Weekly Business Insights from Top Ten Business Magazines – Week 278

Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 278 |January 6-12, 2023

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Shaping Section : Ideas and forces shaping economies and industries

What the great reopening means for China—and the world

The Economist | January 2, 2023

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When its borders open on January 8th, China will have spent 1,016 days closed to the outside world. The country’s “zero-covid” policy has been a social and economic experiment without precedent: a vast public-health campaign that mostly kept the disease at bay; Xi Jinping’s pride and joy; and, by the end, a waking nightmare for many of China’s 1.4bn people. 

Before vaccines were widely available, officials could argue this approach was needed to save lives. By the end, the experiment offered a bleak existence at an extraordinary cost. China’s economy probably grew by less than 3% in 2022. Over the past 18 months, it has forgone about $1trn-worth of GDP, according to Oxford Economics

The economic implications of reopening extend further afield. Zero-covid kept a lid on China’s demand for global goods, services and commodities.  China’s recovery will lift global growth for the simple reason that the country is a large part of the world economy.  According to the Economist’s rough calculation, a recovering China could account for two-thirds of global growth in that period. 

In time, however, China’s recovery may have unfortunate side-effects. In other big economies, the binding constraint on economic expansion is monetary policy, as central banks raise interest rates to suppress inflation. If China’s reopening looks like raising global demand and therefore price pressure to an uncomfortable degree, central banks elsewhere may have to respond by tightening policy to offset the threat. In such a scenario, the impact of China’s reopening on the rest of the world may show up not in higher growth but in higher inflation or interest rates. 

China’s most direct channel of influence is through commodities. It consumes almost one-fifth of the world’s oil, over half of refined copper, nickel and zinc, and more than three-fifths of iron ore. The biggest boost to neighbours will come not from selling goods to China but from selling tourist destinations to Chinese citizens.

The Communist Party is deft at rewriting history. Yet Mr Xi will struggle to shake the damage done to his reputation in 2022. The clumsy enforcement of zero-covid, followed by its hasty abandonment, will go down as an error for the ages.

Deep damage has been done to parts of China’s supply chain. A covid outbreak, followed by protests, at a plant making Apple’s iPhone 14 in central China has delayed orders for the product. For foreign firms, the crisis was the first time that central policy interfered with local officials’ commitment to keep factories running. Many companies are now willing to pay more to manufacture elsewhere. Take the process of launching new products, which requires an almost continuous flow of researchers and scientists between headquarters, usually in the West, and plants in China. The covid years made this dance impossible.

3 key takeaways from the article

1. When its borders open on January 8th, China will have spent 1,016 days closed to the outside world. The country’s “zero-covid” policy has been a social and economic experiment without precedent.  
2. China’s recovery will lift global growth for the simple reason that the country is a large part of the world economy. However, if China’s reopening looks like raising global demand and therefore price pressure to an uncomfortable degree, central banks elsewhere may have to respond by tightening policy to offset the threat. In such a scenario, the impact of China’s reopening on the rest of the world may show up not in higher growth but in higher inflation or interest rates. 
3. The clumsy enforcement of zero-covid, followed by its hasty abandonment, will go down as an error for the ages.  For instance, deep damage has been done to parts of China’s supply chain hence many companies are now willing to pay more to manufacture elsewhere. 

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Topics:  Global Economy, China, COVID -19, Supply Chain, Inflation

Pixels of Progress: A granular look at human development around the world

By Chris Bradley et al., | McKinsey & Company | December 7, 2022

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In its new report, McKinsey shares the findings from a new dataset that breaks the world down into more than 40,000 microregions, a view 230 times more granular than a country perspective. This pixelated version of the world, compiled with cutting-edge statistical techniques like the use of night-time satellite imagery, provides a much more nuanced view of development than previous research, enhancing our understanding of global progress in ways that can help businesses and governments make better, more targeted decisions.  Six chapters of the report provided a detailed look at the rich findings and insights on the development of human health and economic prosperity over the last 20 years.

The story uncovered by McKinsey Global Institute’s latest research on human development starts in Mapusa, a small town along a historic trade route in the Indian state of Goa, and in Porto, the second largest city in Portugal. Both places had virtually the same GDP per capita of $33,000 in 2019.  At the country level, they are worlds apart: India’s GDP per capita was $6,700 in 2019, compared to $34,900 in Portugal—overall more than five times less.  Similar discrepancies mar our perspective of well-being, blurred out by country-level averages.

Data at the country or subcontinental level often obscures precisely where that progress has occurred and just how extensive it is. Just as the invention of the microscope in 1590 by Hans and Zacharias Janssen began revealing previously hidden worlds invisible to the eye, new research techniques—such as satellite-enabled luminosity studies—help us compile and understand the granular details that challenge existing assumptions and improve our understanding of human progress.

