent with the business strategy, start to generate tangible results, which, when celebrated early and often across an entire organization, can inspire more new actions. Over time, this cycle of new behaviors generates new, lasting habits that snowball across the organization.
Three of the most widespread dangers to culture change, along with strategies for addressing them are:
- Not connecting culture to business outcomes. Organizations often embark on a cultural transformation without clearly defined, measurable outcomes, which makes it nearly impossible to truly judge progress or assess which efforts are effective. Another common trap is trying to emulate the “great” culture of another organization. The key is to recognize that culture change is not a goal in itself, but rather a means to achieve a specific business outcome, whether that is greater customer intimacy, more innovative products, greater operational efficiencies, or something else entirely.
- Driving culture by decree is not just unhelpful but actively harmful. Involvement and direction from senior leaders are essential in successful culture change — but change efforts, especially culture change initiatives, are unsuccessful when pushed from the top down. Lasting change arises from new behaviors, instilled over time, from many people across the organization. True behavior change requires that people become inspired by what’s possible and driven to achieve that vision.
- Stopping short of sustainability. Don’t let up once you see signs of progress. Find ways to continue to uncover and broadly share examples of the desired culture in action. Viewing culture change as a way to enable business outcomes is also helpful in ensuring sustainability.
3 key takeaways from the article
- Driving intentional culture is a critical element of an adaptable organization that can respond to emerging challenges and opportunities at today’s fast pace.
- Organizations should take an approach that starts with new actions, not with leaders identifying or articulating a desired culture.
- Three of the most widespread dangers to culture change are: not connecting culture to business outcomes, driving culture by decree, and stopping short of sustainability.
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Topics: Culture, Change Management, Transformation, Organizational Behavior
Using Evolutionary Thinking To Gain An Advantage In The Realm Of Startups
By Abdo Riani | Forbes | July 06, 2021
Business to a degree works as the applied science brother of economics. For example, markets are extremely reminiscent of ecosystems in the natural world. Because of this, there are concepts in biology which fit the business world surprisingly well and can help you become a better thinker when it comes to entrepreneurship and startups. Three analogies are important:
- Evolution By Natural Selection Applied to Startups. Mutations in organisms drive differential reproductive success, which means that the successful traits get passed on, while the unsuccessful ones are driven into extinction. This is true not only of genes but also of memes – ideas and behavior that get passed on in a similar manner (e.g. building a nest in a particular way, etc.). And while companies don’t have genes, they most certainly can be viewed as an amalgamation of memes. Because of this, the environment in which companies live (the market) determines which behaviors are beneficial to the success and survival of the company, and which are detrimental. In other words – the market shapes the product features, business models, startup culture, marketing or financial practices, etc. of the businesses that operate in it.
- Biological And Business Niches. In order to survive, most species specialize in a niche of their own. This is a way to differentiate themselves from other species and to reduce the level of direct competition to a minimum. This is also true for businesses, especially in the digital era with its low marginal costs and strong network effects. Tech startup niches are often winner-takes-all economies. Consequently, one of the best ways to ensure the success of your startup is to avoid competing directly with other businesses over the same customers with the same proposition.
- The Red Queen Effect In Biology And Business Evolution by natural selection forces species to be in a constant evolutionary arms race. The ones that fail to adapt go extinct. This is also true of businesses and especially of startups. Markets are rarely static, especially in the technological age. Over time, the only constant thing is change. This means that ensuring success in the long run you have to pay extremely close attention to changes in the market and to constantly adapt.
3 key takeaways from the article are
A few important lessons for startups that could be derived from concepts in biology are:
- A dynamic, changing environment is a prerequisite for successful innovation.
- Finding your own unique niche and avoiding direct competition is the best strategy for long-term success.
- Being able to constantly adapt to changing market conditions is vital for survival in the face of competition.
