Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making | Week 227|January 14-20, 2022
Welcome to the era of the bossy state
The Economist | January 15, 2022
The relationship between governments and businesses is always changing. From state-ownership of allocation of factors of production to its decision to retreate and to become an umpire overseeing the rules for private firms to compete in a global market. Now a new and turbulent phase is under way, as citizens demand action on problems, from social justice to the climate. In response, governments are directing firms to make society safer and fairer, but without controlling their shares or their boards. Instead of being the owner or umpire, the state has become the backseat driver.
Signs of this approach are everywhere i.e., from biggest economies to medium-sized. Crucially, in most democracies, the lure of intervention is bipartisan. Few politicians fancy fighting an election on a platform of open borders and free markets. That is because many citizens fear that markets and their umpires are not up to the job.
This opening of the interventionist mind is coalescing around policies that fall short of ownership. One set of measures claims to enhance security, broadly defined. The class of industries in which government direction is legitimate on security grounds has expanded beyond defense to include energy and technology. The definition of what is seen as strategic may well expand further to include vaccines, medical ingredients, and minerals, for example. The other set of measures aims to enhance stakeholderism. Shareholders and consumers no longer have uncontested primacy in the hierarchy of groups that firms serve. Managers must weigh the welfare of other constituents more heavily, including staff, suppliers, and even competitors.
The ambition to confront economic and social problems is admirable. The first is that the state and business, faced by conflicting aims, will fail to find the best trade-offs. Diminished efficiency and innovation is the second danger. The last problem is cronyism, which ends up contaminating business and politics alike.
The Economist believes that the state should intervene to make markets work better, through, for example, carbon taxes to shift capital towards climate-friendly technologies; r&d to fund science that firms will not; and a benefits system that protects workers and the poor. But the new style of bossy government goes far beyond this. Its adherents hope for prosperity, fairness and security. They are more likely to end up with inefficiency, vested interests and insularity.
3 key takeaways from the article
- The relationship between governments and businesses is always changing. From state-ownership of allocation of factors of production to its decision to retreat and to become an umpire overseeing the rules for private firms to compete in a global market.
- Now a new and turbulent phase is underway, as citizens demand action on problems, from social justice to the climate. In response, governments are directing firms to make society safer and fairer, but without controlling their shares or their boards. Instead of being the owner or umpire, the state has become the backseat driver.
- This bossy business interventionism is well-intentioned. But, ultimately, it is a mistake.
Topics: Global Economy, Regulations, Free Market Forces
The Strategic Advantage of Incumbency
By Thomas W. Malnight and Ivy Buche | Harvard Business Review Magazine | From January–February 2022 Issue
Is a slow demise inevitable for incumbent companies? Over the past two decades many corporate leaders have become focused—perhaps too focused—on that existential question. For most of the 20th century a company that had been in business for many years and had a strong market share and a large employee base was viewed positively. Size was seen as an asset, not a liability. But in the early 1990s long-dominant firms like IBM and General Motors began experiencing significant losses. The evidence reinfored the theory of disruptive innovation, which describes how established companies fall victim to their own success, caused a shift in the prevailing mindset: Today age and size are often perceived as vulnerabilities. This has put many market leaders in a defensive stance. Inside such firms innovation and transformation efforts can take on an air of desperation.
The authors of this article see a different path forward. Instead of embracing a defensive posture, established companies should adopt a mindset and a set of behaviors referred as strategic incumbency. Defined as an established firm’s ability to dynamically convert age, size, and tradition into the key advantages of market power, trusted relationships, and deep insights. That conversion, when managed well, allows incumbents to reinvent themselves, their strategies, and their business models and create new opportunities and ward off upstarts.
The authors tried to search the answer of the questions How? What steps do successful incumbents take to prevail through tough circumstances? How are they better equipped than other firms? What critical pitfalls do they avoid? The authors identified three capabilities that give the incumbent an edge: the ability to manage complexity, the ability to maintain a long-term focus, and the ability to leverage customer relationships to expand into adjacent spaces.
3 key takeaways from the article
- For most of the 20th century a company that had been in business for many years and had a strong market share and a large employee base was viewed positively. Few of the evidence and the theory of disruptive innovation caused a shift in the prevailing mindset: Today age and size are often perceived as vulnerabilities – making the incumbent organizations defensive in which they considered their demise inevitable.
- Instead of being defensive the incumbent organziations need to adopt a strategic incumbency posture to dynamically convert age, size, and tradition into the key advantages of market power, trusted relationships, and deep insights.
- Three capabilities that give them an edge are: the ability to manage complexity, the ability to maintain a long-term focus, and the ability to leverage customer relationships to expand into adjacent spaces.
Topics: Strategy, Disruption, Business Model, Resilience
If we’re all so busy, why isn’t anything getting done?
