Informed i’s Weekly Business Insights

Oil has long lubricated the Gulf’s relationships abroad. That is especially so in Asia, which takes in almost three-quarters of its exports of oil and gas. Cheap energy from the Gulf has helped fuel Asia’s rise as the global centre of manufacturing, and filled the sheikhs’ coffers in return.

Now, though, the Gulf’s rulers are eager to diversify their economies away from oil.   For support, the Gulf is turning east. Asian companies are flooding into the region to build infrastructure and set up factories. Meanwhile, the Gulf is investing heavily in Asia to secure access to technologies and profit from the growth of its fast-developing economies. The upshot is a deepening of commercial relationships between the two regions, at the expense of the Gulf’s ties to Western business.

A growing number of Asian companies are putting down roots in the Gulf, signalling long-term commitments. Greenfield foreign direct investment from Asia to the Gulf rocketed from $4bn in 2018 to $26bn last year. By contrast, investment from America went from around $4bn to just under $7bn in 2023.

Analysts at UNCTAD, an international agency, calculate that over three-quarters of Asia’s greenfield investment in the Gulf last year was for manufacturing facilities, which will produce goods ranging from basic metals to electronics and cars.  More than money, which the Gulf already has bucketfuls of, Asian companies are offering the region their technical know-how.  More than money, which the Gulf already has bucketfuls of, Asian companies are offering the region their technical know-how.  Investment is flowing in the other direction, too. The Gulf’s deep-pocketed funds are diversifying away from Western stockmarkets.  Governments on both sides are helping foster deeper commercial ties.

At the same time, the Gulf’s economic relationship with the West is shifting. Trade ties are loosening: America and the six largest economies in the EU last year consumed only 8% of its exports, down from 27% in 1990, according to Efstathios Polyzos of Zayed University and Emilie Rutledge of the Open University. Between 2018 and 2022 Gulf imports from America and the eu rose from $128bn to $130bn; imports from Asia soared from $169bn to $247bn.  Although recent flows have moderated, Western companies still retain a sizeable stock of investment in the Gulf.  Much of that investment is skewed towards hydrocarbons, although some spending from non-energy firms is trickling in. Earlier this year aws, Amazon’s cloud business, said it would invest $5bn in Saudi Arabia.

America is therefore keeping a keen eye on China’s rapidly growing commercial presence in the region.  Officials in the Gulf lament that, with American investment volatile, they have little choice but to look elsewhere. As the Gulf keeps diversifying, expect to see more geopolitical machinations playing out.

“You’ll see why 1984 won’t be like 1984.”  was the tagline for Apple’s first Macintosh advertisemen, which later become one of the most famous commercials of all time. Its director, Ridley Scott, reframed computers from boring business tools into statements of identity. Co-founder Steve Jobs and other early Apple executives saw themselves as rebels and artists.  Four decades later, the disruptive power of personal computing has gone from revelation to cliché, and Apple is widely understood to have helped democratize information by defining the PC and its successor, the smartphone.

One side effect of this influence, however, is that Apple is no longer the plucky rebel taking on the evil empire.   These days, critics argue, Apple is the one using technology to entrench its power, and the face of Chief Executive Officer Tim Cook is the one looming from the telescreen.

Through its App Store, Apple tightly controls enormous platforms for digital communication, mobile finance, social networks, music, movies, transportation, news, sports and pretty much anything else that happens in 1s and 0s, which is to say, everything. This software ecosystem, Apple’s own version of the garden of pure ideology, is accessible only to those who comply with the company’s rigorous store policies and related “Human Interface Guidelines,” its content standards, and its tolls. When money crosses through this system, as it does constantly, Apple gets as much as 30%. Every time you wave your iPhone or Apple Watch at a credit reader in the real world, Apple gets a small cut of those transactions, too.  For companies of a certain size, there’s no real way to get out of paying what’s become known as the “Apple tax.” 

