Business leaders may find it increasingly risky and unnecessary to transform their businesses when things are going right. The costs of such efforts may also have an unfavourable impact on their decision-making. However, after BCG’s study encompassing hundreds of such transformation efforts between the years 2010 and 2014 took effect, it was realized that pre-emptive transformation is the best way to forge ahead. This kind of change gets embedded right from the level of the corporate strategy itself, so the efforts are more concerted towards effecting long-term change, rather than anything reactive. For most industries this is true, with the greatest per capita impact generating for material followed by consumer staples and discretionary. The one industry where the effect is the opposite is financial services. There also exist some secondary benefits of opting for this strategy such as reduction in the average costs, and a change in leadership to people more proactive. For effecting such transformation success, companies must have above-average spending on R&D, restructuring costs and capital expenditure, plus a long-term strategic orientation. A sense of urgency needs to be curated for this while constantly watching out for any early-warning signals. The talent recruitment team must work towards creating a leadership structure which has such transformative personnel. This will help control the narrative. The right approaches to change need to be selected away from traditional, project-management methods.

Source:https://www.bcg.com/publications/2018/preemptive-transformation-fix-it-before-it-breaks.aspx?linkId=55688388&redir=true

Uploaded Date:11 September 2018

The agile philosophy of management emerged in the early years of this century in the software industry. It emerged as a counter-point to the then-dominant hierarchical model dominated by the Board and CEO. Such a model was entirely driven by the corporate strategy drafted from the very top, with its sole mission being to maximize returns for the shareholders alone. However, this strategy soon ran its course, as it was realized that such an approach hindered other key aspects of the business such as innovation and research. Being customer-centric is a key dogma of the evolved agile method that has now come to dominate. It is a term being used liberally across management training sessions for the top leadership. And that is why Boards and CEOs will have a rough time as increasingly people are challenging their complete authority. To cite an example, the CEO tenure length is gradually reducing. Under such circumstances, directors need to play a cautious game, without giving in liberally to any stakeholder group.

Source:https://knowledge.insead.edu/blog/insead-blog/agile-boards-of-directors-a-fad-or-the-future-9961

Uploaded Date:01 September 2018

Zero-Based Budgeting (ZBB) has long existed, but now it has been revisited. It is a system that allows companies to align their resources along the corporate strategy drafted. It also helps in building a tiered cost structure. The five critical components of such a structure are transparency, process, governance, initiatives and the mind-set. One of the reasons for this renaissance in the ZBB has been the fact that a lot of corporate resources have been lying idle over many years. Technology and telecommunications is one industry which is already using ZBB to the hilt. This figure is slightly lower for the retail and consumer goods sector. Same goes for healthcare and pharma. Most financial services firms too have confirmed that they will soon be doing so. As of now transportation and utilities are making less use of ZBB, but many have confirmed to be on the path of implementing the same.

Source:https://www.mckinsey.com/business-functions/operations/our-insights/zero-based-budgeting-revisited-why-this-time-is-different?cid=podcast-soc-twi-mip-mck-oth-1808&kui=KiARSS3345csZPYKCpgVIw

Uploaded Date:01 September 2018

Complex capital projects routinely go over-budget and behind schedule. A study on such projects priced above a billion dollars found that projects were on average late by a full year and almost a third over-budget from what was planned in the corporate strategy. The right blend of technologies, financing models and leadership skills is the art required to execute project delivery. All these tools and management practices can be clubbed under PVI (project value improvement). This ensures smooth flow of work from inception to the FEED (front end engineering design). This PVI integration can save trillions of dollars worldwide. Business consulting giant McKinsey has predicted the value of US$ 77 billion to be the global capital spending between the years 2018 and 2023. To help the PVI integration during this time, three major targets need be taken up, beginning with reduction in the initial capital requirement. Then, the project timeline needs to be ramped up. The life-cycle cash flows too need to be maximized. PVI began in the 1950s simply as value engineering before progressing to SGP (Stage Gate Process) in the 1990s. A PVI wheel has been suggested by McKinsey which would include management system, technical system, mind-sets and behaviours.

Source:https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/capital-project-value-improvement-in-the-21st-century-trillions-of-dollars-in-the-offing?cid=other-eml-alt-mip-mck-oth-1808&hlkid=04343a7d0aa44d92ae4934d9954eb7eb&hctky=2657824&hdpid=4efbfdc4-f88f-4238-8f9a-5a8a560b5192

Uploaded Date:27 August 2018

Finance and HR are two areas which often seem to be at odds with each other. Yet, if one probes deeper, one can notice that Profits and People matters are intertwined. An example of these two proactively collaborating was found at McGraw-Hill Companies. Up until 2011, the company had two distinct divisions. One worked on education so catered to students and educators. The other dealt with businesses, providing financial and business intelligence using its analytical tools. Some group companies such as S&P, CRISIL and Platts continued to prosper while deliberately some were sold off. The latter included Businessweek which went to Bloomberg, as well as the company’s broadcasting, education and publishing divisions. The purpose of talent management is not merely to aid the people, but in fact to hone them in a way that it brings business value. In that way, at McGraw-Hill the policies of the two came together.

