Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making | Week 230|February 4-10, 2022
Covid-19 has pushed governments to find new ways to help the poor
The Economist | February 5, 2022
Around the world, covid and the restrictive measures that have been imposed to limit its spread pushed about 110m people into extreme poverty in 2020, says the World Data Lab. It calculates the figures to be around 30m in sub-Saharan Africa, 9m in Latin America and 42m in India.
But the World Bank, among others, spies some glimmers of improvement. Poverty may now be falling slightly again, as governments distribute vaccines and economic activity resumes. Some poor countries have provided emergency assistance to the poor with unprecedented speed. In the first year of the pandemic the World Bank counted more than 3,300 new welfare programmes, roughly a quarter of which have been in poor countries. All told, the world’s governments have spent almost $3trn on covid-related welfare schemes between the start of the pandemic and May last year. The vast majority of the spending—87%—was in rich countries. The very poorest ones accounted for just 0.05%.
Since long before the virus struck, development economists have argued about the best methods to raise the poor out of poverty, not to mention how to rescue them in times of emergency. Brazil’s Bolsa Família, which has been credited with reducing the country’s poverty rate by a quarter, has helped build a consensus that cash is generally the most efficient way to help the poor without skewing markets, as handouts of food and guarantees of employment often do. At the same time, subsidising staples, such as bread and rice, or fertilisers and essential fuels, such as petrol and kerosene, is increasingly frowned upon, partly because this cossets the middle class as well as the poor, and so punches big holes in national budgets.
One lesson from the pandemic is that cash, however, is not always a panacea. It is of limited use when shops are shut or supply-chain disruptions send the price of basic goods soaring. Housewives in the slums of New Delhi have another worry: when they are given food, they tend to use it immediately to feed their children, but if the government hands out money, landlords and creditors immediately come knocking. Besides, cash handouts can take a long time to reach the very poor.
However miserly or generous handouts are, there is still the problem of distributing them. Technology, naturally, can speed up delivery. But the pandemic revealed new flaws with that. And the very poor, especially women and the old, tend to lack the most basic tech skills. But some countries have been adept at finding ways around such obstacles. In any case, it is exceedingly hard for governments to identify precisely who most deserves help, however, delivered, especially when the pot is small.
3 key takeaways from the article
- Around the world, covid and the restrictive measures that have been imposed to limit its spread pushed about 110m people into extreme poverty in 2020.
- In the first year of the pandemic, the World Bank counted more than 3,300 new welfare programs, roughly a quarter of which have been in poor countries.
- Though Brazil’s example shows cash is generally the most efficient way to help the poor without skewing markets, as handouts of food and guarantees of employment often do. One lesson from the pandemic is that cash, however, is not always a panacea. And especially when the governments do not have deep pockets.
Topics: Poverty, Technology, Developing Countries
The “New You” Business
By Lance A. Bettencourt et al., | Harvard Business Review | Magazine (January–February 2022)
Too many service organizations lose sight of the truth that quality, convenience, and experience of what they sell are only as means to the ends that people seek. Even when they do promote what they sell in relation to customers’ aspirations, they rarely design solutions that allow people to realize them. Instead, individuals must cobble together what they think they need to achieve their goals—for example, a trainer, a particular diet, and a support network to lose weight.
Even though we’re all filled with hopes, aims, and ambitions, significant change is incredibly hard to accomplish on our own. Enterprises should recognize the economic opportunity offered by the transformation business, in which they partner with consumers to improve some fundamental aspect of their lives—to achieve a “new you.” Creating economic value from transformations requires first a full understanding of what it means to be in the transformation business. It entails: selling a distinct economic offering, focusing on the customer’s success, having a solutions mindset.
The authors have created a three-step process for learning what customers in general or specific sets of customers would consider to be a successful transformation. These are:
- Ascertain the jobs to be done. Executives must understand what customers want to achieve—their jobs to be done. Those jobs fall into four categories: functional, emotional, social and aspirational jobs. Businesses can use several methods to understand customers’ jobs to be done, including interviews, observation, and ethnography.
- Define success along the way. Companies must spend time interacting with customers to understand what success looks like at every point along the transformation journey.
- Identify the barriers. Once a company knows what success means for a customer, the final step is identifying the barriers that stand in the way and figuring out how to assist in overcoming them. These barriers exist in three primary domains: resources (available offerings, time, budget), customer readiness (skills, motivation, clarity), and context (when and where things are done).
Once a company has ascertained the jobs to be done, defined success at every stage in the journey, and identified the barriers that must be overcome, it can translate this knowledge into a transformation offering by utilizing some or all of the following five approaches: integrate solutions, engage each customer as an essential partner, provide customized support, support the full range of jobs to be done, and charge for outcomes.
