Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 257|August 12-18, 2022
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Shaping Section : Ideas and forces shaping economies and industries
After a covid-fuelled adrenaline rush, biotech is crashing
The Economist | August 10, 2022
Three years ago no one had heard of BioNTech. Today the German biotechnology firm enjoys global renown, as well as annual revenues of $19bn. The company owes both the lustre and the lucre chiefly to the successful mrna covid-19 vaccine which it developed in partnership with Pfizer, an American drug giant. Yet even the effective jab has not immunised it from a downturn afflicting the biotech industry. On August 8th BioNTech reported that sales fell by 40% in the second quarter, year on year, as fewer people are left unjabbed and unboosted. Its share price tumbled by nearly 9%.
The biotech industry is particularly vulnerable to the syndrome of slowing economic growth, higher inflation and rising interest rates. As with other tech startups, rate rises make promised profits, most of which lie far in the future, look less hale today. Unlike software firms, biotech companies need constant injections of capital to develop their drugs, which takes lots of time and money.
Until recently that money was easy to tap. Biotech startups raised $34bn globally last year, twice the figure in 2020. In the first six months of 2021, 61 such firms launched initial public offerings (ipos) in America alone. Since then cash has grown scarcer. The first half of 2022 saw just 14 American ipos. None of the 24 startups that Silicon Valley Bank, a lender to techie companies, expected to go public this year has made the jump. Funding for private biotech businesses is down, too. Banks are reluctant to lend to early-stage firms, whose fate is tied to treatments that might never materialise.
Many companies are shedding staff. An index of biotech companies listed on New York’s Nasdaq exchange has fallen by a quarter since its peak a year ago. Valuations of unlisted companies are dropping faster than ever. Not all will pull through.
Big pharma in particular may be eyeing up biotech startups with promising drug pipelines. The giants will see some $300bn-worth of patents expire by 2030. As for Pfizer’s covid-vaccine partner, BioNTech, it is still worth five times what it was before the pandemic, despite a 50% crash in its market capitalisation since the peak a year ago. Don’t bring out the defibrillator just yet.
3 key takeaways from the article
- Three years ago no one had heard of BioNTech. Today the German biotechnology firm enjoys global renown. The company owes both the lustre and the lucre chiefly to the successful mrna covid-19 vaccine which it developed in partnership with Pfizer, an American drug giant. Yet even the effective jab has not immunised it from a downturn afflicting the biotech industry. On August 8th BioNTech reported that sales fell by 40% in the second quarter.
- Many companies are shedding staff. An index of biotech companies listed on New York’s Nasdaq exchange has fallen by a quarter since its peak a year ago. Not all will pull through.
- Big pharma in particular may be eyeing up biotech startups with promising drug pipelines.
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Topics: Biotechnology, Startups, COVID-19
Big Tech Is Spending Lots of Money to Make Antitrust Reform Seem Scary
By Emily Birnbaum | Bloomberg Businessweek | August 3, 2022
“Reject big government’s Internet power grab” was the message of a short video ad posted online in May. Is Congress going to ban apps such as Google Maps and Amazon Prime?
The closest the video gets to answering these questions is its title “Senator Klobuchar—Leave My Phone Alone”, along with a small logo appearing at the bottom right-hand corner of the screen: NetChoice. Minnesota Democratic Senator Amy Klobuchar is the primary sponsor of the American Innovation and Choice Online Act, the main antitrust bill working its way through Congress. NetChoice is a tech group funded by major companies including Amazon, Google, and Meta.
Groups funded by the tech industry have spent almost $120 million on political advertising since the beginning of 2021, according to AdImpact, an ad-tracking service. (That doesn’t include the $90 million the companies have spent on lobbying over the past year and a half.) It marks the first time the tech industry has spent more on political ads than the pharmaceutical industry, the traditional leader in the field. Almost all of the money is directed against Klobuchar’s bill, making antitrust reform the second-largest political advertising campaign this election cycle.
The tech industry campaign’s video ads show buildings exploding in Ukraine, hackers in dark hoodies typing rapidly on computers in dimly lit rooms, and Chinese soldiers marching past the country’s flag. Dramatic music blares amid images of a declining America, with empty grocery store shelves and escalating gas prices. The connection to Klobuchar’s bill, whose main provisions would prevent the largest tech companies from using their platforms to disadvantage their rivals, can be tenuous at times. “They’ll make any random argument,” says Helen Brosnan, executive director of advocacy coalition Fight Corporate Monopolies. “It reeks of desperation.”
