Extractive summaries of the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making | Week 222 |December 10-16, 2021
What the world can learn from Japan
The Economist | December 11, 2021
As the Economist special report this week argues, Japan is not an outlier—it is a harbinger. Many of the challenges it faces already affect other countries, or soon will, including rapid ageing, secular stagnation, the risk of natural disasters, and the peril of being caught between China and America. The fact that some of these problems hit Japan early makes it a useful laboratory for observing their effects and working out how to respond.
One lesson is that societies must learn to live with risk. As the climate changes and natural hazards proliferate, countries must be able to bounce back from shocks. Many Japanese people understand that responding to disasters is everyone’s problem, not just the state’s. That has helped during the pandemic. Another lesson is that demography matters. Most societies will ultimately age and shrink like Japan. By 2050, one in six people in the world will be over 65 years old, up from one in 11 in 2019. Like climate change, the demographic sort is vast, gradual and seems abstract—until it is not. And like climate change, it will demand a transformation both of institutions and of individual behaviour. Remaining active for longer is essential. The Japanese government urges firms to keep staff until they are 70. Many stay on: 33% of 70- to 74 -year-olds now have jobs, up from 23% a decade ago.
One way to cope with a shrinking population is to get the most out of people. Japan will never live up to its potential while so many of its highly educated citizens are denied the chance to live up to theirs. Seniority-based promotion at traditional companies, combined with excessive deference to grey hairs, silences young voices and stifles innovation. That is why many of the brightest new graduates prefer to work for startups. Japan has done a good job of getting more women into the workforce in recent years, but they still have too few chances to rise. A dual-track labour system traps young people and women in precarious part-time jobs (which, among other things, makes them less keen to have children). Politicians tolerate all this in part because they feel little pressure to do otherwise. Japan’s final lesson is
about the danger of complacency.
2 key takeaways from the article
- Japan, a harbinger nation offers lessons to the world which is going to experience the challenges what it has experienced i.e., rapid ageing, secular stagnation, the risk of natural disasters, and the peril of being caught between China and America.
- Lessons are: societies must learn to live with risks such as climate change and natural hazards, demography matters: most societies will ultimately age and shrink like Japan and be aware of the danger of complacency.
Topics: Japan, Risk, Aging-Population, Environment
The state of AI in 2021
McKinsey & Company | Survey | December 8, 2021
The results of latest McKinsey’s Global Survey on Artifical Intelligence (AI) indicate that AI adoption continues to grow and that the benefits remain significant— though in the COVID-19 pandemic’s first year, they were felt more strongly on the cost-savings front than the top line. As AI’s use in business becomes more common, the tools and best practices to make the most out of AI have also become more sophisticated. The major findings of the survey are:
- AI adoption is continuing its steady rise: 56 percent of all respondents report AI adoption in at least one function, up from 50 percent in 2020. The newest results suggest that AI adoption since last year has increased most at companies headquartered in emerging economies which includes China, the Middle East and North Africa: 57 percent of respondents report adoption, up from 45 percent in 2020. And across regions, the adoption rate is highest at Indian companies, followed closely by those in Asia–Pacific.
- A majority say their organizations have adopted AI capabilities, as AI’s impact on both the bottom line and cost saved is growing.
- As we saw in the past two surveys, the business functions where AI adoption is most common are service operations, product and service development, and marketing and sales.
- Nearly two-thirds say their companies’ investments in AI will continue to increase over the next three years, similar to the results from the 2020 survey.
- The companies seeing the biggest bottom-line impact from AI adoption are more likely to follow both core and advanced AI best practices, including MLOps; move their AI work to the cloud; and spend on AI more efficiently and effectively than their peers.
- There’s evidence that engaging in AI related practices is helping high performers industrialize and professionalize their AI work, which leads to better results and greater efficiency and predictability in their AI spending.
- Cybersecurity remains the most recognized risk among respondents, yet a smaller share says so than did in 2020, despite the rising threat of cyberincidents seen throughout the COVID-19 pandemic.
3 key takeaways from the article
- The results of latest McKinsey’s Global Survey on Artifical Intelligence (AI) indicate that AI adoption continues to grow and that the benefits remain significant— though in the COVID-19 pandemic’s first year, they were felt more strongly on the cost-savings front than the top line. As AI’s use in business becomes more common, the tools and best practices to make the most out of AI have also become more sophisticated.
