Extractive summaries curated from TOP TEN BUSINESS MAGAZINES to
promote informed business decision making
Issue/Week 207 – August 27-September 02, 2021
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Climate change will alter where many crops are grown
The Economist | August 28, 2021
Bonnefield Financial, a company buys fields and leases them to farmers, both in Manitoba and elsewhere in Canada, hopes to benefit from the ways that climate change is changing Canadian agriculture. It is betting that a warmer climate will steadily increase how much its assets are worth, by enabling farmers in the places where it is investing to grow more valuable crops than they have traditionally selected.
The “headwind” caused by climate change will only become stronger, says Ariel Ortiz-Bobea, one of the study’s authors. Their research found that the sensitivity of agricultural productivity increases as temperatures rise. In other words, each additional fraction of a degree is more detrimental to food production than the last. In the coming decades there will be more mouths to feed. Growing middle classes in many developing countries are demanding a wider variety of food, and more of it.
Hence the importance of the changes global warming brings to farming areas. By expanding the tropics, it will change rainfall patterns in the subtropics. By warming the poles especially fast, it is opening up high-latitude land as quickly. The regions to the north of America and China are warming at at least double the global average rate.
Some governments are already keen to capitalise on climate change. Russia’s has long talked of higher temperatures as a boon. Since 2015 Russia has become the world’s largest producer of wheat, chiefly because of higher temperatures.
A much wider range of adaptations will be needed if food is to remain as copious, varied, and affordable as it is today. These will include efforts to help crops withstand warmer temperatures, for example through clever crop breeding, advances in irrigation, and protection against severe weather. Rich and poor countries alike should also make it a priority to reduce the amount of food that is wasted (the un’s Food and Agriculture Organisation guesses that more than one-third is squandered). The alternative will be a world that is hungrier and more unequal than it is at present—and than it might have been.
3 key takeaways from the article
- Climate change could make a cornucopia out of land that was once frigid and unproductive.
- The societies that will benefit from it are mostly already wealthy. Poor places, which rely much more heavily on income from exporting agricultural produce, will suffer.
- A much wider range of adaptations will be needed if food is to remain as copious, varied, and affordable as it is today.
Topics: Agriculture, Global Warming, Food, Poverty
Global trade’s new playbook: 3 lessons for winning in a world transformed
By Geoff Colvin | Fortune Magazine | August 2, 2021
Like everything and everyone that has gone through the pandemic, the global economy has been changed in lasting ways, and Fortune’s new Global 500 directory of the world’s biggest companies shows how. Despite dire predictions, globalization didn’t die. It evolved. Onshoring, nearshoring, and reshoring have become imperatives for businesses (such as hospitals) whose supply chains snapped in 2020. That trend played to some companies’ strengths but devastated whole industries, if only temporarily. Last year’s Global 500 included six airlines; this year there are none. The new Global 500 is a picture of a world we’re rapidly leaving behind and also a guide to the new environment taking shape. Here are three lessons it offers for winning in a world transformed:
Ride the U.S. and China for growth. Together, the U.S. and China now have more companies in the Global 500 than do the world’s other 193 countries combined. The pandemic separated the two giants further from the rest of the pack, and forecasters expect them to grow much faster this year than the other biggest economies, Europe and Japan. Businesses worldwide are taking note. The U.S. will be the world’s No. 1 destination for overseas investment this year and next, the United Nations predicts, with China right behind.
A supply-chain revolution is underway. The long-standing model of Western companies sourcing goods from China at ultralow costs was under pressure before the pandemic, as tariffs and rising Chinese wages made that nation’s products less of a bargain. Now, after Chinese factories abruptly shut down in the early pandemic just as demand spiked for crucial supplies, a new model is taking shape. The big winners are Asian countries that can underprice China, notably Vietnam, Thailand, and India, plus low-cost neighbors of the U.S. and Western Europe, such as Mexico and Poland.
Exporters need to be nimble. As globalization morphs, canny exporters can thrive. Some, especially in China, the world’s largest exporter, are shifting toward domestic markets. Some exporters also realize that they needn’t be tied to their home country. Several Chinese manufacturers, including TV maker TCL and textile producer Huafu, have set up operations in Vietnam. Chinese developers started building industrial parks in Mexico years ago, and the advantages of being there have grown stronger post-pandemic. Exporters, like importers, are learning that diversification pays off in today’s globalization.