For instance, one of the perspective from this analysis reveals that half of the additional GDP generated from 2000 to 2019 came out of 3,600 microregions from  total of 40,000 as ranked by the increase in GDP per square kilometer. While this economic growth was concentrated, it was geographically dispersed.  These 3,600 microregions were scattered across 130 countries yet cover just 0.9 percent of the world’s land mass—collectively the size of South Africa. Twenty-seven percent of the global population lived in them in 2019, totalling two billion people.  Such diversity and commonality have large implications for businesses, governments, and civil society. 

3 key takeaways from the article

1. In its new report, McKinsey shares the findings from a new dataset that breaks the world down into more than 40,000 microregions, a view 230 times more granular than a country perspective. 
2. This research embraces a microscopic perspective to zoom in and build a high-resolution view of the world and its progress as measured by population, life expectancy, and GDP per capita from 2000 to 2019.
3. This pixelated version of the world, compiled with cutting-edge statistical techniques like the use of night-time satellite imagery, provides a much more nuanced view of development than previous research, enhancing our understanding of global progress in ways that can help business and governments make better, more targeted decisions.

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Topics:  Growth, Development, Technology, Global Economy

Leading & Managing Section

Managing in the Age of Outrage

By Karthik Ramanna | Harvard Business Review Magazine | January–February 2023 Issue

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Leaders in every sector are now dealing with angry stakeholders. Managing angry stakeholders is nothing new. What sets apart the times we live in is a perfect storm of three forces. First, many people feel unhopeful about the future. Second, they often feel—whether rightly or wrongly—that the game is rigged and they have been treated unfairly. Third, many people are being drawn, perhaps as a result of the first two forces, to ideologies of “othering”—that is, away from Enlightenment liberalism and toward an us-versus-them approach. 

In this article the authors offers a framework for managing stakeholder outrage that draws on analytical insights from various disciplines and has been built inductively through deep-dive case studies on organizations from multiple sectors. The framework has five steps:

1. Turning Down the Temperature.  This step involves two actions. The first is simply acknowledging the clinical bases of outrage. A key managerial insight is that the interplay of ambient conditions, emotions, and cognitive reasoning shapes the mind’s response to situations.  The second is observing processes for engagement that stakeholders have ideally agreed upon in advance of situations that raise the temperature.
2. Analyzing the Outrage.  Also has two parts.  Causal analysis in which we should try to determine which of the three reasons i.e., pessimism about the future, believe that game is rigged and we-versus-othres could be explaining the outrage.  The second is catalytic analysis. The objective here is to identify the forces contributing to the intensity of stakeholder outrage.
3. Shaping and Bounding Your Responses.  With some understanding of the drivers of outrage, managers can consider how to respond. Here they must strike a balance between not doing enough and doing too much. Considering the following two concepts can help.  Asymmetric capabilities.  Managers need to consider four questions: (1) Are we directly responsible for the outrage? (2) Will our inaction exacerbate it? (3) Is acting to alleviate the outrage part of our (implicit) contract with stakeholders? (4) Do we want it to be?  Only if the answer to all four questions is no should you not act.  And organizations need to respond to shifting expectations.
4. Understanding Your Power to Mobilize Others.  After determining what you will do in response to the outrage, you must decide how to get it done. This is a two-stage process. First identify the sources—internal and external to the organization—of your ability to mobilize others: a spatial mapping of your power. Then ask how your power will evolve as you exercise it: a temporal mapping.
5. Renewing Resilience.  Admittedly, navigating the framework is demanding. Thus renewing resilience, organizationally and individually, is itself part of the framework. By “resilience” we mean the ability to recover from negative shocks. It includes, critically, a capacity for being intelligent about risks and associated failures.

3 key takeaways from the article

1. Leaders in every sector are now dealing with angry stakeholders.
2. Managing angry stakeholders is nothing new. What sets apart the times we live in is a perfect storm of three forces: many people feel unhopeful about the future, they often feel—whether rightly or wrongly—that the game is rigged and they have been treated unfairly and many people are being drawn, perhaps as a result of the first two forces, to ideologies of “othering”—that is, away from Enlightenment liberalism and toward an us-versus-them approach.
3. A suggested framework for managing stakeholder outrage comprises of five steps: turning down the temperature, analyzing the outrage, shaping and bounding your responses, understanding your power to mobilize others, and renewing resilience.

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Topics:  Leadership, Stakeholders, Emotional Intelligence, Outrage

Embrace Mistakes to Build a Learning Culture

By Ben Laker | MIT Sloan Management Review | January 05, 2023

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Mistakes and critical incidents inevitably happen: Websites crash, products break, customers get angry. How leaders react and respond can inform an organization’s culture — for better or worse. Blame leads to finger-pointing, resentment, distrust, and unproductive behavior. It can cause an organization to stagnate, with people feeling that their efforts are not valued. In contrast, responding without blame creates an environment of learning and growth in which employees recognize that mistakes are part of the process and that their efforts are appreciated — a blameless culture.