3 key takeaways from the article
- Too many service organizations lose sight of the truth that quality, convenience, and experience of what they sell are only as means to the ends that people seek.
- Enterprises should recognize the economic opportunity offered by the transformation business, in which they partner with consumers to improve some fundamental aspect of their lives—to achieve a “new you.”
- Competing on transformations makes a company responsible for working with customers to define the transformation each one seeks, identify the barriers to success, and orchestrate all the goods, services, and experiences needed to support them during their journeys. Such business models will be much harder to imitate than those that offer only goods, services, or experiences.
Topics: Transformation, Business Model, Competitive Advantage
Unleashing the next wave of productivity in corporate business functions
By Raphel Buck et al., | McKinsey & Company | February 3, 2022
As the economy continues to reel from the effects of COVID-19 and its aftermath, consumer packaged goods (CPG) companies’ business operating models are under more pressure than ever. Changes in consumer preferences, competition from existing players, and disruption brought by new ones create challenges on top of dramatically spiking costs. To respond to these rapid, sweeping changes in the marketplace, companies need to be quicker and nimbler in their decision-making. Yet many have failed to do what is necessary: transform their operating model to the new reality.
Optimizing selling, general, and administrative functions, or SG&A, can be a powerful step toward this goal, especially when considered as a key digital strategy lever. With the right end-to-end approach, these functions can transform from a “cost of doing business” into enablers that help the business manage risk, seize new opportunities, and make smarter strategic and operational decisions.
To enable this, companies must undertake a holistic enterprise platform transformation to redesign SG&A processes, digitally enable them, and optimize them from end to end to support and enable the overall business strategy. In this model, SG&A functions such as finance, human resources, IT, and other general and administrative services will form a “digital backbone” providing the services that the rest of the business relies on for day-to-day operations.
When companies attempt to transform SG&A, their approaches can vary widely. In the authors’ recommended approach, a company looks at the transformation’s potential value to the business, designs a target operating model, dives into the technological details, and aligns its business and technology to prepare for a transformation roadmap.
V-shaped Value Model is proposed to the implementation. This approach begins by taking a high-level view of the transformation’s potential business value and designing a target operating model, while also drilling down into the technology aspects of the transformation: assessing the company’s current technology landscape; aligning the business value, goals, and strategy with the planned technology; and planning a technology roadmap and approach. From there, the company moves up the “V” to again take a higher-level, business-wide view as it examines how the technology fits into end-to-end processes, how all relevant functions will be affected, and how the business’s strategy will be impacted and enabled by holistically optimized processes.
3 key takeaways from the article
- As the economy continues to reel from the effects of COVID-19 and its aftermath, consumer packaged goods (CPG) companies’ business operating models are under more pressure than ever.
- To respond to these rapid, sweeping changes in the marketplace, companies need to be quicker and nimbler in their decision-making. Yet many have failed to do what is necessary: transform their operating model to the new reality.
- Optimizing selling, general, and administrative functions, or SG&A, can be a powerful step toward this goal, especially when considered as a key digital strategy lever. With the right end-to-end approach, these functions can transform from a “cost of doing business” into enablers that help the business manage risk, seize new opportunities, and make smarter strategic and operational decisions.
Topics: Strategy, Efficiency, Transformation
Leading Disruption in a Legacy Business
By Andy Binns et al., | MIT Sloan Management Review | January 31, 2022
A new cadre of leaders is driving disruptive ventures from inside large corporations. These corporate explorers are ambitious, purpose-driven managers willing to agitate for disruptive new businesses from within stable, successful organizations. They ideate, incubate, and scale innovations, much as an entrepreneur does. However, innovating inside an existing corporation is different in important ways from conventional entrepreneurship. These leaders need an enabling context that authorizes and encourages them. This is the role of what the authors call a strategic ambition.
Defining an Ambition. CEOs like Nvidia’s have provided their organizations with a strategic ambition that excites aspiration and hope, not fear. Most fundamentally, leaders articulate an emotionally engaging higher purpose for their companies.
Create New Rules. Traditional approaches to change often rely on a fear-based formula: the narrative of a burning platform — an urgent, existential problem threatening the company. However, fear inclines people to avoid risk. Setting the organization’s sights on creating something new and improved is much more motivating.
Form a Leadership Movement. CEOs have limited direct influence over the decisions employees make. If they are going to make new rules stick in the organization, they need others to join them to help build momentum for change. A leadership movement can signal that there are new rules for group membership and that people in authority are adopting them. This kind of social movement assures people that it’s OK to break with convention and adopt a new way of working — a cultural shift.
