Weekly Business Insights

Extractive summaries of the article curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making

Week/Issue 210 – September 17-23, 2021

Download this week’s edition in PDF

Download this week’s edition in Audio

Shaping Section : Ideas and forces shaping economies and industries

Why skippers aren’t scuppered

The Economist | September 18, 2021

Over the past few months; the world’s supply chains have elbowed, once again, their way into the foreground; as surging demand for goods and supply disruptions have restricted the flow of trade. At ports around the world, dozens of ships stacked high with containers wait at anchor for their turn to unload, while the cost to ship a box from China to America’s west coast has jumped roughly tenfold from the pre-pandemic level.

The troubles began in 2020, when firms that had idled production in the expectation of a slump instead faced heavy demand for cars, electronics and home-exercise equipment. Generous stimulus, in America especially, kept order books full while the pandemic skewed spending toward goods rather than services. Producers of computer chips have been unable to keep up with the rush. The shipping industry had no spare capacity and has faced a series of disruptions, from the saga of the stuck ship Ever Given, to the closing of ports amid outbreaks of covid-19 and storms like Hurricane Ida. With the system stretched thin, a mishap anywhere affects the movement of goods everywhere. Experts reckon it may take a year or more for conditions to return to something like normal.

In the meantime, firms are neither twiddling their thumbs nor abandoning global supply chains. Instead, they are improvising. Some retailers, like Walmart, have taken to chartering entire ships exclusively for their own cargo. Passenger aircraft are being refitted for freight. Chipmakers are weighing their priorities: tsmc, from Taiwan, is supplying some carmakers and Apple before producers of computer servers, say. Soaring shipping fees themselves help adjust the flow of goods. Higher freight costs scarcely affect the price of expensive electronics which can be crammed into containers, but matter more for bulky, low-value goods like garden furniture. Some consumers may be disappointed, but this means that shipping tangles depress the value of trade by less than might otherwise be the case. New orders for smaller container ships also reflect the view that production will become more regionalized.

3 key takeaways from the article

You may think that supply chain snafus represent the beginning of the end of globalisation. Consumers are learning how infections half a world away or a ship stuck in the Suez Canal can disrupt the near-instant access to goods they take for granted. Manufacturers are discovering that lean supply chains can mean inadequate access to essential components as well as low costs.
The disruptions are one reason inflation is high in America, Britain and elsewhere.
But amid the logistics blues, markets are working as they tend to do, and firms are finding routes around blockages. Under intense pressure, global supply chains are not in fact failing; they are, rather, adapting.

Full Article

(Copyright)

Topics: Global Trade, Globalization, Regionalization, Supply Chains, Disruptions, COVID-19.

China’s Trillion-Dollar Hurdle To Crack Into Top Global Semiconductor Ranks

By Rich Karlgaard | Forbes | September 10, 2021

Last month the world’s capital markets—wondered why Beijing would hurt its own tech stars, such as Ant Financial, Didi Chuxing and TAL, with a barrage of new regulations. According to the author President Xi Jinping was waving a red flag at China’s tech talent: Turn your attention away from splashy consumer tech: online loans, ride shares, tutoring games and the like. Get busy on strategically core technologies, for example, semiconductors. Xi’s bid for national self-sufficiency of at least 70% in critical tech by 2025 is bogged down by China’s weakness in this most strategic of all technologies.

The absence of a mainland-based company from the top global semiconductor ranks is a strategic black hole for Beijing. It is puzzling why China has not yet cracked the top 15. One assumes Xi knows this cannot stand if China is to achieve core technological independence by 2025.

Mainland China’s semiconductor flagships are Shenzhen’s Huawei in design and Shanghai’s SMIC in contract manufacturing. Both compete on the world stage; neither has cracked the world’s top 15 in semiconductor sales. Huawei is a world-class company, but its ability to tap into markets comprising the majority of the global GDP was restricted by the former Trump administration’s policies.

