Weekly Business Insights

Indians are on the move. In 2019 international departures from India hit 27m, a number that will surely be exceeded this year and is predicted to rise to 90m by 2040. Annual spending on foreign travel by Indians will nearly triple to $89bn in three years, reckons Bernstein, a research firm. Airlines’ networks are being expanded and redesigned to handle larger numbers of Indian tourists. Many trips are for business or to visit friends and family. But about 40% are pure leisure, and holidaymakers pack fat wallets.

Around the world tourism boards, hotels and restaurateurs are starting to compete for Indian travellers, especially in the Middle East and South-East Asia. That makes sense. Tourism accounts for 3% of global gdp. It creates jobs, boosts exports and builds cultural ties. A long boom in tourism from China is flagging: its travellers made only 87m trips last year, 40% fewer than they did before covid-19 prompted China to turn inward. All the more reason, then, to lay out the red carpet for Asia’s other giant. But how should countries attract Indian travellers?

Step one is to make it easier for them to get in. India has long had a “weak” passport, which allows visa-free travel to only a few places. As the country grows more powerful, that is changing. Malaysia and Thailand have abolished visa requirements and seen a surge in visitors. Digitising the process and keeping fees low boosts numbers, too. But many Western countries have onerous visa policies, which put off both Indian tourists and those visiting their relatives in the diaspora. A ten-year multi-entry tourist visa to Britain costs £1,000 ($1,300), seven times as much as an American one. America’s consulates are slow: it takes over a year to get an appointment. Continental European countries are stingy, rewarding painstakingly submitted paperwork with visas that last as few as four days.

Once a country has made its tourist-visa regime more welcoming, what next? One way to win the attention of Indian globetrotters is to collaborate with Bollywood.  Diplomacy can also help put a country on the Indian tourist map.  After Narendra Modi’s each visit, say tour operators, interest in that destination shoots up.  Once a place has captured Indian tourists’ imagination and let them in, there is one more thing: it must offer them food they enjoy. Good Indian—and especially vegetarian—food tops the list of requirements for outbound tourists.

In recent years, the world has experienced significant disruptions to the global economy—with lasting effects. Elevated inflation, though easing in some parts of the world, remains a serious issue, and heightened geopolitical tensions show no signs of dissipating. High interest rates continue for now, and volatile commodity prices also persist. It’s become increasingly clear that these disruptions may not be temporary; rather, they are likely sticking around for the foreseeable future.

At the same time, the market landscape has been shifting in fundamental ways. Corporate longevity is at an all-time low. Five of the top ten largest companies in the world didn’t exist 25 years ago, and the average tenure of a company in the S&P 500 is now less than 20 years, compared with 25 years in 2015. New companies, many of which are digital based, have upended the way business is conducted across all industries, capturing 8 to 25 percent of market share in most industries after five to seven years.

Given these trends, corporate reinvention has become more important than ever, especially for established companies looking to achieve sustained growth in the face of new competition. But successful and enduring transformations are difficult to pull off, and a business transformation by itself may not be enough. Leaders would be wise, therefore, to look for new opportunities by widening their scope beyond the core business.

Indeed, growth can come from a dual transformation that involves reinventing and transforming the core business and building new businesses. This approach can enhance companies’ longevity and open up new avenues for expansion, allowing them to potentially realize significant value and outpace market growth.

Although there can be challenges to executing this well—such as an unclear strategic vision, funding constraints, or operational complexity—adopting a two-pronged approach can broaden the impact of an effective transformation. It can also enhance successful business building, where the synergies created together can exceed the contributions from each alone.

The opportunities organizations could have while following the two-pronged strategy are in by creating quick wins for cash and long-term value generation, building rigor into performance management, reimagining new-business building, and establishing organizational health with best-in-class talent.  To trigger reinvention journey the organizations need to have integrated launch of a core transformation and new business growth, prioritize a core transformation before new-business development, and take business building as a trigger for broader transformation.  In this whole process five principles leaders can follow to help ensure impactful outcomes are: articulate a compelling vision for dual reinvention, establish a clear road map rooted in long-term thinking, strengthen the functional ‘common chassis’ for long-term gains, put people front and center and establish a performance infrastructure.

In 2024, few companies have been able to replicate Lego’s success. Its toys span generations, from adult hobbyists reconnecting with their favorite toys to the next generation.  Since its humble beginnings in 1932 as no more than a carpenter’s passion project, Lego toys have become an indispensable part of childhood.  Over the decades, Lego could very well have been replaced by more addictive and appealing electronic gadgets. But that wasn’t the case—if anything, things couldn’t be better for the family-owned Danish company. It outperformed the toy market with record sales in 2023, with a 2% revenue growth, notching DKK 66 billion ($9.7 billion) against a 7% decline in the broader industry. 