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Topics: Startup, Entrepreneurship
The ‘Five Fs’ of Successful Negotiations
By Victoria Medvec | Inc | July 23, 2021
Over the past 20 years, the author has advised many CEOs and senior executives who were selling companies, buying companies, negotiating with critical customers, and crafting partnership and supplier agreements. In all these high-stakes negotiations, she has found that fear holds people back from achieving their ideal results. These fears — of losing the deal, having the other side walk away, securing a poor outcome, getting embroiled in conflict, or damaging the relationship — impede both experienced and novice negotiators.
In her new book, Negotiate Without Fear: Strategies and Tools to Maximize Your Outcomes (Wiley), she share strategies that can help you banish fear and get the results you want out of any negotiation.Some tips from the book are:
- Put the right issues on the table. Many expert negotiators get trapped negotiating the wrong issues. Instead of negotiating what is “standard” or “typical,” first consider your objectives. For each of the objectives, you should include at least one negotiable issue. For example, to expand your footprint with the customer, you might negotiate a dedicated on-site expert once a week to provide customer support, a volume incentive, up-front payment, and an exclusivity discount.
- Before you begin, establish your ideal outcome. Once you have the right issues on the table, establish an ambitious goal for the negotiation. Your goal should be based on the weaknesses of the other side’s alternatives. The more you differentiate your company by highlighting your unique capabilities, the weaker the other side’s alternatives will be and the more ambitious your goal can be.
- Follow the “Five Fs.” Once you have finished preparing and are at the negotiation table, there are five strategies the author recommends to eradicate your fear: go first, focus on the other side (lead with an offer that describes not how the deal can benefit you, but how it can solve the other side’s problems), frame the offer correctly, be flexible, and never make a feeble offer.
2 key takeaways from the article
- In all the high-stakes negotiations, fear holds people back from achieving their ideal results. These fears — of losing the deal, having the other side walk away, securing a poor outcome, getting embroiled in conflict, or damaging the relationship — impede both experienced and novice negotiators.
- Some of the strategies that can help you banish fear and get the results you want out of any negotiation are: put the right issues on the table, before you begin, establish your ideal outcome and follow the Five Fs i.e., go first, focus on the other side, frame the offer correctly, be flexible, and never make a feeble offer.
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Topics: Negotiations, Communication
Why Your Creativity Is Your Most Valuable Skill
Maria Brito | Entrepreneur | July 25, 2021
Reaching our maximum creative potential in our jobs or occupations is paramount to success and living a fulfilling and meaningful life. Several companies, including IBM and Adobe, have conducted extensive surveys of companies across dozens of international industries and found that creativity is the number one skill most sought after and the hardest to find. – a truth reinformed by LinkedIn in 2019 and 2020 and the World Economic Forum.
There has never been a more crucial time to develop our creativity and our ability to innovate than there is now, regardless of who we are and what we do. Each one of us has the potential to become creative and innovative.
A recent study published in the journal Thinking, Skills and Creativity, conducted by three university professors from Maastricht University in the Netherlands and the University of South Australia, claim creative processes are more or less the same across domains and disciplines. While it is true that CEOs, engineers, and artists create very different kinds of work with very different intentions and outcomes, the process they use to get there is very similar.
One of the most important factors to foster a culture of creativity is acknowledging that it isn’t one unique concept available to a handful of chosen ones but is accessible and reachable to every one of us. It’s also an amalgamation of learnable skills, such as risk-taking and curiosity.
Creativity requires ownership of ideas and authenticity. When you retreat from expressing your “crazy” ideas because you fear judgment from your peers or higher-ups, or you are afraid of adverse market reactions, you are leaving behind a chance to let the world know your new invention, product, service, book, film or anything else that could bring so much value to society.
3 key takeaways from the article
- Reaching our maximum creative potential in our jobs or occupations is paramount to success and living a fulfilling and meaningful life.
- A recent study published in the journal Thinking, Skills and Creativity, claim creative processes are more or less the same across domains and disciplines.
- One of the most important factors to foster a culture of creativity is acknowledging that it isn’t one unique concept available to a handful of chosen ones but is accessible and reachable to every one of us. It’s also an amalgamation of learnable skills, such as risk-taking and curiosity.
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Topics: Creativity, Entrepreneurship]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]