Thus SMIC is China’s laggard in its race for core tech independence. The Shenzhen superstar has needed a top factory partner since Trump’s actions in 2020 restricted Samsung and TSMC from fully serving Huawei. China also will have to develop a world-class chip manufacturing equipment business. This is not trivial. Etching transistors onto silicon at 5 nanometer scale—a human hair width is around 90,000 nanometers—is a technological feat. Very few equipment companies can do it.

The investment needed to achieve Xi’s dream of core tech independence, just in semiconductors, is estimated to cost between $1 trillion to $3 trillion. But reaching that goal will take more than just money. It will take trust in the scientists, engineers, bold thinkers and mavericks, along with experimentation and creative finance required to make it happen. It can’t automatically happen by top-down command. Meanwhile, Intel, Samsung, TSMC and others are not sitting still.

3 key takeaways from the article

Beijing raid on its own tech stars was waving a red flag at China’s tech talent: Turn your attention away from splashy consumer tech. Get busy on strategically core technologies, for example, semiconductors.
The absence of a mainland-based company from the top global semiconductor ranks is a strategic black hole for Beijing.
The investment needed to achieve Xi’s dream of core tech independence, just in semiconductors, is estimated to cost between $1 trillion to $3 trillion. But reaching that goal will take more than just money. It will take trust in the scientists, engineers, bold thinkers and mavericks, along with experimentation and creative finance required to make it happen.

Full Article

(Copyright)

Topics: Technology, Semiconductor, China

China’s Trillion-Dollar Hurdle To Crack Into Top Global Semiconductor Ranks

By Rich Karlgaard | Forbes | September 10, 2021

3 key takeaways from the article

Beijing raid on its own tech stars was waving a red flag at China’s tech talent: Turn your attention away from splashy consumer tech. Get busy on strategically core technologies, for example, semiconductors.
The absence of a mainland-based company from the top global semiconductor ranks is a strategic black hole for Beijing.
The investment needed to achieve Xi’s dream of core tech independence, just in semiconductors, is estimated to cost between $1 trillion to $3 trillion. But reaching that goal will take more than just money. It will take trust in the scientists, engineers, bold thinkers and mavericks, along with experimentation and creative finance required to make it happen.

Full Article

(Copyright)

Topics: Technology, Semiconductor, China

Industry Insights Section: Trends and anomalies shaping an industry

Inside the Brutal Realities of Supply Chain Hell

By Brendan Murray | Bloomberg BusinessWeek | September 16, 2021

The pandemic has thrown the vital but usually humdrum world of logistics into a tailspin, spurring shortages of everything. For procurement managers it’s complicated but it has also revealed a bigger, structural challenge.

The system underpinning globalization—production on one side of the planet, connected to consumers on the other by trucks, ships, planes, cranes, and forklifts—is too rigid to absorb today’s rolling tremors from Covid-19, or to recover quickly from the jolts to consumer demand or the labor force. It’s avoided a complete collapse only through a combination of human ingenuity, painfully long hours, strategy, mixed with a stroke of luck. What’s also apparent is that supply uncertainties, disruptions, and inflationary forces are here for the foreseeable future, perhaps into 2023.

Although the pandemic has shuttered factories and shaken supplies of raw materials, procurement managers chief challenge is freight, and it starts with what used to be cheap, plentiful commodities: shipping containers. Container rates and availability are usually built into annual contracts between shippers and the carriers, and these deals normally have strict requirements, such as only nonstop service between ports or a minimum of two sailings a week. But little by little over the past 18 months, procurement managers has had to let those demands go and instead brawl for ship space in the spot market, where the daily rates quoted by carriers and freight agents have soared. And the snarls don’t end when containers land on a dock in North America.

Some of this complexity is as a result of an increase in panic orders from companies nervous about running out of parts or products, but the acceleration of online shopping also has an impact. For logistics professionals this incredible e-commerce spike required a whole new level of alignment and synchronization. Among other concerns, managers must keep sight of whether such strong spending will be sustained, particularly when orders might not arrive for several months.

