Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making | Week 239|April 8-14, 2022
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Shaping Section : Ideas and forces shaping economies and industries
A toxic mix of recession risks hangs over the world economy
The Economist | April 9, 2022
Just a year ago the world’s economists were celebrating a rapid rebound from recession. Now they are worrying that the next downturn could be looming. Several economies could suffer recessions, though at different times depending on the obstacles they face.
The economy in the United States is overheating. The annual rate of consumer-price inflation is 7.9% and hourly wages are 5.6% higher than they were a year ago. America has nearly twice as many job openings as it does unemployed workers—the highest ratio in 70 years. Wage growth has risen anyway, perhaps because workers are negotiating hard as rising prices erode living standards. The Fed needs both wage and price growth to cool if it is to hit its 2% inflation target. Hitting the monetary brakes, though necessary, endangers growth.
Europe has an inflation problem, too, but it is so far caused by expensive imported energy and food more than by overheating. Russia’s invasion of Ukraine and Western sanctions threaten the continent’s energy supply. Gas prices for next winter are five times higher than in America, and spending on household energy is almost twice as high as a share of GDP (partly because Europe is poorer). As energy prices have surged, consumer confidence has slumped. Firms are struggling, too. The EURO area’s economy will probably still grow in 2022 as a whole. But it looks fragile. Should Europe stop importing Russian gas—whether because it chooses to or the Kremlin decides to cut off the supply—the danger of a recession will rise.
The threat to global growth from China’s Omicron outbreak is the most severe and immediate. China reported over 20,000 new cases of the virus on April 6th. Because the government is committed to eliminating covid-19, Shanghai’s 26m residents, and those of other big cities with outbreaks, are under lockdown. If the past relationship between lockdowns and GDP holds, China’s real-time output will be 7.1% lower than in a world with no restrictions, according to Goldman Sachs. Lockdowns will also disrupt global trade, which is still struggling with a hangover from earlier in the pandemic.
The blame for the world economy’s many troubles lies squarely with policymakers. The Fed’s job is supposed to be to take away the punchbowl just as the party gets going; it has instead presided over a blowout. Europe’s governments let the continent become dependent on Russian natural gas. And China’s difficulty in suppressing Omicron was predictable and widely predicted. Economic trouble often strikes as a bolt from the blue. Today’s recession scare was avoidable.
3 key takeaways from the article
- Just a year ago the world’s economists were celebrating a rapid rebound from recession. Now they are worrying that the next downturn could be looming.
- Several economies could suffer recessions, though at different times depending on the obstacles they face.
- The blame for the world economy’s many troubles lies squarely with policymakers. The Fed’s job is supposed to be to take away the punchbowl just as the party gets going; it has instead presided over a blowout. Europe’s governments let the continent become dependent on Russian natural gas. And China’s difficulty in suppressing Omicron was predictable and widely predicted. Economic trouble often strikes as a bolt from the blue. Today’s recession scare was avoidable.
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Topics: Global Economy, Recession
The semiconductor decade: A trillion-dollar industry
By Ondrej Burkacky et al., | McKinsey & Company | April 1, 2022
The semiconductor industry, which makes vital components for the technologies we all depend on, hit the headlines over the past year. And it wasn’t all good news. Supply shortages led to bottlenecks in the production of everything from cars to computers and highlighted how tiny chips are critical to the smooth functioning of the global economy. In many ways, our world is “built” on semiconductors. With chip demand set to rise over the coming decade, semiconductor manufacturing and design companies would benefit now from a deep analysis of where the market is headed and what will drive demand over the long term.
As the impact of digital on lives and businesses has accelerated, semiconductor markets have boomed, with sales growing by more than 20 percent to about $600 billion in 2021. McKinsey analysis based on a range of macroeconomic assumptions suggests the industry’s aggregate annual growth could average from 6 to 8 percent a year up to 2030. The result? A $1 trillion dollar industry by the end of the decade, assuming average price increases of about 2 percent a year and a return to balanced supply and demand after current volatility. Amid megatrends that include remote working, the growth of AI, and soaring demand for electric vehicles, manufacturers and designers should now take stock and ensure they are best placed to reap the rewards.
Drilling down into individual subsegments, about 70 percent of growth is predicted to be driven by just three industries: automotive, computation and data storage, and wireless. The strongest-growing segment is likely to be automotive, where we could see a tripling of demand, fueled by applications such as autonomous driving and e-mobility. Accounting for just 8 percent of semiconductor demand in 2021, the automotive industry could represent from 13 to 15 percent of demand by the end of the decade. On that basis, the segment would be responsible for as much as 20 percent of industry expansion over the coming years. Growth of 4 to 6 percent in the computation and data-storage market could be fueled by demand for servers to support applications such as AI and cloud computing, the analysis shows. In the wireless segment, meanwhile, smartphones could account for the majority of expansion, amid a shift from lower-tier to mid-tier segments in emerging markets and backed by growth in 5G.
