Weekly Business Insights from Top Ten Business Magazines – Week 236

Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making | Week 236|March 18-24, 2022

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Shaping Section : Ideas and forces shaping economies and industries

Russia’s war is creating corporate winners and losers

The Economist | March 19, 2022

Most multinational companies can live without Russian customers. Living without Russian commodities would be much harder. On March 15th the European Commission announced new economic constraints on Russia, including a ban on exports of European luxury items and cars. But the announcement also included a ban on steel products from Russia. More such restrictions on Russian exports may come.

There are two factors that make the shock to supply chains particularly difficult for firms to manage. The first is the breadth of commodities produced by Ukraine and Russia. The two countries together supply 26% of the world’s exports of wheat, 16% of corn, 30% of barley and about 80% of sunflower oil and sunflower-seed meal. Ukraine provides about half the world’s neon, used to etch microchips. Russia is the world’s third-largest oil producer, second-largest producer of gas and top exporter of nickel, used in car batteries, and palladium, used in car-exhaust systems, not to mention a large exporter of aluminium and iron. Even without formal sanctions on most of Russia’s commodities, Western traders are increasingly trying to avoid them, wary of legal risks.  The second complicating factor is the market’s extraordinary swings. The price of Brent crude surged to $128 a barrel on March 8th, then dipped below $100 a week later as China announced new covid-19 restrictions and investors anticipated the interest-rate increase by America’s Federal Reserve on March 16th. The London Metal Exchange halted trading of nickel on March 8th after its price shot past a record $100,000 a tonne. 

The overall American stockmarket is back roughly to where it was before the invasion. But a few industries benefit from the turmoil, from arms makers to cable news and the lawyers who help firms comply with sanctions. The biggest winners are commodities firms, especially outside Russia.  Nevertheless, the war does not affect all commodities firms equally.

Pricey inputs are a more widespread problem for sectors further up the value chain. Just as they were preparing to lift off as pandemic travel restrictions are relaxed, airlines got slapped with rising fuel costs.  Carmakers, which have not yet recovered from the pandemic’s disruptions to supply chains, face fresh problems.  Carmakers have so far been successful in passing their costs on to consumers but it has its limits. At some point, people will not be willing to absorb any further increases.  As the costs of inputs continue to climb, it looks increasingly likely that companies will be forced to choose between compressing profits and depressing demand.

3 key takeaways from the article

1. Most multinational companies can live without Russian customers. Living without Russian commodities would be much harder.
2. There are two factors that make the shock to supply chains particularly difficult for firms to manage. The first is the deep breadth of commodities produced by Ukraine and Russia which will be halted.  The second complicating factor is the market’s extraordinary swings.
3. As the costs of inputs continue to climb, it looks increasingly likely that companies will be forced to choose between compressing profits and depressing demand.

Full Article

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Topics:  War, Commodity Market, Global Economy

A Once Radical Idea to Close the Wealth Gap Is Actually Happening

By Ben Steverman | Bloomberg Business Week | March 17, 2022

Darrick Hamilton, a professor at the New School in New York, grew up shuttling between two worlds – lived in a poor neighborhood but at the same time enjoyed the privilege of a private school becasue of his aspiring parents.  A leading scholar in the emerging field of stratification economics, and a policy adviser to senators, governors, and presidential candidates. One of his cornerstone ideas, to give “baby bonds” to each child, is being embraced and implemented by governments across the U.S.

After getting a Ph.D. from the University of North Carolina, Hamilton became a leading researcher of the U.S. racial wealth gap and a font of policy proposals to address it, advocating ideas such as reparations and a federal job guarantee as part of a broader set of economic rights.

It was his advocacy of baby bonds, though, that brought his academic work off progressive wish lists and into the real world. Hamilton developed the idea a dozen years ago, proposing to give each baby born in the U.S. a trust fund established and guaranteed by the federal government. The goal is to narrow the vast inequalities that exist at the moment of birth, particularly those related to the wide and persistent racial wealth gap. The bonds could give any disadvantaged 18-year-old resources to catch up to wealthier peers by investment in including education, homeownership, small-business startup, and retirement savings.  “The fundamental point is providing people with capital at a key point in their life, so they can get into an asset that will passively appreciate over their lifetime,” Hamilton says.  The basic notion of giving cash to people when they reach the age of maturity is hundreds of years old. 