- The business functions where AI adoption is most common are service operations, product and service development, and marketing and sales.
- Risk management remains a shortcoming for most companies’ AI efforts, but a set of emerging best practices can help.
Topics: Artificial Intelligence, Technology, Cloud Computing
3 Areas Where AI Will Boost Your Competitive Advantage
By Sian Townson | Harvard Business Review | December 06, 2021
As more companies embed artificial intelligence in their products, services, processes, and decision-making, the definition of what AI is and where it can be most effectively applied is evolving as rapidly as the techniques themselves. What started out as algorithms used to determine loans, select new hires, and empower chatbots (with mixed success), is now deeply embedded and used in everything from predicting climate risks to picking sales leads. The question is no longer if a company should use AI — but where it brings the greatest competitive advantage. In their work with companies, the authors see three areas where AI has now shifted from a “nice-to-have” to a “must-have” technology.
- Predictions. Over the past few years, AI has migrated from a technology that finds relationships in data and predicts existing trends more accurately to a technology that spots future shifts in everything from leisure spending and travel patterns to company credit worthiness by analyzing preferences and sentiments in vast quantities of data including text, voice, images, digital news feeds, and social media.
- Efficiencies. In areas such as insurance, human resources, and conduct surveillance, machine learning reads through forms and reviews voice and video recordings to highlight where the reviewer’s attention should be focused, how a call should be routed, or simply if an attachment has been forgotten. The development of so-called “attention” approaches that learn which parts of the input are more critical, has accelerated the use of natural language processing, allowing AI to more reliably link seemingly unrelated concepts and work faster.
- Real-Time Optimization. AI is enabling companies to carry out tasks and shift strategies in real time. Machine learning algorithms now instantly and automatically increase sales promotions or, at the other end of the spectrum, delay launching products that might cannibalize profit from other product lines. In retail, AI can recalibrate these types of decisions to generate additional sales, even of other non-promoted products.
3 key takeaways from the article
- As more companies embed artificial intelligence in their products, services, processes, and decision-making, the definition of what AI is and where it can be most effectively applied is evolving as rapidly as the techniques themselves.
- Companies that push the boundaries of AI to sharpen predictions, boost efficiencies, and optimize the real-time pricing or stock control of their products are moving faster and further than rivals still conservatively wavering over the wisdom of using AI for these purposes.
- companies can no longer afford to treat something so widespread and powerful as optional.
Topics: Artificial Intelligence, Productivity, Efficiency
Better Ways to Green-Light New Projects
By Thorsten Grohsjean et al., | MIT Sloan Management Review | December 07, 2021
Deciding which new ideas are winners and which are duds is tough, because new initiatives are characterized by fundamental technological and market uncertainty. Based on their research, the authors have identified five main issues and suggested specific steps that leaders can take before, during, and after the selection process in order to make more objective, fact-based decisions about which new ideas to green-light.
- Panels tend to show a strong bias against highly novel ideas, even though generating them is the explicit goal of innovation efforts. Decision-makers often reject them because they are uncomfortable with the risk involved in pursuing them.
- Expert panels suffer from a lack of diversity. The inherent uncertainty of green-lighting innovation pushes panelists to revert to established thinking about people and their backgrounds, favoring projects from people who look and sound like themselves.
- Technology companies usually staff expert panels with scientists and engineers, who tend to focus on the technical aspects of an idea without sufficiently considering the business opportunities and challenges.
- The panel decision-making process itself may also lead to inferior outcomes. As in many other areas of collective decision-making, applications are often introduced by a panel member, akin to an informal sponsor.
- The timing of the process can also yield inferior decisions.
In correction measure, before selection companies can take steps to ensure that ideas get a fair assessment based on their merits. This may include e.g., to combat latent biases, organizations should mask or remove the names and key demographic characteristics of creators behind any ideas under consideration. It’s critical that ideas competing against each other are comparable.
During selection try to seek diverse voices from inside the company. Having a more diverse selection panel will not only help it to overcome biases against women and people of different backgrounds and heritages — it will also lead to products that are more appealing to people with different needs and interests.
