Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 268 |October 28-November 3, 2022
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Shaping Section : Ideas and forces shaping economies and industries
The risks of Bidenomics go beyond inflation
The Economist | October 27, 2022
America’s midterm elections are less than a fortnight away. When voters go to the polls on November 8th, surging prices will be uppermost in their minds. Annual inflation is running at just over 8%, nearly a 40-year high and the hottest in many voters’ lifetimes.
Yet the consequences of nearly two years of Bidenomics go well beyond stoking inflation. Bidenomics takes on two of the biggest long-term threats facing America: the rise of an increasingly autocratic China, and the looming dangers of climate change. In the past year Mr Biden has signed three landmark bills, on infrastructure, semiconductors and the environment, which together contain plans to spend $1.7trn. This phase of Bidenomics is praiseworthy in its aims. But its protectionism makes America less likely to achieve them.
The trouble is that protectionism is a poison pill that weakens the whole enterprise. It hurts friend and foe alike, sapping America’s alliances of good faith and encouraging others to respond in kind. The European Union and South Korea complain that buyers of their electric vehicles will not benefit from America’s new subsidies, which will favour cars assembled in North America, and which may breach the World Trade Organisation’s rules. The EU is readying its own chip subsidies, which will compete wastefully with America’s. America’s attempts to woo Asian countries away from China’s sphere of influence, for example through the Indo-Pacific Economic Framework, its latest trade initiative in the region, have been undermined by its inward turn. At home, too, protectionism makes the aims of Bidenomics harder to achieve. Rather than putting up barriers, America should reap the benefits of openness.
Such thinking is flawed. In the short term, gains in the Democrats’ popularity are likely to be small compared with the damage from voters’ fear about inflation. Rebuilding an industrial base and encouraging manufacturing jobs may be popular, but will heap costs on Americans. Bidenomics may help America deal with climate change and China, but less than it ought, because of its costly and inefficient design. Much of its appeal comes from the mistaken idea that America must concoct its own industrial policy to counter China’s steroidal version. In fact, China’s ailing economy and crashing stockmarket show the flaws of centralisation. The West’s advantage lies in its understanding of the strategic and economic benefits of openness. If America casts that aside, it risks losing the technological race.
3 key takeaways from the article
- America’s midterm elections are less than a fortnight away. When voters go to the polls on November 8th, surging prices will be uppermost in their minds. Annual inflation is running at just over 8%, nearly a 40-year high and the hottest in many voters’ lifetimes. Yet the consequences of nearly two years of Bidenomics go well beyond stoking inflation.
- Its protectionism makes America less likely to achieve its targets with respect to China and environment. The trouble is that protectionism is a poison pill that weakens the whole enterprise. It hurts friend and foe alike.
- The West’s advantage lies in its understanding of the strategic and economic benefits of openness. If America casts that aside, it risks losing the race including the technological one.
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Topics: China, USA, European Union, Global Economy
10 Takeaways From Matt Levine’s ‘The Crypto Story’
By Angela Moon | Bloomberg Businessweek | 25 October 2022
Matt Levine’s 40,000-word essay “The Crypto Story” for Bloomberg Businessweek is a deep examination, analysis, and explanation of the most divisive topic in modern finance: crypto. Where did it come from? How does it work? Is it all a scam? Where will it take us? A few of the many highlights are:
- Databases Are a Foundational Part of Our Existence. “Modern life consists in large part of entries in databases. Money, homes, identities—almost everything about you is something that can be distilled into a database such as the ones controlled by banks, governments, and corporations. This is significant because at its heart, Bitcoin and everything else that’s followed are databases.
- Crypto Is ‘Trustless’. Because we depend so heavily on databases, we have to trust the institutions that control those databases. But after the 2008 financial crisis, many people lost trust in those institutions—especially in the banking system. So Satoshi Nakamoto came along and wrote his (or her or their) Bitcoin white paper, which created the first cryptocurrency, showing how to run a shared database using “cryptographic proof instead of trust.”