Provide a License to Explore. With the introduction of a strategic ambition, anyone who has been unsure about backing radical innovation or has even been actively blocking it thinks again. There is now a new priority — a new path to long-term growth. Strategic ambition authorizes innovators who otherwise struggle to break through the corporate hierarchy.
Set Hunting Zones. A license to explore also needs boundaries. Hunting zones describe where a business sees the best potential prospects for realizing its growth ambition and help to narrow the focus of exploration.
3 key takeaways from the article
- Leading innovation in established corporations is hard work. Great companies are rarely disrupted because they do not see disruption coming.
- Strategic ambition provides an emotionally engaging aspiration that creates a logical bridge between the past and the future.
- Ambition that speaks to emotion, logic, and aspiration gives leaders the terms to define new rules for strategic decision-making. These accelerate innovation by letting managers know that what the senior team expects them to do has changed. A semiformal grouping of leaders could carry the message that the rules have been changed. This provides wannabe corporate explorers with a license to explore, helping to accelerate innovations that had been languishing in the organization, as well as spurring new ventures to emerge that may have game-changing implications. Finally, an effective strategic ambition also sets boundaries, or hunting zones, so that there is a tight alignment between innovation and the company’s strategy.
Topics: Strategy, Disruption, Innovation
7 Ways to Boost Your Confidence
By Martin Zwilling | Inc Magazine | February 2, 2022
You can’t win as an entrepreneur or business owner without full confidence in your own ability, as well as in your solution and business model. The author found the power of self-confidence, and how to build it, confirmed in a new book, The Confident Mind, by Nate Zinsser. 7 suggested ways are:
- First, convince yourself of what you want most in life. Then let your brain and body focus on going after it. Every step forward and small success will be recognized as joy and excitement, drowning out stress and fear. Failures will become learning experiences and confidence builders, rather than mistakes that lead to a spiral into the ground.
- Always be your own best (and most honest) friend. You must always stick up for yourself, just like you would for your best friend. Very few entrepreneurs have compassion for themselves in moments of pain and difficulty, as you would for your best friend. Use acceptance, forgiveness, and compassion to keep up your confidence.
- Use both logic and fantasy to create a new reality. Sometimes you have to turn off your careful analytical mind to just “look and do, sense and react.” This is especially true when you are stepping into the unknown, as an entrepreneur. Use realism when making hour-by-hour decisions, but be creative when setting your long-term horizons.
- Gather more knowledge and consistently apply it. Find your core strengths, and apply them consistently. Trying to do all things better at the same time is not a confidence builder. Most of the entrepreneurs are either idea persons or business builders, but rarely both. In these cases, it may be better to find a co-founder with complementary strengths.
- Beliefs produce behavior, so build confidence first. Confidence provides the energy, drive, motivation, and awareness to develop real competence. You will never know just how capable you can be until you act with full confidence. Look for that succession of small steps forward, rather than behavior modifications, to build your confidence.
- Believe that every competitor is human and beatable. Resist the hype, rumor, and gossip that our media-saturated world provides on competitors and reluctant customers. Do your own reality check and recognize that each is no better than you, with fears, doubts, and imperfections. You will then convince yourself that every case is winnable.
- Above all else, always play to win. Never let yourself worry about the mistakes you have made, or might make in the future. These erode confidence rather than build it. Instead, celebrate all your successes and the positive moments along the way. Don’t try to conform to the crowd, but think differently to capitalize on your special insights.
2 key takeaways from the article
- You can’t win as an entrepreneur or business owner without full confidence in your own ability, as well as in your solution and business model.
- 7 suggested ways to build your confidence are: first, convince yourself of what you want most in life, always be your own best (and most honest) friend, use both logic and fantasy to create a new reality, gather more knowledge and consistently apply it, beliefs produce behavior, so build confidence first, believe that every competitor is human and beatable, and always play to win.
Topics: Personal Development, Confidence, Communication, Entrepreneurship
5 Reasons Why You Should Take That Professional Risk
By Amy Blaschka | Forbes Magazine | February 5, 2022
If you want something you’ve never had, you have to do something you’ve never done. And for a lot of people, that means taking a risk, career-wise. Yet far too often, people resist taking action because they’re scared. To get what you want, you need to move past your fear. Here are five reasons why you should take that professional risk:
- It’ll help you smash your limiting beliefs. Horrific nightmares of self-doubt plaque nearly everyone at some point, especially when we genuinely care about the outcome. We stress about doing those things that we place high importance on and value, such as a promotion, winning a new client, or starting our own business. So much so that we might never even attempt them because we mistakenly believe limiting beliefs like “I’ll make a fool of myself” or “I could never be successful.” But taking action is the antidote to that. Once you take that professional risk toward what you want, you’ll begin to banish those limiting beliefs because you’ll see that they were unfounded.
