Lead at your best

Posted in Aktuellt, Leadership / Ledarskap on december 31st, 2014 by admin

Five simple exercises can help you recognize, and start to shift, the mind-sets that limit your potential as a leader.

When we think of leadership, we often focus on the what: external characteristics, practices, behavior, and actions that exemplary leaders demonstrate as they take on complex and unprecedented challenges. While this line of thinking is a great place to start, we won’t reach our potential as leaders by looking only at what is visible. We need to see what’s underneath to understand how remarkable leaders lead—and that begins with mind-sets.

As important as mind-sets are, we often skip ahead to actions. We adopt behavior and expect it to stick through force of will. Sadly, it won’t if we haven’t changed the underlying attitudes and beliefs that drove the old behavior in the first place. Making matters worse, our behavior affects other people’s mind-sets, which in turn LS 1affect their behavior. A leader’s failure to recognize and shift mind-sets can stall the change efforts of an entire organization. Indeed, because of the underlying power of a leader’s mind-sets to guide an entire organization toward positive change, any effort to become better leaders should start with ourselves, by recognizing the thoughts, feelings, and emotions that drive us.1
In this article, we’ll share five simple exercises adapted from our new book, Centered Leadership,2 that can help you become more aware of your mind-sets. Armed with this knowledge, you can start making deliberate choices about the mind-sets that best serve you in a given moment and learn through practice to shift into them without missing a beat. This allows new behavior that improves your ability to lead at your best to emerge naturally.

1. Find your strengths
A surprising amount of our time and energy at work is focused on our shortcomings—the gap between 100 percent and what we achieved. For many executives, this pervasive focus on weaknesses fosters a mind-set of scarcity: a feeling that there are too few talented people in the organization to help it move the mountains that need moving. Many executives we talk to find it very hard to recognize, accept, and appreciate any other view. The same may be true for you. But what if you could move mountains by starting with strengths, leveraging people’s strong desire for meaning?

Try this exercise to learn your strengths. Find a comfortable spot without distraction. Close your eyes and take a few deep breaths. When you’re ready, put yourself back in these three moments, in turn:

As a small child. What form of imaginary play do you like most? What characters or roles do you choose? What games attract you most, and who do you get to be in them?
As a young adult. What activities draw you in so entirely that you lose track of time? What boosts your energy, and what does that say about you?
As a working adult. Look back to a high point that occurred over the past 18 months. What are you doing? What is the nature of the impact you are having on yourself, others, and the organization?
Looking across these moments, what do you value most about yourself? What would fill you with pride if you heard it from your colleagues and loved ones at a celebration for you? Those are your strengths.

Of course, there is no magic in the act of self-reflection on strengths. The magic comes when we learn to integrate strengths into our daily work—a real challenge, since many executives believe that strengths are the words that LS 2come before the inevitable “but” in their performance reviews. It is hard work to shift mind-sets in the face of mounting pressures and worries. We adopt the athletically inspired mantra “no pain, no gain,” as if the shift to “playing to our strengths” was unrealistic, yet we overlook the fact that professional athletes always aspire to play to their strengths.

Some executives will use the greater self-awareness the exercise brings to catalyze a career change—drawing on feelings that may have been percolating. The vast majority find that the simple act of peering through the lens of strengths is a doorway to enhance their power, generating positive emotions and energy. One executive admitted that the process of understanding her strengths—among them empathy and love of learning—and then hearing them confirmed and appreciated by her colleagues brought tears to her eyes. Another reported learning more about a colleague during a ten-minute conversation about strengths than he had in the previous ten years’ worth of conversations about everything else.

To be sure, everyone has weaknesses to improve. But deliberately shifting to a focus on strengths is a far more inspiring approach; you’ll raise the odds of lighting up everyone around you and unleashing enormous energy for creativity and change. Fabrizio Freda, the CEO of Estée Lauder, told us: “You need supertalented people who know they need to do fantastically well. And when your leadership team takes the same attitude, you create a culture where each one can give his or her best. . . . In particular, you have to find the strengths of each individual and of the organization—and then you can create magic.”

2. Practice the pause
We all face challenges at work: impossible deadlines, missed budgets, angry customers, sharp-elbowed colleagues, unreasonable bosses. When the upset caused by any of these experiences threatens something at stake for you, you are likely to suffer an “amygdala hijack”—that moment when your brain sends cortisol and adrenaline coursing through your body to help you defend yourself. You may lash out in anger, walk out on your colleagues, or simply stop in your tracks.

Instead of that “fight, flight, or freeze” reaction, what if you could pause, reflect, and then manage—creatively and effectively—what you’re experiencing? Here’s a tool to help. Recall an upsetting thing that happened recently but still carries an emotional charge. You were not at your best; you felt fear or anger in the moment, along with unpleasant physical sensations: a racing heart, a knot in your stomach, or even nausea. Put yourself back in that moment now. As you do, keep in mind the metaphor of an iceberg, where little is visible above the surface.

In this moment, notice the impact on yourself. What are you doing or not doing? What are you saying or not saying? How are you acting? What effect are your words and actions having?
Below the waterline. What are you thinking and feeling but not expressing? What negative outcomes are you most worried about?
Deeper still, look at your values and beliefs. What is most important to you? What belief do you hold about this situation, about yourself, and about others?
Even deeper, examine your underlying needs. What is at stake for you here? Are you aware of any deeper desires and needs?
Surprisingly, perhaps, we most often create the outcome we fear. Worried about losing control? When you snapped at your team, you just did. Worried about being heard? When you argued defensively, people turned away.

Pause and ask, “What did I really want for—and of—myself in that moment? By noticing when our attention is focused on needs that we want to protect, and redirecting it instead toward the experience we want to create, we open up access to a greater range of behavior.

A senior executive, for example, was involved with a large operational-change effort. He had been at a team meeting to discuss safety standards, and things didn’t go well—he had not created the outcome he wanted. He had hoped for a learning session that generated solutions and empowered the local general manager leading it. Instead, he had remained largely quiet and offered broad-brush advice based on his own experience. The meeting felt like a surface-level discussion or, worse, a top-down audit.

Examining his own motivations, the executive saw he was leery of destroying the general manager’s confidence by speaking; he wanted people to rise to the challenge and learn. But he also wanted to preserve group harmony and be liked. By avoiding conflict and not taking a stand, he was creating the outcome he feared—a vicious cycle of inaction, disengagement, and defensiveness.

With this recognition, he could begin to shift. When he felt this same tension rising, he practiced pausing, thinking about his intentions, and then constructively voicing his concerns or asking a question. His example prompted others on his team to do the same, opening the door for more learning-focused interactions—his initial goal.

LS 3Further, to help teammates increase their self-awareness, he instituted a “check-in” at every meeting’s start. During this step, colleagues would each briefly describe something happening “under the waterline” for them: say, a stressful project deadline. This ritual helped all team members to pause, reflect, and better understand their own mind-sets and those of colleagues. It sparked more honest, productive conversations and encouraged teammates to trust each other—a key factor, as we’ll see.

By figuring out how to pause and reengage our “thinking” brains (the parts governing executive functions, such as reasoning and problem solving), we can make the shift from a mind-set of threat avoidance (a fear of losing) to one of learning and of getting the most out of the moment.

3. Forge trust
Senior leaders need a community of supporters to achieve audacious goals, for communities are built through shared objectives and mutual trust. Yet not everyone views trust in the same way, so as leaders we must learn what others value if we want to inspire trust. At a minimum, the effort leads to greater understanding.

In fact, simply recognizing and embracing the differences in how people perceive trust can strengthen it. Once we are aware of our own—or others’—profiles, we tend to adjust our behavior subconsciously. When we do so deliberately as well, the results are quite powerful. After all, it’s our behavior that instills trust in others, not our intentions.