3 key takeaways from the article
- The semiconductor industry hit the headlines over the past year. And it wasn’t all good news. Supply shortages led to bottlenecks in the production of everything from cars to computers and highlighted how tiny chips are critical to the smooth functioning of the global economy.
- As the impact of digital on lives and businesses has accelerated, semiconductor markets have boomed, with sales growing by more than 20 percent to about $600 billion in 2021 – an industry that could surpass $1 trillion dollar mark by the end of the decade.
- Drilling down into individual subsegments, about 70 percent of growth is predicted to be driven by just three industries: automotive, computation and data storage, and wireless.
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Topics: Technology, Semiconductor
Leading & Managing Section
The Science of Choking Under Pressure
By Alyson Meister and Maude Lavanchy | Published by Harvard Business Review | April 07, 2022
Choking under pressure, where one freezes and underperforms when it matters most — even despite deep expertise and years of practice — is well known in the world of sports. But we hear less about the day-to-day chokes that happen at work. Nobody is immune from choking in a big moment. However, what we learn from the greatest athletes in the world is that there are behaviors and mindsets we can all practice to help prevent a choke and better navigate it when it arrives. Few of these behaviors and mindsets are:
- Be there, over and over. When preparing for a big moment at work, rehearse it in your mind in as much clarity and detail as you can.
- Practice for pressure. Athletes train not only for skills and abilities but also for pressure. Top coaches introduce mental, technical, tactical, or physical competitive stressors by unexpectedly changing the usual conditions.
- Develop a pre-performance routine. Those sometimes perplexing routines, movements, or sets of words that you see and hear before an athlete delivers an important serve in tennis, a free-throw in basketball, or a penalty kick in soccer have a very important purpose. A pre-performance routine can help you clear your mind, get into the moment, and set that well-honed skill to autopilot. At work, you might develop a short ritual, such as breathing exercises, or repeating a phrase or mantra.
- Don’t think, just do. Most athletes know that overthinking in the moment — or paralysis by analysis — can make them doubt themselves or focus too much on every aspect of a movement, instead of letting it go, triggering a choke. To avoid this, some athletes opt for “self-distraction” in the minutes or hours prior to a race or a game. Listening to music e.g., helps you to escape from the surrounding elements and thoughts that could add pressure. Mindfulness and meditation techniques help train you to acknowledge your surroundings while remaining alert, attentive, and present within yourself in the moment.
- Develop a stress mindset. Tennis legend Billie-Jean King has said, “Pressure is a privilege.” Shifting your mindset from “stress is depleting” to “stress is enhancing” actually changes the way your body responds to it. To do this, next time you’re nervous and feel your heart starting to race, don’t tell yourself to calm down — your body won’t buy it. Rather, tell yourself you’re excited and gearing up for optimal performance.
- Rationalize the event and your bumps along the way. It’s important to put your performance into perspective, so the anticipated results don’t overwhelm your ability to perform (or your enjoyment). This involves, for example, disconnecting your identity (i.e., who you are as a person) from the results. You can also put the big moment into perspective by taking what President Obama refers to as “the long view”: reframing any immediate “crises” so that you can see the big picture — whether that’s your values or your long-term goals — which can help you minimize the effects and importance of a single event.
3 key takeaways from the article
- Choking under pressure, where one freezes and underperforms when it matters most — even despite deep expertise and years of practice — is well known in the world of sports.
- Nobody is immune from choking in a big moment. However, what we learn from the greatest athletes in the world is that there are behaviors and mindsets we can all practice to help prevent a choke and better navigate it when it arrives.
- Few of these behaviors and mindsets are: when preparing for a big moment at work, rehearse it in your mind in as much clarity and detail as you can; practice for pressure; develop a pre-performance routine; don’t think, just do; develop a stress mindset; and rationalize the event and your bumps along the way.
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Topics: Personal Development, Communication
Cracking the Culture Code for Successful Digital Transformation
By Carsten Lund Pedersen | MIT Sloan Management Review | April 06, 2022
The success of a digital transformation relies on a deep understanding of the intricacies of culture. But few business leaders fully understand how a company’s culture changes during a digital transformation — and, more importantly, how it doesn’t change. The right balance must be achieved between cultural change and continuity as cultures evolve during digital transformation . Leaders should consider the interplay of cultural change and digital transformation, which in combination create the four elements of cultural identity: identity crisis, chaotic identity, conservative identity, and renewed identity.