- Wait a Sec—Crypto Runs on Trust! “Crypto is in a way about rejecting the institutions of society, about being trustless and censorship-resistant,” Levine writes. “But it quietly free-rides on people’s deep reservoir of trust in those institutions.” It turns out, he says, that “Trust in institutions is so strong and resilient that all of crypto’s bluster can’t stamp it out.
- Yes, You Can Create Your Own Cryptocurrency. Since crypto doesn’t require permission, why not make your own? An “extremely simple generalization of Bitcoin is: You can make up an arbitrary token that trades electronically. If you do that, people might pay a nonzero amount of money for it. Worth a shot, no?
- Bitcoin’s Appeal as a Financial Asset Is Questionable. The first cryptocurrency was originally worth zero dollars; a year ago it peaked at about $67,000 before sinking to less than $20,000. Bitcoin’s extreme volatility makes it a risky and unpredictable investment.
- Crypto Can’t Avoid the Real World. So you have Bitcoin. At some point you’ll want to do something with it—maybe buy a sandwich, writes Levine, or real estate or yachts. “A financial system cannot be entirely self-contained; you have to be able to turn your money into actual stuff.” And that means dealing with intermediaries and even governments.
The others are:
NFTs Take the Bitcoin Idea One Step Further.
Stablecoins Can Be Deeply Unstable.
Traditional Finance People Can Feel Right at Home in Crypto.
As Our Lives Move Online, Crypto Could Come Into Its Own.
2 key takeaways from the article
- Matt Levine’s 40,000-word essay “The Crypto Story” for Bloomberg Businessweek is a deep examination, analysis, and explanation of the most divisive topic in modern finance: crypto. Where did it come from? How does it work? Is it all a scam? Where will it take us?
- A few of the many highlights of this essay are: Databases Are a Foundational Part of Our Existence; Crypto Is ‘Trustless’; Wait a Sec—Crypto Runs on Trust; Yes, You Can Create Your Own Cryptocurrency; Bitcoin’s Appeal as a Financial Asset Is Questionable; Crypto Can’t Avoid the Real World; NFTs Take the Bitcoin Idea One Step Further; Stablecoins Can Be Deeply Unstable; Traditional Finance People Can Feel Right at Home in Crypto; and As Our Lives Move Online, Crypto Could Come Into Its Own.
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Topics: Technology, Cryptocurrency, Bitcoin, Decentralized Finance
Opportunity youth
A report published by The McKinsey & Company in August 2021 but appeared on October 30, 2022 as continuation of its reflection on Saudia Arabia
Today, young people make up 60% of Middle East North Africa and Pakistan’s (MENAP) population; they face several structural barriers to sustainable socioeconomic development. For example, conflict and instability undermine opportunities, Youth are unequipped for the labor market, Job prospects are low, unemployment is high, Government services and delivery are challenged, and Populations’ health levels and health systems are poor.
Seven game-changers could double the region’s economic output and create 100m+ jobs.
- Develop globally-competitive talent. The next generation of youth in MENAP will enter work at a time when the labor market is radically changing. The emergence of new technologies will change the skill sets needed to succeed at work: by 2030, a higher share of professions will require university degrees, and more work activities will require socio-emotional and technology skills. Over the next two decades, around 127 million young people are expected to enter the region’s labor force.
- Drive homegrown firms with regional integration. Building homegrown superstar firms creates a wealth of opportunities for any economy: the largest firms globally account for a disproportionate share of economic profit and act as important drivers of innovation, employment, and productivity.
- Innovation industries. Going forward, the region will not be able to create opportunities for its youth by continuing ‘business as usual’ working practices. Growing populations and the resulting government fiscal burden will limit the ability of governments to create jobs for the next generation of workers. More of these opportunities will have to come from youth themselves, enabled by an ecosystem that facilitates innovation and entrepreneurship—the primary driving forces of growth and development worldwide.
- Bring more women into the workforce to achieve gender parity. Women in the region are unequally represented across the economy, society, and politics with female youth facing even lower representation. These factors are on top of lower access to education in many countries in the region and fewer leadership opportunities that MENAP women experience. Regional gender disparity in the workplace is vast, with only one woman participating in the labor force for around every four men.