Take this test to see what aspects of trust matter most to you. For each of the elements below, score yourself from 1 (I rarely do this) to 7 (I regularly do this):

Reliability. I don’t make commitments I can’t keep; I always clarify expectations and deliver on promises.
Congruence. My language and actions are aligned with my thinking and true feelings.
Acceptance. I withhold judgment or criticism; I separate the person from the performance.
Openness. I state my intentions and talk straight; I’m honest about my limitations and concerns.
Consider the case of the CEO of a large bank who was dissatisfied with how his company had changed: what had once seemed to be a collaborative environment now felt like the opposite. Executives reported an atmosphere of defensiveness, bureaucracy, and pervasive mistrust. These feelings reinforced a “silo” culture that made it harder to collaborate on launching new products.

The senior team used the exercise above to spark a broader discussion about trust and the company’s culture. Fairly quickly, the team recognized that the bank’s moves to become more focused on key performance indicators (consistent with reliability) were the source of the tension. Digging deeper, the team learned that the big emphasis on performance had, over time, discouraged managers from raising concerns about the implications of the program for employees and customers. This, in turn, lowered the quality of debate in meetings and encouraged defensive and bureaucratic behavior.

Consequently, the changes were widely seen to be in opposition to acceptance and openness, trust elements that mattered dearly to employees. People were concerned that openness with customers was being sacrificed to “making the numbers.” This realization spurred the senior team to find areas where reliability and openness could be seen as complements, not opposites—a shift in mind-set and, ultimately, behavior that helped the bank to improve the customer experience significantly.

When you shift your mind-set from “trustworthy people are a scarce resource” to “I can inspire almost everyone to trust me more,” your community of supporters will expand effortlessly.

4. Choose your questions wisely
What propels leaders to carry out unprecedented, audacious visions? Fear? Foolishness? Ambition? A sense of duty?

Hope. Leaders we admire tend to use fear as fuel for action, but they favor hope. Fear is of value because it gets our adrenaline flowing, sharpens us, and makes extraordinary contributions possible. But it’s easy to succumb to fear and feel overwhelmed by downside risks. Fear spreads through an organization like a contagion. Without the counterbalance of hope, fear paralyzes. So how can we find the right mix of both? Start with the questions we ask.

Try this exercise. Find a discussion partner and ask that person to discuss his or her most pressing work problem with you. However, at first use only these questions to guide the conversation:

What’s the problem?
What are the root causes?
Who is to blame?
What have you tried that hasn’t worked?
Why haven’t you been able to fix the problem yet?
In a few minutes, stop, thank your partner, and ask for a redo. Restart the discussion, using these questions instead:

What would you like to see (and make) happen?
Can you recall a time when the solution was present, at least in part? What made that possible?
What are the smallest steps you could take that would make the biggest difference?
What are you learning in this conversation so far?
Five minutes in, stop again and debrief your partner about his or her thoughts and feelings during the first versus the second discussion. What did you notice? What were his or her underlying mind-sets? What were yours?

The difference is tangible. The first set of questions, great for solving technical problems, often prompts defensive reactions and leaves participants feeling drained. By contrast, participants report feeling animated, curious, and engaged the second time around.

We tend to use the first set more often. These problem-focused questions work well for technical, linear issues that have “right” answers. As we move up the ranks as leaders and the challenges become more complex, our problem-solving instincts can lead us astray. By contrast, when we develop solution-focused instincts, we empower and engage others, deliberately infusing hope. Remember that employees with problems already feel fear. Problem-focused questions only fuel it.

A plant manager we know used this approach to spark better ideas and improve accountability on the front line. He created a pack of cards that shop-floor supervisors could use with line workers in daily operational problem-solving sessions. On one side of the card, the problem-focused questions; on the other, a solution-focused translation. The supervisors quickly found that using both sides of the card brought markedly better results than the traditional questions alone—and that the range and quality of solutions improved dramatically.

The plant manager’s message was simple, yet powerful: look for problems and you’ll find them; look for solutions and people will offer them. By choosing our questions thoughtfully, we can shift our mind-set from “my organization is a problem to be solved” to “my organization holds solutions to be discovered.”

5. Make time to recover
Who wouldn’t want to work in high-performance mode nonstop? A desire for achievement and competitive success urges us on—often past our physical and mental limits. Professional athletes build in time to recover, but executives rarely do. Why not? The limiting beliefs are well accepted: commitment is noticed through hard work and suffering; only slackers take time off during the day. People tell the story of a hospitalized colleague with awe: “He worked so hard he collapsed, in service of the company.” Hero? Not really.

If that young executive had the self-awareness to shift his mind-set from managing time to managing and balancing energy,3 he might have remained in good health. The solution is simple: find ten minutes twice each day (morning and afternoon) to recover, stepping back into a zone of low but positive energy to recharge. Consider all four sources: physical, mental, emotional, and spiritual activities can each fuel you. Schedule recovery activities, and stick to them until this is your new normal. Here are some examples we’ve observed:

Physical. A Brazilian exec walks up a few flights of stairs quickly—more flights if she is agitated or upset—and then she slowly walks down, giving herself the time to reflect and come back to center. An Italian senior manager has an afternoon coffee, walking to the lobby café instead of the coffee stand on his own floor.
Mental. When a US CEO needs to recharge his energy levels, he consciously seeks out conversations with employees, so he can learn something new.
Emotional. A Mexican company vice president chooses to recharge by reaching out to friends regularly to send thanks and love. A Swedish entrepreneur reviews an e-mail folder where she keeps compliments, thank-you notes, and warm greetings.
Spiritual. A technology executive turns her chair to look out the window, meditating on nature and life in the form of the oak tree that fills her view. A pharmaceutical executive brings an empty chair, representing patients, to LS 4important meetings, to remind everyone why they are there.
Of course, managing energy isn’t necessarily a solitary activity; we’ve seen leaders inject recovery practices into daily business routines. For example, the CFO of an aerospace company found that a weekly meeting he chaired was draining. To energize his team, he changed the format, starting each discussion with the prior week’s notable lessons and achievements. The new format was a hit: weekly attendance went up, the meetings’ substance improved dramatically, and what had been a pure number-crunching exercise began to generate new ideas the company could use. The meetings were more fulfilling for the CFO, too. “I finally feel like I’m a thought partner to the business,” he told us, “rather than a cop.”

As you reflect on the mind-sets that limit you, consider a shift to “practicing recovery regularly helps me spend more time in high performance.”

In our work with executives, we’ve found that tools, practices, and exercises like the five above help leaders understand—and shift—the mind-sets that govern their actions. Trying to change our behavior (what is seen and judged) will fail—the old, hard-wired patterns return when pressure mounts—unless we have first addressed internal patterns with conscious effort.

To make change stick, unwire and rewire from the inside. Start with self-awareness: seeing yourself as a viewer of your own “movie.” Once you see the pattern, you have a choice whether to change. Owning the choice creates enormous freedom. And as you exercise that freedom to change your mind-set and practice new behavior, you role-model a transformation—creating what does not exist today but should. And isn’t that what leaders do?

Source: McKinsey.com, April 2014
Authors: Joanna Barsh and Johanne Lavoie
About the authors: Joanna Barsh is a director emeritus in McKinsey’s New York office, and Johanne Lavoie is a master expert in the Calgary office.
More: This article is based in part on the authors’ book, Centered Leadership: Leading with Purpose, Clarity, and Impact (Crown Business, March 2014).

What could happen in China in 2015?

Posted in Aktuellt, Allmänt, Thailand / Asia on december 20th, 2014 by admin

What do you get when you add slower economic growth, greater volatility, and rising competition to more international flights and genuine Chinese innovation? McKinsey director Gordon Orr’s annual predictions.

It seemed harder to prepare my “look ahead” this year. On reflection, I believe this is because political and economic leaders in China have clear plans and supporting policies that they are sticking to. You can debate the pace at which actions are being taken, but not really the direction in which the country is traveling. This means a number of the themes I highlighted for this year will remain relevant in 2015:

Improving productivity and efficiency will remain the key to maintaining profitability for many companies, given lower economic growth (overall and at a sector level) and the impact of producer price deflation on multiple sectors.
china 4The impact of technology as it eliminates jobs in services and manufacturing will become even greater (but still not in government).
As a result, the government will keep a sharper focus on net job creation and the quality of those new positions. Companies will hire even more information technologists to keep up in the race to exploit technology better than their competitors.
The push to lower pollution, and now carbon emissions, will lead to even greater investment in domestic solar and wind farms, boosting the global position of Chinese producers.
High-speed-rail construction will continue domestically and increasingly abroad, as Chinese companies become the builder of choice for high-speed rail globally.
Beyond these, there are several additional themes that will be important in 2015. I describe them below.