The ads’ main utility may be to intimidate lawmakers, says Richard Hall, a political science professor at the University of Michigan’s Ford School of Public Policy. He interprets the ads as a signal from the groups that they could oppose officials in the next election cycle. “That can make a member very nervous,” he adds.
Tech companies aren’t making these ads directly, and their names aren’t associated with them.
3 key takeaways from the article
- “Reject big government’s Internet power grab was the message of a short video ad posted online in May. Is Congress going to ban apps such as Google Maps and Amazon Prime?
- The ad is part of the multi-million dollar campaign by big tech firms directed against the Senator Klobuchar—Leave My Phone Alone bill, making antitrust reform the second-largest political advertising campaign this election cycle.
- The connection to Klobuchar’s bill, whose main provisions would prevent the largest tech companies from using their platforms to disadvantage their rivals, can be tenuous at times. The tech companies campaign through such ad are signaling that they could oppose such senators in the next election cycle.
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Topics: Technology, Social Media, Anti-trust
Multinationals Need Closer Ties as Globalization Retreats
By Quy Nguyen Huy et al., | MIT Sloan Management Review | August 03, 2022
Globalization is in retreat, and multinationals are on the defensive. Across the world, countries rich and poor have erected trade barriers and set up outright export bans to cope with the pandemic and the war in Ukraine. In 2020, respirators, surgical gowns, medicines, and other lifesaving equipment were hard to come by. Two years later, it’s wheat, palm oil, beef, and other food products — and that’s not including other items related to the sanctions that nations have imposed on Russia.
Citing national interest, governments have reclaimed much of the power multinationals had acquired over decades of almost unfettered globalization. As a result, multinational corporations (MNCs), whose very rise was premised on free movement of goods and labor, are at a disadvantage. Accustomed to friendly governments and easy access to overseas markets, they have not cultivated the sophisticated political judgment to manage government and public expectations.
If conditions for MNCs in their home countries are now less cozy, spare a thought for their operations in foreign countries. Relationships between MNCs and host governments may deteriorate over time, along with the bargaining power that MNCs initially enjoyed on entry. Yet little is known about what makes some MNCs better able than others to deal with host hostility. To find out, the authors studied eight MNCs involved in disputes with foreign governments in South America between 2001 and 2012.
The study reveals the importance of MNCs nurturing direct, local ties and investing in social initiatives that benefit local communities. According to the findings, companies that operated in foreign countries through joint ventures with local businesses tended to rely too much on their partners to relate to stakeholders. Often, this created a liability of insiderness and caused them to be complacent and miss early warning signs of hostile government actions. In comparison, MNCs that operated through directly controlled subsidiaries were more hands-on and more likely to gain the goodwill of locals, enabling them to react quickly to government hostility.
3 key takeaways from the article
- Globalization is in retreat, and multinationals are on the defensive. Across the world, countries rich and poor have erected trade barriers and set up outright export bans to cope with the pandemic and the war in Ukraine.
- Little is known about what makes some MNCs better able than others to deal with host hostility.
- According to the findings, companies that operated in foreign countries through joint ventures with local businesses tended to rely too much on their partners to relate to stakeholders. Often, this created a liability of insiderness and caused them to be complacent and miss early warning signs of hostile government actions. In comparison, MNCs that operated through directly controlled subsidiaries were more hands-on and more likely to gain the goodwill of locals, enabling them to react quickly to government hostility.
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Topics: MNCs, Globalization, Diplomacy
Strategy & Business Model Section
Where delegation fails: Five things only the enterprise CEO can do to build new businesses
By Shaun Collins et a., | McKinsey & Company | August 9, 2022
This may be the most challenging time in more than a generation to be a CEO. Global uncertainty, a concussive series of tech-driven disruptions, and an ever-broadening set of risks have piled onto an already daunting set of pressures for the CEOS in running a business.Those pressures likely go a long way toward explaining the increasing importance of new-business building.
The authors we found that there are five tasks that can’t be delegated—tasks that only CEOs with their overarching strategic focus and decision-making authority can do. When CEOs adopt these measures as part of a clear playbook, they can succeed in building new businesses.