Finally, once organizations have determined which projects to green-light, selection panels should provide specific feedback on all proposals and make it accessible across the organization. This kind of feedback should help idea creators to better structure future submissions, alleviate the potential demotivating effect of having an idea rejected, and increase trust that the decision process is fair.
3 key takeaways from the article
- Deciding which new ideas are winners and which are duds is tough, because new initiatives are characterized by fundamental technological and market uncertainty.
- To improve their track record of choosing the right innovations to bring forward, leaders must first understand where R&D selection panels go wrong. The issues could be: panels tend to show a strong bias against highly novel ideas, expert panels suffer from a lack of diversity, staffing expert panels with scientists and engineers with the exclusion of marketers, panel decision-making process itself may lead to inferior outcomes, and timing of the process can also yield inferior decisions.
- By making the selection process more open, fluid, and collaborative, organizations can spot the true gold nuggets among the rocks.
Topics: Project, Innovation, Creativity
Great Leaders Embody These 4 Principles, According to Best Buy’s Former CEO
By Fran Velasquez | Inc Magazine | December 10, 2021
Being a successful leader calls for empathy and a noble purpose. That’s according to Hubert Joly, the former CEO and chairman of Best Buy. He’s credited with turning around the consumer electronics retailer, in the face of significant competition from e-commerce giant Amazon. Joly explains the following four principles that every leader should abide when attempting to tap into the human magic of employees.
- Hire the person, not the position. The most important decisions CEOs can make are choosing whom they put in positions of leadership. According to Joly he used to mistakenly put too much emphasis on experience and expertise–hiring those who seemed like the best person for the position on paper. Instead, he suggests, focus more on who the person is and what kind of leader they are.
- Employees should be your North Star. Many public companies have pursued a shareholder-first approach, putting that constituency above others, such as customers, community, suppliers–and employees. That era is over. In the next 50 years, Joly said, businesses will need to put employees at the center of the company’s vision, no matter the industry. Leaders can often get bogged down on the end goal, but how it’s achieved is just as important, Joly explained. By advocating to put people at the forefront of your work, your purpose to do good can create an environment that encourages employees to successfully accomplish company goals.
- Connect people with what drives them. Joly says leaders should be asking themselves how they can create an environment where people naturally want to do their job. He suggested a different approach: Tap into human magic. “Human magic is when, at scale, you have employees who do things for each other and for customers that nobody has told them to do,” he said. To find this, he said encourage leaders to inspire connection and remind your employees that they are seen. Know what drives your employees, including their struggles and their dreams.
- Admit you don’t have all the answers. “I think that’s the great leadership trend today, to be able to say, ‘I don’t know. I’m going to need help, but we’re going to figure this out and we’re going to experiment,” Joly said. The responsibility of modern leaders is to create an environment where all employees can be themselves, provide feedback, and have an impact on key decisions.
2 key takeaways from the article
- Being a successful leader calls for empathy and a noble purpose. That’s according to Hubert Joly, the former CEO and chairman of Best Buy. He’s credited with turning around the consumer electronics retailer, in the face of significant competition from e-commerce giant Amazon.
- Joly explains the following four principles that every leader should abide when attempting to tap into the human magic of employees: hire the person, not the position, employees should be your North Star, connect people with what drives them, and admit you don’t have all the answers.
Topics: Leadership, Organizational Behavior
4 Ways Readers Have Adapted To Filter Out Irrelevant Content
By John Hall | Forbes Magazine | December 12, 2021
Only quality content is king. The rest is a court jester, distracting the audience but failing miserably to entertain or inform it. The internet features a proliferation of content, but not all of it is relevant to those who find it. Savvy readers have become wise to both irrelevant content and how to deal with it. The readers have found ways to filter out irrelevant material. Four of these are:
- They Have Become Contradictory Searchers. These days, most internet searchers are loath to scroll through pages of search results to find the most relevant links. That’s why the first page of a Google search captures 71%-92% of clicks and page two, just 6%. Businesses can do better. Search engines change algorithms hundreds of times a year to help quality content rise to the top. Businesses need to keep up with algorithm adjustments and focus on creating high-quality content that will land on page one.
