Weekly Business Insights

When visiting a doctor a few years from now, you can expect to be accompanied by a virtual version of yourself. This so-called digital twin will be a working model of your body that can be summoned onto a physician’s computer screen. Updated with your latest vital signs, it will help the doctor make an accurate diagnosis. It also opens the door for medicines and procedures designed specifically for you, greatly increasing recovery rates.

As the Economist Science & technology section reports, digital twins are starting to pop up everywhere. Among other things, they monitor the health of jet engines on airliners, keep track of Uber’s network of vehicles and replicate Amazon’s extensive supply chain well enough for the online retailer to accurately forecast sales several years ahead. They are helping local authorities respond to the effects of flooding and letting carmakers shave years off the development of new models by simulating test drives and crashes. Twins are also being developed to help manage factories, companies and entire cities. All this is being turbo-charged by recent progress in artificial intelligence (ai), which gives twins the ability to make predictions about their physical counterparts, and fine-tune themselves on new data.

Digital twins began as basic computer models of physical objects and systems.  The use of ai takes all this much further, allowing virtual models to become more sophisticated, and to both simulate and optimise activities in the real world. You may worry that this portends a dystopian future.

Reality is more prosaic. The idea of creating symbolic representations of real-world things is centuries old. Today’s digital twins extend this process, making it easier for humans to tackle complex problems. They can act as virtual crystal balls, allowing people to peer into the future, spot problems before they materialise and test wild ideas without real-world consequences. For businesses, this should mean better designs, more streamlined operations and fewer costly blunders. For society, the promise is equally tantalising: personalised health care, cities that flow and breathe more easily and, thanks to the threats exposed by climate modelling, clues as to how the planet might avoid environmental catastrophe. Digital twins offer the ultimate sandbox in which castles can be built and tested before being made real.

Could these virtual doppelgangers go rogue? They might if they are programmed badly, or hacked into. Such concerns need to be considered, as in the current debate over the use of ai. The emergence of the digital mirror world will doubtless raise new questions, but its potential advantages are already plain to see.

A country level perspective of Vietnam can provide a good, general overview of what is taking place in the country—just imagine what a pixelated breakdown 230 times more granular could reveal. Such a granular deep dive is now available with a new dataset, Pixels of Progress, compiled by the McKinsey Global Institute (MGI). This specialized dataset provides a close-up view of human progress in Vietnam by breaking the country down into approximately 710 microregions.

Vietnam’s economic progress in the 21st century has been clear: GDP per capita grew by approximately 7 percent annually over 20 years, from $3,691 in 2000 to $10,252 in 2019 (PPP, 2017, constant international dollars). Vietnam’s integration with global supply chains, which enabled growing and more sophisticated exports, contributed to this transformational growth. In 2000, Vietnam’s main exports were crude oil and textiles, at close to $4 billion each. By 2019, electronics had become the main export with $100 billion in annual value.  Simultaneously, the Vietnamese average life expectancy has risen moderately to 74 years in 2019 from around 72.5 years in 2000.

A granular look at successful microregions in Vietnam revealed that, beyond mere numbers, the underlying reasons for their respective development varied. The following four regional examples illustrate the different indicators, showing economic progress related to specific sectors, such as agriculture, industry, services, and tourism.

Muong Te, in Lai Châu Province, shows an overall improvement in quality of life. Average life expectancy in Lai Châu, along with similar provinces in the mountainous and highland regions, was among the country’s lowest in 2000 but leapt the most from 2000 to 2019, mainly due to changes to food security and better access to healthcare.  Food security improved in Muong Te District, most likely as a result of a focus on producing high-yield crop varieties from modernized agriculture techniques. Healthcare workers were trained or retrained through, for instance, a ten-year project between the government and an NGO, Church World Services, that focused on healthcare and education from 2006 to 2017 in Muong Te.  In addition, investments were made to upgrade medical facilities at district level.

Viet Yen District in Bac Giang Province experienced a significant change in its GDP per capita as a result a nearly threefold increase between 2000 and 2019. While the area once mainly consisted of agrarian crops such as rice paddies, Viet Yen has now emerged as an economic hub of Bac Giang.  This change was likely boosted by changes to the industrialization of the area by means of large-scale projects (projects with total registered capital of above $100 million).   Bac Giang Province’s government instituted various policies that included focusing on removing challenges for investors and developers.