By Aaron De Smet et al., | McKinsey & Company | January 10, 2022
Have you ever asked why it’s so difficult to get things done in business today—despite seemingly endless meetings and emails? Many organizations address similar problems by redesigning boxes and lines: who does what and who reports to whom. This exercise tends to focus almost obsessively on vertical command relationships and rarely solves the underlying disease: the poor design and execution of collaborative interactions. It is possible to quickly improve collaborative interactions by categorizing them by type i.e., decision making, creative solutions and coordination, and information sharing and making a few shifts accordingly.
- For decision making: Determine the decision rights: It’s no wonder one of the key factors for fast, high-quality decisions is to clarify exactly who makes them. Role clarity can enable easier navigation for employees, sped up decision making, and those could be resulted in decisions that would be much more customer focused. To make this shift, ensure everyone is crystal clear about who has a voice but no vote or veto. While it is often helpful to involve more people in decision making, not all of them should be deciders—in many cases, just one individual should be the decider. Don’t underestimate the difficulty of implementing this.
- Fro creative solutions and coordination: Open innovation. Routine working sessions are fairly straightforward. What many organizations struggle with is finding innovative ways to identify and drive toward solutions. How often do you tell your teams what to do versus empowering them to come up with solutions? While they may solve the immediate need to “get stuff done,” bureaucracies and micromanagement are a recipe for disaster. They slow down the organizational response to the market and customers, prevent leaders from focusing on strategic priorities, and harm employee engagement. Key success factors in winning organizations could be empowering employees and spending more time on high-quality coaching interactions.
- Information sharing: Fit-for-purpose interactions. An increasing number of organizations have begun to realize the urgency of driving ruthless meeting efficiency and of questioning whether meetings are truly required at all to share information. Live interactions can be useful for information sharing, particularly when there is an interpretive lens required to understand the information, when that information is particularly sensitive, or when leaders want to ensure there’s ample time to process it and ask questions.
3 key takeaways from the article
- Why it’s so difficult to get things done in business today—despite seemingly endless meetings and emails? Many organizations address similar problems but rarely solve the underlying disease: the poor design and execution of collaborative interactions.
- We can quickly improve collaborative interactions by categorizing them by type i.e., decision making, creative solutions and coordination, and information sharing and making a few shifts accordingly.
- Other solutions include moving to shorter meetings; meetings for one-way information sharing could be canceled in favor of other mechanisms such as a memo, podcast, or vlog; two-way information sharing during meetings is limited by having attendees review materials in advance; replacing presentations with Q&As; make meeting time a scarce resource; implement no-meeting days; and leaders should treat time spent in meetings as seriously as companies treat financial capital.
Topics: Teams, Productivity, Time-management
13 Creative Ways To Retain Ambitious Employees When Promotions Are Scarce
By John M. O’Connor | Forbes Magazine| January 14, 2022
Most hardworking professionals strive to be promoted; unfortunately, promotions are not always available. It’s an uncomfortable position for a manager to be in when one of their best employees wants to advance in their career and there’s no desirable lateral or more senior position open at the moment for them to move into. Faced with such issues, many managers have had to figure out ways to retain a valued employee before they look elsewhere for career advancement. 13 members of Forbes Coaches Council discuss and suggest some creative ways to offer other types of growth and development opportunities that can keep eager employees happy while they wait for a better role to open up. Three of these are being shared in this extractive summary.
- Create A Made-To-Measure Promotion. How about a made-to-measure promotion? You don’t have to be limited by the existing structure as a senior manager. Based on your knowledge, advise your fellow leaders on why it’s worth creating a position just for this employee and make sure you do the sums, checks and balances needed to make it a strong business case. Be clear that it’s not about promoting the person but about elevating the organization.
- Listen To How They Want To Be Recognized. The key to successful employee retention is customization. Communicate and partner with your employees to determine how they want to be recognized. While some employees desire increased compensation or a bigger title, others prefer more visibility or larger projects.
- Assign Work That Utilizes Their Top Strengths. A high-visibility stretch assignment that utilizes the employee’s top strengths and aligns with their purpose is always very effective.
The others in brief are:
- Emphatically Appreciate The Value They Bring
- Explore More Challenging Tasks For Them
- Recognize Their Value And Learn Their Motivators
- Be Compassionate And Understanding
- Engage In Transparent, Creative Conversation
- Have Them Work With A Mentor
- Encourage Them To Double Down Where They Are
- Offer Them More Control With A Bespoke Opportunity
- Understand Their Career Path And Professional Interests
- Change Their Title And Create New Incentives
3 key takeaways from the article
- Most hardworking professionals strive to be promoted; unfortunately, promotions are not always available.
- 13 members of Forbes Coaches Council discuss and suggest some creative ways to offer other types of growth and development opportunities that can keep eager employees happy while they wait for a better role to open up.