With summer winding down, the big test of the global trading system’s resilience might still be ahead. Every October a weeklong national holiday in China marks the unofficial deadline to get shipments out of the world’s second-largest economy in time to reach the U.S. and Europe for the holiday shopping season.

3 key takeaways from the article

The pandemic has thrown the vital but usually humdrum world of logistics into a tailspin, spurring shortages of everything.
For procurement managers it’s complicated but it has also revealed a bigger, structural challenge.
The system underpinning globalization is too rigid to absorb today’s rolling tremors from Covid-19, or to recover quickly from the jolts to consumer demand or the labor force. What’s also apparent is that supply uncertainties, disruptions, and inflationary forces are here for the foreseeable future, perhaps into 2023. But how things play out this month, one of two peak seasons each year for goods, will be crucial in determining how long these shortages last and which companies are able to adapt.

Full Article

(Copyright)

Topics: Supply Chain, Global Trade, COVID-19

Leading & Managing Section

What matters most? Five priorities for CEOs in the next normal

By Homayoun Hatami and Liz Hilton Segel | McKinsey & Company | September 8, 2021

Over the course of the pandemic, businesses have largely—and often successfully—adapted to new ways of working – but it will not be enough. To prepare for the post-COVID-19 era, leaders need to do more than fine-tune their day-to-day tasks. Companies need to adopt these five priorities as their North Star if they want to substantially improve the odds of their success:

Center strategy on sustainability – the principle of producing goods and services while exacting minimal damage to the environment. Many companies have taken earnest steps in this regard because they wanted to. In the very near future, however, doing so will be as fundamental to doing business as compiling a balance sheet: consumers and regulators will insist on it. So it will be an important source of long-term competitive advantage.
Transform in the cloud. Its potential has long been recognized; now it is beginning to bring real results in innovation and productivity. Companies need to deploy the cloud for good purpose. To do so, their people need to be “cloud literate”—that is, to have a keen sense of the cloud’s capabilities.
Cultivate your talent. As ever, it’s the human element that makes the difference. The organization of the future will not—or, at least, should not—look like the one that existed as recently as 2019. It will need to be more flexible, less hierarchical, and more diverse.
Press the need for speed. The pace of change is speeding up, and the landscape of business is more fluid than ever. The need for speed as a priority is acute. But this speed needs to be sustainable. To put it another way, speed is not just about revving the engine faster, but designing it to run more efficiently and intelligently.
Operate with purpose. Leaders need to recognize that people want meaning in their lives, and their work. Previous research has found that companies with a strong sense of purpose outperform those that lack one. And those who say they live their purpose at work are simply better employees—more loyal, more likely to go the extra mile, and less likely to leave. Purpose helps companies recognize emerging opportunities and connect with their customers.

2 key takeaways from the article

Over the course of the pandemic, businesses have largely—and often successfully—adapted to new ways of working – but it will not be enough. To prepare for the post-COVID-19 era, leaders need to do more than fine-tune their day-to-day tasks.
Companies need to adopt these five priorities as their North Star if they want to substantially improve the odds of their success: center strategy on sustainability, transform in the cloud, cultivate your talent, press the need for speed, and operate with purpose.

Full Article

(Copyright)

Topics: Disruptions, Business Performance, Leadership, Sustainability

Unconscious Bias Training That Works

By Gino and Katherine Coffman | Harvard Business Review Magazine | From the Magazine (September–October 2021)

Across the globe, in response to public outcry over racist incidents in the workplace and mounting evidence of the cost of employees’ feeling excluded, leaders are striving to make their companies more diverse, equitable, and inclusive. Unconscious bias training has played a major role in their efforts. UB training seeks to raise awareness of the mental shortcuts that lead to snap judgments—often based on race and gender—about people’s talents or character. Its goal is to reduce bias in attitudes and behaviors at work, from hiring and promotion decisions to interactions with customers and colleagues.

But conventional UB training isn’t working, research suggests. Other studies have revealed that the training can backfire: Sending the message that biases are involuntary and widespread—beyond our control, in other words—can make people feel they’re unavoidable and lead to more discrimination, not less.