- Set the bar high: Look to launch unicorns. If companies expect 50 percent of their new revenues to come from new businesses, products, and services, they need to aim high. The CEO has a challenging role to play to ensure that the time and resources that go into a new business are worth it. The CEO’s laser focus on value is crucial in keeping the organization from being distracted by the latest hot idea that might sound good but that doesn’t have the market potential to be transformative. Orienting the entire company toward this level of value starts with identifying a clear aspiration, ambitious goals, and specific targets.
- Protect the new business from business as usual. The analysis makes it clear that allocating protected funding for the new business is one of the most important things a CEO can do. CEOs must invest sufficiently and then protect that money from the inevitable attempts from incumbent parts of the enterprise to take it back as issues arise.
- Identify a leader who could one day be CEO and create the right talent blend. The CEO needs to find someone with not only the entrepreneurial and operational capabilities to run the new business but also the softer influencing and collaboration skills to be able to work well with those in the incumbent business.
- Give leaders in the incumbent a stake in the new business’s success. Inevitably, there will be conflicts between the new business and the established one. In these cases, the CEO must be ready to personally work with the corresponding functional or business leaders to resolve the issue.
- Communicate, and when you feel you’ve done enough, do some more. The art behind successful communications is being systematic and intentional in tailoring the message to the audience. Focusing on how the new business can help drive growth and build skills for the incumbent, for instance, can help convince those in the company who might be resistant to the new business.
2 key takeaways from the article
- Global uncertainty, a concussive series of tech-driven disruptions, and an ever-broadening set of risks have piled onto an already daunting set of pressures for the CEOS in running a business. Those pressures likely go a long way toward explaining the increasing importance of new-business building.
- While building new business five tasks that can’t be delegated —tasks that only CEOs with their overarching strategic focus and decision-making authority can do are: set the bar high: Look to launch unicorns, protect the new business from business as usual, Identify a leader who could one day be CEO and create the right talent blend, give leaders in the incumbent a stake in the new business’s success, and communicate, and when you feel you’ve done enough, do some more.
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Topics: Strategy, New Businesses, Leadership
Leading & Managing Section
Don’t Focus on Your Job at the Expense of Your Career
By Dorie Clark | Harvard Business Review | August 12, 2022
You have a vision for your career and where you’d like to end up. You may even know what to do to get there. But there’s an obstacle in the way: your current job. For some lucky professionals, simply executing well is the path to recognition and eventual promotion to the position you want. But for many others — especially if the job you covet involves a different skillset. Over time, this can become a serious handicap, in what Marshall Goldsmith and Sally Helgesen term “focusing on your job at the expense of your career.”
Based on his recent book The Long Game: How to Be a Long-Term Thinker in a Short-Term World, the author shares four principles you can follow to make progress, even if you’re feeling overburdened by current expectations.
- Analyze the strategic value of your activities. In order to understand which parts of your job are most — or least — aligned with your future vision, create a Venn Diagram, with one circle representing your existing responsibilities, and another the job description you aspire to. You can use this diagram to help you identify the tasks you’d like to maintain (current tasks that will carry over and be relevant in your new role), stretch toward (ones you don’t perform now but will need to in the future), and hopefully jettison (ones that have no relevance for your desired position).
- Enlist allies. It’s rare that we have total discretion over our workload and responsibilities, so you’ll need to enlist allies — especially your manager — to help you achieve your vision. Assuming you have a good relationship, you can go to them and explain the career path you’d ultimately like to take. Ask for their help in identifying and recommending you for stretch assignments or opportunities to help you develop new skills and contacts.
- Manage your brand. For instance, just as the classic advice is to “dress for the job you want,” you should also raise your level of conversation, as though you’re already in your desired position. If you want to be promoted, start asking higher-level strategic questions in team meetings. If you’re planning to shift functional areas, read up on your new domain and begin posting about it on social media, or mentioning it in conversations with colleagues.
- Be willing to experiment with “120% time.” Google (now Alphabet) famously encourages its employees to use 20% of their time on experimental activities outside the scope of their current job requirements. You may not be able, structurally, to find an extra 20% — demands in other areas of your life may interfere. But even an extra 5%, especially if it’s coupled with a smart readjustment of your existing workload, may be enough to make demonstrable progress over time.