District 2 in Ho Chi Minh City (now Thu Duc City)—the microregion with the highest GDP per capita in Vietnam by 2019—wasn’t always the city it is today. Once a rural district with coconut groves and rice paddies, District 2 is now home to a new central business district, Thu Thiem, Thao Dien, and a large portion of the city’s expatriate community, all of which help form a thriving business precinct in Ho Chi Minh City.

Phan Thiet: From fishing villages to tourist hubs.  Despite having pristine beaches and favorable conditions for watersports, Phan Thiet—a coastal town in Binh Thuan Province—was a relatively unknown destination in 2000. However, between 2000 and 2005, infrastructure for tourism was developed that enabled economic growth for the province.  As a result, the number of visitors to Phan Thiet grew 12-fold between 2000 and 2019, increasing from 513,000 tourists in 2000 to 6.4 million in 2019.

Every business experiences a life cycle, transitioning from a startup through growth and maturity, and eventually decline. While no leader wants to see their business in decline, the best response to aging as a business is to accept that it’s happening and run the company to reflect its age. There are several factors that induce companies to fight aging, sometimes with success. 

Before a company reaches the point where it must accept its maturity or decline, it may attempt to fight aging. There are three ways leaders can reverse the aging process: renewals, where they try to fix the existing business to make it grow again; revamps, where they extend into new markets and new products; and rebirths, where they change the business, hoping to restart the corporate aging clock.

In a renewal, a company can take actions ranging from the cosmetic to the more tangible. These can include a corporate name change to reflect expanded product offerings, strategic makeovers, in which companies facing a low-growth future present a shift in focus to investors and consumers and they can also include efforts at remarketing and rebranding existing product.  Renewal efforts tend to be successful when change is real rather than merely cosmetic, based on operating changes that add value. Renewal plans can fail when an entire sector, rather than just an individual company, is struggling. Success is more likely if you have plans that are original and build on strengths that are unique to your company. Finally, some renewal efforts can alienate existing customers as new ones are being pursued, creating net negative effects for the company.

Revamps require more change and are more costly than renewals, but they can have bigger positive payoffs if they work. Examples include expanding product or service offerings, expanding to new geographies, or shifting to new business models.  A mistake that many companies make in identifying targets for growth is that they pay too much attention to the size of the market and far too little to what unique strengths they possess that will allow them to capture a tangible share of the targeted market. 

In a rebirth, a company remakes itself as a new business, perhaps very different from its original one. There are companies that have beaten the odds of the business life cycle, fought off decline, and been reborn as successful ventures. 

If you have a management team that recognizes where the company is in the life cycle, this is how the rest of the playbook unfolds: a narrative that fits, consistency in investing policy, consistency in financing and cash return, and investors who buy into that narrative.

In their pursuit of strong performance, CEOs and executives often overlook a critical factor in organizational success: the health of their leadership team. That’s a big problem, because a dysfunctional team can become a serious drag on strategy execution and erode morale. Not only that, the health of a senior team can make or break a CEO’s tenure.  Leadership teams tend to exhibit one of three main patterns of dysfunction referred as shark tank, petting zoo and mediocracy.

The shark tank. Only highly ambitious leaders make it to the top team, and it’s inevitable that they will compete with one another—to promote their ideas, gain access to scarce resources, or win promotions. Within limits, this is healthy and important, because competition fosters innovation and drives results. But unconstrained it can lead to a self-serving, destructive feeding frenzy in which meetings become battlegrounds for personal agendas, decisions are made through power struggles rather than open discussion, and teams have difficulty coming to consensus and executing on strategic initiatives.  Why do leadership teams become shark tanks? Often, research suggests, it’s because the CEO or the executive leading the team fails to provide clear direction, set boundaries, and reign in incipient aggressive behaviors among team members.

The petting zoo.  The problems that top teams face rarely have an obvious solution; that’s why they haven’t been solved at lower levels of the organization. To address the complicated problems they’re presented with, the members of a leadership team have to spar actively. They must challenge one another’s ideas, question assumptions, and push back in debates. Even as they move collaboratively toward a shared goal, they are propelled by the forces of conflict, competition, and ambition. When these forces fade away, what’s left is a petting zoo, in which an atmosphere of ineffectual niceness reigns. Everybody shies away from confrontation, meetings become echo chambers, ideas go unchallenged, and decisions are made without sufficient critical evaluation. As a result, teams uncover few opportunities for innovation, renewal, and growth.  Why do some become petting zoos? Often, it’s because the team leader has put an inordinate amount of emphasis on collaboration.