Hamilton, Darity, and other scholars spent decades laying the intellectual foundations for the idea, publishing research that stressed the importance of focusing on wealth and not just income or education.  Too often, Hamilton says, Black people have been blamed for this lack of progress. But the gap can’t be closed solely with hard work, better education, and saving more.  The larger problem, in Hamilton’s view, is that Black families are starting from too far behind, because they inherit so much less from their parents.

3 key takeaways from the article

1. Darrick Hamilton, Professor of Economics at the New School in New York, a leading scholar in the emerging field of stratification economics, and a policy adviser to senators, governors, and presidential candidates. 
2. One of his cornerstone ideas, to give “baby bonds” to each child, is being embraced and implemented by governments across the U.S.  The goal is to narrow the vast inequalities that exist at the moment of birth, particularly those related to the wide and persistent racial wealth gap. 
3. The bonds could give any disadvantaged 18-year-old resources to catch up to wealthier peers by investment in including education, homeownership, small-business startup, and retirement savings.  The idea stressed the importance of focusing on wealth and not just income or education.

Full Article

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Topics:  Poverty Alleviation, Wealth Distribution, Sustainability

4 Ways to Bridge the Global Skills Gap

By Mihnea Moldoveanu et. al., | Harvard Business Review | March 18, 2022

Already facing historic unemployment levels, young people around the world have lost even more of their already precarious footing over the past three years. And now, effects of the Covid-19 pandemic and global automation are making it extremely and increasingly difficult for millions of the world’s 1.3 billion young people to find work.  While the global youth skilling challenge varies by country, region, or locale, there are four high-impact actions governments and businesses can take to reverse the trend.

1. Understand what skills your organization or country needs.  Ask yourself (or your team): What specific skills does your country or business need workers to possess? Answer can help you build a pipeline of workers suitably trained for the future labor market that requires both digital and realtional skills, whether in regular employment, entrepreneurial ventures, or the gig economy.  The best way to answer it is with a national skills maps, or an overview of all the skills future employees will need not just technical and job-specific skills, but emotional, relational, and communicative ones as well.
2. Leverage corporate training outside of corporations.  By pairing elements from best-of-class corporate programs with a government-led national policy framework, stakeholders can jointly help establish a high-quality national skills development program that is germane to national and local populations, efficiently achieves scale, and doesn’t need to be built from the ground up.  While it may seem difficult to convince a company to use their resources to train the “general public,” there are already examples such as Amazon Web Services (AWS) and Microsoft Learn.
3. Build a national digital skills verification trust.  Beyond interviews, aptitude tests, and online portfolios, employers lack a standardized, low-cost way to verify the skills new employees claim to have — especially for graduates of schools, universities, and colleges and vocational training programs that lie outside a very small core of 100 or so trusted “top universities” worldwide.  
4. Develop a regional and/or national skills forum to improve information sharing among all key stakeholders.  Because the half-life of skills is short and getting shorter. We need a skills-in-demand prediction engine that cuts across regions and industries. It takes employers, educators, government officials, and professional associations working together to address trends in the job market, identify skills gaps, and support the programs that youth need to thrive.

3 key takeaways from the article

1. Already facing historic unemployment levels, young people around the world have lost even more of their already precarious footing over the past three years because of factors including Covid-19 pandemic and global automation –  making it extremely and increasingly difficult for millions of the world’s 1.3 billion young people to find work.  
2. Reversing it is important; this dire situation threatens social stability and economic recovery in many parts of the world.
3. While the global youth skilling challenge varies by country, region, or locale, there are four high-impact actions governments and businesses can take to reverse the trend.  These are:  understand what skills your organization or country needs, leverage corporate training outside of corporations, build a national digital skills verification trust, and develop a regional and/or national skills forum to improve information sharing among all key stakeholders.

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Topics:  Skills Development, Employment, Global Economy

Leading & Managing Section

How the Wrong KPIs Doom Digital Transformation

By Michael Schrage et al., | MIT Sloan Management Review | March 08, 2022

While there are many reasons why so many companies report poor results from their digital initiatives, what stands out for us is how many aspiring transformers seek to measure the wrong things. They consistently pick poor and misleading key performance indicators, such as the number of users per license purchased or the number of processes performed using new software.  These digital KPIs miss the point.  The authors argue that KPIs should lead, not track, digital initiatives. Top management must define and communicate both the key performance that is required to execute its strategic plan and the digital capabilities that will enable that performance.