What else may happen in 2015?
China will be the focus of many, many boardroom discussions around the world next year. Unlike most previous years, the topic won’t be whether to double down on China—it will be whether to hold or even reduce exposure to a particular sector or the country overall. With China experiencing lower growth, greater competition, and more china 5volatility, it won’t only be multinational companies having these conversations. Similar questions will be asked by senior executives of many of China’s private-sector leaders, who are looking to sustain their historic growth rates by pivoting to new sectors within China and especially to international markets. Most companies will ultimately decide to stick with their current China strategy, but there will be real choices and trade-offs on the table.

What will be at the center of these conversations? I believe that it will be a debate about Chinese consumers and how they will behave in a slowing economy and, ultimately, the extent to which they will be the driver of economic growth over the next few years. Let me elaborate.

Next year will likely see the lowest annual income growth in China for at least a decade, with knock-on implications across the economy. Early signs are already there. Government data show urban disposable income rose in single digits year on year in the first nine months of 2014, a hint at the big shift that is under way. The vast majority of the economy has seen double-digit wage growth for the past decade, with the minimum wage in many citieschina 3 doubling in less than five years. This has created an expectation that this is simply the new normal for income growth. It is not. As a result, workers are pricing themselves out of the market: for example, International Monetary Fund research in China suggests that a 10 percent increase in the minimum wage leads to a 1 percent fall in employment.

The manufacturing sector provides a telling example. Manufacturing wages are up fourfold in dollar terms over the past decade. In recent years, private-sector enterprises have had to agree to annual wage increases three to four percentage points higher than state-owned enterprises in order to narrow the significant pay differential that had developed by 2010. The challenges for low-skill assemblers in Guangdong and Zhejiang are well documented. They are downsizing, as countries from Bangladesh to Kenya gain share. The cost of technology that substitutes for labor in factories has plummeted, displacing more and more workers. Chinese assembly lines today bear no resemblance to those of a decade ago. The best Chinese private companies are as capital intensive as an equivalent factory in the United States. Employers today are under enormous short-term pressure to reduce wage costs amid ongoing weakness in the Purchasing Managers Indexes and persistent deflation in producer prices.

Service industries will also be affected. For example, Chinese airlines use e-ticketing to substitute for desk agents at least as aggressively as any mature-market airline. Telecommunications, financial services, and retail are all being challenged by “people lite” Internet-based business models from new competitors, which have already led them to substantially reduce hiring. In 2015, they will need to quietly cut back further, whether they are in the private sector or a state-owned enterprise—it doesn’t matter. In some sectors, such as professional-services industries, entry salaries are actually falling. I believe 2015 will be seen as a tipping point for wages in China.

Job seekers next year will realize that the historical attractions of working in state-owned enterprises and government are not coming back—the job for life, opportunities for status, high pay, and other perks are gone for china 6good. Smaller state-owned enterprises are, in many cases, anyway destined for the more commercially demanding world of private ownership. Many larger state-owned enterprises are recruiting less and encouraging departures to improve efficiency. Lower growth means fewer promotion opportunities, and the upcoming regulatory limitations on the multiple of highest and lowest compensation in state-owned enterprises will increase wage compression.

The private sector has become the driver of job creation in China, with official statistics (likely understated) showing an increase of 50 percent or more in private-sector jobs over the past five years. However, many of these jobs are relatively low skill and low paying. In 2015, the service sector’s criticality to job creation will be called out even more by the government, with expanded policies to encourage service-sector hiring and additional focus on the quality of jobs created.

In the government sector, the official salaries of teachers, doctors, and civil servants remain low, and opportunities for side arrangements are shrinking. Eventually, the government is going to have to pay its employees more—but I don’t see that happening at scale in 2015, despite the growing number of cases of teachers striking for better pay. The number of students taking the central-government entry exam fell this year despite an increase in open positions. There has to be a connection.

The substitution by technology of certain categories of service jobs that have been at the heart of the growing middle class—call centers, shop assistants, bank tellers, insurance agents—will accelerate in 2015. Even those who retain their jobs will wonder if technology will displace them next. Critically, their confidence in their personal economic future will decline.

At the city level, we will start to see signs of the “Detroitization” (post-auto) or “Glasgowization” (post-shipbuilding) of some Chinese cities. Many cities are heavily dependent on a single industry, not just mining or steel but often a specific single manufactured good—lamps, socks, or automotive wheels. While great in times of fast growth, the reverse is also true. It’s not just that real-estate construction is no longer a driver of growth in those cities. Construction, even when it overshot true demand, was always driven off the back of the success of an industry creating jobs and incomes that enabled citizens to buy housing. That success will no longer be there. And with loans to business often guaranteed by other companies in the same industry in the same city, a single default can quickly cascade into other otherwise viable companies. In 2015, we will see the first of many “city transformation” programs as cities go through a Chinese version of restructuring and workout. Hopefully, cities at risk will see what may be coming and will act early to create new economic engines.

It’s all about consumer confidence
As a result, Chinese consumers will feel less financially secure in 2015. Fewer will feel they have a job for life, most will see wages rise more slowly, many of their real-estate investments will decline in value, and lower interest rates will make other investment products look less attractive. Overall, the momentum of their wealthchina 2 generation will slow dramatically after a decade of remarkable acceleration. And if they have children graduating from college in 2015, they will likely see them struggle to get a good job.

Lower consumer confidence may then translate into lower growth in discretionary spending. Fortunately for many in the middle class, they have already bought their home, car, and other core trappings of middle-class life. Many Chinese consumers could easily postpone further big-ticket-consumption items and, at the same time, cut back on daily consumption spending. Price deflation reduces the perceived opportunity cost of waiting to spend. Already there are signs of this. Recent Nielsen numbers showed only a 3 percent increase in annual purchases of fast-moving consumer goods. More specifically, food and beverage company Tingyi reported a 13 percent decline in turnover in the third quarter of 2014, while beer volume sold by brewing and beverage group SABMiller fell in its most recent reporting period. And remember: very few in the current Chinese middle class were in the middle class the last time there was an economic slowdown. They could well overreact to a small slowdown and turn it into a larger one as a result.

With fewer attractive investment options in China, the opportunity to invest in Hong Kong–listed companies through the Shanghai–Hong Kong stock-exchange connection will look more attractive in 2015. Currently, a lack of awareness about the available stocks and a high minimum investment are holding people back, and the fund flows are way below daily limits. In 2015, that will change.

Where will growth come from?
The result of all of this is that drivers of economic growth will be harder to find in 2015. Increasing consumption has accounted for more than 50 percent of GDP growth for the past couple years. Its share, for reasons laid out above, will likely be smaller next year. Infrastructure investment is directly under government control and will likely remain at current levels and contribute to growth as it did this year. However, property investment—historically, the driver of around 15 percent of GDP—will probably have another weak year. Residential supply has exceeded demand in many cities, and investor interest has diminished as prices have stagnated. While the picture is city specific, significant unsold inventory exists in many cities, and new building is only adding to it. Policy support will have some impact in growing demand, but it would take much lower real interest rates to make a meaningful difference. Could growth be driven by exports? Not since 2007 have net exports contributed more than a percentage point to China’s growth. Recovery in the United States has not led to a growth in net exports, and a big boost from demand in Europe in 2015 seems unlikely, even with lower oil prices.

Students reinvent themselves for the jobs of 2015
It will be another year of frustration for students, both those graduating and those still in school considering their prospects. A substantial proportion of new graduates will not find jobs that require a degree. Indeed, many will find what they learned and how they learned at university has done little to prepare them for the 2015 job market in China. Other than for an elite minority, starting salaries will be flat yet again, at levels less than the income level of a full-time taxi driver (student starting salaries have only increased 1 to 2 percent annually over the past five years, one of the few categories in the economy where wages have not risen). The consequences will become increasingly obvious—graduates will be unable to pay off their education debts, let alone save to buy a home or a car or to become meaningful middle-class consumers.

