Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making | Week 234|March 4-10, 2022
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Shaping Section : Ideas and forces shaping economies and industries
A new age of economic conflict
The Economist | March 5, 2022
Russia’s invasion of Ukraine could yet become the biggest military action in Europe since 1945. It also marks a new era of high-risk economic warfare that could further splinter the world economy. The measures the West has imposed on Russia are so potent that they have triggered chaos in its $1.6trn economy and prompted the president, Vladimir Putin, to issue nuclear threats. The instant immiseration of a big economy is unprecedented and will cause alarm around the world. The West’s priority must be to win the economic confrontation with Russia. Then it must create a doctrine to govern these weapons in order to prevent a broader shift towards autarky.
The fact that Russia did not take the threat of sanctions seriously at first is no surprise. For years they have been plentiful but ineffective. Reluctant to use hard power, America and Europe have reached for economic penalties instead. Some 10,000 people or firms are subject to American sanctions, affecting over 50 countries with 27% of world GDP, and covering everything from torture to cryptocurrencies. Often they make little difference. Autocrats can evade targeted measures.
On February 26th that Rubicon was crossed, when sanctions were imposed on the world’s 11th-biggest economy. By making it illegal for Western firms to deal with big Russian banks, except in the energy trade, and expelling them from the global-payments plumbing, the flow of money across borders is seizing up. Action against Russia’s central bank means it cannot gain access to much of its vast $630bn pile of foreign reserves. Confidence has evaporated. The rouble has fallen by 28% this year as capital flees, threatening soaring inflation. Russian share prices have dropped by over 90% in offshore trading, and multinationals are leaving. From Moscow to Murmansk, Russians are queuing outside banks.
The shock could lead to a coup or a cash-crunch that impedes the war machine. But Mr Putin could retaliate with his own economic weapons including strangling the flow of gas.
If the West faces down Russia, and cements the new weapons’ deterrent power, the long-run implications will be daunting. The more they are used, the more countries will seek to avoid relying on Western finance. That would make the threat of exclusion less powerful. It would also lead to a dangerous fragmentation of the world economy. That is why after the crisis in Ukraine passes, the West should aim to make clear how sanctions will be controlled.
3 key takeaways from the article
- Russia’s invasion of Ukraine could yet become the biggest military action in Europe since 1945. It also marks a new era of high-risk economic warfare.
- The measures the West has imposed on Russia are so potent that they have triggered chaos in its $1.6trn economy and prompted the president, Vladimir Putin, to issue nuclear threats.
- If the West faces down Russia, and cements the new weapons’ deterrent power, the long-run implications will be daunting including reduced reliance on Western’s finance and dangerous fragmentation of the world economy. That is why after the crisis in Ukraine passes, the West should aim to make clear how sanctions will be controlled.
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Topics: World Economy, Russia, Sanctions, USA, Europe
5G Has Been a $100 Billion Whiff So Far
By Scott Moritz and Rob Golum | Bloomberg Businessweek | March 3, 2022
The three big U.S. carriers have spent more than $100 billion on 5G airwaves and network upgrades, but they have little to no revenue or major new businesses to show for it. Moreover, the arrival of the technology has gone largely unnoticed by consumers, and the future fortunes the industry is banking on are far from certain.
From the start, there have been challenges with the technology, like when AT&T Inc. confusingly branded 4G as “5G E.” Conspiracy theorists have tagged 5G as a source of harmful radiation and a spreader of the coronavirus. More recently, airlines have complained that some frequencies could interfere with radar and jeopardize air safety. To date, the biggest knock against 5G is that it’s been a nonevent. And, by the time it’s in full force, big tech companies including Amazon, Microsoft, and Google may have beaten the wireless carriers to the kinds of data-hungry applications that superfast 5G networks have been expected to spawn.
The higher speeds and greater capacity of 5G are needed to meet growing demand for services such as high-definition video streaming. But with the technology, the key improvement is in the almost immediate network response time, a feature known as low latency. That’s largely invisible to consumers, except in cases like highly competitive video game tournaments. Lacking a compelling reason to persuade customers to upgrade, carriers have been offering whopping incentives to help jump-start the conversion process. One area where 5G has had early success is in providing wireless home broadband service.