As Amy C. Edmondson’s psychological safety theory suggests, by acknowledging that mistakes are inevitable, organizations allow employees to experiment and take risks without fear of punishment or embarrassment. This encourages creative problem-solving, collaboration, and innovation — all essential components of successful businesses. Here are three ways to use failures to move forward.

1. Reframe incidents as opportunities. Culturally, it’s better to encourage employees to try, even if they might fail, than to avoid failure at all costs; after all, the best way to learn is through experience.  This can help foster a culture where failure is accepted as part of the process, which encourages innovation and creativity.
2. Reward people for sharing knowledge.  Leaders should incentivize and congratulate those who share their institutional knowledge with others just as enthusiastically as they celebrate the on-call hero moments (if not more so). For example, leaders could create rewards for team members who document processes and share information with colleagues, or create an education budget for external training or internal shadowing opportunities.  Leaders also need to ensure that team members have the right tools, templates, and processes to easily share information with their teammates. .
3. Review what went wrong to move forward. In order for a company to truly learn from an incident, team members must be comfortable discussing failure or raising potential problems without fear of punishment or reprisal. One way to create this type of culture is by using post-incident reviews as learning moments, not inquisitions. By doing this, organizations can continuously improve, grow, and reach their goals and objectives through these lessons learned.

2 key takeaways from the article

1. Mistakes and critical incidents inevitably happen. How leaders react and respond can inform an organization’s culture — for better or worse. Blame leads to finger-pointing, resentment, distrust, and unproductive behavior. It can cause an organization to stagnate, with people feeling that their efforts are not valued. In contrast, responding without blame creates an environment of learning and growth in which employees recognize that mistakes are part of the process and that their efforts are appreciated — a blameless culture.
2. Three ways to use failures to move forward:  reframe incidents as opportunities, reward people for sharing knowledge, and review what went wrong to move forward.

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Topics:  Learning Organizations, Leadership, Decision-making

Entrepreneurship Section

How To Sell Yourself In Your Job Search

By Sarah Doody | Forbes Magazine | December 28, 2022

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If you’ve been applying to jobs and not getting interviews or offers, you may not be selling yourself enough.   If sales is about connecting, then in your career, you need to focus on building authentic relationships that can help hiring managers and recruiters see your value.  You can increase the possibility of your successful job search by sending engaging messages at various stages of your job search to communicate your value.  These messages and stages are:

1. Before You Apply: Find & connect with people who work at the company.  When looking for a new job, it’s important to know that 88 % of jobs are filled through networking and relationships. But what happens when you don’t know anyone at a company you want to work at? You have to find people who work there and reach out to them and start to build a relationship.  Let’s imagine you want to work at Salesforce and you don’t know anyone there. One of the first things you should do is leverage various professional groups and communities you might be a part of to see if anyone works there.
2. When You Apply: Send a cold email or message to the hiring manager.  Contrary to what you may think, it’s not a bad idea to cold email a hiring manager before or after you apply for a job. Cold emailing gets a bad reputation because so many don’t know how to write a good cold email. However, a strong cold email can help catch the attention of a hiring manager.  The purpose of a cold email is to let the hiring manager know you applied (or plan to), provide a concise pitch for why you’re a fit for the role, and start a conversation. 
3. After You Interview: Convert job interviews to job offers with follow-up messages.  If you think no one reads thank-you emails, think again. According to a study by TopResume, 68% of hiring managers said that a thank you email or note can make a difference.  The key to writing an effective thank you note is to use it as an opportunity to highlight your relevant skills and experience, especially anything you may forgot to talk about in the interview, as well as demonstrate your written communication skills.

3 key takeaways from the article

1. If you’ve been applying to jobs and not getting interviews or offers, you may not be selling yourself enough. It can often be the difference between getting a job offer or not.
2. If sales is about connecting, then in your career, you need to focus on building authentic relationships that can help hiring managers and recruiters see your value.  
3. You can increase the possibility of your successful job search by sending engaging messages at various stages of your job search to communicate your value.  These messages and stages are:  Before You Apply: Find & connect with people who work at the company; When You Apply: Send a cold email or message to the hiring manager; and After You Interview: Convert job interviews to job offers with follow-up messages.