- Adopt a holistic approach to health. Despite their young populations, countries in the region are expected to face a rise in age- and lifestyle-related diseases. This trend will be partly driven by demographic shifts that, in mature economies, are already causing a surge in healthcare demand. It is also driven by the changing lifestyle habits of the region’s populations.
- Rebuild conflict zones.
- Focus on performance and delivery.
3 key takeaways from the article
- Today, young people make up 60% of Middle East North Africa, and Pakistan’s (MENAP) population; they face several structural barriers to sustainable socioeconomic development. For example, conflict and instability undermine opportunities, Youth are unequipped for the labor market, Job prospects are low, unemployment is high, Government services and delivery are challenged, and Populations’ health levels and health systems are poor.
- Seven game-changers could double the region’s economic output and create 100m+ jobs. These game-changers are: develop globally-competitive talent, drive homegrown firms with regional integration, Innovation industries, bring more women in the workforce to achieve gender equity, adopt a holistic approach to health, rebuild conflict zones, and focus on performance and delivery.
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Topics: Middle East North Africa, and Pakistan’s (MENAP), Global Economy, Global Politics
Strategy & Business Model Section
Revitalizing Culture in the World of Hybrid Work
Based on the Research by Gartner | Harvard Business Review Magazine | November–December 2022 Issue
Two-plus years into the pandemic, many leaders worry that remote and hybrid work are undermining their organizations’ culture. Their concerns aren’t entirely misplaced: A 2022 global study by the research and advisory firm Gartner found that just 25% of remote or hybrid knowledge workers feel connected to their company’s culture.
Culture can be evaluated on the basis of two components: alignment (meaning that employees know what the culture is and believe that it is right for the firm) and connectedness (they identify with and care about the culture). Before the pandemic, firms tended to focus their culture-building efforts on alignment, trusting that connectedness would occur more or less by osmosis. That approach had limitations even before the pandemic and it is obviously insufficient in a world where employees spend 65% less time in offices than they did before the pandemic. The researchers suggest three strategies for driving connectedness among hybrid and far-flung workers.
Shift from diffusing culture through the office to diffusing it through the work itself. Managers often worry that remote workers’ productivity will suffer because of interruptions and distractions at home. In fact just the opposite happens: People often have more time for deep work, and productivity soars. This points to a valuable opportunity for employers to instill culture through daily tasks. Leaders should start by auditing the firm’s work processes to make sure they are compatible with the intended culture. Companies should help employees see that their value comes from the role they perform, not their physical location.
Connect through emotional proximity, not physical proximity. The view that in-office interactions sustain culture confuses physical proximity with the more important sensation of emotional proximity. Physical proximity is being in the same space as another individual—being seen. Emotional proximity is being of importance to others—feeling seen. Because remote and hybrid employees have fewer workplace interactions, each exchange makes a stronger impact. That heightens the imperative to identify and remove toxic workers, especially those in positions of influence. It also means that companies should refrain from requiring people to attend meetings unless they’re truly needed. Finally, leaders can create moments of emotional proximity by helping remote employees see how their work connects to the company mission.
Shift from optimizing corporate culture to fostering microcultures. With hybrid work splintering workforces into more-autonomous cells, all companies must now strike the balance between strong corporate culture and local multicultures. The research suggests that leaders should favor somewhat devolved control: team-level experiences increased connectedness substantially more than enterprisewide initiatives.
3 key takeaways from the article
- Culture can be evaluated on the basis of two components: alignment (meaning that employees know what the culture is and believe that it is right for the firm) and connectedness (they identify with and care about the culture).
- Before the pandemic, firms tended to focus their culture-building efforts on alignment, trusting that connectedness would occur more or less by osmosis. That approach had limitations even before the pandemic and it is obviously insufficient in a world where employees spend 65% less time in offices than they did before the pandemic.
- The researchers suggest three strategies for driving connectedness among hybrid and far-flung workers: shift from diffusing culture through the office to diffusing it through the work itself; connect through emotional proximity, not physical proximity; and shift from optimizing corporate culture to fostering microcultures.