2 key takeaways from the article
- Like everything and everyone that has gone through the pandemic, the global economy has been changed in lasting ways, and Fortune’s new Global 500 directory of the world’s biggest companies shows how.
- Three lessons we can learn for winning in a world transformed are: ride the U.S. and China for growth, a supply-chain revolution is underway and exporters need to be nimble.
Topics: Global Economy, China, USA
Winning formula: How Europe’s top tech start-ups get it right
By Kim Baroudy et al., | McKinsey & Company | August 18, 2021
European start-ups are being created and growing at an unprecedented pace these days, attracting the attention of global investors, customers, and corporate partners alike. To better understand how these standouts succeed, the authors studied the top 1,000 European tech start-ups founded after 2000 in 33 countries. According to the findings successful European tech start-ups follow one of four distinct roads to success: network, scale, product, or deep tech.
As is often the case in other parts of the world, network effects can be global or local. The network effects in the sharing economy happen on a city and even neighborhood level, while the network effects from social-media companies are often more global. Among the companies studied, those that successfully pursue a network play make a trade-off between being right and being fast: they need to expand internationally to grow, but they first need to focus enough effort on individual markets to become the dominant local platform.
Start-ups pursuing scale plays seek to win through rapid sales growth early on, relying on initial commercial success to create the economies of scale they need to dominate a market. To achieve this early commercial success, outperforming scale start-ups invest more heavily in sales, marketing, and business-development roles.
Successful product players start with an outstanding product in a narrow use case before moving to a full-suite offering. Getting the product (and market fit) right early on is more important to these kinds of start-ups, and so their product and tech roles—R&D, engineering, product management, and IT, for example—have greater importance. At the same time, their focus on commercial and operational roles is much lower than for the other strategic plays. Product players are usually B2B software-as-a-service (SaaS) providers or fintechs such as Personio (HR software) and N26 (neobanking).
Deep-tech players tend to work on AI, hardware, biotech, or healthcare, and so they focus longer and more intensively on exploratory research and development than companies pursuing other strategic plays. The companies in this group are characterized by a relatively low number of employees but highest share of employees in R&D roles. As a result, they receive on average 1.87 patents per year, significantly higher than companies pursuing the other three paths.
3 key takeaways from the article
- European start-ups are being created and growing at an unprecedented pace these days, attracting the attention of global investors, customers, and corporate partners alike.
- Successful European tech start-ups follow one of four distinct roads to success: network, scale, product, or deep tech.
- For network players, it’s crucial to win local markets one by one and not try to grow globally in one fell swoop. Scale plays need to over-index on building strong commercial capabilities. Both network and scale players benefit from M&A. Product-play companies need to prioritize a compelling product and narrow use case initially, while for deep-tech plays, attracting the best research and development talent is most important.
Topics: Entrepreneurship, Ecosystem, Business Model
B-Schools Must Evolve for Future Business Demands, Employers Say
By Chris Stokel-Walker | Bloomberg Businessweek | August 23, 2021
MBA programs have traditionally been the finishing school for ambitious students, who hand over eye-watering fee for a year or two of studies that promise to jump-start high-paying careers. That venerable formula is showing signs of strain, according to executive education consultants Carrington Crisp in London. The company surveyed 508 employers from 22 countries this year and found that 77% believe the MBA needs some form of makeover. Since the 2008 financial crisis, companies and B-schools have drifted apart, says Andrew Crisp, co-founder of Carrington Crisp. The coronavirus pandemic has exacerbated the disparity by spurring shifts in the economy and the way we work. “There’s this mismatch between what employers are looking for and what many of the business schools are offering,” he says.
MBA programs focus heavily on corporate finance. Employers want grads to also be able to handle strategic projects such as broad-scale digital transformation, according to the consultancy. Many respondents said the MBA degree must evolve to be relevant for the future, and they were interested in changes to the delivery of education, including co-creation of content with B-schools; approaches to taking a degree that don’t involve full-time study; and short, inexpensive, and flexible programs that deliver appropriate skills for employees and meet the requirements of lifelong learning.