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Topics:  Employment, Job Interview, Sales, Marketing, Communication

This Book Can Teach You How to Generate Ideas

By Jeremy Utley & Perry Klebahn | Inc Magazine | January 4, 2023

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Some of the best business ideas are unplanned. They come through everyday experiences or thought processes that feel more subconscious than deliberate. How and why breakthroughs happen is often seen as a mystery or an act of spontaneous creativity.  But it’s also possible to engineer such breakthroughs, and the authors have outlined how to do just that in their new book, Ideaflow: The Only Business Metric That Matters. The book distills the lessons they have learned in the 10 years since starting Stanford’s Masters of Creativity speaker series and the d.school’s Design Leadership Lab and LaunchPad Accelerator. Here are some of the book’s key lessons for entrepreneurs.

1. Don’t have just one idea; have many.  There’s a dangerous myth in Silicon Valley that it’s possible to create a business out of thin air. But here’s the problem: The theory is just not correct. The human brain is incapable of creating something from nothing. Ideas are connections between two or more things we already know.  Nobel Prize-winning scientist Linus Pauling said it best: “The best way to have a good idea is to have a lot of ideas.”
2. Ignore the experts, and listen to novices.  Radical leaps of the invention are rare and when they do happen, interestingly enough, novices often make the boldest leaps, simply because they don’t know the rules of the game. So when looking for new ideas, don’t listen to just those at the top. When markets are stable, the rules change slowly. In a dynamic competitive environment with rapid change, expertise about what’s worked in the past can be a liability. 
3. Little data trumps big data.  Every entrepreneur wonders how much time they should dedicate to one idea or another. In searching for the answer, many turn to surveys, which are cheap and easy to create and offer insights using large collections of data. But the authors believe in little data..  Little data–the kind that a couple of founders can create through a series of cleverly devised, scrappy experiments–comes from decision moments that reveal actual human behavior, rather than hypotheticals.
4. The takeaway? Anyone can innovate. Creativity and entrepreneurship remain shrouded in mystery, and that’s a shame. Innovation is a learned skill, a developable capability. With effort and attention, every single person is capable of the kinds of “zero to one” innovations that have previously been attributable to the chosen few.

3 key takeaways from the article

1. Some of the best business ideas are unplanned. They come through everyday experiences or thought processes that feel more subconscious than deliberate. How and why breakthroughs happen is often seen as a mystery or an act of spontaneous creativity.  
2. But it’s also possible to engineer such breakthroughs, and the authors have outlined how to do just that in their new book, Ideaflow: The Only Business Metric That Matters. The book distills the lessons they have learned in the 10 years since starting Stanford’s Masters of Creativity speaker series and the d.school’s Design Leadership Lab and LaunchPad Accelerator. 
3. Some of the book’s key lessons for entrepreneurs are:  don’t have just one idea, have many; ignore the experts, and listen to novices; little data trumps big data; and anyone can innovate.

Full Article

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Topics:  Entrepreneurship, Innovation, Creativity, Startups

4 Powerful Tips To Create A Successful Airbnb Business

By Jorge Contreras | Entrepreneur Magazine | January 5, 2023

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If you’re new to the short-term rental industry, you may find launching an Airbnb business quite challenging. The ins and outs of the business may confuse you, and you might even get scared to go further, especially if you don’t have properties to use for your listing.  But just like any enterprise, Airbnb is learnable. And there are tricks you can use to start and thrive in the business. Four of these are:

1. Prioritize progress over perfection.  Using whatever resources you have is better than waiting before making a move. To illustrate this, the author shared his story.  He first started with Airbnb in 2017.  During the first few years before launching, he didn’t had much. The only property he had was very basic. The only edge they probably had over other Airbnb units in the same area was that they were cheaper to rent. That was the best he could do at that time, but he still started anyway.  Now he has more properties, which are way better than the ones he had when he first started.  Lesson: Don’t stress too much about getting everything perfect. Just focus on moving forward.
2. Surround yourself with the right people.  If your friends don’t have plans to grow, you won’t be motivated to improve either.  By the same token, if you want to succeed, you must be with people who understand your mindset. It’s better to find people who are more successful than you. Because when you stick with them and follow their advice, you’ll be at the same level as they are and will continue to seek growth.
3. Always think ahead.  Planning for the near future is great, but thinking further will give you a better head start. 
4. Leverage other people’s money.  Want to launch a business but lack the budget? Start looking for people, banks or institutions that can lend you some! In the business world, this is a legitimate strategy called “leveraging,” and it’s how the rich get richer. 

2 key takeaways from the article

1. If you’re new to the short-term rental industry, you may find launching an Airbnb business quite challenging. The ins and outs of the business may confuse you, and you might even get scared to go further, especially if you don’t have properties to use for your listing.  
2. Just like any enterprise, Airbnb is learnable. And there are tricks you can use to start and thrive in the business. Four of these are:  Prioritize progress over perfection, surround yourself with the right people, always think ahead, and leverage other people’s money.

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Topics:  Entrepreneurship, Real Estate Business, Hospitality