It wasn’t supposed to go this way. Carriers were rolling out 5G to deliver an “oh, wow” experience that customers would willingly pay extra for. Instead the technology has become a standard feature in an arena where mobile phone companies and cable operators are battling it out with similar packages. As that reality started to take hold, the carriers pointed to bigger, more immediate opportunities such as selling 5G to large companies and governments. To help make that happen, the major carriers formed partnerships with the so-called webscalers, the big cloud service providers, online ordering, and video streaming for big companies.
3 key takeaways from the article
- The three big U.S. carriers i.e., Verizon, AT&T, and T-Mobile have spent more than $100 billion on 5G airwaves and network upgrades, but they have little to no revenue or major new businesses to show for it. Moreover, the arrival of the technology has gone largely unnoticed by consumers, and the future fortunes the industry is banking on are far from certain.
- The higher speeds and greater capacity of 5G are needed to meet growing demand for services such as high-definition video streaming. But with the technology, the key improvement is in the almost immediate network response time, a feature known as low latency. That’s largely invisible to consumers.
- As that reality started to take hold, the carriers pointed to bigger, more immediate opportunities such as selling 5G to large companies and governments. Nevertheless, the future fortunes the industry is banking on are far from certain.
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Topics: Technology, 5G, Telecommunications
Leading & Managing Section
Creating High-Impact Coalitions
By Rosabeth Moss Kanter and Tuna Cem Hayirli | Harvard Business Review | From the Magazine (March–April 2022)
Increasingly more number of CEOs are becoming increasingly worry about big systemic challenges and what they can do to help fix them. That’s because they’re keenly aware of people’s expectations: A high proportion of stakeholders—86% on the 2021 Edelman Trust Barometer—believe that business executives must play a lead role in tackling societal issues.
Traditionally, spearheading the responses to crises and catastrophes—the Covid-19 pandemic; climate disasters such as hurricanes, floods, and heat waves; racial disparities—is considered the responsibility of the public sector and NGOs. Of course, businesses and their resources and expertise can be tapped to provide aid against specific calls. No longer enough. Today’s business leaders must be more than followers. The authors argue that they can best respond to big societal challenges through what they call high-impact coalitions—an emerging organizational form that reaches across boundaries of business, governments, and NGOs.
Leading and participating in these coalitions may well require actions that go against the grain for executives used to the calculus of business competition, but it can also supercharge a company’s sense of purpose and produce a treasure trove of ideas and partnerships. Leading and participating in these coalitions may well require actions that go against the grain for executives used to the calculus of business competition, but it can also supercharge a company’s sense of purpose and produce a treasure trove of ideas and partnerships.
Although public-private partnerships have existed for some time in various forms, large cross-sector, multistakeholder initiatives are newly resurgent and are not yet widely understood. They are more voluntary and relationship-based than formal organizations but more task-directed than networks. They connect otherwise disparate spheres of activity that bear on big problems by aligning powerful actors behind a purpose-driven mission. They are particularly well-suited for addressing systemic challenges. Once underway, they can harness and utilize capabilities quickly and flexibly. High-impact coalitions are characterized by: open boundaries, they attempt to minimize rules and requirements and just dive in, evolve into platforms that coordinate multiple projects and a succession of issues, and keep relationships tight.
3 key takeaways from the article
- Increasingly more number of CEOs are becoming increasingly worry about big systemic challenges and what they can do to help fix them. They can best respond to big societal challenges through what we call high-impact coalitions—an emerging organizational form that reaches across boundaries of business, governments, and NGOs.
- High-impact coalitions are an underrecognized organizational form addressing systemic challenges that require leadership, resources, and skills beyond those of any single organization, industry, or sector.
- High-impact coalitions are characterized by: open boundaries, they attempt to minimize rules and requirements and just dive in, evolve into platforms that coordinate multiple projects and a succession of issues, and keep relationships tight.
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Topics: Sustainable Development, Leadership, Collaboration
How Well-Designed Work Makes Us Smarter
By Sharon K. Parker and Gwenith G. Fisher | MIT Sloan Management Review | March 02, 2022
Promoting worker learning is an increasingly urgent priority: To succeed at executing technology-driven strategies, a company must have a workforce that can rapidly adapt to and master new tools, processes, and roles. The authors identified the powerful role of work design for enhancing workers’ cognition. This means that, irrespective of a person’s occupation, more learning will happen when work is well designed.
