The Columbia Business School’s professor of management Rita McGrath posted last week on board strategy. Namely, she talks about how innovation is key on any board and a stale or unproductive board can significantly hinder an organization.
David Nadler suggested that one key thing boards need is input into strategic decisions when there are still choices to be made, rather than simply being asked to vet decisions that management has already come to a conclusion about. We need, he suggests, to get away from a “review and concurrence” process and instead adopt one in which a board can make meaningful choices. The second key issue that boards need to be engaged on has to do with the question of risk — often the most significant risks don’t show up in the spreadsheets and presentations shown to the boards. What is needed, instead, are candid conversations about what happens if the unexpected happens or if the strategy goes wrong.
Rita argued in such environments, she also proposed that boards can completely kill effective innovations by insisting on the wrong metrics — such as worrying about the rate of failure. She has long said that the rate doesn’t matter if the costs are low. Imposing those requirements will guarantee risk aversion among the staff.
The Accenture Institute for High Performance published a new paper presenting a playbook of options particularly for emerging market multinationals expanding into the global ecosystem.
When choosing strategies to harness different economic geographies, it is useful to look at how high-performance businesses turn these principles into actions. This report isolates a number of specific imperatives that can help companies make focused choices in how they execute their global strategy.
If you are considering international expansion or have recently started, we strongly recommend this article.
In a series of powerful Accenture papers hitting the press, this paper presents research that there are seven catalysts that can help managers integrate an acquisition successfully while positioning their companies for growth during a downturn.
These seven merger integration catalysts are:
- Effective governance and fast decision making
- A well-defined target operating model.
- Creation of the “keep list” and migration approach.
- Targeting and implementing achievable quick wins.
- Alignment of skills with integration activities.
- Effective management of country and regional differences.
- Engaging and training employees to deal with the newly acquired customers.
The paper recommends hard-pressed managers should better balance their company’s need for speed with the imperative of customer retention.
How is your organization’s balancing the need for speed with customer retention activities?
A fourth power-paper out of Accenture argues that a majority of businesses, US and foreign, are no longer equipped for the markets they currently or will have to compete in by using the WRONG operating models.
Even with international operations, many companies lack the focus on critical aspects such as processes, centralization, performance metrics, and structures required to support global growth.
How is your organization currently setup to excel in the global marketplace?
Following on a theme from another recent post here, this Accenture paper argues it is in the economic downturn that the opportunity for transformation occurs. The paper looks at examples set by industry leaders to articulate the strategies best employed during these times.
But for many companies, change is difficult, particularly for those that may have developed an array of mechanisms that discourage deviation from the (now outdated) successful strategies of the past. Those capable of orchestrating a timely response, on the other hand, are likely to emerge as the dominant high-performance businesses in their industries.
The paper makes the following recommendations:
- Overcoming internal barriers to change will require strong leadership and engagement of all levels of the organization—both in designing the response to the incumbent strategy and executing against it with conviction.
- New structures and processes can help, for example appointing an executive team with the responsibility and authority to design and deliver the response can help to break up the silos and create momentum for change.
- Speed is of the essence. At the same time that you are considering your response, your existing competitors and potential entrants to your market are calculating how to take share away from you.
The paper goes on to suggest questions your company should be asking itself include:
- How can we use this window of opportunity to fundamentally restructure and streamline the cost base?
- How can we strengthen the loyalty and profitability of our existing customer base while growing our share of the most profitable customers?
- How can we capture a higher share of value versus upstream and downstream partners?
- How can we take advantage of favorable market conditions to scale the business, acquire new capabilities and enter new markets through acquisitions?
Monitor Consulting recently published on StrategicOxygen.com on the importance of awareness of where your organization currently exists. That progression is dependent on awareness.
Similar to Monitor Consulting, we too provide organizational assessments and have have seen vast misalingment, but also a lack of metrics to even build an understanding of current performance.
This is a picture from the blog entry on managing performance, how can it be applied to your current campaigns?
The article asks the following questions:
- What are the likely pain points for next year?
- Where are the pain points you still need to solve?
- What experiments must we force to happen?
- What skills do we need to enhance?
This Accenture paper addresses how to approach divestiture and rejuvenating your company’s portfolio. How to position for strong growth once conditions improve is a question we’ve been focusing heavily on here and one that you should keep top of mind.
Based on this paper, Accenture believes divestitures have an important role to play in enabling long-lasting positive change. This is the time to pursue acquisition of key assets required to capitalize on more appealing markets, at home or abroad.
Proctor & Gamble, the world’s largest consumer products company, has just announced a new strategy for growth. It starts with company values and sense of purpose. Their strategy is ‘purpose-inspired growth’ of ‘touching and improving more consumers’ lives in more parts of the world.’
P&G is a company that invests heavily in innovation, outspends the competition in R&D, and targets emerging markets with growth potential. Provided leaders understand the rising importance of values, a recent Harvard post outlines 3 key lessons:
- Inspire employees to add their hearts to their heads. People care more and work harder when values are tapped.
- Add potential for impact to your performance measurement. Seeing untapped potential raises aspirations.
- Find a way for market opportunities and commercial considerations to compliment each other by enhancing your values, not diluting them.
Recent research from McKinsey has found that more than 70% of offshore delivery centers have narrowed their global operations to India, China, and the Philippines. This lack of differentiation has introduced new risks including abrupt currency fluctuations, intense competition among the workforce, and regulatory limits.
The locations are chosen for the availability of highly skilled labor and low labor cost. While lower cost may result in the outset, the McKinsey research finds the overall risks to be higher than most understand them to be.
It seems offshore service providers largely have ignored the traditional investment rule of diversification. The McKinsey paper is arguing for an investment by BPO providers to make a portfolio approach. Countries such as Romania, Egypt, Russia, and Brazil are quickly on the rise of building a capacity comparable to China and the Philippines as a new choice.
A next-generation strategy for offshore operators should focus on the added benefits that come from multiple sourcing locations such as improved governance, process standardization, workflow transitions, and contingency planning. Combined with development of specialist skills to enhance innovation and IT project delivery, over the long term it is an investment in lower costs and improved performance.
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