The way forward for most is finding employment in the private sector, services, or small and midsize enterprises, or becoming an individual entrepreneur—none of which average students have been prepared for by their education or their family. Growth in vocational schools is being boosted by many newly graduated students who realize they need to gain more work-relevant skills. Those students still in school will become more vocal in demanding change in what and how they are taught.

Individuals going global
Governments around the world will compete harder to capture a greater share of China’s international tourism and outbound-investment boom. The new US ten-year multientry visa sets a bar for other countries to follow. The United Kingdom’s guaranteed 24-hour turnaround on visas for premium business travelers sets a bar for speed, although the $1,000-plus price is eye watering. Beyond visas, many countries also offer popular investment paths to a passport or permanent residency. The majority of those using these schemes in most countries are Chinese. In the most popular countries, limited supply is allowing governments to push up the required investment dramatically. We might hear about a $10 million passport this year.

Airlines are also big beneficiaries of this growth in international travel, with a new wave of growth in direct flight connections to key global cities from second- and third-tier Chinese cities (two recent examples are Wuhan to San Francisco and Changsha to Frankfurt). While these routes have been subsidized initially by local Chinese governments, the subsidies won’t be needed for long. The big Middle Eastern airlines are also expanding beyond Beijing, Guangzhou, and Shanghai, for example, with Qatar Airways now flying into Hangzhou. Next year will see the launch of dozens more direct flights to non-Asian destinations from second- and third-tier Chinese cities.

Chinese innovation—seriously
Does China innovate? Next year, we will finally stop asking that question and focus on the global impact of the china 6innovation that is clearly taking place. The number of Silicon Valley–based investors visiting China to learn from Internet-enabled business is now remarkable. These folks don’t waste their time on sight-seeing trips.

Beyond the Internet, hundreds of midsize companies in the Chinese industrial sector are creating their own version of the German Mittelstand, providing ever-more-serious competition to Fortune 1000 competitors. No longer focused simply on cheap, they deliver great value, listen to what customers want, and develop products in response. Only this month, on a visit to India, I noticed a tipping point. No longer were there complaints about the low quality of Chinese industrial goods; instead, there were compliments about their remarkably high quality. Biotech, pharmaceutical, consumer electronics, medical tech, drones, graphene, and telecommunications equipment are just some of the sectors where aggressive Chinese midsize companies lead the way in their field, often privately owned by a founding chairman or CEO who has a true passion to become a global leader.

Rule of law increases its impact in 2015
A comment you’ll hear less in 2015: I can do this—it’s China. Businesses will more fully recognize that anticorruption initiatives and rule of law with Chinese characteristics are long-term foundational elements of this leadership’s platform—they’re not optional, and they’re not going away. Companies will need to become clear aboutchina 1 how recent statements—such as President Xi declaring that the objective of advancing the rule of law is conducive not only to updating state governance but also to deepening reform—apply to them.1
We will see the government standardize more of its approaches to decision making on business and regulatory issues, using the precedent of cases heard. For example, reviews of acquisitions should be faster, with clearer conclusions. We will also see the government leveraging technology more to monitor, audit, and impose sanctions on bad behavior, from tax avoidance to overly aggressive entertainment of government officials. Where could anticorruption investigations bite in 2015?

In an Internet company where a senior executive gets investigated for begging forgiveness, rather than asking permission, once too often in local government, where rapid asset sales made it possible for some sales to be made to favored individuals at below-market prices in companies that have yet to fully get their sales forces under control.

Return of the DVD store
Shops offering pirated DVDs will make a comeback in 2015 as the rule of law extends to what can and cannot be shown online, pushing very popular international series off the Internet. US series including The Big Bang Theory and The Good Wife have already been blocked, and rules announced in September by the State Administration of Press, Publication, Radio, Film and Television require unapproved shows to be removed from websites by the new year. Perhaps only in China will the selection of available online content be more tightly controlled than the availability of physical content. Or maybe the international providers of virtual private networks will learn to accept payment from UnionPay cards, and demand for their services will skyrocket. Cinemas will likely also benefit, as good-quality online sources for newly released movies have almost entirely disappeared.

A footnote: be careful with national-level statistics from China in 2015. In times of slower growth, they are historically less reliable.

Source: McKinsey.com, 20 December 2014
By: Gordon Orr
About the author: Gordon Orr is a director in McKinsey’s Shanghai office. For more from him on issues of relevance to business leaders in Asia, visit his blog, Gordon’s View, at McKinsey’s Greater China office website.

Making boards work

Posted in Aktuellt, Board work / Styrelsearbete, Executive Team / Ledningsgruppsarbete on december 20th, 2014 by admin

Most directors don’t understand the company’s strategy and prioritize short-term gain at the expense of creating long-term value. We recommend four essential changes.

Boards aren’t working. It’s been more than a decade since the first wave of post-Enron regulatory reforms and, despite a host of guidelines from independent watchdogs such as the International Corporate Governance Network, most boards aren’t delivering on their core mission: providing strong oversight and strategic support for management’s efforts to create long-term value.

This isn’t just our opinion. Directors also know they’re falling short. A mere 34 percent of the 772 directors surveyed by McKinsey in the spring of 2013 agreed that the boards on which they served fully comprehended their companies’ strategies. In March 2014, McKinsey and the Canada Pension Plan Investment Board asked 604 C-suite executives and directors around the world which source of pressure was most responsible for their organizations’ overemphasis on short-term financial results and underemphasis on long-term value creation. The most frequent response, cited by 47 percent of those surveyed, was the company’s board. And the result among those who identified themselves as sitting directors on public-company boards? Seventy-four percent.

These are shocking results. How can companies strengthen their boards’ knowledge and help directors build, BR 1maintain, and refine a long-term mind-set? A good first step might be to help everyone firmly grasp what a director’s “fiduciary duty” really is. Most legal codes stress two core elements: loyalty (placing the company’s interests ahead of one’s own) and prudence (applying proper care, skill, and diligence to business decisions). Nothing suggests that the role of a loyal and prudent director is to pressure management to maximize short-term shareholder value to the exclusion of any other interest. To the contrary, the logical implication is that he or she should help the company thrive for years into the future.

If directors can keep their fiduciary duty firmly in mind, it should encourage big changes in the boardroom. They will spend less time talking about meeting next quarter’s earnings expectations, complying with regulations (although that, of course, must be done), and avoiding lawsuits, and more time discussing potential new goods, services, markets, and business models, as well as what it takes to capture value-creation opportunities with big upsides over the long term. Let’s look at four familiar areas where change is essential for this to happen:

Selecting the right people
What’s behind the dramatic increase in interventions by activist shareholders? According to Stephen Murray, president and CEO of CCMP Capital Advisors, a major private-equity firm, “The whole activist industry exists because public boards are often seen as inadequately equipped to meet shareholder interests.” In short, companies keep appointing directors who aren’t independent thinkers and whose experience is too general.

Spending quality time on strategy
Most governance experts would agree that public-company directors need to put in more days on the job and devote more time to understanding and shaping strategy. While we recommend that board members dedicate at least 35 days a year to the job, the precise number of days a board meets or the mix of field trips isn’t the main issue. What matters most is the quality and depth of the strategic conversations that take place.

Engaging with long-term investors
While boards may be guilty of pushing executives to maximize short-term results, we have no doubt where that pressure really originates: financial markets. That’s why it’s essential to persuade institutional investors, whose ownership position makes them the cornerstone of our capitalist system, to be a counterforce. Boards can and should be far more active in facilitating a dialogue with major long-term shareholders—and many investors would welcome such engagement.

Paying directors more
Good capitalists believe in incentives. There is a growing consensus that directors should sit on fewer boards and get paid more. We fully agree, but the even more important issue is to structure that pay toward longer-term rewards. To get directors really thinking and behaving like owners, companies should ask them to put a greater portion of their net worth on the table. This could be achieved by giving them a combination of incentive shares, a portion of which vests only some years after directors step aside, and requiring incoming directors to purchase equity with their own money.