- They Have Learned to Navigate It. If irrelevant content creates a Catch-22, keywords create a chicken-or-egg quandary. Do you use keywords relevant to your product in your content? Or do you create your content based on keywords found using Google’s keyword tool? It’s your target audience that should be driving this decision. Businesses should use simpler, more focused keywords and avoid a broad match keyword strategy.
- They Take Shortcuts. The vast majority of the time, humans will take a shortcut if it’s available. We want what we want, and we want it now. Readers searching for relevant content and not finding it are even more likely to use hacks that shorten the process. An intuitive digital marketing strategy should keep a company’s content prioritized. In turn, readers will find the company’s relevant content high in a search, increasing readership and the number of potential customers. That could help them eschew the shortcuts and enjoy a fruitful journey instead.
- They Are Going Incognito. To avoid the distraction of getting search results based on predictive elements, readers are going incognito on Google. This offers an easy way to prevent the algorithm from offering results based on previous search history. It’s kind of like getting a new identity with every query. The more often readers find relevant content on page one of their search results, the more likely they are to search overtly. It’s up to businesses to create the relevant content that keeps them out in the open by repeatedly giving them what they want.
3 key takeaways from the article
- The internet features a proliferation of content, but not all of it is relevant to those who find it. Savvy readers have become wise to both irrelevant content and how to deal with it.
- The readers have found ways to filter out irrelevant material. Four of these are: They Have Become Contradictory Searchers, They Have Learned to Navigate It, They Take Shortcuts, and They Are Going Incognito.
- To make their content relevant, businesses need to develop content that addresses readers’ concerns, answers their questions, solves their problems, and engages them authentically.
Topics: Creative Writing, Digital Marketing
How to Launch a High-End Small Business
By Marilisa Barbieri | Entrepreneur Magaznie | December 13, 2021
Building a new high-end brand is a nuanced art that luxury brands have achieved over the centuries. Think about the French crystal manufacturer St. Louis, over 250 old, e.g. All luxury companies have one thing in common: They have key features that give them the allure and mysticism required to command respect, attention — and pricing power. But how can you build something iconic given the exclusive position occupied by these companies in the market? How can you achieve higher brand value and pricing power if you are a startup?
- Forget conventional wisdom, marketing strategy and management practices. Affiliate marketing, deep discounts and other sales tactics don’t convince the affluent. Rather analyze how your ideal customers live, work, entertain and vacation to conduct a study similar to how an anthropologist studies a culture. Your message at a brand level must resonate with their lifestyle. Only this way, the brand connects on a deeper level with the luxury consumer. Most importantly, you want to offer them a new universe that enables a transformation in their lives. Do not aim at solving problems. Create a dream instead: A new space to discover and experiment.
- Embrace your weirdness and secure your brand identity. If an iconic brand inspires emotions, then the inspiration behind your business idea might incite wonder if unique to you as a person. Think about the impact of the combination “weird + wow”. Everyone has quirks and insights unique to themselves. Do not hide these things. They are what makes you interesting and can make a niche in business. Identify your story, create it and sell it. The story of you as a founder or something that makes it unique. Luxury consumers value authenticity above all.
- Get ready to lose sales. Creating exclusivity means resisting the urge to discount and respond to rising demands. Most luxury consumers want high-end brands precisely because they are not easily accessible. They value the thrill and delight that we associate with luxury purchases.
- Consistent delivery on the superior brand promise. Luxury customers buy the product and everything the brand represents. Superior quality must permeate all aspects of your business: Think about your product experts on the sales floor, the team of brand curators in the marketing office, your suppliers, your collaborations and your partnerships.
3 key takeaways from the article
- Building a new high-end brand is a nuanced art that luxury brands have achieved over the centuries. All luxury companies have one thing in common: They have key features that give them the allure and mysticism required to command respect, attention — and pricing power.
- But how can you build something iconic given the exclusive position occupied by these companies in the market? How can you achieve higher brand value and pricing power if you are a startup?
- Four pieces of advice: Do not aim at solving problems. Create a dream instead: A new space to discover and experiment. Identify your story, create it and sell it. A luxury brand has the power to say no to discount requests. And deliver on the superior brand’s promises consistently.
Topics: Marketing, Branding, Luxury Goods