Many graduates are well-grounded in core competencies, but companies are now looking for emotionally intelligent executives. In addition to this students need new digital skills that aren’t really taught in schools, according to the findings. Part of the challenge for B-schools is to move beyond the “generic” and broad nature of the traditional MBA program.
3 key takeaways from the article
- MBA programs have traditionally been the finishing school for ambitious students, who hand over eye-watering fees for a year or two of studies that promise to jump-start high-paying careers. That venerable formula is showing signs of strain.
- There’s a growing mismatch between what employers are looking for and what many of the business schools are offering.
- According to one of the extensive research, MBA needs some form of makeover which include ability to handle strategic projects such as broad-scale digital transformation, emotionally intelligent and reasonable competence in digital skills.
Topics: Business Education, Employment, Market
How Chinese Retailers Are Reinventing the Customer Journey
By Mark J. Greeven, Katherine Xin, and George S. Yip | Harvard Business Review | September–October 2021 Issue
China is both a large and a fast-growing retail market—worth about $5 trillion in 2020—and highly digitized. Chinese companies and individuals have led the way in developing video retail, social commerce, community retail, retail-as-a-service, and many other new digital channels, including the super app, which provides an all-in-one experience for consumers by accessing various services and offerings. In this article, the authors draw on their research to explain five lessons that companies can learn from China as they develop their own digital market offerings.
Create Single Entry Points. A single point online where customers can access all their potential purchases is the holy grail for retailers. China’s digital giants have come close to achieving it by creating commerce ecosystems, general platforms offering portals for independent brands, and proactive automated product recommendations.
Embed Digital Evaluation in the Customer Journey. A key challenge for retailers is ensuring that consumers can efficiently and effectively evaluate their products in a transparent and unbiased way. With its strong emphasis on influencers and social media, Chinese retail evaluation is highly sophisticated and provides content much richer than what is available in the West.
Don’t Think of Sales as Isolated Events. Providing a seamless experience when and where the consumer chooses can radically increase the chances of purchase. Legacy businesses that are embracing digital approaches need to cut across the silos of online and off-line selling that have been traditional.
Rethink the Logistical Fundamentals. China combines old-fashioned methods and high-tech software to deliver faster and at a lower cost than almost any Western retailer can. A same-city order with a retail chain takes less than half a day to arrive in a large urban center like Shanghai, while local supermarkets can usually deliver orders in under 60 minutes.
Always Stay Close to the Customer. In China, customer loyalty in digital retailing is generated in large part by extraordinarily high levels of after-sales engagement by companies and loyalty programs that are integrated into both e-commerce channels and social media. Companies also work with influencers and cultivate fan communities of their own.
3 key takeaways from the article
- China is both a large and a fast-growing retail market—worth about $5 trillion in 2020—and highly digitized.
- Chinese companies and individuals have led the way in developing video retail, social commerce, community retail, retail-as-a-service, and many other new digital channels, including the super app, which provides an all-in-one experience for consumers by accessing various services and offerings.
- Western retailers lag their Chinese counterparts in leveraging customer data to make better business decisions, increase operational efficiency, and reduce costs. They need to integrate that data with off-line businesses so that customers are visible, identifiable, and traceable both online and off-line.
Topic: Social Media, China, Retailing, Business Model
Small Stake, Big Voice
Lois Fernandes D’Costa et al., | MIT Sloan Management Review | August 19, 2021
Taking a minority stake in a joint venture (JV) can make good business sense. What doesn’t make sense is ceding more control than you have to. Based on their experience and research, the authors shared 10 practices that minority partners can use to more effectively negotiate and structure their rights to amplify their voices and better govern and influence a venture. Five of these are being shared in this extractive summary.
- Don’t let your ownership interest define your decision rights. Minority decision rights are not necessarily correlated with ownership interests. Instead, a company’s ownership interest is determined by its formal contributions to the venture (for instance, capital, assets and intellectual property, and commercial contracts), while its voting rights and protections are driven by its negotiating leverage and informal contributions.