Based on their experiences working with companies engaged in digital transformation, the authors have developed a four-component leadership framework for KPI-driven digital transformation:

1. Create a strategic KPI portfolio.  Transformational KPIs are the metrics chosen to lead and drive digital transformation. As a rule, they reflect increased customer value and revenue growth; they operationally align digital capabilities with desired business outcomes. They require — and guide — collaboration between digital developers and business process owners. And they represent where leadership wants the enterprise to go.  Designing effective strategic KPI portfolios requires guiding principles, including having a balanced focus on predictive (leading) and retroactive (lagging) outcomes; establishing direct, observable links between KPIs and the organization’s strategic objectives; and crafting KPIs to uncover root causes. 
2. Commit to data as a digital asset.  Misunderstanding and mismanaging the role of data is the greatest obstacle to successful and sustainable digital transformation. Defining the key data points that individually and collectively make up the KPI portfolio is the first and hardest task in this step. For example, who or what is a customer? What constitutes acceptable data quality? What is standard output? Determining clear, objective, enterprisewide data standards and definitions is essential.  Mapping quality data assets to the strategic KPI portfolio is the surest path to effective transformation alignment.
3. Orchestrate data flows to make KPIs shareable, visible, and dynamic.  Strategic KPIs — NPS, customer churn, daily active users, or perfect order rate — typically appear as single metrics, but they are calculated from skillfully sequenced combinations of data building blocks. Data sets coalesce into data flows. Coordinating, sequencing, and orchestrating the journey of reliable data through systems, processes, business units, functions, and geographies makes calculating trustworthy strategic metrics possible.
4. Commit to continuous KPI improvement.  Because digital transformation is a process, not a destination, KPIs are waypoints, not endpoints. Culturally and operationally, leaders must accept that KPIs have to continuously evolve in order to continue to drive value creation.  KPIs continuously improve when linked to better data, better analytics and machine learning, and better experimentation.

3 key takeaways from the article

1. The most dangerous step leaders take in pursuit of digital transformation is declaring digital transformation their goal. More than any other error, confusing the means with the end is responsible for the dismal digital track record of transformation efforts.
2. Top management must define and communicate both the key performance that is required to execute its strategic plan and the digital capabilities that will enable that performance.
3. A four-component leadership framework for KPI-driven digital transformation is:  create a strategic KPI portfolio; commit to data as a digital asset; orchestrate data flows to make KPIs shareable, visible, and dynamic; and commit to continuous KPI improvement.

Full Article

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Topics:  Digital Transformation, Key Performance Indicator, Organizational Performance

Conan The Communicator: Valuable Lessons For Corporate Leaders

By Michael Peregrine | Forbes Magazine | March 21, 2022

Highly controversial political and social issues are emerging to present boards with difficult decisions on whether, and in what circumstances, their companies should respond with public positions. And who should be expressing those voices on behalf of the company.  In a business environment focused on sense of purpose, the corporate social voice will be a key indicator of whether the company is truly embracing the interests of these constituencies.  Thus, whether it is the CEO, the CFO, the Board Chair or another leader, the corporate social spokesman must be thoughtfully and carefully identified and prepared; for much is at stake.

Say what you will about the guy’s politics, his movies and his private life. Arnold Schwarzenegger knows how to give a speech – and business leaders of all stripes and across all industries should take note.  For Schwarzenegger’s tour-de-force message to the Russian people is a template for the types of social justice and ESG type speeches corporate executives are increasingly called upon to make. For those leaders, “Conan” provides many take-aways, including the following:

1. Pick Your Spots. Leaders should be selective in their choice of topic and timing of their public presentations, to avoid over-exposure.
2. Watch Your Backdrop. It’s ok to present from an office environment, but make sure that it’s authentic and that it doesn’t look like a prop.
3. Keep Your Sword in its Sheath. Great speakers start slowly and build to a crescendo. They don’t verbally assault their listeners from the beginning.
4. Maintain Composure. A measured, calm approach is critical to build trust with an audience, no matter the controversy associated with the topic.
5. Personalize It. The power of a corporate executive’s presentation will be enhanced by demonstrating that he/she “gets” the issue; understands the stakes; feels the emotion. 
6. Express Hard Points Simply. If you are a corporate spokesman, make your points plainly; four letter words, one or two syllables.
7. Subliminal Messages Count. An expression of corporate social voice works best when the listener recognizes the speaker’s core authority to deliver the message. 
8. And attire Counts. 