- These suggestions are: Create A Made-To-Measure Promotion, Listen To How They Want To Be Recognized, Assign Work That Utilizes Their Top Strengths, Explore More Challenging Tasks For Them, Emphatically Appreciate The Value They Bring, Recognize Their Value And Learn Their Motivators, Be Compassionate And Understanding, Engage In Transparent, Creative Conversation, Have Them Work With A Mentor, Encourage Them To Double Down Where They Are, Offer Them More Control With A Bespoke Opportunity, Understand Their Career Path And Professional Interests, and Change Their Title And Create New Incentives
Topics: Leadership, Organizational Behavior, Motivation
CEO who recovered from a workplace scandal offers career advice for young workers
By Jane Thier | Fortune Magazine | January 14, 2022
In 2017, Anne-Marie Slaughter, CEO of think tank New America, faced public scrutiny following the firing of Barry Lynn and 10 of his colleagues. Lynn claimed he was fired for criticizing Google and pushing for stronger antitrust enforcement. Eric Schmidt, executive chairman of Google’s parent company, Alphabet, was one of New America’s biggest funders. In her book Renewal: From Crisis to Transformation in Our Lives, Work, and Politics, Slaughter recounts her experience and the lessons she learned dealing with the public and private controversy. Renewal is also a deep dive into how Slaughter’s leadership style evolved in the aftermath, and how owning one’s missteps and shortcomings are vital to moving forward. While most people likely won’t face such a public reckoning, Slaughter’s book provides advice that can be applied to anyone’s career. Her four pieces of advices are:
- Learning to share the power. Slaughter had two very specific reasons why she wanted to write Renewal, an often unflattering account of that moment in New America’s history. “The first is that desire, once I’d come through the crisis, to learn from it, and see if there were lessons I could offer others”. Second, spreading power across a team won’t necessarily protect against poor decision-making, but it will certainly decrease the odds of calamity.
- Owning your wrongs—publicly. Another one of Slaughter’s new dogmas: Leadership means having to say you’re sorry. According to Slaughter, “I would tell my organization to pursue a path of radical honesty, first with themselves. It’s so tempting to shade the truth, to think, ‘Well, I really wasn’t responsible,’ or ‘Someone else did something.”
- Run toward criticism. To that end, the best advice Slaughter said she received came from David Bradley, chairman of Atlantic Media, who told her to run toward the criticism. Rather than waiting for board members to tell Slaughter what she did wrong in wake of the Google fallout, she approached them and asked for feedback. “It wasn’t easy, but it allowed me to take charge,” she said. “To do that, you have to be ready to hear it.”
- Practicing grace. The generational differences are a particular point of focus for Slaughter, who says millennials are encountering a radically different world than her generation faced. Another key to bridging a generational divide: practicing grace. “We’re in a time when it’s so easy to offend, really unwittingly, in so many ways,” she said. “It’s hard for young people to understand how dramatically social mores have changed.”
3 key takeaways from the article
- In 2017, Anne-Marie Slaughter, CEO of think tank New America, faced public scrutiny following the firing of Barry Lynn and 10 of his colleagues.
- Slaughter’s book Renewal: From Crisis to Transformation in Our Lives, Work, and Politics, in which recounts her experience and the lessons she learned dealing with the public and private controversy..
- Slaughter’s book provides advice that can be applied to anyone’s career. Her four pieces of advice are: learn to share the power, own your wrongs—publicly, run toward criticism and practice grace.
Topics: Leadership, Crisis Management, Decision Making
Embrace the Unknown to Transform Your Life
By Grace Kim | Entrepreneur Magazine | January 15, 2022
It’s normal to fear the unknown, and not having a plan is a terrifying thing indeed. But if the pandemic has taught a common understanding, it’s 1. we can’t plan everything in life, and 2. life is short. Based on author’s experience she shared six reasons why embracing the unknown will be the most significant thing you do for yourself.
- Within the unknown, you will find yourself. Stepping out of your comfort zone in small ways can help you find yourself. By placing yourself in uncomfortable situations, you will find out what you’re capable of accomplishing, what you like and dislike and what you’ll tolerate. The best way to find out who you are is to say yes to new experiences, especially those that scare you or make you anxious.
- You’ll become comfortable with the best and worst things that life throws at you. Embracing the unknown will prepare you to tackle anything without being phased. The best part of putting yourself in uncomfortable situations is that you always come out of it a stronger person. As you go through unfamiliar and uncomfortable situations, the fear of the unknown becomes less scary. This teaches you perseverance and increases your confidence to handle any situation.
- You’ll not only realize that you have no control over what happens, but you will be okay with it. Embracing uncertainty will make you realize very quickly that you really have no control over what happens. More importantly, you’ll have control over your reactions and quickly learn to manage and control your emotions in any situation.