- Be willing to consider exceptions, thresholds, and other terms that limit decision rights. Minority partners often do not have the unhindered ability to exercise their decision rights. These rights might be contingent — that is, either triggered or fall away — only when certain thresholds are crossed or conditions are fulfilled. The authors’ believe that the judicious use of contingencies that limit the minority partner’s decision rights can, counterintuitively, be a positive for the minority partner.
- Allow for a loss of rights upon a drop in ownership. A minority partner might consider agreeing to an automatic reduction in decision rights if its ownership interest falls below a threshold. This reduction can be used to address anticipated future ownership changes — including dilution, the transfer of some of its ownership to a third party or another owner, or the exercise of a right to purchase another partner’s interests.
- Pre-agree on key decisions. Prospective minority partners should seek to gain pre-agreement on certain matters, such as an initial business plan.
- Find creative ways to resolve deadlocks to increase a majority partner’s comfort. Majority partners may fear a deadlock if a minority partner has a blocking right on key decisions. Minority partners should consider mitigating this risk, and thus increasing the likelihood that the majority will agree to grant additional rights, by building in deadlock-breaking mechanisms.
3 key takeaways from the article
- Taking a minority stake in a joint venture (JV) can make good business sense. What doesn’t make sense is ceding more control than you have to.
- Based on their experience and research, the authors shared 10 practices that minority partners can use to more effectively negotiate and structure their rights to amplify their voices and better govern and influence a venture.
- Five of these are: don’t let your ownership interest define your decision rights; be willing to consider exceptions, thresholds, and other terms that limit decision rights; allow for a loss of rights upon a drop in ownership; pre-agree on key decisions and find creative ways to resolve deadlocks to increase a majority partner’s comfort.
Topics: Joint Ventures, Negotiations, Partnerships
Take a page out of Jeff Bezos’s book and follow the rule of writing. It’ll make everyone better.
By Justin Bariso | Inc Magazine | August 29, 2021
Before meeting to discuss a new product or idea, Bezos would arrange for an executive to write a narratively structured six-page memo. While some leaders would try to write such a memo in just a few hours, Bezos said the best ones took at least a week to complete. “The great memos are written and re-written, shared with colleagues who are asked to improve the work, set aside for a couple of days, and then edited again with a fresh mind,” Bezos once explained. When it came time to meet, Bezos and his team would then sit together in silence for the first 20 minutes or so as they took time to read the memo, make notes, and prepare to discuss it. The better written the memo, the higher the quality of the discussion that followed. This Amazon practice is just one of many that crystallize an important lesson, one that can transform the way you think and communicate.
This can be referred to as the rule of writing. The rule of writing is simple: If you want to clarify your thinking, remember something important, or communicate something clearly, write it down. The rule of writing work helps you in three ways.
- It clarifies thinking. Have you ever experienced the following? You have a question for a colleague, but when you ask it, they don’t quite follow. You try to explain it, but as you do, you clumsily fumble your words — only to discover you haven’t completely thought through your question. If you are experiencing this problem enough times, start writing down questions before asking them. Often when you do so, a funny thing happens:
• determine you actually need to ask a completely different question,
• no longer see the need to ask the question, or
• figure out the answer to the question yourself.
There’s a simple reason for this phenomenon: Clear writing leads to clear thinking, and vice-versa.
- It improves understanding, memory, and application. Experienced copywriters know that one of the best ways to learn to write great copy is to transcribe writing from other great copywriters. This practice helps you create your own style while borrowing from the best practices of others.
- It improves communication. Writing helps you to walk away from what you’ve written and return to it later. As Bezos explained, this allows you to edit “with a fresh mind,” and can help you further clarify your communication. In this way, once you’re ready to share your thoughts with others, you’re setting the stage for a high-quality discussion, leading to better work moving forward.
A key takeaway from the article
- If you want to learn, understand, remember, apply, and communicate or better leverage the collective intelligence of your team, take a page out of Jeff Bezos’s playbook, and follow the “rule of writing.” It’ll make you better — and make everyone else better, too.