Source:https://www.strategy-business.com/article/Finance-and-HR-The-Executive-Partnership-That-Transformed-a-Company?gko=bcdab

Uploaded Date:18 August 2018

Nonprofit firms enjoy certain privileges beyond tax exemption. However, few of these firms truly leverage these. Only the best ones have aced corporate strategy to benefit their firms. This advantage can be seen in marketing, product development, customers servicing and most importantly revenues. In customer servicing, what nonprofits must do is segment them separately as they all have separate requirements. Products need be developed on the basis of goodwill, openness and business intelligence gathered from the target audience. Marketing will best succeed when nonprofits sign aligned partnerships. To enhance revenues, nonprofit firms need to target financial sustainability. Fundraising needs to be approached just like sales. Social entrepreneurs need to get more involved to take advantage that such opportunities bring in.

Source:https://hbr.org/2018/08/what-the-best-nonprofits-know-about-strategy?utm_medium=email&utm_source=newsletter_daily&utm_campaign=dailyalert_activesubs&utm_content=signinnudge&referral=00563&deliveryName=DM11717

Uploaded Date:16 August 2018

Most business leaders are now comfortable with the concept of agile innovation teams. These are smaller units within a larger company working specifically on business innovations. Their approach is not remote or removed from the customer, but indeed post direct communication with the customer base so iterations may be made with  breakneck speed. For a lot of digital natives such as Spotify or Netflix, the process comes naturally. For established older companies though, it is an    effort as they had a very different set of established hierarchies in place. Some such as Amazon and USAA have transitioned successfully, while many have failed. Imitating startups’ agile methods do not always work, nor are they desirable in every situation. Merely launching multiple agile teams does not work either unless the existing bureaucracy is loosened to facilitate this system.

Source:https://hbr.org/2018/05/agile-at-scale

Uploaded Date:16 August 2018

The insurance industry is going through a lot of changes in the regulatory, financial and economic sense. Mere cost-cutting is no longer improving margins like it did earlier. So, the entire industry is seeking a transformation. The rising capital requirements, emergence of new competitors, use of disruptive technologies and shifting customer needs have added to the problems. It has precipitated the need to explore business innovations within this industry, in order merely to survive. Some strategies have been identified which can help the industry players to ride through this storm. Exiting some businesses can be a wise decision as not all sectors are bringing equal benefits. Another path to survival could be through partnerships and acquisitions. MassMutual’s acquisition in 2016 of MetLife’s broker-dealer network and Sun Life’s similar foray into Assurant’s employee benefits business are key examples of this trend. One can also expand into new lines and geographies as done successfully by Sun Life, Mass Mutual and Voya. If nothing works, then one has no option but to cut costs as done by Wilton Re.

Source:https://www.strategy-business.com/article/The-Insurance-Industry-Needs-an-Intervention?gko=edb5b&sf192099579=1

Uploaded Date:16 August 2018

Most business leaders are now comfortable with the concept of agile innovation teams. These are smaller units within a larger company working specifically on business innovations. Their approach is not remote or removed from the customer, but indeed post direct communication with the customer base so iterations may be made with breakneck speed. For a lot of digital natives such as Spotify or Netflix, the process comes naturally. For established older companies though, it is an effort as they had a very different set of established hierarchies in place. Some such as Amazon and USAA have transitioned successfully, while many have failed. Imitating startups’ agile methods do not always work, nor are they desirable in every situation. Merely launching multiple agile teams does not work either unless the existing bureaucracy is loosened to facilitate this system.

Source:http://www.bain.com/publications/articles/andrew-noble-scaling-agile-video.aspx

Uploaded Date:10 August 2018

While office politics is usually a derided term, it does have some benefits in terms of corporate strategy execution. Internal politics allows differences to be shared and methods reshaped well beyond what the narrow confines of company rules It refers to a series of tactics to influence others towards personal or organizational interests. The political terrain can be mapped out using a conventional quadrant. There exist four metamorphic domains based around formal or informal source of power at individual or organizational level. The first one is the Weeds where the source of power is informal at individual level. The Rocks provide formal power at the same individual level. The Woods are the most chaotic with max participation. It is at organizational level but power informal. The High Ground is that occupied by the top management. Here, power is formally vested with responsibility towards the entire organization.

Source:https://knowledge.insead.edu/leadership-organisations/organisational-politics-can-be-an-asset-to-strategy-execution-6111

Uploaded Date:09 August 2018

In a common situation test, participants are often asked about the ethicality of store owners hiking the prices of snow shovels on the day of a major snowstorm. To this most answer that it is alright, due to a combination of several reasons. However, business research conducted clearly reveals that a majority or four-fifths of survey respondents feel that such an act will hinder the long-term sustainability of the business. This is especially true if the business is of a local nature as stores often are. It will not improve the profitability. Leaders need to take decisions based on the timing. Countries too need to take holistic decisions based on their stage of development commensurate with the recent history. As leadership is both a science and an art, so leaders need take decisions based on both hard evidence as well as the ethicality of them.

Source:https://knowledge.insead.edu/blog/insead-blog/the-key-to-cultivating-agility-in-decision-making-9521

Uploaded Date:09 August 2018