3 key takeaways from the article

1. Highly controversial political and social issues are emerging to present boards with difficult decisions on whether, and in what circumstances, their companies should respond with public positions.
2. Whether it is the CEO, the CFO, the Board Chair or another leader, the corporate social spokesman must be thoughtfully and carefully identified and prepared; for much is at stake.
3. Arnold Schwarzenegger’s recent tour-de-force message to the Russian people is a template for the types of social justice and ESG type speeches corporate executives are increasingly called upon to make. For those leaders, “Conan” provides many take-aways, including the following: Pick Your Spots, Watch Your Backdrop, Keep Your Sword in its Sheath, Maintain Composure, Personalize It, Express Hard Points Simply, and Subliminal Messages & attire Count.

Full Article

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Topics:  Leadership, Communication, Stakeholders

Understanding Customers’ Experiences

The five zeros reshaping stores

By Tiffany Burns  | McKinsey & Company | March 16, 2022

Shoppers are reshaping the retail landscape faster than ever before. They have switched brands or retailers during the pandemic adopted new shopping behaviors,  started using a new channel or service such as “buy online, pickup in-store,” for example, and possibly would continue the practice post-COVID-19. As such, the omnichannel consumer has never been more powerful.  So this can be expected that cross-channel shopping to continue even as the pandemic fades.  

However, consumers today are likely to be looking for more than convenience and cross-channel connectivity. The implications for retailers are profound. As the shopper continues to change—and expects retailers to do the same—customer experience, store operations, and talent become more inextricably linked on the journey to keep pace with customer preferences.  The margins for error in retailing are shrinking toward zero in five areas: 

1. Zero difference in channels.  To serve omnichannel customers better, winning retailers are reimagining channels and bridging the gap across supply chains, stores, web presence, and partners. Some players are transforming stores into supply chain nodes to serve customers both online and in the store.  Further blending channels, the “all on, anywhere” service model is permanently raising consumer expectations of zero differences in channels.  As channels blur, retailers will need to rethink traditional measures of productivity and what success looks like in the eyes of the consumer. 
2. Zero need for assistance with transactions.  Shoppers are giving retailers less “credit” for traditional and transactional services from checkout at cash registers to beyond. Self-service is becoming the preferred service. So retailers can redirect associates to activities that shoppers value more, such as consultative selling where help and guidance really matter.
3. Zero wait for delivery.  Two-day delivery is the new five-day, and instant will soon take its place in many markets.
4. Zero tolerance for inaction on equality or sustainability.  Consumers, especially the coveted Gen Z and millennial segments, are increasingly anchoring their retailer and brand choices on sustainability, diversity, equity, and inclusion.
5. Zero wiggle room for talent.  The pandemic has greatly raised the stakes in recruiting and retention. To recruit and retain the right people, retail leaders are raising pay, providing more autonomy (through, for example, flexible “gig” schedules), promising better career paths, and more. Retailers would need new approaches to the talent that infuse data from end to end, from AI-driven hiring to digital training throughout employees’ careers to flexible staffing models.

3 key takeaways from the article

1. Shoppers are reshaping the retail landscape faster than ever before.  And this can be expected that cross-channel shopping will continue even as the pandemic fades.  
2. As the shopper continues to change—and expects retailers to do the same—customer experience, store operations, and talent become more inextricably linked on the journey to keep pace with customer preferences.
3. The margins for error in retailing are shrinking toward zero in five areas: shopping channels, customer assistance, delivery times, equity and sustainability, and talent. We believe retailers will have to bend, reinvent, and innovate to meet customers where they are—and where they’re going.

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Topics:  Marketing, Retail, Customers’ Experiences

Entrepreneurship

8 Limiting Beliefs That May Be Holding Your Business Back

By Inc Magazine | March 17, 2022

Self-doubt is common among entrepreneurs. When business owners are overcome with these doubts, it can hold them back from achieving their goals and reaching their full potential.  Thankfully, there are ways to work through these limiting beliefs and develop a more secure mindset.