The mediocracy. While the first two patterns of dysfunction emerge from an overemphasis on either competition or collaboration, the third pattern emerges when neither competition nor collaboration is emphasized enough. Team members lack the skills or motivation needed to drive individual unit performance; at the same time, there is little collaborative spirit on the team. The executives operate in silos, hindering synergy and leading to duplicated efforts and missed opportunities.  In mediocracies, there’s a mismatch between what a team needs to do and what it is able to do. Long periods of success are sometimes to blame: Instead of challenging themselves and developing plans to meet the demands of the future, teams become complacent, fixate on past glories, and develop a harmful preference for the status quo.

From shark tank to team of stars. Conflict is everywhere in a shark tank, and the only way to settle things down is to locate the source—which often will turn out to be just one or two people who are engaging in self-serving behaviors that turn collaboration into cutthroat competition. If you discover that this is the case, you’ll need to confront the individuals and make them aware of the effects of their behavior.  If you want to not only control but also prevent shark-tank behaviors, you’ll need to clearly define for your team what behaviors are desirable, acceptable, and unacceptable.

From petting zoo to synergistic team. You need to encourage more conflict among members of the leadership team, in the form of constructively critical debate. But you’ll only be able to manage that if you can first create a foundation of trust and psychological safety. 

From mediocracy to a set of high performers. If you find that most of your leaders are ill-suited for their roles or not up to the task, you may need to significantly remake your team. 

The authors’ research suggests that it’s often a lack of clarity—strategic, operational, and behavioral—that paves the way for leadership-team dysfunction.  No matter what kind of dysfunction a company may need to address, there are several general steps that all leaders should take to ensure the health of their teams:  Develop a clear vision and purpose.  Focus on alignment.  Outline responsibilities. And establish behavioral norms.

According to Accenture’s Pulse of Change Index, the rate of change across key factors—technology, talent, economic, geopolitical, climate, consumer and social—has increased by a staggering 183% over the past four years.

In this dynamic environment, the mindset with which you approach leadership can make all the difference. Here are five crucial mindset shifts that can help you steer your organization through this era of constant business transformation.

1. From Predictive to Adaptive Strategies.  In today’s rapidly changing environment, forecasting the future with any precision is nearly impossible unless you have a complete picture of existing conditions.  Instead, shift from a predictive to an adaptive strategy.  It means focusing on flexibility, constantly gathering feedback and being ready to pivot your business strategy as new information and market trends emerge. 
2. From Stability to Agility.  Stability is comforting, but agility is crucial for survival in today’s modern business transformation framework.   This shift requires you to foster a culture of continuous improvement, where your team is encouraged to experiment, learn and innovate. Imagine your organization as a nimble athlete rather than a rigid machine.
3. From Hierarchical to Network Leadership.  Studies show that businesses with network leadership are far more likely to adapt quickly to market changes and disruptions.  In a networked organization, you empower teams, flatten hierarchies and encourage cross-functional collaboration. This approach not only accelerates decision-making but also fosters innovation by incorporating diverse perspectives. 
4. From Competition to Collaboration.  In this age of constant business and digital transformation, collaboration trumps competition. As consumer demands evolve rapidly, partnering with other organizations can provide a competitive advantage.  Whether through strategic alliances, joint ventures, or open innovation ecosystems, collaboration allows you to pool resources, share risks and tap into new markets. Consider how collaborating with others, even competitors, can enhance your organization.
5. From Fear of Failure to Learning From Failure.  Finally, the fear of failure must give way to a culture of learning from failure. Research shows that businesses that view failure as a learning opportunity are more resilient in the face of market changes and disruptions. This mindset shift encourages experimentation, promotes risk-taking, and ultimately drives innovation.

When management theorist Peter Drucker coined the term knowledge workers in 1959, most people had no idea what he was talking about. Since then, knowledge workers have come to rule the world. Today, seven of the world’s 10 most valuable companies are tech com­panies, the ultimate workplace for knowledge workers.

But now, 65 years after the knowledge economy was born, we’re about to be ushered into the wisdom economy. In this landscape, artificial intelligence will be the commodity, and human wisdom will be a valued yet scarce resource.

All those folks who followed the trending advice to become software engineers? According to the author, his gut tells him they’re a dime a dozen now, and research shows 96 percent of those engineers’ current skills could be augmented by AI in the next couple of years. But discerning leaders who dive deep into what makes us human will never be rendered obsolete. What is your unique way of communicating, collaborating, and showing compassion? How do you metabolize your experiences and share that wisdom for the common good?

There are several distinct commonalities among the leaders who have effectively tapped into their wisdom.