What, then, is Lego’s secret sauce to keep kids (and, more recently, adults) hooked to its colorful bricks? 

One of Lego’s long-standing themes—space—illustrates what makes its approach unique and helps it stand the test of time. Space was one of the company’s three official categories within which it developed toys (“castle” and “city” were the others) dating back to the 1970s.  Space’s popularity with kids has endured through the years as it has captured kids’ imaginations as a realm of endless opportunities

Lego realized early on that there was no proxy to understanding what kids want without hearing from them directly.  The quality of Lego’s bricks is another factor that sets it apart, as sets can get passed from one generation to the next. Unlike mindless games, parents think their kids could gain something good from Lego toys, whether that’s engineering abilities or using their creativity.

As a long-time toy maker, Lego has developed a well-oiled machine to help it constantly generate new ideas. The company does a “boost week” once a year—think of it like a rapid brainstorming session typically associated with startups that spur new concepts. Designers come up with fresh ideas or work on existing ones, giving them creative freedom outside their day-to-day schedules. There isn’t a checklist of what needs to be achieved, although the goal is to see what can be turned into a potential Lego set.  The next step is to figure out how “decodable” the models are, including finding elements that tell stories and make them easier to play with, like Lego astronauts or purple collectible crystals.   In addition to milking ideas from the company’s designated toy developers, the company hears directly from its audience. 

Lego’s quality and complexity can make its products expensive—sometimes pricier than the latest iPhone. That’s especially true of products pulled out of the market, making them rare. The novelty of its products has made them a collector’s dream.

The company’s penchant for detail applies not just to its space creations or toy development process but also to its business. Goldin, for instance, straddles meetings that look at the company’s present performance while also discussing the pipeline for the next few years.

Traditional thinking around how to innovate teamwork has often been based on intuition and observation, with a dash of psychology. But increasingly we face an environment of constant change and disruption, and new ideas about how to create well-functioning teams are emerging; some are based on experience, some are guided by new practices, and some are being made up on the fly. None of this has yet cohered into a systematic approach to improving how teams work.

In recent years at McKinsey, the authors have devoted themselves to developing a new science of teamwork for their organization.  This approach allows McKinsey to understand how their 4,000-plus teams are performing and to intervene when necessary. It combines the best of established wisdom with new data-driven techniques and insights. It relies on testing, learning, analysis, adaptation, and improvement—in real time and with accountability—to enable continuous learning. And it includes metrics that link practices to outcomes, for both individuals and teams.  Three key principles of this approach that can help teams in any organization perform at their best are:

Develop an Operating System.  We use the term “operating system” to mean the building blocks for the way team members collaborate, create change, and support one another. Effective operating systems vary widely, depending on the needs and norms of the organization. What they all have in common is that they set out a view of how teams create value, what teams are supposed to achieve, the technical skills each team member is expected to contribute, the processes by which the work will be managed, and the cultural norms and mindsets of constructive collaboration that will guide behavior. The best operating systems embed an ethos of continuous improvement throughout the organization, not just in a single team or department. They are structured enough to provide consistent guidance but loose enough to accommodate changing conditions, priorities, data, and needs.  In the authors’ research on high-performing teams, they have found that the best teams consistently do the three things: hold kickoffs, conduct one-on-ones, and take stock of progress using retrospectives. 

Invest in Active, Real-Time Measurement.  To make teamwork scientific, organizations need to be able to measure the outcomes of their actions and determine how changes in the inputs affect results.

Create a System for Continuous Improvement and Innovation.  The idea of continuous improvement is hardly novel. What is fresh, however, is that teams today have new forms of technology and data collection at their disposal to help them self-correct while projects are underway. 

Finally, it may be useful to set up a center of excellence, staffed with full-time employees with experience in analytics and operating system design. The center’s task would be to identify the rituals, data, and continuous learning practices that are most likely to deliver the best outcomes for a given team.

Our collective experience of the pandemic enabled us to conduct endless experiments with work. Initially, the experiments were about where work took place (the home becoming a viable option), and soon they became about when work took place (the rigors of nine-to-five morphing into more flexible arrangements). Even now, leaders are watching with some combination of unease, hope, and curiosity to see what effects these experiments are having on the organization, especially on workers’ productivity.

In mid-July, the author and her research team at HSM ran a research webinar on the topic of productivity, in part to explore how the definition and measurement of productivity are shifting and what these changes mean for individuals, managers, teams, and organizational design.  Seven truths about hybrid work and productivity have begun to emerge. 