- It makes you more chill. When you become okay with not knowing what will happen, an overwhelming sense of chill and adaptableness comes upon you. You’ve been through the points of putting yourself in rough terrain and not knowing where your decisions will lead you. After identifying that you can figure yourself out in any situation, you become happier and more confident.
- You’ll become happier. Embracing the unknown makes you more inclined to do the things that are good for you and the things that will make you happy. You’ll say no a lot more than you say yes. You won’t care about disappointing others because you’ll know that you can hold your own whether you disappoint them or not. You’ll become more sure of yourself and won’t need to seek the approval of others. In return, these actions will make you more genuine and will attract the respect of others.
- Opportunities will present themselves to you. When you decide to embrace fear and do what’s best for you, you attract better opportunities and the universe will align to meet your expectations and desires.
3 key takeaways from the article
- It’s normal to fear the unknown, and not having a plan is a terrifying thing indeed. But if the pandemic has taught a common understanding, it’s 1. we can’t plan everything in life, and 2. life is short. So start embracing the unknown.
- Six reasons why embracing the unknown will be the most significant thing you do for yourself. Within the unknown, you will find yourself. You’ll become comfortable with the best and worst things that life throws at you. You’ll not only realize that you have no control over what happens, but you will be okay with it. It makes you more chill. You’ll become happier. And opportunities will present themselves to you.
- Embracing uncertainty is one of the most rewarding skills you can learn.
Topics: Uncertainty, Personal Development
Why Having Low-Stakes Conflicts Can Improve Your Relationships
By Angela Amias | Inc Magazine | January 14, 2022
You might hate conflict, or fear it, but you can’t run from it forever. Not only is conflict an unavoidable part of life, but it’s also necessary, both at home and at work. When it’s done poorly, you can alienate colleagues, potential friends, and even family members. People who sense that they’re conflict avoidant and who want to become more confident in their management style can benefit from learning how to engage in low-stakes conflict. Think of low-stakes conflicts as times when there’s a real difference of opinion and a decision to be made, but neither you nor the other person are heavily invested in the outcome (which lets you know there won’t be hard feelings). Here are the reasons it’s well worth investing the time in learning this valuable skill.
- You learn to be honest with yourself and others. One big reason why some people avoid conflict is to escape the discomfort of being honest with themselves (and others) about what they actually want. Unfortunately, not openly expressing your true preferences leads to other ways of communicating them indirectly, either by being passively noncommittal or by being passive-aggressive. These indirect ways of communicating leave everyone–including you–guessing, unsure about where you actually stand. People who don’t know what they want, or won’t express it openly, are often perceived as being impossible to please. Offering your actual opinion, to the extent that you know it, might be the start of a minor conflict, but this will let you learn how to listen to yourself.
- You get to know other people better. Starting out by expressing your own honest sentiment opens up the possibility to genuinely ask people for theirs. Expressing an opinion that doesn’t demand agreement initiates a more genuine form of conversation. No matter how this conflict is decided, you now have more information about what the other person values–and how they make decisions. This lets you feel more comfortable in future encounters, and enables you to have more meaningful interactions.
- You learn that conflicts are rarely winner-takes-all. Conflict-avoidant people tend to feel trapped when they perceive the likelihood of a disagreement because they view conflict as win-lose. Having a low-stakes conflict introduces you to the expansive middle ground where sometimes you get your way and sometimes you don’t and either way, life goes on. When you stop treating conflict as a win-lose battle, you can start becoming more strategic about focusing the conflict on the one point where you really need agreement.
- You become a more confident thinker. Being in the habit of having thoughtful, respectful low-stakes conflicts gives you a free education about how to see things from many different perspectives. You find that you’re more able to articulate what it is you actually think. You start really listening to ways other people approach problems. You learn to focus conflicts on the essential points where agreement is important.
- Other people will find you more trustworthy. As it turns out, people who are levelheaded in how they approach conflict, able to state their position but also consider other perspectives, are highly respected and sought after. You can become known as someone who actually solicits honest feedback from others–which always results in better decisions.
3 key takeaways from the article
- You might hate conflict, or fear it, but you can’t run from it forever. Not only is conflict an unavoidable part of life, but it’s also necessary, both at home and at work. When it’s done poorly, you can alienate colleagues, potential friends, and even family members.
- You can benefit from learning how to engage in low-stakes conflict – conflicts as times when there’s a real difference of opinion and a decision to be made, but neither you nor the other person are heavily invested in the outcome.
- 5 reasons why it’s well worth investing the time in learning this valuable skill are: you learn to be honest with yourself and others, you get to know other people better, you learn that conflicts are rarely winner-takes-all, you become a more confident thinker, and other people will find you more trustworthy.
Topics: Conflict Management, Personal Development, Organizational Behavior