While the thrust of each of these broad changes is relatively simple to articulate, none is easy to make. All of them must fit the specific company and industry context. Introducing them—and making them stick—will require deft handling by board chairs or lead directors, working alongside CEOs. But we need a deep shift in the culture, behavior, and structure of public-company boards. Over time, nothing else will do more to ensure that these core institutions of our capitalist system deliver the kind of sustained value creation that long-term shareholders expect and that our society deserves.

Read the full article, “Where boards fall short,” on the Harvard Business Review website. For more on this topic, visit the Focusing Capital on the Long Term website.

Source: McKinsey.com, 20 December 2014
Authors: Dominic Barton and Mark Wiseman
About the authors: Dominic Barton is McKinsey’s global managing director, based in McKinsey’s London office; and Mark Wiseman is the president and chief executive officer of the Canada Pension Plan Investment Board.

Amerikansk stad förbjuder all mobiltelefoni

Posted in Aktuellt, Allmänt, Digitalisering / Internet on december 20th, 2014 by admin

I Green Bank i USA är mobiltelefoner och wifi-utrustning mot lagen. Det är som att slungas 30 år tillbaka i tiden, rapporterar Discovery Channel och UR Play.

PS TV Den mobila revolutionen har nått så gott som hela världen. Men det finns en plats i USA där tiden stått stilla. I Green Bank, West Virginia, är det förbjudet att använda mobiltelefoner och trådlös wifi-utrustning. Anledningen är det stora radioteleskopet i närheten. För att inte störa de astronomiska mätningarna, har myndigheterna upprättat en mobilfri zon runt teleskopet.
Det finns mobiltelefoner – men ingen täckning. Vi pratar total radioskugga.
“Det har inte varit ett problem förrän nu. Ökad användning av trådlös teknologi är ett problem för radioastronomin”, säger Michael Holstine, chef för Green Bank-teleskopet, i programmet på UR Play.
För att stoppa invånare från att använda wifi kör myndigheterna omkring i en särskilt bil, som spårar och plockar bort illegal utrustning.

Källa: Dagensps.se, 18 december 2014

Strategic principles for competing in the digital age

Posted in Aktuellt, Allmänt, Digitalisering / Internet on december 18th, 2014 by admin

The board of a large European insurer was pressing management for answers. A company known mostly for its online channel had begun to undercut premiums in a number of markets and was doing so without agents, building on its dazzling brand reputation online and using new technologies to engage buyers. Some of the insurer’s senior managers were sure the threat would abate. Others pointed to serious downtrends in policy renewals among younger customers avidly using new web-based price-comparison tools. The board decided that the company needed to quicken its digital pace.

DA 5For many leaders, this story may sound familiar, harkening back to the scary days, 15 years ago, when they encountered the first wave of Internet competitors. Many incumbents responded effectively to these threats, some of which in any event dissipated with the dot-com crash. Today’s challenge is different. Robust attackers are scaling up with incredible speed, inserting themselves artfully between you and your customers and zeroing in on lucrative value-chain segments.

The digital technologies underlying these competitive thrusts may not be new, but they are being used to new effect. Staggering amounts of information are accessible as never before—from proprietary big data to new public sources of open data. Analytical and processing capabilities have made similar leaps with algorithms scattering intelligence across digital networks, themselves often lodged in the cloud. Smart mobile devices make that information and computing power accessible to users around the world.

As these technologies gain momentum, they are profoundly changing the strategic context: altering the structure of competition, the conduct of business, and, ultimately, performance across industries. One banking CEO, for instance, says the industry is in the midst of a transition that occurs once every 100 years. To stay ahead of the unfolding trends and disruptions, leaders across industries will need to challenge their assumptions and pressure-test their strategies.

Opportunities and threats
Digitization often lowers entry barriers, causing long-established boundaries between sectors to tumble. At the same time, the “plug and play” nature of digital assets causes value chains to disaggregate, creating openings for focused, fast-moving competitors. New market entrants often scale up rapidly at lower cost than legacy players can, and returns may grow rapidly as more customers join the network.
Digital capabilities increasingly will determine which companies create or lose value. Those shifts take place in DA 3the context of industry evolution, which isn’t monolithic but can follow a well-worn path: new trends emerge and disruptive entrants appear, their products and services embraced by early adopters (exhibit). Advanced incumbents then begin to adjust to these changes, accelerating the rate of customer adoption until the industry’s level of digitization—among companies but, perhaps more critically, among consumers as well—reaches a tipping point. Eventually, what was once radical is normal, and unprepared incumbents run the risk of becoming the next Blockbuster. Others, which have successfully built new capabilities (as Burberry did in retailing), become powerful digital players. (See the accompanying article, “The seven traits of effective digital enterprises.”) The opportunities for the leaders include:
Enhancing interactions among customers, suppliers, stakeholders, and employees. For many transactions, consumers and businesses increasingly prefer digital channels, which make content universally accessible by mixing media (graphics and video, for example), tailoring messages for context (providing location or demographic information), and adding social connectivity (allowing communities to build around themes and needs, as well as ideas shared among friends). These channels lower the cost of transactions and record them transparently, which can help in resolving disputes.
Improving management decisions as algorithms crunch big data from social technologies or the Internet of Things. Better decision making helps improve performance across business functions—for example, providing for finer marketing allocations (down to the level of individual consumers) or mitigating operational risks by sensing wear and tear on equipment.
Enabling new business or operating models, such as peer-to-peer product innovation or customer service. China’s Xiaomi crowdsources features of its new mobile phones rather than investing heavily in R&D, and Telstra crowdsources customer service, so that users support each other to resolve problems without charge. New business or operating models can also disintermediate existing customer–supplier relations—for example, when board-game developers or one-person shops manufacture products using 3-D printers and sell directly to Amazon.
The upshot is that digitization will change industry landscapes as it gives life to new sets of competitors. Some players may consider your capabilities a threat even before you have identified them as competitors. Indeed, the forces at work today will bring immediate challenges, opportunities—or both—to literally all digitally connected businesses.

Seven forces at work
Our research and experience with leading companies point to seven trends that could redefine competition.

1. New pressure on prices and margins
Digital technologies create near-perfect transparency, making it easy to compare prices, service levels, and product performance: consumers can switch among digital retailers, brands, and services with just a few clicks or finger swipes. This dynamic can commoditize products and services as consumers demand comparable features and simple interactions. Some banks, for instance, now find that simplifying products for easy purchase on mobile phones inadvertently contributes to a convergence between their offerings and those of competitors that are also pursuing mobile-friendly simplicity.

Third parties have jumped into this fray, disintermediating relationships between companies and their customers. The rise of price-comparison sites that aggregate information across vendors and allow consumers to compare prices and service offerings easily is a testament to this trend. In Europe, chain retailers, which traditionally dominate fast-moving consumer goods, have seen their revenues fall as customers flock to discounters after comparing prices even for staples like milk and bread. In South Korea, online aggregator OK Cashbag has inserted itself into the consumer’s shopping behavior through a mobile app that pools product promotions and loyalty points for easy use across more than 50,000 merchants.

These dynamics create downward pressure on returns across consumer-facing industries, and the disruptive currents are now rippling out to B2B businesses.

2. Competitors emerge from unexpected places
Digital dynamics often undermine barriers to entry and long-standing sources of product differentiation. Web-based service providers in telecommunications or insurance, for example, can now tap markets without having to build distribution networks of offices and local agents. They can compete effectively by mining data on risks and on the incomes and preferences of customers.

DA 4At the same time, the expense of building brands online and the degree of consumer attention focused on a relatively small number of brands are redrawing battle lines in many markets. Singapore Post is investing in an e-commerce business that benefits from the company’s logistics and warehousing backbone. Japanese web retailer Rakuten is using its network to offer financial services. Web powerhouses like Google and Twitter eagerly test industry boundaries through products such as Google Wallet and Twitter’s retail offerings.

New competitors can often be smaller companies that will never reach scale but still do a lot of damage to incumbents. In the retailing industry, for instance, entrepreneurs are cherry-picking subcategories of products and severely undercutting pricing on small volumes, forcing bigger companies to do the same.