Investors, as a general rule, have no problem with this kind of dominance, as Apple’s soaring stock price over the past decade makes clear. Regulators, on the other hand, have some questions.  In March the US Department of Justice filed a sweeping antitrust complaint accusing Apple of anticompetitive practices that have essentially locked consumers and partners into its ecosystem, extracting ever larger sums from both groups.

The US proceeding gained greater urgency in August, when a federal judge ruled against Google in a separate case that hinged, in part, on its default search agreement with Apple. (Google has said it will appeal.) Taken together, the two cases raise questions about how we look at some of the world’s most successful tech companies. How did businesses that were once widely seen as counterweights to corporate dominance find themselves in positions of otherworldly power and influence? And how did Apple, which has long considered itself an advocate for free expression, get accused of the same Orwellian tactics it once mocked? Does Apple’s power derive from the strength of its beloved products or from the way the company designed those products to lock out competitors?

The answers have implications for Apple shareholders. The company is facing disputes with a growing list of partners, including banks, filmmakers, car manufacturers, app developers and customers who’ve begun to doubt that Apple is still the creative force they fell in love with years or decades ago. The implications for the rest of us non-shareholders are just as significant. More than ever, and very much by design, we’re all living in Apple’s world.

Teaming is difficult at any level, but for top teams, the challenges expand exponentially. They are responsible for addressing their organization’s weightiest and most complex problems, so their struggles are almost existential.

What could our senior leadership team achieve if we worked at full potential? And what’s keeping us from achieving it? Those were the questions the leaders at Root Capital found themselves asking in 2022.  That’s what the team at Root Capital did: The leaders acknowledged that the hard, deliberate, and sustained effort that it takes to become a team is actually part and parcel of being a team.

Based on their case study, the authors identified five behavior traits that effective top teams have in common: direction, discipline, drive, dynamism, and collaboration. These traits are collective: They characterize the behaviors of the team as a whole, not those of its individual members.  

1. Direction. How a top team works together to set the organization’s direction—its purpose, vision, and strategy—is a cornerstone of its effectiveness. Team members must be aligned on and share ownership of their short- and long-term priorities. They must exhibit public commitment to one another and their strategy, even when facing pressure from outside forces and other teams within the organization.
2. Discipline. For many top teams, a lack of discipline, particularly in managing meetings, can be at the core of problems.  In order to make and execute decisions consistently, have productive meetings, and practice healthy norms and routines, team members need to have a clear understanding of their own and one another’s roles—and all too often, they don’t. 
3. Drive. Top teams with drive prepare assiduously, debate constructively, and are industrious and resilient over the long term. They know how to prepare for and surmount obstacles.
4. Dynamism. In business, as in life, allowing for the possibility of failure is important because it’s a prime source for learning and positive change. But top teams typically avoid practicing this behavior. In the high-stakes world they work in, failure can be a terrifying prospect, but aversion to risk undercuts dynamism and means that leaders can’t respond effectively to change.  A better approach is for top teams to publicly recognize the opportunities for learning that failure provides.
5. Collaboration. The very heart of teaming is collaboration. It combines direction, discipline, drive, and dynamism, and it thrives in an environment of connection, inclusion, and trust. Collaborative behaviors include developing personal relationships, giving everybody an equal voice, and sticking to commitments.

Top teams seeking to become more effective can take these four steps:  

1. Commit and invest.  Make an explicit commitment to invest time and money establishing and nurturing the five traits discussed earlier.
2. Hold up the mirror. To determine how you’re currently working together, conduct a team-effectiveness diagnostic.
3. Map the journey and begin. Next, plan your team’s journey to new collective behaviors.
4. And maintain momentum. 

Following through on those steps is hard but rewarding. Several enabling factors can help:  get together, build habits, Be opportunistic in a sense use meeting for other purposes to build teams as well, be adaptable, make teaming real and applicable, reinforce habits, measure progress, and communicate.