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Topics: Culture, Hybrid Work, Technology, Productivity
Leading & Managing Section
9 Reasons Teams Outperform Individuals
By Eli Amdur | Forbes Magazine | November 1, 2022
From the time any of us played on our first team we understood why teams exist in the first place: because a bunch of individuals working in an uncollaborative way, no matter how talented each may be, can’t do what a good team can. Itis not a revelation, nor is it in question, but it had to be said in order to set up the fundamental question: Why? Borrowing from groundbreaking and extensive work of Kurt Lewin (1890-1947), universally revered as the “Father of Social Psychology 9 reasons are:
- Team results are improved due to a phenomenon he called process gain, which increases all facets of decision making: perspective, clarity, and especially synthesis, the hoped-for result of thesis followed by antithesis.
- Teams are more likely to recognize and reject incorrect solutions. This, said Lewin, is the result of perspective in an environment of liberal thinking. Remember, a team ultimately has to agree on a solution; otherwise, it’s not going to work, considering the immutable law of decision effectiveness.
- Memory of facts is more accurate and more complete. This may sound outdated in today’s world of advanced computing, data harvesting, and artificial intelligence, but we’re not talking about technology now; we’re talking about holistic thinking.
- Teams tend to have higher motivation to achieve. That’s because when we like the team we’re on, we want that team to win., more so than on dysfunctional teams.
- “Riskier” decisions can be made more safely and cautiously. This is another way of expressing the idea of reality checks.
- In high-performing teams, we tend to see increased commitment due to involvement in decisions. In other words, more team members will be willing to do more things.
- Involvement in teams facilitates changes in values, attitude, and behavior needed to implement decisions. This is simple to understand if you look at the sequence backwards. Changes in behavior don’t happen until attitudes change, and attitudes don’t change until values do.
- Members promote each other’s success for another reason other than business. They like each other, advancing social facilitation.
- Finally, great teams foster what Lewin called thought polarization, the security to adopt more conservative, aggressive, or creative positions whenever necessary.
3 key takeaways from the article
- From the time any of us played on our first team we understood why teams exist in the first place: because a bunch of individuals working in an uncollaborative way, no matter how talented each may be, can’t do what a good team can.
- Borrowing from the groundbreaking and extensive work of Kurt Lewin (1890-1947), universally revered as the “Father of Social Psychology 9 reasons are: team results are improved due to process gain; they are more likely to recognize and reject incorrect solutions; memory of facts is more accurate and more complete because of holistic thinking; they tend to have higher motivation to achieve; “Riskier” decisions can be made more safely and cautiously; increased commitment due to involvement in decisions; it facilitates changes in values, attitude, and behavior needed to implement decisions; members promote each other’s success and it fosters thought polarization.
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Topics: Teams, Performance, Organizational Behavior
Entrepreneurship Section
Microsoft’s Brad Smith Shares 4 Cybersecurity Tips for Small Businesses
By Melissa Angell | Inc Magazine | October 31, 2022
If Microsoft president Brad Smith were running a small business, the first thing he says he’d do to assess cybersecurity risk doesn’t even cost a cent. During the Small Business Administration’s inaugural Cyber Summit last week Smith said he’d first ask his team if there’s somebody on staff who’s knowledgeable about IT. Whether it’s someone on staff or an external security partner, Smith says he’d look to spend 15 minutes learning about the organization’s vulnerabilities and examine what has, and has not, been addressed. Smith shared four insights:
Stay up to date. Keep software current. This is something that tech companies such as Microsoft, Oracle, and others already assist by releasing patches on Patch Tuesday, or when software updates are released to fix any vulnerabilities.
Tighten up your passwords. Businesses need to set up multi-factor authentication and deploy strong, unpredictable passwords, according to Smith. “It shouldn’t be ABC123,”. If it may seem unbelievable that someone would use such a fallible combo, think again — digital security company Nordpass worked with independent researchers to take a look at more than 15.6 million breaches sustained by Fortune 500 companies in a past study. The findings revealed that the word “password” was one of the most popular passwords among all industries.