1. ‘Success should come easy.’  Many entrepreneurs get discouraged when their efforts aren’t immediately yielding results because they somehow believe success should be easier to achieve.  In truth, for an entrepreneur to achieve their goals, they must be patient, steadfast and focus on smaller instances of growth.
2. ‘This person is doing better than me.’  In the social media era, it’s almost a natural instinct to constantly compare yourself to your peers. This comparison can lead to self-doubts and limiting beliefs.  Because everyone’s definition of success differs.
3. ‘I should be further along.’  For entrepreneurs who see others at a more advanced stage of their businesses, can be counterproductive.  We need to stop looking sideways and keep focused forward.  Focus on how far you’ve come and what your own goals are.  Growth takes maturity and time, and it’s different for everyone.
4. I’m not good enough.  Many entrepreneurs think they are not good enough or skilled enough to start something big now.  But if you keep waiting for the moment when you feel “good enough,” it will never come.
5. ‘I’m not ready.’  Whether entrepreneurs fear failure or success, it may be rooted in the words, “I’m not ready.” This belief makes an entrepreneur more conservative and causes them to avoid taking risks to grow their business.
6. ‘Someone else will take this opportunity away from me.’  A scarcity mindset — believing that there is a finite number of opportunities and everyone else is competing with you for them — can often hold entrepreneurs back.  Instead, focus on the fact that growth comes not from clinging to the status quo, but from seeking new ways to solve problems.
7. ‘I have to be perfect.’  Perfectionism is a common trait among entrepreneurs. However, the drive and desire to be perfect may limit your ability to reach goals.
8. Business success is all or nothing.’  “All or nothing” thinking is a common mindset that affects people both in and out of business.  For instance, when you encounter a setback, you may think your business is over and you are a failure.  That’s not true.  Set a list of concrete yet flexible goals, with appropriate metrics. Note daily and weekly accomplishments, finding areas of improvement. A printed record of affirmation will help.

2 key takeaways from the article

1. Self-doubt is common among entrepreneurs. When business owners are overcome with these doubts, it can hold them back from achieving their goals and reaching their full potential.  
2. There are ways to work through these limiting beliefs and develop a more secure mindset.  Eight of these are:  success should come easy, this person is doing better than me, I should be further along, I’m not good enough, I’m not ready, someone else will take this opportunity away from me, I have to be perfect, and business success is all or nothing.

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Topics:  Entrepreneurship, Startups, Personal Development

4 Keys to Grow and Scale Your Startup

By Summit Ghimire | Entrepreneur Magazine | March 23, 2022

One common thread between all types of startups is navigating the pathways between growth and scaling. This rings true whether you’re a business with dozens of employees or a duo working out of a studio apartment. While some startups are easier to scale than others, all companies must grow.  The four key tactics that founders should implement:

1. Master the Power of Digital Advertising.  As new digital technologies continue to advance dramatically, the way firms communicate and interact with consumers via digital media has, by necessity, evolved.  Without a doubt, digital advertising must be a significant component of modern-day marketing strategies. Accurately implemented, digital advertisements add pure fuel to the fire powering your online identity. Want your startup to be at the forefront of your industry, define quality digital marketing as a cornerstone of your marketing strategy and business plan.
2. Sustainability through a Strong Support Network.  Nurturing an entity from birth through growth and into successful scaling requires an inner resolve and passion; sustaining this energy requires a key ingredient: people. Always keep like-minded people close to you, in your inner circle, and flesh out your support system.  Maximize the local meetups in your area, and integrate yourself into the business support groups that will empower you and your startup. Find the right individuals, fellow entrepreneurs, and friends, and lean on them for brainstorming, feedback, and constructive criticism. And throughout your time within this circle of trusted individuals, remember a key nugget of wisdom we all learned during our formative years: what was the key to good relationships is not making them one-sided; give as much as you get, helping others where you can, and you’ll find you have an enviable support system, a network of people you can rely on as you work to grow and scale up your business.
3. Maximize Time and Resources by Outsourcing Sales.  Whatever industry you may operate in, you undoubtedly want to maximize your resources to allow you the most significant amount of time to spend on that which drives you: the service or product you provide. Outsourcing sales to a third party to generate sales for your startup or business has proven to be highly beneficial for many companies across a broad spectrum of industries. Young companies can face time and resource limitations as well as knowledge or skill gaps that can not be addressed internally. Proactively executing outsourcing partnerships enables founders to successfully achieve results beyond what you might be limited to on your own.
4. Meeting the Needs of a Transformed Customer Base.  Businesses within every industry are having to adjust to a transformed customer base, with clientele possessing instant access to more information than ever. This shift can benefit both parties, ideally helping to minimize frustration or delay. An informed customer experiencing clear cut and transparent communication is always the end goal.

2 key takeaways from the article

1. One common thread between all types of startups is navigating the pathways between growth and scaling. This rings true whether you’re a business with dozens of employees or a duo working out of a studio apartment. 
2. While some startups are easier to scale than others, all companies must grow.  The four key tactics that founders should implement are:  Master the Power of Digital Advertising, Sustainability through a Strong Support Network, Maximize Time and Resources by Outsourcing Sales, and Meeting the Needs of a Transformed Customer Base.

Full Article

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Topics: Startups, Growth, Scaling up