The most effective UB training does more than increase awareness of bias and its impact. It teaches attendees to manage their biases, change their behavior, and track their progress. It gives them information that contradicts stereotypes and allows them to connect with people whose experiences are different from theirs. And it’s not just a onetime education session; it entails a longer journey and structural changes to policies and operations. To unpack what drives these positive changes, the authors interviewed dozens of leaders at companies that have implemented rigorous UB programs across a variety of industries. In this article the authors share what they have learned about how they’re leveraging a more practical approach to UB training.

According to the authors, a successful UB training gives people concrete tools for changing their behavior. It helps them better understand others’ experiences and feel more motivated to be inclusive. Strategies include calling out stereotyped views, gathering more individualized information about people, reflecting on counterstereotypical examples, adopting the perspectives of others, and increasing interactions with different kinds of people.

3 key takeaways from the article

Across the globe, in response to public outcry over racist incidents in the workplace and mounting evidence of the cost of employees’ feeling excluded, leaders are striving to make their companies more diverse, equitable, and inclusive.
Unconscious bias training has played a major role in their efforts.
The most effective UB training does more than increase awareness of bias and its impact. It teaches attendees to manage their biases, change their behavior, and track their progress. It gives them information that contradicts stereotypes and allows them to connect with people whose experiences are different from theirs. And it’s not just a onetime education session; it entails a longer journey and structural changes to policies and operations.

Full Article

(Copyright)Topics: Leadership, Informed decision-making, Biasness

The Problem With Certainty

By Morela Hernandez | MIT Sloan Management Review | September 15, 2021

People are certain that there is only one way to understand actions. The possibility that the decisions came after weighing several equally important factors and priorities was rarely, if ever, considered. Organizations have faced similar divisive reactions to controversial decisions.

It seems our collective capacity to consider — simultaneously — the many sides to a decision is weak, if not nonexistent. We crave certainty in some (any!) aspect of our lives, and the pressures of the moment reinforce our natural tendency toward confirmation bias. Seeing an issue through another person’s eyes has become too uncomfortable to bear, especially in light of the marathon ills, both literal and figurative, we are enduring from the COVID-19 pandemic. The continual demands of adjusting to changes in our home and work environments have left us with little emotional energy and cognitive space.

The problem, however, is that being certain about the rightness or wrongness of others’ decisions leaves little room for us to grow or expand our understanding, not just of other people but of their situations and their circumstances. Our inability to control a knee-jerk reaction that shuts down ambivalence borne from disagreement or uncertainty limits our ability to make progress, personally and professionally. In other words, we get stuck. We get stuck as individual citizens, and we get stuck as managers and leaders.

How do we get unstuck? By doing what’s uncomfortable i.e., by becoming ambivalent. We feel ambivalence when we simultaneously hold contradictory beliefs or opinions. In fact, we can lean both toward and against a decision, perhaps for the same reason or different reasons. Humans are funny this way. We often hold incongruous views that stir conflicting emotions, and this experience is uncomfortable. But our need for certainty means we jump to one side of the issue or another. Getting unstuck and being more open to hearing points of view that don’t make sense to us requires us to build the capacity to withstand cognitive discomfort.

3 key takeaways from the article

People are certain that there is only one way to understand actions. The possibility that the decisions came after weighing several equally important factors and priorities was rarely, if ever, considered.
It seems our collective capacity to consider — simultaneously — the many sides to a decision is weak, if not nonexistent. We crave certainty in some (any!) aspect of our lives, and the pressures of the moment reinforce our natural tendency toward confirmation bias. In other words, we get stuck. We get stuck as individual citizens, and we get stuck as managers and leaders.
How do we get unstuck? By doing what’s uncomfortable i.e., by becoming ambivalent.

Full Article

(Copyright)

Topics: Decision-making, Certainty, Personal Development

Entrepreneurship Section

Think You Need Venture Capital Backing to Start Your Business? Think Again.