- Identity crisis: If digital transformation results in neither cultural change nor continuity, the organization can be said to be in need of a corporate identity. The managerial imperative in such contexts may be to create a strong digital identity that incorporates digital technologies into the company’s business model and value propositions, and to create a culture where employees exhibit digital literacy and familiarity with AI, data science, and social media.
- Chaotic identity: If digital transformation changes the culture significantly with little continuity, the end result will be chaos. Change necessitates a cultural basis from which to emerge; without such a basis, the resultant change will likely be too fragmented and detached to make sense to members of the organization.
- Conservative identity: If digital transformation reinforces the current culture and leaves little room for cultural change, the end result will likely be cultural dogma and inertia. In other words, the organizational culture can obscure the organization’s recognition of its own outdatedness, creating the risk that the organization will become obsolete. In such a scenario, the collective culture draws upon a snapshot of the past — which, in a fast-moving digital world, will likely result in an unfortunate path or even a potential trap.
- Renewed identity: A digital transformation entailing both elements of cultural change and cultural continuity allows for the kind of sustainable renewal that can secure corporate longevity. While some elements will change and adapt to a new digital reality, those change initiatives are sufficiently rooted in the preexisting culture to ensure cultural continuity as well. The end result is a digital transformation that operates in accordance with the experience and understanding of organizational members. This may result in a slower but more successful transformation.
3 key takeaways from the article
- The success of a digital transformation relies on a deep understanding of the intricacies of culture. But few business leaders fully understand how a company’s culture changes during a digital transformation — and, more importantly, how it doesn’t change.
- Leaders should consider the interplay of cultural change and digital transformation – referred as Culture-Transformation Matrix, which in combination create the four elements of cultural identity: identity crisis, chaotic identity, conservative identity and a renewed identity.
- By identifying the relevant cultural dynamics and exposing the related internal concerns, the Culture-Transformation Matrix tool can eliminate the danger of overlooking critical cultural concerns. As a result, managers can more deliberately start to manage the human aspect of business transformations in a thoughtful way.
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Topics: Culture, Digital Transformation
Rebranding A Company Or Organization: When, Why, And How
By Kimberly A. Whitler | Forbes Magazine | April 12, 2022
Rebranding is a common effort firms, organizations, and even professional sports teams take to increase relevance and value. The rebranding process begins when a company or organization needs to evolve and shift – often times seeking to drive growth. These efforts could begin because they want to reposition themselves within their current market, they want to broaden their appeal, or they may be looking to expand into a new space. Other times they might consider rebranding after a recent merger or acquisition, following a public relations crisis, or because they have a new company vision. As these decisions are made, there are five elements that should be considered.
- Identifying the New Brand. Identifying a new brand name is complicated because you want to keep current consumers, and acquire new consumers. This requires ideating (i.e., developing new name ideas), testing, and checking for availability. A company may start with a name and then consider how that name will look – colors, logo, and so forth.
- Build Out the Strategy. Once the mission, vision, and values have been established and agreed upon, the next step is to create a strategy that will allow for a smooth transition from the current brand to the new brand. Existing brand features will need to be adapted into the new plans while also confirming it fits the elements that come with the change. This includes but is not limited to changing product labels, updating your website, adjusting promotional materials, and making changes to marketing efforts.
- Get Feedback from Key Stakeholders. Involving key stakeholders, in particular employees in the rebranding of your company is helpful as they are the ones spending the most time interacting and engaging with the market.
- Research Your Industry and Competition. On top of the opinions and ideas shared by your team, another important aspect is to generate market understanding through detailed research. While understanding consumers is important, it’s also critical to understand competitors. Repositioning a brand requires navigating around your competitors.
- Consider Whether a Name Change is Needed. A new company name may be necessary if it is confusing, difficult to spell (or find digitally), doesn’t reflect what your business stands for, or has trademark problems. As with any business decision, the real costs should be considered along with the potential benefits.
3 key takeaways from the article
- Rebranding is a common effort firms, organizations, and even professional sports teams take to increase relevance and value.
- These efforts could begin because they want to reposition themselves within their current market, they want to broaden their appeal, or they may be looking to expand into a new space. Other times they might consider rebranding after a recent merger or acquisition, following a public relations crisis, or because they have a new company vision.
- There are five elements that should be considered: Identifying the New Brand, Build Out the Strategy, Get Feedback from Key Stakeholders, Research Your Industry and Competition, and Consider Whether a Name Change is Needed.