- It’ll open you up to new people, opportunities, and possibilities. A whole new world opens up to you when you put yourself out there. New people cross our paths, and with them, new opportunities. We’re forced to get out of ruts we may not know we’ve been in, to view things differently with a fresh perspective. It’s about envisioning what’s possible, not just what is.
- You’ll gain valuable experience. Challenging yourself to leave your comfort zone helps you stretch your wings and gain new skills, experience, and confidence. That might look like mustering up your courage to strike out on your own, volunteering to lead an educational webinar, or offering to put together (or deliver) that new business pitch for your boss.
- You’ll regret it if you don’t. In his new book, The Power of Regret: How Looking Backward Moves Us Forward, Dan Pink shared that among the 16,000 responses to his World Regret Survey, a common thread was that people regretted not being daring enough in their careers.
- Action begets more action. When you decide to make the leap, you’re taking the first step toward growth. And the funny thing about action is that it begets more action. Once you start, you build momentum and are more inclined to keep it going. Action is empowering and contagious; inaction breeds stagnation.
3 key takeaways from the article
- If you want something you’ve never had, you have to do something you’ve never done. And for a lot of people, that means taking a risk, career-wise.
- Yet far too often, people resist taking action because they’re scared. To get what you want, you need to move past your fear.
- Here are five reasons why you should take professional risk: it’ll help you smash your limiting beliefs, it’ll open you up to new people, opportunities, and possibilities, you’ll gain valuable experience, you’ll regret it if you don’t, and action begets more action.
Topics: Professional Development, Growth, Change
5 Lessons I Learned from Launching Startups Online and Offline
By Zaheer Dodhia | Entrepreneur Magazine | February 4, 2022
There are some 472 million self-identified entrepreneurs worldwide (without even counting those who dream of founding a startup but who haven’t taken steps yet). More than 300 million startups are founded each and every year. Research suggests that the failure rate for startups, over the first ten years, sits high at about 90 percent. If anything, the sheer number of new startups each year should tell you that launching a new company require forethought, planning, investment — and a few other things, too. The author shared 5 lessons he learned in this process.
- Be Adaptable. The importance of adaptability is well illustrated by the changes that we as a species have gone through over the last year and a half. When the pandemic started back in March of 2020, businesses shuttered for weeks and even months at a time, some of them never to open again. Those who adapted to the change in circumstances were the ones who survived.
- Be Ready To Invest. Entrepreneurs cite funding as vital to a successful startup, and certainly its importance can’t by taken away. But the investment author emphasizes on is-your personal investment. Your time, effort, energy, attention, and even your emotions. You need to go into it without a self-sparing attitude. Be ready for sleepless nights and long hours grappling with problems that seem to keep renewing themselves.
- Be The Competition. Sometimes, as an entrepreneur you will think of a great product or service idea, do a quick search, discover that someone else is already providing it, shrug, and forget about it. Instead of deciding to ignore your idea, change your reaction to one of inquisitiveness. What are the differences between your idea and the product that’s already in place? The fact that your idea is out there already means that there’s a market for it.
- Be Focused. If you have the entrepreneurial spirit, it’s easy to get distracted by whatever the next big idea crosses your mind. And having new ideas isn’t bad — in fact, it’s a skill that not everyone possesses.
- At the same time, though, you can’t let your new ideas run roughshod over your older ones, especially if they’re still in the delicate startup stage.
- Be Patient. Startups are a lot like children. We all, as startup creators, are all anxious parents, looking forward to the point where our creation starts to walk and talk on its own. We don’t want to worry about forgetting to nurture it often enough, or neglecting it somehow, or dropping it on its head. But we have to take the patient approach with our startups. Don’t expect too much too soon. Don’t push too far; set goals, but set boundaries, too.
3 key takeaways from the article
- Research suggests that the failure rate for startups, over the first ten years, sits high at about 90 percent.
- If anything, the sheer number of startups failure should tell you that launching and running a new company require forethought, planning, investment — and a few other things, too.
- The author shared 5 lessons he learned in this process: Be adaptable. Be ready to invest your time, effort, energy, attention, and even your emotions. In case of competition, don’t ignore your idea, change your reaction to one of inquisitiveness. Be focused, you can’t let your new ideas run roughshod over your older ones, especially if they’re still in the delicate startup stage. And be patient, don’t expect too much too soon. Don’t push too far; set goals, but set boundaries, too.
Topics: Entrepreneurship, Startups