2 key takeaways from the article are:
- You have a vision for your career and where you’d like to end up. But there’s an obstacle in the way: your current job. If you are not among the lucky professionals, your existing job involves a different skillset. Over time, this can become a serious handicap, in terms of “focusing on your job at the expense of your career.”
- Based on his recent book The Long Game: How to Be a Long-Term Thinker in a Short-Term World, the author shares four principles you can follow to make progress, even if you’re feeling overburdened by current expectations: analyze the strategic value of your activities, enlist allies, manage your brand, and be willing to experiment with “120% time.”
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Topics: Career, Personal Development
What Is Your Service Achilles Heel
By Chip Bell | Forbes Magazine | August 15, 2022
Service processes, the hoops customers go through to get their needs met, may have a thoughtful and protective “mom” in the form of customer-centric leaders, but can still be the victim of an Achilles heel that robs them of their success. It could be the grumpy stock person in the aisle of a grocery store who throws rudeness at a customer seeking help locating an item. Wise organizations conduct service audits (with the help of customers) to spot glitches before they turn an otherwise positive customer experience into a dark memory. Here are five ways to avoid getting the “poisoned arrow” that can turn loyalty into abandonment.
- Use the Longstreet Technique. When John Longstreet was the general manager of a large hotel near Dallas, he realized his front desk queries and guest surveys were not giving him the intelligence he needed to spot his hotel’s Achilles heels. So, he held quarterly focus groups with the taxi drivers who frequented his property to transport guests from his hotel to the airport.
- Hold What’s Stupid Meetings. Longstreet had another creative technique he used at his large hotel. On Friday mornings he held a “What’s Stupid” meeting with his hotel staff. It was not atypical for him to include a frequent guest or a regular vendor. The “anything goes” discussion enabled him to hear meeting attendees describe any policy, practice, or viewpoint they perceived as “stupid,” especially those that impacted guests’ experiences. When the obvious glitches were corrected, the discussion turned to issues hidden from the eye of most hotel leaders.
- Be the Customer. There could be no more eye-opening learning opportunity than experiencing your service processes “like a customer.”
- Ask the “One Thing” Question. Actor Jack Palance taught us in the movie City Slickers the power of “one thing.” Customers are too busy and lack the interest to answer many questions about their experiences. They ignore suggestion boxes as a useless exercise that never yields results. However, at the point of contact, there is often a chance to ask one simple question: “What is one thing we can do to make your experience a great one.” And there are many versions of that “one thing” question. The “one thing” question is focused, efficient, and typically timely.
- Don’t Ask Unless You Are Serious. Research tells us that 95% of organizations have some way of soliciting customer feedback. About thirty percent take some action based on the input. But less than five percent respond to customers to let them know their input triggered an action.
2 key takeaways from the article
- Service processes, the hoops customers go through to get their needs met, may have a thoughtful and protective “mom” in the form of customer-centric leaders, but can still be the victim of an Achilles heel that robs them of their success.
- Five ways to avoid getting the “poisoned arrow” that can turn loyalty into abandonment are: get the feedback from stakeholders who interact with your customers, hold what’s stupid meetings to question what impacted customers’ experiences, be the customer, ask the “One Thing” question, and don’t ask unless you are serious.
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Topics: Marketing, Leadership, Services
Entrepreneurship Section
3 Essential Tips for Entrepreneurs From an Indie Film ProducerLife lessons on becoming an expert and attracting an audience.
By Bharat Kanodia | Inc Magazine | August 9, 2022
The idea of starting a business has become a fixture in the public subconscious. Look no further than every other YouTube ad of a happy couple traipsing through a rainforest while claiming that dumping their 9-to-5 and painlessly funding their nomad existence was as simple as saying yes. In reality, as one may soon discover upon attempting to replicate such a scheme, entrepreneurship has its own hurdles. But is there a (non-affiliated) secret that sets the seemingly lucky few apart from the starry-eyed masses? According to Andre Jetmir, an independent television producers there are three essential strategies for establishing yourself as a business, attracting an audience, and building a base of buyers.
Feel Your Format. In an ever-globalizing world, one component that can sometimes go overlooked when producing content is culture — more specifically, the producer’s personal connection (or lack thereof) to the culture of their genre or format. This is important for two reasons: 1) it enables authenticity, and 2) it sustains your interest in and passion for what you are producing. When it comes to entrepreneurship in general, being aware of the relevant culture and how you can tap into that is essential to the establishment and longevity of your business.
