MANAGING in the

NEW WORLD

Mergers and Acquisitions (M&As) do not always succeed. The transition is often painful. But there have been some notable cases where this has been seamless, and turnarounds successful. These are worth looking up as business lessons. One such successful M&A was between automotive companies Opel and PSA. Another was in the bio pharmaceuticals between Genzyme and Sanofi. Yet another case abounds from the media line between the trip of Charter Communications, Bright House Networks and Time Warner Cable. The industrial equipment industry saw something similar during the coming together of MHPS and Konecranes. Coop Norge and ICA Norway had a likewise impact in the groceries, while Turku Shipyard did well to combine with Meyer Werft. Office Max and Office Depot too came together, as did Dynegy and Vistra, within the energy space. In all of these, the buyers leverage the entire potential of the sale, and not just the seemingly synergetic parts. Successful buyers already have the corporate strategy and its blueprint in mind when going for the acquisition. This blueprint is then executed with speed and rigor. Once the acquisition or merger is done, the new team proactively handles the new entity’s culture. The talent management systems are put in place to build accountability and a sense of collaboration.

Source:https://www.bcg.com/publications/2018/lessons-from-eight-successful-mergers-acquisitions-turnarounds.aspx

Uploaded Date:27 February 2019

Setting up of ambitious targets, backed by specific and measurable goals, is a key ingredient to establishing the corporate strategy of any company. This said strategy then needs to be communicated throughout the organization, with periodic progress reports displayed. In most organizations, even individuals set their own goals, such has been the hold of this concept. Companies often commit the mistake of setting conservative targets, just to ensure that employees reach their goals. Critical interdependence across silos is necessary, as it enables course corrections along the way. More than SMART, it is FAST which is more trending nowadays. While SMART stands for Specific, Measurable, Achievable, Realistic and Time- bound, FAST goes for Frequent, Ambitious, Specific and Transparent.

Source:https://sloanreview.mit.edu/article/with-goals-fast-beats-smart/

Uploaded Date:27 February 2019

When it comes to investment blunders, two kinds stick out. One is over estimating the buyout, as happened during the acquisition of Sears by Eddie Lampert. The other is pushing aside an opportunity that existed, as in the case of Blockbuster giving away the chance to acquire Netflix. Over- analysis is often the root cause behind such errors. One of the reasons for such errorsto take place, is confirmation bias. Here, a common trait is finding analogies of other such failures or successes. Two more types of errors are to do with “sins of omission”. The first of these is when the business intelligence captured, fail to take into account the consumer passion associated with any brand or future business model. The other is the very opposite. Here, the passion and emotion are well accounted for, but the practical realities behind them, not so well. The ‘Super’ Geo’ model is the best one to look past these obvious flaws.

Source:https://hbr.org/2019/02/why-its-so-hard-to-predict-the-size-of-new-markets

Uploaded Date:20 February 2019

Customer Experience (CX) is now seen as the differentiating factor for several service- oriented industries. Some leaders of the CX space, have shared their views on what will keep this field ticking in 2019. The President of Customer Bliss exclaims that the quality of leadership will make a massive dent on the CX this year, as they will need to be at the forefront of changing the company’s culture towards a more customer- first attitude. The author of “Customer What?” feels that brands will need to actively understand the entire Customer Journey Management. Once the customer journey gets well- mapped, the brand will be able to eke out authentic business intelligence, and respond accordingly. Another author, who has written The Convenience Revolution says that the one thing CX leaders really want to hear in 2019, is how easy the brand is to work with for the customer. The writer of More is More wishes to see more of personalized experiences being broadcast. Showcasing more of this will do wonders for the brand’s digital marketing footprint. And to top it all, the Founder of Convince & Convert, wants all key players this year, to adopt just one practice which they feel can be done better. This one practice alone can carry a brand’s CX from the level of mediocre to magnificent.

Source:https://smartercx.com/what-5-customer-experience-leaders-are-loving-in-2019/

Uploaded Date:18 February 2019

Several newer capabilities have been identified that go a long way in developing the 21st century organizations under agile leaders. At such places, the leaders need to transcend as well as tend their set of capabilities. During this transition phase, the team needs to shift from a reactive to a creative mindset. This involves three fundamental shifts, beginning with fostering innovations. It also involves fostering collaboration as leaders more from an authoritative mode to one of partnership. They will also need to work in conditions of abundance. Not all who do well under conditions of scarcity, do well when blessed with substantial resources. Teams need to embrace design thinking, as this will help in applying the principles of agile organizations. Culture has to be at the forefront of the transformation. Systems also need to be built in for leaders to be developed to work in such environments. Management training sessions must be curated specialty to develop enterprise agility coaches. The executive team needs to get involved in such development, so that the entire leadership experience becomes immersive. Leaders have to be invited to roll out these capabilities with an agile tempo.

