There are certain industries flush with risks. The airline industry is one such that operates within a macroeconomic climate of uncertainty. Some industries and companies actively plan for risks such as the threat of substitutes or new market entrants, but it is never really enough. When things actually go awry, companies, societies or economies rarely have the right backup plan to take control. So a new concept has been developed known as Risk Advantage which entails a conscious better-preparedness for such major disruptions. Risk advantage is actually a combination of competitive advantage and risk return. This risk then gets systematically included right from the stage of the corporate strategy. Unlike risk assessment or management which are reactive, this new system assessed by BCG, goes well beyond merely ticking any checklist. To ensure this is a success, BCG has provided a list of four major fallacies that need to be overcome. To start with, the ERM (Enterprise Risk Management)mentality needs to be weeded out. Planning circles must not be dictated by time of the year or fiscal calendars but by what is required for the business. Herd mentality is also something that goes against the grain of business transformation. Companies also make the mistake of going by deterministic thinking. Instead they must go probabilistic, based on hard data evidence and subsequent business analytics being used.

Source:https://www.bcg.com/publications/2017/taking-advantage-of-risk.aspx?linkId=51526094

Uploaded Date:05 June 2018

The digital age brings multiple opportunities as well as challenges galore for Private Equity (PE) Funds. On the one hand, business complexities are enormous, so very difficult to assess which one would be a horse to back in the long-run. On the other, the plethora of data available, business analytics capabilities and increased connectivity has increased the capacity of PE funds to conduct due diligence with the right set of derived business intelligence. Such analytics capabilities need to be married to a more street-smart business savvy. A new methodology to assess investments has been developed by Bain, termed as “today forward, future back”. Today forward looks at the present status of the company within the particular sub-sector and how they can leapfrog ahead. Future back takes the other view where the company takes slow steps with an eye on the growth. Platforms and partners need to be brought onside for this entire venture. Customer and channel engagement has to be a key feature of the process.

Source:https://www.forbes.com/sites/baininsights/2018/04/11/the-digital-challenge-through-a-private-equity-lens/amp/

Uploaded Date:05 June 2018

Private Equity (PE) Funds have not historically been known to distinguish between investment opportunities’ moral or social imperatives. But now the trend is changing. One of the major reasons for this shift is being driven by clients themselves who are focusing on increased ESG (environmental, social, governance) factors. A lot of LPs (Limited Partners) in particular have been pushing for such ESG awareness. A business research assignment was launched by INSEAD’s GPEI (Global Private Equity Initiative) to gauge the impact on the entire ecosystem. There is a five-point framework in the entire ecosystem of PE investment. On the one extreme end is the PE shareholder model focused on maximizing financial returns, and the other side is venture philanthropy aimed at social returns. In between the wedges exist Negative Screening, Proactive ESG Management and Impact Investing. Impact Investment has now emerged as a mainstream, away from the fringes. TPG, Bain Capital and KKR are examples of such funding. The LPs are generated from a diverse set of funds such as Sovereign Wealth Funds, High-Net Individuals and pension funds. The millennial generation is especially interested in the environmental aspects. Measuring the overall impact of these impact investments is a challenge, which is why PG LIFE has come up with up to five important tangible metrics.

Source:https://knowledge.insead.edu/blog/insead-blog/impact-investing-comes-into-its-own-8956

Uploaded Date: 05 June 2018

In some professions such as journalism, litigation or the medical practice, the art of questioning is something actively honed. In business management, this is rarely done, thus representing a tremendous missed opportunity. Asking the right questions aids in the development of emotional intelligence. Through much study, researchers have found out the right type, framing, tone and sequencing of questions, that can reap maximum benefits for the entire organization. Unless one asks questions, one can never gauge the authentic business intelligence. Asking more number of questions is always the first step in becoming a good questioner. The ideal question-answer session must involve a combination of cooperation and competitiveness. Questions may broadly be divided into four categories. These are introductory, mirror, full-switch and follow-up. The first and fourth type are self-explanatory, but mirror refers to those where the questioner has already answered and is posing the same question to the other. Full-switch are used to change the topic. Sometimes questions need to be open-ended, such as when one wants to uncover the truth, but the one answering cannot respond with a yes or no. One must also gauge the group dynamics while posing questions. The sequencing also needs to be correct, so the first question must never be too sensitive, but not too vague either.

Source:https://hbr.org/2018/05/the-surprising-power-of-questions?utm_medium=social&utm_campaign=hbr&utm_source=twitter

Uploaded Date:05 June 2018

Consulting giant Bain has curated a list of the top management trends captured through its data over the past twenty-five years. Titled “A History of Bain’s Management Tools and Trends Survey”, it charts the top ideas or trends during this period of time. At present, the nearly four-fifths of those surveyed feel that “business leaders must trust and empower their employees, not command and control them.”If one compares the top tools over time, Mission and Vision Statements ruled the roost back in 1993 with an eighty-eight percent approval rating, while strategic planning was strongest in 2000. Strategic planning was on top last year, but in 2014 it was Customer Relationship Management. Advanced business analytics is the most popular tool now followed by agile management and balanced scorecard. To enhance satisfaction levels, the Internet-of-Things has been most judiciously followed by customer segmentation and analytics. CRM is most popularly adopted, while Zero-based budgeting seems to have fewer takers. Total digital usage most significantly increased in the Asia-Pacific and Latin America regions, while declining in North America.

Source:http://www.bain.com/publications/articles/management-tools-and-trends-2017.aspx

Uploaded Date:01 June 2018

A lot of companies fail or underperform in their abilities to balance the corporate strategy initially set with the underlying cost agenda. To gauge the exact metrics, a study was conducted by audit firm PwC, which throws up interesting revelations. The study was called the Fit for Growth Index Profiler. A staggering eighty-two percent of respondents claimed that the company strategy was not well-understood across the firm. Three-fourths indicated that while the strategy may be sound, thetalent recruitment was faulty, so the capabilities are not matched accordingly. A similar figure said that the said strategy does not get translated into real action. A bit over half the respondents even made the damning accusation that the resources or time was not allocated in coherence with the overall strategy in mind. A vast majority was not happy with the incentives on offer, while a bit over half feel that the funding for strategic initiatives needs to be better formalized. Only about fourth though claim that the organization’s culture is a hindrance to achieving the desired goals.

Source:https://www.strategyand.pwc.com/fitforgrowth/profiler-results?platform=hootsuite

Uploaded Date:01 June 2018

Sales personnel make all kinds of deals, because their focus is on the top line. The top management however needs to take a more holistic approach towards fulfilling the bottom-line concerns. So, they must realize that at least in the B2B segment, all kinds of deals don’t make sense. As per insights provided by management consulting giant Bain, unless deals are beyond a minimum critical mass, the company will end up making losses. So, more than the mass numbers, B2B sellers must focus on getting deals large enough to cover the costs, scalable and generate repeat business.

Source:http://www.bain.com/publications/articles/lets-make-a-larger-deal-bain-snap-chart.aspx

Uploaded Date: 30 May 2018