3. Winner-takes-all dynamics
Digital businesses reduce transaction and labor costs, increase returns to scale from aggregated data, and enjoy increases in the quality of digital talent and intellectual property as network effects kick in. The cost advantages can be significant: online retailers may generate three times the level of revenue per employee as even the top-performing discounters. Comparative advantage can materialize rapidly in these information-intensive models—not over the multiyear spans most companies expect.

Scale economies in data and talent often are decisive. In insurance, digital “natives” with large stores of consumer information may navigate risks better than traditional insurers do. Successful start-ups known for digital expertise and engineer-friendly cultures become magnets for the best digital talent, creating a virtuous cycle. These effects will accelerate consolidation in the industries where digital scale weighs most heavily, challenging more capital- and labor-intensive models. In our experience, banking, insurance, media, telecommunications, and travel are particularly vulnerable to these winner-takes-all market dynamics.

In France, for instance, the start-up Free has begun offering mobile service supported by a large and active digital community of “brand fans” and advocates. The company nurtures opinion-leader “alpha fans,” who interact with the rest of the base on the Internet via blogs, social networks, and other channels, building a wave of buzz that quickly spreads across the digital world. Spending only modestly on traditional marketing, Free nonetheless has achieved high levels of customer satisfaction through its social-media efforts—and has gained substantial market share.

4. Plug-and-play business models
As digital forces reduce transaction costs, value chains disaggregate. Third-party products and services—digital Lego blocks, in effect—can be quickly integrated into the gaps. Amazon, for instance, offers businesses logistics, online retail “storefronts,” and IT services. For many businesses, it may not pay to build out those functions at competitive levels of performance, so they simply plug an existing offering into their value chains. In the United States, registered investment advisers have been the fastest-growing segment3 of the investment-advisory business, for example. They are expanding so fast largely because they “insource” turnkey systems (including record keeping and operating infrastructure) purchased from Charles Schwab, Fidelity, and others that give them all the capabilities they need. With a license, individuals or small groups can be up and running their own firms.

In the travel industry, new portals are assembling entire trips: flights, hotels, and car rentals. The stand-alone offerings of third parties, sometimes from small companies or even individuals, plug into such portals. These packages are put together in real time, with dynamic pricing that depends on supply and demand. As more niche providers gain access to the new platforms, competition is intensifying.

5. Growing talent mismatches
Software replaces labor in digital businesses. We estimate, for instance, that of the 700 end-to-end processes in banks (opening an account or getting a car loan, for example), about half can be fully automated. Computers increasingly are performing complex tasks as well. “Brilliant machines,” like IBM’s Watson, are poised to take on the work of many call-center workers. Even knowledge-intensive areas, such as oncology diagnostics, are susceptible to challenge by machines: thanks to the ability to scan and store massive amounts of medical research and patients’ MRI results, Watson diagnoses cancers with much higher levels of speed and accuracy than skilled physicians do.DA 2 Digitization will encroach on a growing number of knowledge roles within companies as they automate many frontline and middle-management jobs based upon synthesizing information for C-level executives.

At the same time, companies are struggling to find the right talent in areas that can’t be automated. Such areas include digital skills like those of artificial-intelligence programmers or data scientists and of people who lead digital strategies and think creatively about new business designs. A key challenge for senior managers will be sensitively reallocating the savings from automation to the talent needed to forge digital businesses. One global company, for example, is simultaneously planning to cut more than 10,000 employees (some through digital economies) while adding 3,000 to its digital business. Moves like these, writ large, could have significant social repercussions, elevating the opportunities and challenges associated with digital advances to a public-policy issue, not just a strategic-business one.

6. Converging global supply and demand
Digital technologies know no borders, and the customer’s demand for a unified experience is raising pressure on global companies to standardize offerings. In the B2C domain, for example, many US consumers are accustomed to e-shopping in the United Kingdom for new fashions (see sidebar, “How digitization is reshaping global flows”). They have come to expect payment systems that work across borders, global distribution, and a uniform customer experience.

How digitization is reshaping global flows
In B2B markets from banking to telecommunications, corporate purchasers are raising pressure on their suppliers to offer services that are standardized across borders, integrate with other offerings, and can be plugged into the purchasing companies’ global business processes easily. One global bank has aligned its offerings with the borderless strategies of its major customers by creating a single website, across 20 countries, that integrates what had been an array of separate national or product touch points. A US technology company has given each of its larger customers a customized global portal that allows it to get better insights into their requirements, while giving them an integrated view of global prices and the availability of components.

7. Relentlessly evolving business models—at higher velocity
Digitization isn’t a one-stop journey. A case in point is music, where the model has shifted from selling tapes and CDs (and then MP3s) to subscription models, like Spotify’s. In transportation, digitization (a combination of mobile apps, sensors in cars, and data in the cloud) has propagated a powerful nonownership model best exemplified by Zipcar, whose service members pay to use vehicles by the hour or day. Google’s ongoing tests of autonomous vehicles indicate even more radical possibilities to shift value. As the digital model expands, auto manufacturers will need to adapt to the swelling demand of car buyers for more automated, safer features. Related businesses, such as trucking and insurance, will be affected, too, as automation lowers the cost of transportation (driverless convoys) and “crash-less” cars rewrite the existing risk profiles of drivers.

Managing the strategic challenges: Six big decisions
Rethinking strategy in the face of these forces involves difficult decisions and trade-offs. Here are six of the thorniest.

Decision 1: Buy or sell businesses in your portfolio?
The growth and profitability of some businesses become less attractive in a digital world, and the capabilities needed to compete change as well. Consequently, the portfolio of businesses within a company may have to be altered if it is to achieve its desired financial profile or to assemble needed talent and systems.

Tesco has made a number of significant digital acquisitions over a two-year span to take on digital competition in consumer electronics. Beauty-product and fragrance retailer Sephora recently acquired Scentsa, a specialist in digital technologies that improve the in-store shopping experience. (Scentsa touch screens access product videos, link to databases on skin care and fragrance types, and make product recommendations.) Sephora officials said they bought the company to keep its technology out of competitors’ reach and to help develop in-store products more rapidly.4
Companies that lack sufficient scale or expect a significant digital downside should consider divesting businesses. Some insurers, for instance, may find themselves outmatched by digital players that can fine-tune risks. In media, DMGT doubled down on an investment in their digital consumer businesses, while making tough structural decisions on their legacy print assets, including the divestment of local publications and increases in their national cover price. Home Depot continues to shift its investment strategy away from new stores to massive new warehouses that serve growing online sales. This year it bought Blinds.com, adding to a string of website acquisitions.5

Decision 2: Lead your customers or follow them?
Incumbents too have opportunities for launching disruptive strategies. One European real-estate brokerage group, with a large, exclusively controlled share of the listings market, decided to act before digital rivals moved into its space. It set up a web-based platform open to all brokers (many of them competitors) and has now become the leading national marketplace, with a growing share. In other situations, the right decision may be to forego digital moves—particularly in industries with high barriers to entry, regulatory complexities, and patents that protect profit streams.

Between these extremes lies the all-too-common reality that digital efforts risk cannibalizing products and services and could erode margins. Yet inaction is equally risky. In-house data on existing buyers can help incumbents with large customer bases develop insights (for example, in pricing and channel management) that are keener than those of small attackers. Brand advantages too can help traditional players outflank digital newbies.

Decision 3: Cooperate or compete with new attackers?

A large incumbent in an industry that’s undergoing digital disruption can feel like a whale attacked by piranhas. While in the past, there may have been one or two new entrants entering your space, there may be dozens now—each causing pain, with none individually fatal. PayPal, for example, is taking slices of payment businesses, and Amazon is eating into small-business lending. Companies can neutralize attacks by rapidly building copycat propositions or even acquiring attackers. However, it’s not feasible to defend all fronts simultaneously, so cooperation with some attackers can make more sense than competing.

DA 1Santander, for instance, recently went into partnership with start-up Funding Circle. The bank recognized that a segment of its customer base wanted access to peer-to-peer lending and in effect acknowledged that it would be costly to build a world-class offering from scratch. A group of UK banks formed a consortium to build a mobile-payment utility (Paym) to defend against technology companies entering their markets. British high-end grocer Waitrose collaborated with start-up Ocado to establish a digital channel and home distribution before eventually creating its own digital offering.