1. Pattern recognition or connecting the dots.  In middle age, the brain shrinks a little, so memory and speed can decline. But the ability to synthesize information grows into late adulthood, in part because an older mind can traverse from the left brain to the right brain more adeptly.  A wise leader has an all-wheel-drive brain, which helps them see the whole instead of just the parts. It also means they have the peripheral vision to see the long-term consequences of short-term decisions more clearly.
2. Unvarnished insight.  With experience comes a clearer view, an intuitive insight, and the courage to express that insight. A wise leader can cut through the clutter to find the core issue that needs attention, whether it’s in a job interview or a strategic discussion.  Because many wise leaders have ceased trying to impress or prove themselves, there’s an unvarnished yet polished authenticity to these observations.
3. Self-reflection and presence.  Knowledge speaks, but wisdom listens. And that doesn’t mean just literal listening. Authentic listening begins by listening to yourself and to the energy in a room.
4. Openness to dissent.  In 2012, Google’s Project Aristotle studied hundreds of internal teams at the company, and found that the most consistent variable among effective teams was how psychologically safe the team members felt. This safety is fostered by creating a more mindful, less emotionally reactive environment–the kind of environment cultivated by a wise leader who is both compassionate and capable of seeing beyond their personal needs to identify what’s valuable for the group.  The smartest person in the room is often stroking their own ego. The wisest person in the room stokes curiosity and builds trust.  A wise leader creates the space for people to not always toe the company line, whether that means they’re dissenting in a meeting or submitting a crazy new idea for the company.
5. Comfort in the face of paradox.  1Wise leaders are chemists of juxtaposition. They can synthesize seemingly opposite qualities in themselves: yin and yang. Gravitas and levity. Extroversion and introversion. Left brain and right brain. The wise leader transmutes these juxtaposed ingredients, and knows there is limited value in fixating on singular ingredients.
6. Lifelong curiosity.  Curiosity is the taproot of creativity and innovation. It’s a quality that opens you up to new experiences.  While lifelong learning is important, accumulating knowledge isn’t the same as distilling wisdom. Wise leaders explore the art of long life learning, which teaches how to live a life that’s as deep and meaningful as it is long. These leaders realize that knowledge is on your iPhone, and wisdom is in your gut–and that, yes, our gut may grow as we age, but it’s also full of hard-earned lessons.

For 25 years, the author has worked on and helped build some of the best-known B2C and B2B brands – from LinkedIn to Yahoo!, Coca-Cola brands, Home Depot and now BILL.   She has seen a consistent trend how customers are changing.

Here are four simple and effective strategies the author has seen Small and Medium Business use to respond to these shifts in customer behavior and leverage them for success.

1. Build a seamless customer journey.  A customer’s journey begins before a sale. From the moment they signal intent, you want to deliver a coherent, holistic and seamless experience. Creating this experience can be tough because, typically, different teams look after different parts of that customer journey. This process can cause friction or missed opportunities as customers move through the customer funnel.  If you can align sales, marketing, customer support and product or engineering teams and point them towards the same north star of a ‘seamless customer journey,’ you can deliver a great experience at every touchpoint.  Your leadership team plays a central role in facilitating this cross-functional collaboration, but establishing a culture of empowerment at every level is the key to ensuring all employees feel ownership of the customer journey.
2. Communicate with customers.  Great brands don’t just market to customers — they open a two-way dialogue with them that is targeted to their needs and interests and authentic to company values and voice. To do this, they start by listening to customers’ needs and then building a brand and marketing strategy around them.  An effective two-way communication approach meets customers where they are — and in the modality they choose. Focus on how your communications can add value to customers’ lives. For example, share educational content to help customers optimize your product or service. Building community between customers is a fantastic way to deepen emotional connections with your brand.
3. Make technology a competitive advantage.  Technology is a game-changer for SMBs looking to understand better and serve their customers. As automation and AI become more powerful and ubiquitous, so too does the ability of SMBs to incorporate technology across every part of the customer journey.
4. Live by your values to foster trust.  In a competitive landscape, trust is the most valuable asset a SMB has. To build trust, you first need to deliver on your product or service promise to customers. You also need to establish emotional connections with customers to translate that trust into long-term loyalty. Do they believe in your mission? Do they understand your commitment to innovate for them? Can they feel the empathy you have for their needs?  Trust starts with a company’s values and culture. Values guide who you hire, the products you build, the service you provide and how you communicate. Values provide certainty, security and reassurance to customers. If something goes wrong, customers need to trust you’ll put their interests first and be accountable to them. It’s also not enough to write values on a wall or website – you must infuse them at every level of your organization.