What does it take for a large, established business to be as responsive to changing market conditions as the startups in its industry are?  Or in other words agile – defined in terms of how quickly teams can move through a four-stage cycle in which they identify opportunities and then analyze, decide on, and experiment with ideas for solutions to address them. That question is a vital one for leaders seeking to move nimbly to address new customer demands and competitive shifts.  The answer often lies in a single word: empowerment.

How can large organizations foster empowerment in a way that maintains organizational coherence and strategic alignment? Four decision rights guardrails that define constraints around an organization’s purpose, data, policies, and allocation of resources.  Like the barriers on a highway, these guardrails provide a zone within which employees can act autonomously, enabling their organizations to operate faster, reduce risk, and keep teams headed in the right direction.    The same guardrails can give large, established organizations the potential to be just as agile — if not more so — than their startup counterparts.  How?

1. Put purpose into action. Ideally, decision-making in an organization reflects the company’s future aspirations, value propositions, and core values, which it has articulated in statements of purpose and/or mission. Ingraining this purpose in planning and decision-making processes by frequently reflecting on whether choices are aligned with it serves as both a rallying cry and a compass. It motivates teams by infusing their work with meaning yet also serves as a beacon that guides their efforts toward a shared ambition.
2. Democratize data. To foster more efficient decision-making at the team level, organizations need to provide teams with regulated access to more and better data in a timely manner — and at its intended level of use. Doing so is both enabling and constraining: It helps teams analyze and experiment with relevant solutions more quickly while simultaneously keeping them from jeopardizing data integrity, endangering company compliance with legal and governmental regulations, and working on similar problems in isolation.
3. Establish minimum viable policies. If empowered teams are to make the most of their own operational decisions, then organizations should reasonably aim to simplify existing heuristics in the form of policies and standards. Setting the guardrail of minimum viable policy safeguards business continuity without overly restricting teams.
4. Provide the required resources.  To ensure that teams have adequate resources when pursuing uncertain outcomes, some organizations use venture capital-type funding approaches or provide explicit mechanisms for teams to unlock contingent budgets.

Some of the most innovative and creative people in history succeeded because they were versatile. They were able to master more than one discipline and then combine them to forge new ideas and inventions.  Why is being a versatile CEO so important? Because it can help leaders effectively engage with employees and other stakeholders and make a big impact on the bottom line.  The authors, while taking excerpt from their new book, The Journey of Leadership: How CEOs Learn to Lead from the Inside Out (Portfolio, September 2024), explore how today’s business leaders can similarly turn their diverse experiences into meaningful outcomes.  Three elements: 

1. Do what feels uncomfortable.  One thing the authors noticed about some of the most successful leaders is that most credit their career trajectories to a singular formula.  Whatever the bundle of skills, most of these leaders operate in only one basic mode. They do what they’re good at and feel comfortable with, and they get rewarded for that behavior.  But having a single strength might not always be what’s needed to run a large, complicated organization.  Much of this comes down to what kinds of experience leaders have. If they lack certain types of experience, they must find people both inside and outside the organization to complement any gaps.  Those striving to become CEOs should make sure they put themselves into a range of environments, situations, and challenges where they can grow a varied set of skills. At one point, they might volunteer to, say, help with a big restructuring. At another point, they might decide to run a midsize company that wants to grow from $500 million in revenue to $5 billion over the next five years. 
2. Go deep.  A variety of operating skills is the first prerequisite for cultivating versatility. The second is to be a deep, creative thinker. Most leaders think of themselves as deep thinkers, but are they really? How many of them really know or understand the intricacies of their business? Some take a “fake it until you make it” mentality, brushing over technical details or not truly understanding the competitive landscape, hoping that others in the organization will explain. We’re not saying that every leader has to master at a molecular level the products or services they provide. However, versatile leaders must think deeply about what makes an organization tick and its different capabilities and assets.  Mastering the details of a company’s business might seem a daunting task for a CEO running a high-tech or biotech company, especially if the CEO rose through the ranks via finance or marketing. Yes, a formal education in a particular discipline certainly helps, but the lack of one shouldn’t discourage a leader from buckling down and absorbing the intricacies of the business. The key is to be constantly curious.
3. Know when to speak up.  A third—and one that has taken on increasing importance—is having the skills to communicate where a business stands politically, socially, and on environmental issues.  Leaders know that these situations sometimes create tough trade-offs where they must forgo lucrative opportunities that are not consistent with their companies’ moral compass.  It’s tempting to keep silent and hope the problem disappears. The world no longer works this way, however. Staying silent all the time is no longer an option in a world of social media scrutiny.  CEOs should take a public stance on a topic only when it is both relevant to the company and authentic.