Digital technologies themselves are opening pathways to collaborative forms of innovation. Capital One launched Capital One Labs, opening its software interfaces to multiple third parties, which can defend a range of spaces along their value chains by accessing Capital One’s risk- and credit-assessment capabilities without expending their own capital.

Decision 4: Diversify or double down on digital initiatives?
As digital opportunities and challenges proliferate, deciding where to place new bets is a growing headache for leaders. Diversification reduces risks, so many companies are tempted to let a thousand flowers bloom. But often these small initiatives, however innovative, don’t get enough funding to endure or are easily replicated by competitors. One answer is to think like a private-equity fund, seeding multiple initiatives but being disciplined enough to kill off those that don’t quickly gain momentum and to bankroll those with genuinely disruptive potential. Since 2010, Merck’s Global Health Innovation Fund, with $500 million under management, has invested in more than 20 start-ups with positions in health informatics, personalized medicine, and other areas—and it continues to search for new prospects. Other companies, such as BMW and Deutsche Telekom, have set up units to finance digital start-ups.

The alternative is to double down in one area, which may be the right strategy in industries with massive value at stake. A European bank refocused its digital investments on 12 customer decision journeys,6 such as buying a house, that account for less than 5 percent of its processes but nearly half of its cost base. A leading global pharmaceutical company has made significant investments in digital initiatives, pooling data with health insurers to improve rates of adherence to drug regimes. It is also using data to identify the right patients for clinical trials and thus to develop drugs more quickly, while investing in programs that encourage patients to use monitors and wearable devices to track treatment outcomes. Nordstrom has invested heavily to give its customers multichannel experiences. It focused initially on developing first-class shipping and inventory-management facilities and then extended its investments to mobile-shopping apps, kiosks, and capabilities for managing customer relationships across channels.

Decision 5: Keep digital businesses separate or integrate them with current nondigital ones?
Integrating digital operations directly into physical businesses can create additional value—for example, by providing multichannel capabilities for customers or by helping companies share infrastructure, such as supply-chain networks. However, it can be hard to attract and retain digital talent in a traditional culture, and turf wars between the leaders of the digital and the main business are commonplace. Moreover, different businesses may have clashing views on, say, how to design and implement a multichannel strategy.

One global bank addressed such tensions by creating a groupwide center of excellence populated by digital specialists who advise business units and help them build tools. The digital teams will be integrated with the units eventually, but not until the teams reach critical mass and notch a number of successes. The UK department-store chain John Lewis bought additional digital capabilities with its acquisition of the UK division of Buy.com,7 in 2001, ultimately combining it with the core business. Wal-Mart Stores established its digital business away from corporate headquarters to allow a new culture and new skills to grow. Hybrid approaches involving both stand-alone and well-integrated digital organizations are possible, of course, for companies with diverse business portfolios.

Decision 6: Delegate or own the digital agenda?
Advancing the digital agenda takes lots of senior-management time and attention. Customer behavior and competitive situations are evolving quickly, and an effective digital strategy calls for extensive cross-functional orchestration that may require CEO involvement. One global company, for example, attempted to digitize its processes to compete with a new entrant. The R&D function responsible for product design had little knowledge of how to create offerings that could be distributed effectively over digital channels. Meanwhile, a business unit under pricing pressure was leaning heavily on functional specialists for an outsize investment to redesign the back office. Eventually, the CEO stepped in and ordered a new approach, which organized the digitization effort around the decision journeys of clients.

Faced with the need to sort through functional and regional issues related to digitization, some companies are creating a new role: chief digital officer (or the equivalent), a common way to introduce outside talent with a digital mind-set to provide a focus for the digital agenda. Walgreens, a well-performing US pharmacy and retail chain, hired its president of digital and chief marketing officer (who reports directly to the CEO) from a top technology company six years ago. Her efforts have included leading the acquisition of drugstore.com, which still operates as a pure play. The acquisition upped Walgreens’ skill set, and drugstore.com increasingly shares its digital infrastructure with the company’s existing site: walgreens.com.

Relying on chief digital officers to drive the digital agenda carries some risk of balkanization. Some of them, lacking a CEO’s strategic breadth and depth, may sacrifice the big picture for a narrower focus—say, on marketing or social media. Others may serve as divisional heads, taking full P&L responsibility for businesses that have embarked on robust digital strategies but lacking the influence or authority to get support for execution from the functional units.

Alternatively, CEOs can choose to “own” and direct the digital agenda personally, top down. That may be necessary if digitization is a top-three agenda item for a company or group, if digital businesses need substantial resources from the organization as a whole, or if pursuing new digital priorities requires navigating political minefields in business units or functions.

Regardless of the organizational or leadership model a CEO and board choose, it’s important to keep in mind that digitization is a moving target. The emergent nature of digital forces means that harnessing them is a journey, not a destination—a relentless leadership experience and a rare opportunity to reposition companies for a new era of competition and growth.

Source: McKinse.com, 2014
Authors: Martin Hit and Paul Willmott
About the authors: Martin Hirt is a director in McKinsey’s Taipei office, and Paul Willmott is a director in the London office

Some MBA students may have just made the greatest feminist anthem of our time

Posted in Aktuellt, Allmänt on december 18th, 2014 by admin

Check it out here!

Consumers want product experts, not salespeople

Posted in Aktuellt, Försäljning / Sales on december 8th, 2014 by admin

There is a major barrier that dealers today have to contend with—the fact that
consumers come to the dealership armed with more knowledge than ever.
When the amateur knows more than the professionals on your lot, it’s diffi cult for
salespeople to develop trust and add value.

Wanted: Product Experts
The average customer conducts about fi ve months of research before visiting
a dealership. Information available on the Internet and the ubiquity of mobile
devices mean consumers can access all the information they need about a car
anytime, anyplace—including your showroom.
autosales 2
According to a Nielsen/Cars.com survey, 83 percent of consumers have a
smartphone in their pockets when they walk into your dealership. That means
even when they’re in your showroom, they’re able to access information not
immediately available to the salesperson. That makes it nearly impossible for
your salespeople to build trust and add value.
The fact is that today, consumers don’t want salespeople; they want product
experts. Salespeople tend to be very knowledgeable about models in general but
not necessarily about specifi c units. But consumers already know about makes
and models. You have to talk about why the cars on your lot are preferable to the
ones offered at a nearby competitor.

Why Buy This Car?
Used car buyers in particular have done their research online and have already
made the decision to visit your store to see a specifi c vehicle—for instance, a
BMW 328i. Unlike new car buyers, they didn’t come to your store because you
sell the BMW 3 Series. They came because they found a particular 328i on your
website and they want to know why they should buy the one on your lot today. So
when your salesperson starts talking about the benefi ts of the 3 Series in general,
the used car buyer is thinking, “I already know this.”
That’s why it’s critical for dealerships to equip their staffs with the insights that
consumers already have. Your salespeople have to be instant experts on every
car on your lot. They have to be able to demonstrate why the BMW 328i on your
lot is better than the one a mile down the road that’s $1,000 cheaper.
The only way to build that value and trust to reach today’s car shopper is to adapt
your processes.
Here’s a news fl ash for you: car shoppers don’t want to talk with salespeople. Not
only do they come to your dealership armed with more knowledge than most of
your sales staff, they simply don’t trust auto dealers. Yet too many dealerships
continue to stick with the old ways of trying to close the sale.

Lack of Trust
According to a 2013 Gallup poll, 91 percent of consumers said they don’t trust car
salespeople. So they do what any wise person would do—they try to negotiate
as low a price as possible or they walk away. Salespeople have been trained to
negotiate to close the sale by discounting or else take a hit on their closing rates,
in effect offering a “double discount.”
autosales 3
It’s that focus on “always be closing” that is keeping dealerships from building
trust and adding value. When a shopper enters your dealership, they already
know what they want. They’re simply there to fi nd out why they should buy
that particular car from you. But before they can get any of that information, a
salesperson is usually hounding him or her for their phone number. No wonder
the customer’s fi rst reaction is typically, “Slow down. You’re moving too fast.”