Work design is about the nature of people’s work — for example, which tasks workers do and how many tasks they have — as well as how the work is organized, such as whether people work on a team or independently. The authors describe five aspects of work design that shape worker cognition, and also suggest ways to maximize them to boost learning.
- Job autonomy, or job control, refers to how much opportunity workers have to make or influence decisions and choose when they work on particular tasks, and how they go about doing their work.
- Feedback is the information a worker receives about the effectiveness of their work behaviors. Feedback can come from the job, from formally structured systems, from others in the environment, and from the worker’s own efforts to obtain feedback.
- Job complexity refers to the extent to which a job puts mental demands on a worker that require aptitude, skill, training, thought, creativity, and independent judgment.
- Relational aspects of work concern the social context within which tasks are executed, such as the degree of social contact, social support, task interdependence, and interaction with people outside the organization relevant to the job.
- Psychosocial job demands, such as workload and emotional demands, include those social and organizational elements of a job that require sustained physical or mental effort and incur physiological or psychological costs such as increased cortisol release, fatigue, and/or feelings of anxiety.
The way that work is designed does more than shape whether people have the opportunity to use their cognition: Work design can also accelerate learning. Especially important is having complex and challenging tasks, job autonomy, and feedback. Complex, challenging tasks stimulate the need for employees to explore effective work strategies to achieve their goals. Job autonomy then allows people the chance to explore and experiment with different strategies. And finally, feedback provides information regarding which strategies are effective. Together, these aspects of work design speed up workers’ learning. Over time, well-designed work can also help maintain workers’ cognitive abilities and reduce age-related decline, likely as a result of changing brain structure or function.
3 key takeaways from the article
- Promoting worker learning is an increasingly urgent priority: To succeed at executing technology-driven strategies, a company must have a workforce that can rapidly adapt to and master new tools, processes, and roles.
- Work design plays a very powerful role for enhancing workers’ cognition. This means that, irrespective of a person’s occupation, more learning will happen when work is well designed.
- Five aspects of work design that shape worker cognition and maximize learning are: extent of job autonomy, provision of feedback, level of job complexity, relational aspects of job and psychosocial job demands.
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Topics: Job Design, Learning, Productivity
Five ways to ADAPT pricing to inflation
By Alex Abdelnour | McKinsey & Company | February 25, 2022
As they eye the top of the Omicron peak, most business leaders are hopeful that the worst impacts of COVID-19 may be subsiding. But as our returning-from-remote economy ramps up, inflation has taken off. Companies are grappling with rapidly rising costs that are passed on to their customers. Simply raising prices across the board is an option that, used as a blunt tool, can damage customer relationships, depress sales, and hurt margins. Five ways to help you ADAPT to sales-led pricing for inflation while maintaining long-term value for your business and your customers are:
- Adjust discounting and promotions, and maximize non-price levers. Price increases are a given in any inflationary environment. But companies that consistently address total customer and product profitability are likely to weather inflationary cycles better than those that focus solely on cost changes, which can limit the size and frequency of their price increases.
- Develop the art and science of price change. Instead of making broad price increases that may erode customer trust and demonstrate insensitivity, companies can tailor their inflationary price increases thoughtfully for each customer and product segment.
- Accelerate decision-making tenfold. Raising prices as a response to inflation is seldom a one-and-done move. It is full of unintended and unexpected consequences and puts significant pressure on the selling organization. Companies that manage price increases well have a council of dedicated cross-functional decision-makers who can act quickly to manage price increases thoughtfully and knowledgeably, approving exceptions and reacting to customer and market feedback.
- Plan options beyond pricing to reduce costs. We see best-in-class companies encourage their sourcing and engineering teams to reimagine products most affected by inflation. The aim is to adjust product design—materials, packaging, or even product features—in response to elevated production and servicing costs while maintaining the functionality customers require.
- Track execution relentlessly. Value capture must be enabled through relentless execution and performance management. An important key to continuous performance management is providing the newly established inflation council the data and insights it needs to build conviction, enforce price increases, and react to customer feedback.