2024 is the year of the personal brand, and it’s not set to stop. Entrepreneurs are finding they can grow their company much faster when an audience of people buy into them as its owner. A strong brand and impressive following can negate the need for advertising spend. It can attract opportunities, open doors, and mean exceptional team members come to you. It’s time to get involved.  Here are 10 compelling reasons to start building your personal brand right now.

1. Make you stand out.  Sharing your strong opinions online makes you stand out. It makes you memorable. When people know what you’re about, it makes it easier for them to like and trust you. When clients have choices, they’ll pick the name they know.
2. Build trust on autopilot.  Share your expertise regularly, and watch strangers turn into loyal customers. Showing up online is a non-stop trust-building engine. Your followers become your biggest fans.
3. Set the trends.  Don’t copy what everyone else is doing. Be a leader online as well as in your company. Make yourself the go-to expert. 45% of decision-makers use thought leadership content to vet organizations. When people need answers, they’ll come to you first. They trust your wisdom will stack right up.
4. Grow your network.  Your personal brand attracts like-minded professionals. It creates connections you never knew possible. The wider your network, the greater your impact. It’s a domino effect.
5. Attract inbound opportunities.  A solid personal brand doesn’t wait for chances; it creates them. Speaking gigs, media spots, and book deals will all start coming your way as your profile grows. 
6. Forget the hard sell.  No one really loves cold calling. But when you build your personal brand, it does the selling for you. Rather than fight your way to clients, they fight their way to you. So when opportunities come knocking, people are willing, even eager, to pay for your service.
7. Bring your company along.  Building your personal brand isn’t selfish. Your personal brand lifts your entire business. 49% of a company’s reputation can be attributed to its CEO. As your reputation grows, so does your company’s. You attract sales, amazing team members and investors who are ready to go.
8. Make a lasting impact.  People might remember a television commercial for 5 minutes, and a billboard for 5 seconds. But an insight from you, based on your unique experience, could be retold for years.  Your personal brand and everything you share has the power to stick in people’s minds. It’s evolution. Be remembered long after the meeting has ended when you prove you’re a person who people want to follow.
9. Attract top talent easily.  Great people want to work with inspiring leaders. Your personal brand draws in awesome people who share your values and vision, and they already know what your company stands for.
10. Give your business a human touch.  Your personal brand makes your business relatable. 88% of consumers trust recommendations from people they know over any type of advertising. It turns your company into a story people want to be part of.

According to the author every business leader he knows recognizes the need for a culture that promotes continuous innovation and an entrepreneurial spirit, and creates sustainable growth across all functions in the business. Yet most don’t really know how to foster that environment or assess when they have achieved it. They only learn too late when they don’t have it, and the business is in crisis mode.  This topic was well addressed in the classic book, The Invisible Advantage: How to Create a Culture of Innovation, by Soren Kaplan, who lays out the key steps to assess, disrupt, and reshape the existing culture of a company to get more innovation.

According to the author in his own work as an advisor to many entrepreneurs and business leaders, he sees many who are focused on creating one single big, disruptive innovation that will change the world. It’s a good impulse, but that’s not the continuous flow of smaller innovations required to survive, thrive, and win in today’s rapidly changing world. Thus the author recommends Kaplan’s steps.