Consider the cloud. If businesses keep their software current and use multi-factor authentication, they’ll likely eliminate 95 percent of the risks they’d normally face, according to Smith. But he adds that it’s also important for businesses to look into cloud security. “If everybody’s just trying to run their software on their own hardware in their own four walls, it means you have to do everything to maintain that hardware,” he explains. “Whereas if you move to the cloud that becomes cloud company’s problem.
Use all available resources. There’s no question that small businesses have fewer financial resources than larger counterparts to fend off cyber attacks. Various platforms offer educational programing for small businesses to take advantage of, including planning and assessment tools along with explainers around common threats.
2 key takeaways from the article
- If Microsoft president Brad Smith were running a small business, the first thing he says he’d do to assess cybersecurity risk doesn’t even cost a cent. He would first ask his team if there’s somebody on staff who’s knowledgeable about IT. Whether it’s someone on staff or an external security partner, Smith says he’d look to spend 15 minutes learning about the organization’s vulnerabilities and examine what has, and has not, been addressed.
- Smith shared four Cybersecurity Tips for Small Businesses. These are: stay up to date, tighten up your passwords, consider the cloud, and use all available resources (including free) to educate yourself.
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Topics: Technology, Small Businesses, Cyber Security
Why Innovation Doesn’t Always Guarantee Success (and How to Implement Your Innovative Ideas Effectively)
By Steve Taplin | Entrepreneur Magazine | October 19, 2022
Many professionals are excited about implementing new ideas into their work to make a revolutionary change in their industries. However, most leaders do not understand that business success depends on other factors, like the presence of wealthy and willing buyers or investors to actualize innovative plans. Business professionals should leverage the following lessons to make a significant change in their businesses:
- Innovative ideas should solve a customer’s problem. Introducing an innovative idea that solves consumer problems — for example, creating chapter alternatives or developing easy-to-use products that are not complicated for customers, thus encouraging the use of new innovative products.
- Innovative ideas must have alternatives. Most professionals rush into implementing a specific design without considering its limitations or trying out alternatives. This business approach could be detrimental to success, especially if there is a need for future adjustments that may be expensive. The only way to avoid wasting business resources is to comprehensively analyze all aspects of your idea to appreciate any adjustments before its implementation to save on production costs.
- Dreaming is great for innovation, but realism is perfect for implementation. Professionals should analyze the practicality of a new idea before implementing it in business operations. An excellent strategy to analyze business risk is to build a prototype. Business owners should appreciate the significance of testing a prototype to identify challenges in actualizing a specific innovative idea.
- Use consumers to test your innovation. Although you might think that your innovative ideas could solve a specific problem in the market, you should test your innovation with customers to quantify interest. Innovators should collaborate with customers to identify their needs and thus quantify interest in a new idea.
- Plan for change. You might be excited to start your project but face challenges that require you to change your original plan. Unanticipated competition, adverse customer reaction or insufficient funding could make investors opt for alternative approaches to your ideas. Remain flexible by developing alternative methods to your ideas to deal with unforeseen challenges.
- Generate an innovation project plan. Innovators should take the time to generate a one-year, three-year and five-year innovation project plan from their business model. An innovation project plan is a perfect guide to identifying critical elements for success in your business.
- Communication among industrial stakeholders is essential. If you want to make a significant change in the industry, you need to collaborate with other stakeholders in your industry. Communicating with investors and team members will ensure that relevant stakeholders remain updated on the progress of your project and promote credibility and visibility for accountability.
2 key takeaways from the article
- Many professionals are excited about implementing new ideas into their work to make a revolutionary change in their industries. However, most leaders do not understand that business success depends on other factors, like the presence of wealthy and willing buyers or investors to actualize innovative plans.
- Business professionals should leverage the following lessons to make a significant change in their businesses: innovative ideas should solve a customer’s problem; innovative ideas must have alternatives; dreaming is great for innovation, but realism is perfect for implementation; use consumers to test your innovation; plan for change; generate an innovation project plan; and communication among industrial stakeholders is essential.
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Topics: Entrepreneurship, Innovation, Business Success
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