3 key takeaways from the article
- As they eye the top of the Omicron peak, most business leaders are hopeful that the worst impacts of COVID-19 may be subsiding. But as our returning-from-remote economy ramps up, inflation has taken off.
- Companies are grappling with rapidly rising costs that are passed on to their customers. Simply raising prices across the board is an option that, used as a blunt tool, can damage customer relationships, depress sales, and hurt margins.
- Five ways to help the organizations to do this in the right way are: adjust discounting and promotions and maximize non-price levers; develop the art and science of price change; accelerate decision-making tenfold; plan options beyond pricing to reduce costs, and track execution relentlessly.
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Topics: Marketing, Pricing, Consumers, Inflation
5 Habits Every CEO Should Avoid to Be a Truly Remarkable Leader
By Ryan McGrath | Entrepreneur | February 24, 2022
What constitutes a truly remarkable leader. What traits does this sort of leader embody and what types of habits does he or she successfully avoid? Five unfortunate habits that CEOs can easily adopt if they’re not careful:
Setting too many strategic priorities. CEOs tend to be ambitious. Though, sometimes, this can cause you to set too many strategic priorities —ones that may end up working against you rather than for you. An excess of priorities can muddy a company’s overarching vision, creating unecessary spin for all team members. There isn’t necessarily a correct number of strategic priorities but rather an appropriate range. The sweet spot for many companies is three to five for any given year. Remain mindful of how these priorities will work together; as a CEO, it’s your job to connect the dots.
Trying to do it all on your own. It is unrealistic for one individual to effectively lead a large sum of people. Trying to do this would be a disservice not only to yourself, but also to the employees you’re responsible for. Selecting great leaders is the cornerstone of being a great leader. No business can truly scale without proper, strategic support at various touchpoints within an organization.
Eliminating team members who disagree. Critical thought often leads to thoughtful discourse. That’s why it is important to surround yourself with individuals that will speak up even when their perspective is decidedly unpopular. Don’t just employ these folks but cultivate them. It takes courage and a certain level of passion to challenge conventional wisdom. Ultimately, diversity of thought is the catalyst for growth and progress; it’s needed to scale the business.
Sustaining bad hires. A bad hire is an expensive misstep — one that harms both the employee in question (who could potentially thrive elsewhere) and the greater organization. Don’t double down on poor recruiting calls. The longer the employee remains within your organization, the worse off everyone will be. All things considered, a bad hire is as much a reflection on the employee as it is on your organization, and by extension, you as its CEO.
Focusing on the past or competitors. Looking at competitors or previous strategies is a common practice when planning for the future. It can, however, inadvertently stifle innovation and overall creativity at your organization. As the CEO, it’s your responsibility to inspire critical thought at all levels of the business. Constantly looking to your competitors or the company’s history for answers will only hinder progress and growth. Using the past as a benchmark is smart, but using it as a source of inspiration is not.
2 key takeaways from the article
- What constitutes a truly remarkable leader. What traits does this sort of leader embody and what types of habits does he or she successfully avoid?
- Five unfortunate habits that CEOs can easily adopt if they’re not careful: setting too many strategic priorities, trying to do it all on your own, eliminating team members who disagree, sustaining bad hires, and focusing on the past or competitors.
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Topics: Leadership, Strategy, Decision-making
Understanding Customers’ Experiences
The Three Marketing Principles That Made Over 3,000 Brands Soar
Shep Hyken | Forbes Magazine | March 6, 2022
The Hawke Method: The Three Principles of Marketing That Made Over 3,000 Brands Soar, by Erik Huberman. What intrigues the author of this article about the book is that Huberman talks from his point of view as an owner of a media company. In other words, he’s metaphorically “in the trenches,” doing what he preaches and teaches in the book for his clients, which include some of the most recognizable brands on the planet.
Huberman introduces us to The Marketing Tripod. Imagine a tripod where your company is at the top, and the three legs holding up that company (the tripod) represent three concepts: Awareness, Nurturing and Trust. These are the three principles that “made over 3,000 brands soar,”.
Awareness is a popular word in marketing. It’s how you get people to notice your company and product. It can include advertising, social media campaigns and more. One of the concepts that fall into the category of “and more” but should be at the top of the list, is customer experience. This is what gets people to talk about you. When you provide an experience that stands out, your customers become aware that they are doing business at a special place. Give them that experience and they reciprocate with not only more business, but also word-of-mouth referrals.