1. Make your innovation marching orders clear. Frame the way you want to change the world, and make it about the customer. Start with defining and publishing innovation goals at the company level, and then ask for specific objectives from every organization. Ask teams for a breakdown into incremental, sustaining, and disruptive innovations.
2. Take time to create a structure for innovation. If you don’t take time early to set the culture, you will get a crisis when you need innovation. It can start by setting aside 20 minutes in a weekly meeting to explore new ideas for making things better, and then following through. Carve out unstructured time for team members to focus on ideas.
3. Decide what to measure and create metrics. You only get what you measure. Ideas are the beginning. Make sure your measurements are customer-oriented, as well as focused on internal processes. What you measure must reinforce your goals, values, and best practices around innovation. Promote very specific actions and behaviors.
4. Reward with recognition over financial incentives. An annual bonus or award is just not enough to catalyze a culture of innovation. Frequent and informal recognition with peers is the most powerful incentive to innovate and change the culture. Symbols that reinforce your desired intent can make innovation a reality that becomes everyone’s job.
5. Practice leadership actions that shape the culture. Little things can have a big impact when it comes to creating a culture of innovation. Avoid comments like “we can’t do anything until we have more data,” or “we tried that before and it failed.” Watch the unintended facial expressions, practices that get rewarded, and how failures are handled.
6. Assess your innovation culture regularly. In a large organization, online surveys and questionnaires are helpful. It’s always valuable and symbolic to take the time to speak with people face to face, both informally and in executive interviews. Count the innovation success stories published internally, or visibly rewarded in each organization.
7. Design your invisible competitive advantage. Your culture of innovation should be largely invisible to competitors, but it better be clear to all your teams. Every company has different strengths and goals, yet each can internally publish their innovation canvas of technology, leadership, people, structure, rewards, and metrics that set them apart.

As business owners and leaders, we often encounter a variety of problems in our organizations, but not all problems are created equal.  According to the author, she has found that most issues fall into one of three layers, each requiring a different approach to solve. The three layers are:

Layer 1: Simple mistakes.  For Layer 1 problems, a process is in place, and the person involved knows exactly what they should be doing. The issue here is that they simply made a mistake. It happens to the best of us — sometimes, we just slip up.  When a Layer 1 problem pops up, your first move should be to remind the person of the correct process. A quick, gentle nudge is often all that’s needed to get things back on track. If this kind of mistake starts happening regularly, it’s time to dig a little deeper. There may be something else going on — stress, disengagement or even burnout. In these cases, it’s important to address the root cause rather than just the symptom.

Layer 2: Lack of understanding.  The second layer of problems is a bit more complex. For Layer 2 problems, a process is in place, but the person doesn’t fully understand it. This could happen for several reasons — maybe they’re new and still learning, or maybe their training wasn’t as thorough as it should have been. Either way, the root of the problem is a lack of understanding, not just a simple mistake.  The solution for a Layer 2 problem is straightforward: training.  If a Layer 2 problem keeps happening, it’s a sign that your training materials — or your training methods — might need an update.  When you’re addressing a Level 2 problem, aim to share feedback within a week.

Layer 3: Lack of process.  Finally, we have the third layer of problems, which occurs when there’s no process in place at all. If there’s no process, you can’t expect your team to know what to do. Layer 3 problems often happen when your business has grown or changed, and you’re facing new challenges that existing processes just don’t cover. They’re a great sign that it’s time to create or overhaul some new processes.  Layer 3 problems are the most complex because they require you to build something from scratch. The first step is to assess the situation and define what needs to be done. Once you have a clear understanding of the problem, you can begin creating a process that addresses the issue. This might involve mapping out the steps, assigning responsibilities and ensuring that the process aligns with the overall goals of the organization.  Once the process is in place, it’s also essential to train your team so they know how to execute it.  If a Layer 3 problem keeps happening, it could mean that the process you created isn’t quite right for the team’s needs. In this case, you may need to tweak or update the process or create supplemental processes to cover other parts of the business.