1. Hybrid work is a continuum. Research indicates that there’s been a settling down of practices and implications since the end of the pandemic. Some companies are requiring the majority of employees to go back into the office. Some companies are implementing a “work from anywhere” policy. The majority are somewhere in the middle: We see language such as “majority office-based”, “team-led office days”, and “flexible arrangement”.
2. It’s crucial to communicate policies straightforwardly. My advice to senior teams about hybrid working: Make the “deal” clear. For example, don’t pretend that there’s flexibility when the culture is to be in the office and a failure to show up will be punished. 
3. Leaders need to be prepared for the trade-offs. Another piece of advice for senior leaders is to acknowledge that all deals have compromises associated with them. Now, with three years of hybrid experiments under our belts, it’s becoming ever clearer what these trade-offs are. Take the “work every day from the office” deal.
4. Acknowledge differing narratives about the impact of hybrid working on productivity.  Groups of leaders (like the fintech leaders) fret about the impact of hybrid — while the perception of the webinar group (more representative of the development and HR functions) was more generally upbeat that hybrid working is having a positive impact on productivity.
5. Productivity is usually challenging — and measurement is always complex. The axis of these differing narratives about hybrid are concerns about productivity.  Hybrid/productivity issue should be seen in the context. Productivity is a concept that is complex, little understood, and hard to move the needle on in a verifiable way. Nevertheless, three concepts emerge to measure productivity in hybrid environment collaboration, energy, and focus.
6. An expanded set of productivity measures needs to be part of the conversation. Too often, the move to hybrid work has been seen almost as an article of faith: You are either a true believer or someone who’s totally against it. What the author heard from the fintech leadership team was a more nuanced question about productivity. They wanted to understand, at a granular level, the impact of hybrid work on productivity and, importantly, to answer the question “Does it boost or deplete productivity?” This is an entirely reasonable question.
7. It’s useful to view hybrid work as fundamentally a job design option.

In light of the unprecedented global events, crises and predictions after Covid-19, sometimes it seems that the world has gone mad. The world-describing frameworks like VUCA—volatile, uncertain, complex and ambiguous—or BANI—brittle, anxious, nonlinear and incomprehensible—helped us understand the complexity of the world over the years.  However, over the last two or three years, we have seen several crises and problems in various areas, such as catastrophic weather events, geopolitical rifts, economic instability and burgeoning fake news. These problems have drastically changed the global landscape to a more unsafe and depressive one, now demanding a new structure to understand and navigate the difficulties of our time. Here you have what the author calls the GINI framework: 

1. Gloomy.  This term reflects the pervasive feeling of pessimism and despair caused by recent global events. The 2024 Global Risks Report by the World Economic Forum emphasizes extreme weather events, societal polarization and economic downturns as the main global risks.  There’s a growing number of mental disorders, and projections indicate that by 2030 depression will be the main contributor to the burden of disease in the whole world, and “half of the world’s population will experience a mental health disorder.”
2. Insecure.  It runs through many different dimensions of today’s life. The assassination attempts or deaths of leading politicians are a reality. Cyber insecurity, misinformation and disinformation are ranked high among the global risks. Even though artificial intelligence (AI)’s rapid development provides significant advances, it also poses a threat to work safety and economic stability.  Besides, geopolitical conflicts and societal polarization aggravate the feeling of insecurity even further.
3. Nontransparent.  The World Economic Forum’s Global Risks Report 2024 emphasizes the seriousness of misinformation, which is among the main short-term global risks. Nontransparency further complicates the decision-making process, undermines public confidence and aggravates societal discord.
4. Inconsistent.  Responses to global crises and problems are often uneven and unpredictable. Political economy, environmental initiatives and geopolitical strategies vary greatly in different regions, which leads to unpredictable results. ITR Economics’ prediction about a second Great Depression in the 2030s highlights the potential for considerable economic turmoil and lost opportunities. 

Interventions required on the behalf of companies and governments: pay greater attention to mental health, increase investment in cybersecurity, adapt to rapid technological advancements, commit to transparency, overcome economic discrepancies, and adhere to environmental responsibility.

Warren Buffett, the Oracle of Omaha, has transformed simple investing principles into extraordinary wealth. But what makes Buffett truly remarkable isn’t just his financial acumen–his timeless wisdom offers valuable lessons for anyone looking to build a successful future.  How has Buffett defined success over the years? That would be an exercise too long for this article, but the author boils it down to five life decisions that Buffett has repeatedly said:

1. Protect your reputation at all cost.  One of the authors favorite Warren Buffett quotes, which should be top of mind for business leaders, speaks volumes of truth:  It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.  To Buffett’s point, a single mistake, a moment of poor judgment, or an unethical decision can undo decades of hard work. This is particularly true in today’s digital age, where information spreads rapidly, and negative news can go viral within seconds.
2. Invest in No. 1.  That’s you. Buffett attributes his success to a simple choice: investing in oneself. Here’s what he shared with Good Morning America years back: Investing in yourself is the best thing you can do. Anything that improves your own talents.  As entrepreneurs and business leaders, we often focus on external opportunities and investments, but Buffett’s timeless advice reminds us that the most critical investment lies within ourselves.
3. Find a mentor.  Buffett’s advice on success is clear: choose your associates wisely, as their behavior can influence your own. “Pick out associates whose behavior is better than yours and you’ll drift in that direction,” he once remarked.  Adopting the traits of successful individuals further along the path than us is a powerful life lesson. As the saying goes, we are the average of the five people we spend the most time with. Therefore, surround yourself with individuals who can inspire you, teach you new things, and help you advance in your career. This is the key to personal and professional growth.
4. Take care of yourself.  “You only get one mind and one body. And it’s got to last a lifetime,” Buffett famously told a group of students. “But if you don’t take care of that mind and that body, they’ll be a wreck 40 years later…. It’s what you do right now, today, that determines how your mind and body will operate 10, 20, and 30 years from now.”
5. Prioritize personal relationships.  Buffett has emphasized the importance of personal relationships for happiness and success on numerous occasions. He’s had several close connections in both his professional and personal life. The most obvious is Charlie Munger, Buffett’s long-time business partner and close friend, who recently passed at 99. The two worked together for decades, with Munger playing a crucial role in shaping Buffett’s investment philosophy and the success of Berkshire Hathaway.

Are you an aspiring business owner who doesn’t fit the traditional mold? Don’t let a lack of stereotypical leadership qualities keep you from taking the head seat at the table.  According to the author she was shy and accommodating — not exactly traits that suggested I had a future in entrepreneurship.  She made up for what she lacked in entrepreneurial qualities like assertiveness and risk-seeking with hard work and tenacity. Her strong work ethic was instilled in her by her mother. An engineer who fled Iran after the fall of the Shah, her mom taught her the values of determination, recognizing opportunities and maintaining a positive mindset in the face of setbacks.  

Her knack for solving problems, empathy, and a talent for rallying others led her to take on leadership roles in school projects and activities. Eventually, these qualities would help her start up a company valued at over $100 million. It’s one of the fastest-growing private companies in the United States and the fourth fastest-growing business in Central Texas.  Her fundamental tips for unconventional budding entrepreneurs are:

1. Eliminate unnecessary risks.  Any entrepreneur worth their salt will tell you that starting a business requires taking risks. However, you can improve your odds of succeeding by eliminating the unnecessary ones.  For her part, she decided to remove the variable she found scariest: running out of funding. She spent 10 years skipping vacations and forgoing fancy dinners until she had saved $150,000 to devote to building her company. Armed with capital, she felt more confident taking a leap of faith.
2. Uncover the unknown unknowns.  In the early days of starting her global company, she quickly discovered how mistakes can be our greatest teachers.  Painful as it was, her oversight taught her a powerful lesson: the importance of uncovering “unknown unknowns”. The most dangerous errors are often completely unexpected because you never know how to look for them.  To reveal your unknowns, seek advice from those with firsthand experiences. Imagine a project that has failed and try to determine the possible causes. Question your assumptions and — above all — stay humble.
3. Identify a problem.  Her company was born after she spotted a rare opportunity to tackle a real-world problem. Working to solve a personal problem she had experienced firsthand was uniquely fulfilling and motivated her when times got tough. However, pulling from personal experience isn’t the only way to hunt down problems — you can also conduct customer feedback, perform industry analysis and brainstorm with others to generate ideas.
4. Understand your audience.  Solving real problems for real people.  As a founder, you set yourself up for success by gaining an intimate knowledge of your target customer base. Understanding your audience helps you learn their wants, requirements, and frustrations and determine how best to connect and cater to them.
5. Get comfortable with rejection.  Rejection is painful. The way you respond to it matters. Considering how 90% of startups fail, bouncing back after rejection and failures lets you move on to bigger, better endeavors. Every disappointment yields lessons and growth if you have the resilience, courage and humility to embrace it.
6. Believe in your idea.  As a startup founder, you have to deal with setbacks daily. Having a firm belief in your product makes it easier.  Need help finding a business idea you believe in? Ask yourself: What communities matter to you, and what problems do you feel passionate about solving?
7. Team up.  Seeking help from people with experience is essential. Your co-founder, teammates and mentors can help you with the ins and outs of starting a business — from the logistics of setting up a company to the marketing tactics you’ll need to get your startup off the ground — and contribute new perspectives and unbiased advice.
8. Celebrate unconventional strengths.  Leadership is often associated with stereotypically masculine qualities like dominance, independence and assertiveness. However, in today’s rapidly evolving business landscape, feminine qualities — like empathy, good listening, emotional intelligence, inclusion and patience — are gaining recognition as a mighty force for fueling innovation, collaboration and creativity.  It’s not that one leadership style trumps the other — both are needed in a well-rounded founder. Entrepreneurs who can fuse traditionally masculine and feminine traits will be better at problem-solving, decision-making, empathizing with clients and employees and identifying growth opportunities.