Topic: Thinking, Communication
The One Thing That Can Make A Big Difference For Small Business Owners And Entrepreneurs
By Bernhard Schroeder | Forbes | August 23, 2021
Most people might believe that successful entrepreneurs are rare, exceptionally smart and or lucky. According to the author having met more than 1,000 entrepreneurs, that is not the case in general. They are normal, hard-working people with similar intelligence to most people. What separates them however, from most people, is not the business or startup idea. It’s a rock-solid belief in themselves. Based on his experience the author offers ten insights that can help us to better understand how to build this confidence. Five of these are being shared in this extractive summary.
- You were not born to be owner/entrepreneur. No one is actually born to do anything specific. So, you have to believe that you have the potential to be an entrepreneur or small business owner. You just have to choose what you will do to match your experience or skill set or passion.
- Growth mindset and learning new things. You have to believe, regardless of your parent’s DNA or what people have said, that you have the potential to learn new things, to be creative and to be more curious. Start to cultivate your growth mindset by learning a new language, attending a course on creativity, trying new foods, talking with an artist or coder for new perspectives, traveling to a country you have never visited. Be more curious.
- Be positive and believe in yourself. Confidence is not being cocky or arrogant. It’s believing in yourself, surrounding yourself with positive people who believe in you and always focusing on positive outcomes even when things go wrong.
- Own your goals. There will be trying days. There will be happy days. The key is to own your goals and your destiny. Set clear simple goals with a one, two- or three-year deadlines and focus on one year at a time. And let your network know what your goals are so they can help.
- Being comfortable with being uncomfortable. Remember when you were in school and had to give that presentation, how nervous you were and how you thought you would never get through it? Well, you did. Remember how good you felt afterwards? Funny, as life goes on, we tend to avoid being uncomfortable but at the edge of uncomfortable is exploration, opportunity and potential reward.
3 key takeaways from the article
- Most people might believe that successful entrepreneurs are rare, exceptionally smart and or lucky. That is not the case in general. They are normal, hard-working people with similar intelligence to most people.
- What separates them however, from most people, is not the business or startup idea. It’s a rock-solid belief in themselves.
- Five insights that can help us to better understand how to build this confidence are: you were not born to be owner/entrepreneur; growth mindset and learning new things; be positive and believe in yourself; own your goals and being comfortable with being uncomfortable.
Topics: Entrepreneurship, Startups, Small Business
5 Critical Lessons you can learn From 100 Entrepreneurs
By Nicole Bernard | Entrepreneur | August 31, 2021
Entrepreneurship can be lonely. It’s hard to explain the amazing highs and soul-crushing lows to people who haven’t experienced them. There’s nobody to hang out around the proverbial water cooler with, share exciting new ideas with, or ask advice when needed. The author has had the privilege of interviewing over 100 entrepreneurs from all across the U.S., Canada, the U.K. and New Zealand. Based on these interviews she shared 5 lessons that she saw as common themes across these 100 interviews.
- Get comfortable with being uncomfortable. This is a big one. It will never get easy; you just get used to doing things outside of your comfort zone.
- The importance of systems, routines, and delegation. The entrepreneurs enjoying the most success are the ones who have systems and routines in place. They have goals and have taken the time to brainstorm, create and execute systems that support them in achieving these goals.
- Entrepreneurs are resilient and take risks. Before “pivot” became a buzzword during the pandemic, entrepreneurs were already well versed in adjusting, adapting, and expanding when needed in their business.
- Entrepreneurs are constantly learning. Whether it’s from other entrepreneurs, books, courses, or YouTube, 95% of the people that the author interviewed talked about constantly learning. And it’s not all business either. Granted, most of it is, but they also take time to learn things that they are interested in.
- Entrepreneurs want more.
2 key takeaways from the article
- Entrepreneurship can be lonely. It’s hard to explain the amazing highs and soul-crushing lows to people who haven’t experienced them.
- 5 lessons or common themes which the author shared, based on her interviews with 100 entrepreneurs are: get comfortable with being uncomfortable; the importance of systems, routines, and delegation; entrepreneurs are resilient and take risks; entrepreneurs are constantly learning; and entrepreneurs want more.
Topics: Entrepreneurship, Startups