Nurturing begins the moment the customer learns about your company and product and continues until they buy from you. Huberman writes that this is the element in marketing that is typically most misunderstood and overlooked. While there are plenty of ways to nurture your prospects, one of the most powerful is through customer service. Don’t think that customer service is a department that handles complaints. It’s much more than that, and it includes how every contact the customer has with your company and its people is managed, especially in the nurturing phase. Start by asking yourself, “How easy are we to do business with?”
Trust has actually become a marketing strategy over the years. Huberman mentions the Edelman study that found 75% of consumers won’t buy from a company they don’t trust. Another customer experience research found that 83% of customers trust a company or brand more if it provides an excellent CS experience. Great service builds trust. Trust creates confidence. Trust drives more sales and makes it easy for a customer to leave positive reviews and recommend you to friends, family and colleagues.
2 key takeaways from the article
- Huberman in his book The Hawke Method: The Three Principles of Marketing That Made Over 3,000 Brands Soar introduces us to The Marketing Tripod. Imagine a tripod where your company is at the top, and the three legs holding up that company (the tripod) represent three concepts: Awareness, Nurturing and Trust. These are the three principles that “made over 3,000 brands soar,”.
- By adopting the tripod principles you have a winning combination that gets customers in the door, gets them to come back, and makes them want to talk about you to their friends, family and colleagues.
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Topics: Entrepreneurship, Marketing, Customers Experience
Entrepreneurship
3 Kinds of Self-Doubt That Are Actually Signs of Success
By Jessica Stillman | Inc | March 8, 2022
Success isn’t like temperature. There’s no measurement tool you can wave around and get an objective reading on exactly how successful you are. Today our tendency to overweight problems and take achievements for granted means that many people find themselves in the strange position of being pretty darn successful but still being blind to that success. 3 signs can help you to evaluate how successful you are:
Intellectual humility. Intellectual arrogance i.e., you know everything was silly when you were a teenager, but according to both a ton of science and some of the smartest people in business, it’s also silly when you’re grown. Being willing to doubt your beliefs and hear alternative viewpoints and fresh evidence is a sign of intelligence. This sort of intellectual humility helps you learn faster, spot fake news, connect openly and honestly with others, and become more tolerant of difference. Not being sure what you believe can be uncomfortable but it is also a sign of a mature mind.
Imposter syndrome. Perhaps you’ve heard of the Dunning-Kruger effect. This much-cited psychological principle says that the most incompetent are often the most confident because they don’t know enough to understand just how incompetent they are. It’s useful to have a scientific explanation for your office’s most annoying blowhard, but many of us fail to consider the flip side of Dunning-Kruger: If ignorance can breed unearned confidence, then advancing knowledge can lead to doubt. If you worry about your skill level, that’s actually a good indication you understand your field well enough to see its full complexity but haven’t yet settled into intellectual complacency. And your self-doubt is likely to spur you toward greater excellence. Perhaps that’s why research shows those who report suffering from imposter syndrome actually perform better at work.
Questioning the value of “success” itself. Many people pursue worldly “success” — big bank accounts, fancy job titles, the esteem of their peers — without thinking deeply about whether that’s what life is really about. The result is that a lot of us spend our early years battling to attain something that, once we have it, just makes us realize we were chasing the wrong goals all along. If you’ve reached that stage, it’s a good sign. It shows you now have the stability and self-awareness to start pondering your true values and setting your own course. You will start to realize that it is not the answer to your problems, and that you also value the people in your life, your downtime, and your ability to enjoy your days. True success is realizing that success is not everything people think it is, and it is a privilege to be able to know that.”
3 key takeaways from the article
- Success isn’t like temperature. There’s no measurement tool you can wave around and get an objective reading on exactly how successful you are.
- Today our tendency to overweight problems and take achievements for granted means that many people find themselves in the strange position of being pretty darn successful but still being blind to that success.
- 3 signs can help you to evaluate how successful you are: being willing to doubt your beliefs and hear alternative viewpoints and fresh evidence; a continuous worry about your skill level and start questioning the value of “success” itself.
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Topics: Success, Personal Development
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