Know Your Buyer. Another often-overlooked detail is knowing your target audience. “Know who your buyer is.. Get into their mind. Understand what makes them tick. Be interested in what interests them. This goes beyond just guessing what keywords they might type into the search bar; rather, the complexity of humans requires a continual process of discovery – especially when it comes to convincing them to spend money. Attracting a reliable audience as an entrepreneur is a fine balancing act between defining your niche and expanding your reach.
Cut Your Losses. When the floodgates to opportunities, information, and gigs are buttons on a screen, it’s increasingly important to know when to say no. This is crucial for entrepreneurs, for whom time is the ultimate commodity. “You have to know when you’re wasting your time,” says Jetmir. Successful entrepreneurs are bold and decisive. They are like expert wine tasters; they know the precise taste or nuance they are looking for, are quick to detect fraud, and will swiftly and shamelessly decline whatever falls short of their standard.
2 key takeaways from the article
- The idea of starting a business has become a fixture in the public subconscious. In reality entrepreneurship has its own hurdles. But is there a (non-affiliated) secret that sets the seemingly lucky few apart from the starry-eyed masses?
- According to Andre Jetmir, an independent television producers there are three essential strategies for establishing yourself as a business, attracting an audience, and building a base of buyers. These strategies are: be aware of the relevant culture and how you can tap into that; know your buyer – get into their mind, understand what makes them tick, be interested in what interests them; and cut your losses by knowing when you’re wasting your time.
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Topics: Entrepreneurship, Startups, Media Business
6 Ways to Stay Positive Through Crisis and Show Your Team You’re in This Together
By Nellie Akalp | Entrepreneur Magazine | August 16, 2022
If you watch or read the news, it’s easy to start feeling anxious about the state of the world today. Feeling grief, guilt and despair about not doing more to facilitate change is normal. But you can’t give in to all that negativity. Being a business owner is like being a parent — not only do insurmountable world events affect you, but they impact your staff, so you need to be concerned about your employees’ mental health. Try the following six strategies to cope and address the proverbial elephants in the room within your own company and prove that you’re all in this together.
- Lead by example. It’s critical to listen, ask questions and contribute, so your team knows it’s acceptable to discuss current issues at work. The best way to encourage communication is to make it clear that people are free to express their opinions without being judged by their boss or peers.
- Issue a statement. When something significant happens, many companies take the initiative to issue a company-wide statement to employees (and sometimes the media). Clearly, the kind of statement you give about a critical issue depends on the culture you’ve developed. It’s vital to show employees you are aware and empathetic to the circumstances around you.
- Provide resources. People often prefer to keep their feelings and opinion to themselves, or at least out of the workplace. You can still help those employees by offering resources such as recommending well-being apps your team can download and use independently. Post information on your intranet or send a memo about helpful mental health and wellness apps or services.
- Bring in outside help. There may also be times when a current event directly affects your employees and consequently puts your business at risk. In these cases, offering outside assistance is crucial to help employees deal with the mental and physical aftereffects.
- Get involved. Don’t disregard the healing effect of taking action. You can make it a company-wide project or something you do yourself and ask interested employees to volunteer with you. Creating a culture of volunteerism in your company boosts employee morale.
- Banish negativity. As bad as things may get, strive daily to practice gratitude and banish negativity, which is a mindset that people often choose to embrace due to underlying issues. This can quickly turn into fear. Don’t fight it. Instead, surrender and let things work out on their own. Try to accept your current situation, feel grateful for what you have and have faith that something great will emerge.
3 key takeaways from the article
- If you watch or read the news, it’s easy to start feeling anxious about the state of the world today.
- Being a business owner is like being a parent — not only do insurmountable world events affect you, but they impact your staff, so you need to be concerned about your employees’ mental health.
- The following six strategies can help you to cope with stress: it’s critical to listen, ask questions and contribute, so your team knows it’s acceptable to discuss current issues at work; it’s vital to show employees you are aware and empathetic to the circumstances around you; provide resources to the employees to cope up with stress; bring in outside help if required; get involved and banish negativity.
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Topics: Entrepreneurship, Mental Health, Organizational Behavior
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