Source:https://www.mckinsey.com/business-functions/organization/our-insights/leading-agile-transformation-the-new-capabilities-leaders-need-to-build-21st-century-organizations

Uploaded Date:13 February 2019

Eight shifts have been identified which will ensure that the corporate strategy drafted, can actually yield great results. For a start, the annual planning needs to be replaced by a continuous journey. Instead of getting approvals from all, the management needs to debate the real alternatives to any scenario. Businesses will also need to adopt the one- in- ten approach common to fashion, venture capital, movies and oil exploration. This explores the big hits, rather than the mere regular success stories. The top leadership needs to be dedicated towards these big wins, rather than merely in approving budgets. The resourcesneed to be channeled in such a manner, that the inertia regarding budgets gives way to liquidity. Instead of the carefully plotted projects, one needs to think big and work on open risk portfolios. The talent management and performance review schemes must be allotted in such a way, that it measures a holistic brand of work, rather than merely an enumeration of the numbers achieved. Strategy is ultimately not merely about the long- run, but small steps, one at a time, leading up to the bigger picture.

Source:https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/eight-shifts-that-will-take-your-strategy-into-high-gear

Uploaded Date:02 February 2019

Traditional large companies, gained their advantage thanks to their massive deployment of scale. That however, no longer necessarily holds true. This is because of the emergence of the platform economy, and the availability of technologies that can be rented out anytime. Investments on scale has been the norm for about a century now, thanks to the development of mass media tools such as radio and television. The addition of Artificial Intelligence (AI) to the mix has reversed the trend, with economies of unscale set to the ushered in. An appropriate example of this is the tailored map route provided by the app Waze. Due to the lower needs of scale and size now, companies can also remain nimble. This allows them to embrace business innovations, with lesser effort committed, and at lower costs. Stripe, Airbnb and Warby Parker are examples of such unscaled companies.

Source:https://sloanreview.mit.edu/article/the-end-of-scale/

Uploaded Date:25 January 2019

A lot of business alliances do not work. A clear example is that between French carmaker Renault and its Swedish counterpart Volvo. It worked well for a few years, but excess French government interference, but an end to this marriage of convenience. Reluctantly Renault took the decision then to ally with then struggling Japanese automotive player Nissan. The latter had then been struggling for years, so Renault decided to acquire a certain stake in it. Within a few years, Nissan was making good money again. The reasons for this successful and durable alliance may be plenty. But one area of clarity, right from the start of this merger of sorts, was that the transactional mentality would be set aside, replaced by one of mutual dependence. The corporate strategy was revisited, with points made for collaboration. A transition was also made towards a boundary- spanning alliance leadership. Common goals were thus set in. A sense of trust was built in, individually at both organizations. This also needs a cultural awareness of the other’s presence in the partnership. Periodically, all alliances need to be revisited to understand the continuing gains.

Source:https://knowledge.insead.edu/blog/insead-blog/designing-durable-alliances-lessons-from-renault-nissan-10726

Uploaded Date:22 January 2019

Arguing at the workplace is often seen in a negative light. This is especially true when teams are large, so it gets difficult to manage the situation, if things go out of hand. Yet, if the proper management training is provided to the team members, arguing can only be good for the idea- generating capabilities of the organization. It will lead to cognitive diversity, a must for curating innovations in the organization. Teams need to abide by certain ground rules to make this work. For a start, all must value the fact that everyone works for the same organization, at the end of the day. All discussions must be keeping in view facts and logic, towards the specific, relevant topic. Deviations must be at the minimum. None of the arguments must veer towards personal attacks. Ultimately, one needs to be intellectually humble.

Source:https://hbr.org/2019/01/how-to-debate-ideas-productively-at-work

Uploaded Date:22 January 2019

Behavioral economics was once deemed as off- limits for professional economists, but is now very much mainstream. It is being used in gauging investor behaviour and leveraging stock- price up- downs. A lot of decisions at the strategy level, though inadvertently allow cognitive biases to creep in. To tackle this, a behavioral strategy needs to be put in place. For drafting the corporate strategy, the company leaders need to weed out the biases inherent in themselves. This is in stark contrast to the fields of marketing and finance. To counter pattern- recognition biases, the angle of vision ofvision ought to be changed. Similarly, for action- oriented biases, one needs to embrace uncertainty. Stability biases need to be shaken up, while interest biases need be revealed openly to counter. Debates need to be depersonalized. In adopting this behavioral strategy, some steps need to be followed. Firstly, the company needs to decide, which decisions need this sort of close scrutiny. The biases need to be identified that will most affect decision- making. Tools and practices need to be taken into account which will best counter these relevant biases. These new practices now deemed appropriate must be incorporated into the formal processes.

Source:https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-case-for-behavioral-strategy

Uploaded Date:22 January 2019

For any business, uncertainty always dogs their attempts at executing the corporate strategy. No form of planning can negate the effects of political turmoil, competitors’ tactics or overall economic scenario. A new book published Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds, discusses in detail methods to deal with such inherent uncertainties. Before solutions are derived, one needs to understand the common reasons for our failures are dealing with these uncertainties. One of them is that, people deliberately choose to ignore the clear signs of such uncertainty existing. Copious amounts of planning is done, with little heed to this uncertainty, until quite light, only as an afterthought. A lot of people even pretend to deal with the same, butdo not actually take honest steps in the right direction. To deal with such uncertainty, for a start, the team needs to understand the cause of the undesired outcomes. Instead of being certain of any outcome, right from the start, the planners need to be aware of probability figures. A strategy has to be curated to nullify the effects of the odds amounting to major.

Source:https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-to-confront-uncertainty-in-your-strategy

Uploaded Date:22 January 2019

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