Product Specialists Needed
That approach doesn’t foster trust or communicate value to the consumer. That’s
because too many sales staffs aren’t equipped to collect customer information
without sounding like the creep in the bar.
If you stick with the old ways of trying to close the sale, you’re not building trust or
adding value. That’s why dealerships need to convert their salespeople to product
specialists. How do you do that?
We’ve discussed the reasons why your sales staff needs to demonstrate its
expertise on every unit in your dealership. Here’s how successful dealerships are
doing just that.
Mike Anderson Auto Group has been able to close sales without double
discounting and taking the subsequent reduction in gross profi ts or closing rates.
They did this by proactively building value into every car. How?
• They sold consumers on specifi c units—not on the model alone.
• The sales team proactively pointed out the differences between their units
and their competitors’ instead of waiting to be asked by the consumer.

The Right Tools
Essentially, Anderson armed its staff with the tools to become product experts
instead of salespeople. And it’s not just about building value—it’s also about
developing trust in your process. Remember, consumers inherently distrust car
salespeople. But by taking a proactive approach, Anderson created a sense of
“transparency” in the process.
autosales 1
Tools like MAX Digital Showroom allow salespeople to search for specifi c stock
or VIN numbers and access detailed vehicle information—including packages,
MSRP values, and certifi ed information—all of which helps you sell on value
rather than price.
Salespeople can email this information directly to customers while they’re on the
lot so they can view it on their own devices. Anderson’s sales team was able to
develop trust by sharing this information with customers versus simply telling

Amazing Results
In the end, Anderson no longer had to discount to get the deal closed (or if they
did, the discounts were signifi cantly smaller). Because the salespeople provided
detailed information proactively and offered a sense of transparency, customers
were confi dent that they were getting a good value at the asking price. As a result,
Anderson raised its pre-owned gross profi ts by more than $700 per car.
The old ways of closing a sale are no longer relevant. Today, you have to build
trust and value into every car on your lot. That’s what Mike Anderson Auto Group
has done, and the results speak for themselves.

Source: Autonews.com

Verkliga möten kan bli ett lyft för karriären

Posted in Aktuellt, Allmänt, Försäljning / Sales, Leadership / Ledarskap on december 8th, 2014 by admin

Facebook, Linkedin och Twitter i all ära. Möten öga mot öga smäller ändå högst. DN Jobb har tittat närmare på ett antal fysiska karriärnätverk.

Många söker jobb och bygger ett personligt varumärke i sociala medier. Men som kontrast till det är suget efter verkliga möten stort. Nya karriärnätverk skapas hela tiden och enligt karriärcoachen Nina Jansdotter har referenser och rekommendationer från människor man har träffat i verkliga livet stor betydelse i yrkeslivet.
– Fördelarna med att vara med i ett karriärnätverk är många. Det handlar inte bara om att hitta nytt jobb utan också om att få inspiration, utbildning och affärsmöjligheter, säger Nina Jansdotter.

Alexandra Barganowski, Nicole Kalinowska och Natalie Furman studerar alla företagsekonomi vid Stockholms universitet. De är i slutet av sin utbildning och valde själva att starta ett nätverk för att få stöd i den framtida karriären.
– Många av de nätverk som finns har fokus på företag. Vi är mer nyfikna på personerna bakom företagen. Vi vill höra historien bakom framgången och hela vägen dit, säger Alexandra Barganowski.
Nätverket som kallas Leadership academy är nystartat och har hittills haft en träff. Då föreläste den amerikanska ambassadörens fru Natalia Brzezinski som är frilansjournalist och bland annat bloggar för Huffington Post.
– Syftet med nätverket är att vi ska få ta del av inspirerande ledares egna erfarenheter, upptäcka vilka möjligheter som finns på arbetsmarknaden och att vi ska knyta kontakter, förklarar Natalie Furman.

Förutom föreläsningar ska nätverket satsa på workshops där man tränar jobbsökande, frukostmöten och diskussioner.

Ett annat relativt nystartat karriärnätverk är F-gruppen. Det är ett forum för föräldralediga som vill ta en paus från barnpratet.
– Jag klättrade lite på väggarna när jag blev föräldraledig för andra gången och saknade det utbyte av tankar och den energi man får av jobbet, säger Emily Rosenqvist som startade nätverket för två år sedan.

Syftet med nätverket var att hålla i gång jobbtankar.
– Jag tror att många föräldralediga tar sig tid att fundera över yrkeslivet och karriären och då är det bra att ha andra att prata med.

Emily Rosenqvist har nu börjat jobba och Ylva och Emelie Lindén driver nätverket vidare. De vänder sig till föräldralediga kvinnor och män inom alla yrkesgrupper och ägnar sig till exempel åt föreläsningar, studiebesök och diskussioner inom olika teman. All verksamhet sker i centrala Stockholm och på platser som är anpassade för att kunna ha med sig barn. Planen är att utöka nätverket till andra delar av Sverige i framtiden.

Det finns också flera nätverk som är nischade. De kan till exempel vara inriktade på en viss bransch eller en yrkesroll. Några exempel på sådana är Ruter dam som riktar sig mot kvinnor i chefspositioner, Womentor och Geek girl som fokuserar på kvinnor inom IT-brancshen, BNI som är ett affärsnätverk för företagare och Founder alliance som vänder sig till entreprenörer.

Nina Jansdotter rekommenderar alla att gå med i ett karriärnätverk och ju förr desto bättre.
– Nätverka mest när du behöver det som minst. Det tar tid att bygga upp ett kontaktnät och det är inte lika lätt att nätverka när man är desperat efter ett nytt jobb, säger hon.

Källa: DN.se, 24 november 2014
Av: Caroline Englund (caroline.englund@dn.se)

En bilhandlare utan en enda bilförsäljare!

Posted in Aktuellt, Allmänt, Customer care / Kundvård, Digitalisering / Internet, Försäljning / Sales on december 5th, 2014 by admin

Många människor ogillar bilförsäljare. Hyundai tog konsekvenserna av det.
Enligt undersökningar från det koreanska bilmärktet Hyundai så är en stor del människor ovilliga att handskas med bilförsäljare. Därför har nu företaget öppnat en bilbutik – utan säljare.
Se filmen här!

Kom igång med er mötes-evolution!

Posted in Aktuellt, Allmänt on december 4th, 2014 by admin

Tänk om vi kan beskriva våra möten så här istället:
“Mötet är en tillfällig samling människor som alla aktivt tar eget ansvar för att tillsammans arbeta mot att uppnå ett tydligt syfte och mål.”

Under vår serie med frukostseminarium det senaste året har vi stött på många som undrar hur de kan få sina möten att fungera bättre, kännas roligare och bidra mer till organisationens framgång.

Finns det enkla tips och trix? Kan vi ta ett helhetsgrepp? Om vi blir bättre på möten, hur hjälper det oss? Vart börjar vi och hur? Frågorna är många och som tur är finns det lika många svar.
Tillsammans med gr8meetings och Meetmarket har vi på 3S kartlagt möteskulturen i organisationer som Hyresgästföreningen, Cryo AB, Riksbanken, IF Metall, Cale, Täby Kommun och Scandic Hotels med flera.

Med år av erfarenhet från dessa projekt och kunskap hämtad från verkligheten känner vi väl till fallgroparna och hindren – och framförallt; vi vet vad som fungerar och hur man kan nå stora förbättringar på kort tid med små insatser.

När vi har berättat om dessa erfarenheter vid föreläsningar och seminarium har många frågat om vi kan komma ut till deras organisation och inspirera ledning, chefer och medarbetare.

Så vi bestämde oss för att få ihop våra kalendrar och ge ett antal organisationer möjligheten att komma igång med sin mötes-evolution med vår hjälp under första kvartalet 2015.

Boka ett av tio tillfällen
Under perioden januari till april har vi totalt 10 möjliga tillfällen där vi kan hjälpa er organisation rulla igång kugghjulen och få snurr på era möten.
Vårt erbjudande gäller vid bokning innan årsskiftet och ni har två möjligheter som ni kan läsa mer om nedanför.

Ta chansen och kom igång med er mötes-evolution undeer 2015!
Läs mer här!