By Jaime Schmidt | Entrepreneur | September 19, 2021

2021 has been a banner year for venture funding with an all-time high of over $288 billion invested within the first half of the year globally. But there’s an alternative approach equally deserving of the flashy headlines — bootstrapping. Wanting to build their businesses without investor money, these founders wear bootstrapping as a badge of honor and are fired up to prove themselves. The author offered his story as proof and offered five pieces of advice.

Build your baseline. In the early years of starting your business, it’s important to take time to build up your own seed money and create the foundation for growth. Start by working side jobs while you’re taking things slowly at the beginning and, if possible, focus on opportunities where you’ll learn something useful that you can apply back to the business later.
Ditch the hustle mentality. It’s important to think about the future and how today’s actions will impact your outcomes, but you have to grow at a speed that works for you and your circumstances. Focus on laying the groundwork for what your business needs, and put the blinders up on competitors who are focused on landing big investments.
Learn who to hire and when to hire them. Staying lean at the beginning not only saves money, but also allows you to refine your vision for the business. When it is time to hire, bring on one new employee at a time. Start them part-time and expand their role as they prove their value. Operate with a lean and strong team, and make every employee count.
Be smart with your money. You must be both frugal and willing to spend — the trick is knowing where. Start by prioritizing expenses that have a direct impact on sales that give you the return on investment to keep going. Pay close attention to what’s working and what isn’t. Negotiate everything. Shorter payment terms with retailers means faster money in the bank, while longer payment terms with suppliers allows you to sell inventory before paying for raw materials. Nurture these relationships for favorable order minimums and better pricing.
Be realistic and have a backup plan. Bootstrapping requires recycling all profits back into the business. Have a plan for getting more cash quickly if you need it. Explore options for lines of credit and other loans. Start building relationships with investors, even if you aren’t raising now. Be realistic about the risk and sacrifice required of you and your family. Be comfortable living with uncertainty, and have a Plan B.

2 key takeaways from the article

Wanting to build their businesses without investor money, many founders wear bootstrapping as a badge of honor and are fired up to prove themselves.
Five pieces of advice for bootstrappers are: build your baseline, ditch the hustle mentality, learn who to hire and when to hire them, be smart with your money and be realistic and have a backup plan.

Full Article

(Copyright)

Topics: Entrepreneurship, Growth, Startup, Business Model

5 Ways To Get An Edge By Changing The Game

By Peter Cohen | Inc | September 14, 2021

Business is a game — but unlike baseball — you can change the game. Your game-changing moves can either make you a winner to your rival’s detriment or create a bigger pie that you and your rivals can share. Five ways for a business leader to change the game to make their company — and possibly their rivals — better off are:

Change the players. There are many moves you can make to change who is playing in your market. For example, you can eliminate competitors by acquiring them or create new players.
Boost your added value. Think about what your industry would lose if your company went away. If you have a clear answer, then your company offers added value. What’s more if you can increase your company’s added value compared to rivals, you will win new customers. Find an industry leader, offer customers what Hungry Start-Up Strategy calls a quantum value leap, and reap the rewards of higher added value.
Alter the rules. Industries operate according to regulations and widely accepted rules. If you can change those rules, you can make yourself better off and pave the way for a new industry.
Try new tactics. Tactics are short-term moves you can make to win a battle against rivals.
Broaden or narrow your scope. Changing your scope can boost your growth. For example, you can outsource business activities or vertically integrate.

2 key takeaways from the article

Business is a game — but unlike baseball — you can change the game. Your game-changing moves can either make you a winner to your rival’s detriment or create a bigger pie that you and your rivals can share.
Five ways for a business leader to change the game to make their company — and possibly their rivals — better off are: change the players, boost your added value, alter the rules, try new tactics, and broaden or narrow your scope.

Full Article

(Copyright)

Topics: Business Model, Strategy, Competition

Contributing in promotion of informed business decision making

Weekly Business Insights – Week 210

Be the first to comment

Leave a Reply Cancel reply