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Topics: Marketing, Branding, Repositioning
Entrepreneurship
Personality Traits of Self-Made Millionaires
By Jessica Stillman | Inc Magazine | April 7, 2022
How should aspiring millionaires pursue the popular goal of becoming a millionaire? There are of course many pathways to wealth (including that low-effort standby: inherit it), but there are nonetheless certain skills, like high-value tech and financial know-how, that seem to correlate with wealth. But that leaves one big part of the puzzle missing. What about the personality it takes to get rich? Is there a particular constellation of inner traits that makes you more likely to end up wealthy? A large new study recently published in Humanities and Social Sciences Communications has a much more scientific answer to this question.
The study found that the rich participants [those with an individual net worth of more than one million euros] had a distinct personality profile from the non-rich participants: They tended to be more risk-tolerant, and were more open, extroverted, and conscientious, but less neurotic.” Wealthy respondents were also slightly less agreeable, but this turned out not to be statistically significant.
This personality profile of high extroversion, conscientiousness, openness, risk tolerance, and emotional stability was higher among self-made millionaires than among those who inherited their money, suggesting but not proving that these personality traits lead to wealth rather than wealth leading people to develop these personality traits. The fact that this personality type was also slightly more common among the self-employed but not rich bolsters the case that it drives the kind of entrepreneurialism that is likely to create wealth.
Contrary to what many people believe, personality isn’t destiny. While there is certainly a hefty genetic component to personality, science shows it can still shift dramatically across our lifespans and in response to the demands of our lives. One recent study even showed you can consciously shift your personality in a matter of weeks by performing simple activities to train the target trait.
3 key takeaways from the article
- How should aspiring millionaires pursue the popular goal of becoming a millionaire? Skills, geting this in inheritance, but that leaves one big part of the puzzle missing. What about the personality it takes to get rich?
- A recent study indicates richer ones had a distinct personality profile from the non-rich participants: They tended to be more risk-tolerant, and were more open, extroverted, and conscientious, but less neurotic.”And slightly less agreeable.
- While there is certainly a hefty genetic component to personality, science shows it can still shift dramatically across our lifespans and in response to the demands of our lives. One recent study even showed you can consciously shift your personality in a matter of weeks by performing simple activities to train the target trait.
Extractive Summary of the Article
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Topics: Personality, Wealth Creation
5 Success Tips for Personal Trainers and Coaches
By John Stanly | Entrepreneur Magazine | April 7, 2022
With over 500,000 subscribers on YouTube and hundreds of thousands of followers on other social media platforms, Vahva Fitness is one of the more successful fitness companies in the world. While the average personal trainer makes an average salary, Samuli Jyrkinen shares valuable tips on how personal trainers and coaches can double and sometimes even triple their yearly income.
- Specialize and out-improve your competition. “When you look at medical doctors, the highest paid professionals in the field are always the surgeons and specialists. The more specialized your skillset becomes, the more money you will make. This same principle applies to fitness as well. In order to stand out from your competition and be in high demand, you must curve your specialized niche.”
- Provide premium services or products. “One of the easiest ways to make more money is to provide better services and products for your clients. Think of bigger and better packages that will help your clients more. That is the way: think how you can help your clients more and do that. By providing premium services you can instantly increase the price and many of your clients will be happy with the new service because they will get better results.
- Leverage technology, automation, and systems. “Whether you work online or offline, the first thing you must learn to leverage is social media. It’s the best way to get leads, new clients, period. In addition to social media, try to use ads, organic marketing, SEO, webinars, email workflows, and free online courses to attract high-quality leads.” “Once you build a system to attract leads, you must build systems and automation to take care of them.
- Set clear boundaries and expectations for your clients. “If you want to be happy with your work and running a business, you must set clear boundaries and expectations for your clients. The easiest way to avoid refunds and disappointed customers is to set clear expectations for them beforehand.
- Understand that time is an essential part of the recipe. “Success is like baking a cake – it takes time and you can’t speed it up. There’s a perfect temperature and time to make the perfect cake. While it may take 30 minutes to bake a good cake, it might take 15 months before you get friction with your business.” “Resilience and being either too smart or too tough to quit are crucial elements of success.
2 key takeaways from the article
- With over 500,000 subscribers on YouTube and hundreds of thousands of followers on other social media platforms, Vahva Fitness is one of the more successful fitness companies in the world.
- Five valuable tips from Samuli Jyrkinen – the owner of Vahva Fitness, on how personal trainers and coaches can double and sometimes even triple their yearly income are: specialize and out-improve your competition, provide premium services or products, leverage technology, automation, and systems, set clear boundaries and expectations for your clients, and understand that time is an essential part of the recipe.
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Topics: Consulting, Coaching, Startup