Executive Insight

The Importance of Cultural Literacy

When the subject of organizational culture is considered, the work of Edgar Schein, professor emeritus at the Sloan School of Management at MIT, is frequently cited as preeminent in the field.

Karl Moore, professor at the Desautels Faculty, McGill University in Montreal and an Associate Fellow at Green Templeton College, Oxford University interviewed Edgar Schein this week on the subject of corporate culture. Schein tells us that our views on the subject must increasingly encompass a broader view…

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Source: Forbes

The Joy of India

Need a lift? Here’s a video to inspire you.

Three years ago last Saturday, 10 gunmen laid siege to two hotels and a train station in Mumbai, killing 166 people. This week the same Mumbai train station, the famous Chhatrapati Shivaji Terminus was the scene of what is commonly termed a flash mob, a seemingly spontaneous but actually choreographed group dancing to the popular Bollywood hit “Rang de Basanti,” to the bewilderment and amusement of a crowded station. More than 200 people, from age 4 to 60, joined in the dance. The video is going viral, especially in India. Indians are praising its message of hope over terrorism.

It’s well worth a watch.

Source: The Washington Post

The Challenges and Opportunities of Global Resources; The Revolution Ahead

A complete rethink of resource management will be needed to keep pace with demand, as up to three billion new consumers join the world’s middle classes over the next 20 years. A new McKinsey report, Resource Revolution: Meeting the world’s energy, materials, food, and water needs shows that the challenge can be met through a combination of expanding the supply of resources and a step change in the way they are extracted, converted, and used. Such resource productivity improvements, using existing technology, could satisfy nearly 30 percent of demand in 2030.

But meeting the resource supply and productivity challenges will be far from easy. There are many barriers, including the fact that the capital needed each year to generate a resource revolution will rise from roughly $2 trillion today to more than $3 trillion, with additional capital required to pursue the climate change and universal-energy-access agendas. The benefits could be as high as $3.7 trillion a year, however, if carbon had a price of $30 per metric ton and if governments removed substantial resource subsidies and taxes.

McKinsey suggests that policy makers should consider action on three fronts: unwinding subsidies that keep prices artificially low and encourage inefficiency; ensuring that enough capital is available and that market failures associated with, for instance, property rights and incentives are corrected; and bolstering society’s resilience by creating safety nets to help very poor people deal with change and educating consumers and businesses to heed the reality of future resource constraints.

In the 20th century, governments and businesses didn’t have to worry about resource productivity; they could focus on capital and labor. Over the next 20 years, resources must be at the heart of public policy and business strategy.

The main findings of the report include:

1. Progressively cheaper resources underpinned global economic growth during the 20th century
2. The world could be entering an era of high and volatile resource prices
3. Meeting future demand would require a large expansion of supply
4. A step change in resource productivity is possible
5. Additional efforts would be necessary to address climate change and universal access to energy
6. Tackling the resource agenda must start with a shift in institutional mind-sets and mechanisms
7. Firms should consider how to adjust strategy to take account of resource-related risks and opportunities

The strategic implications of resource related trends are likely to vary from sector to sector, of course. Nevertheless, all companies are likely to benefit from adopting a more systematic approach to how resources might shape their profits, produce new growth opportunities and technological discontinuities, and generate new stresses on their management of risk and regulation. Industry leaders could usefully go one step further and strive to shape industry standards in a way that generates greater transparency through the supply chain about resource productivity and the end-to-end measurement of that industry’s environmental footprint.

Source: McKinsey Sustainability & Resource Productivity practice

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The Stuck and the Mobile

Nearly six in ten Americans live in the state where they were born, according to the U.S. Census bureau. But there is considerable variation from state to state, as the map (below) by Zara Matheson of the Martin Prosperity Institute shows. More than three quarters of the people in Louisiana (78.9 percent), Michigan (76.6 percent) and Ohio (75.1 percent) were born there, as opposed to just 24.3 percent of Nevadans, 35.2 percent of Floridians, 37.2 percent of the residents of Washington, D.C., and 37.7 percent of Arizonans. A high level of home-grown residents is also indicative of a lack of inflow of new people.

There is a distinctive “stuck belt” across the middle of the country running from Pennsylvania, Ohio, Michigan, Wisconsin, and Iowa, down through West Virginia and into the Sunbelt states of Kentucky, Alabama, Mississippi and Louisiana. Mobility is largely a bi-coastal—plus Rocky Mountain state—phenomenon.

America can be divided into two distinct classes, the stuck and the mobile. The mobile possess the resources and the inclination to seek out and move to locations where they pursue economic opportunity. Many Americans are stuck in places with limited resources and opportunities.

Source: The Geography of Stuck by Richard Florida

The Management of Digital Transformation

Digital technologies are changing the business of some of the world’s leading firms but only one third of companies globally have an effective digital transformation program in place. Despite the pervasive influence of digital technology in everything from delivering enhanced productivity and efficiency to improving customer experience and the way people interact and collaborate within an organization, the majority of companies are still not taking advantage of its transformative potential and, therefore, risk falling behind more forward-thinking organizations.

Capgemini Consulting and the MIT Centre for Digital Business interviewed over 157 senior executive-level respondents from across 15 countries at global companies with more than $1bn in annual sales. The research highlights the fluctuating pace at which digital transformation is taking place and the varying levels of success experienced. It assessed the maturity of organizations in terms of their digital transformation, with maturity made up of two dimensions characterized as the ‘what’ and the ‘how’. The what is the specific digital transformation elements being implemented by the organization, made up of their specific investments in customer experience, operational processes and worker enablement. The how is the way organizations are driving the transformation, made up of aspects such as project governance, workforce engagement, and measurement mechanisms.

These two elements are at the heart of the alchemy of digital transformation. Firms that are mature on both these dimensions can drive powerful digital transformation that yields significant business value. These mature few have mastered not only the style of digital transformation but also the substance. Very mature exponents of digital transformation have a sophisticated grasp of both the what and the how, but overall the study characterizes 4 levels of maturity:

Digital Beginners: These companies are doing very little with advanced digital capabilities, although they have more traditional digital capabilities such as internet, e-mail or ERP. Companies may be in this category by choice but many are either unaware of the possibilities of new digital technologies or are starting to invest here without effective transformation management in place.

Digital Fashionistas: These companies have implemented digital tools, some of which may be creating value, but some may not. These companies are motivated to bring on digitally-powered change, but their digital transformation strategy is not founded on real knowledge of how to proceed. Many of these companies believe they must move fast to keep up with demand for digital capabilities, but do not necessarily have a clear vision of how the elements will collectively create value.

Digital Conservatives: These companies understand the need for a strong unifying vision and for governance and internal engagement activities to ensure prudent investment management. They understand where the company should be going and how to master digital challenges, but they can’t always build organizational momentum to carry out an ambitious program. As a result, though aiming to spend wisely, their careful approach may cause them to miss out on valuable opportunities.

Digirati: These companies truly understand how to drive value from digital transformation. They combine a strong shared vision for transformation, careful governance and engagement with sufficient investment in new opportunities. They have developed a digital culture that can envision further changes and have the ability to implement them wisely for competitive advantage.

Despite the hype around innovative new technologies such as social media or mobile, most companies still have a long way to go on their digital transformation journeys. Whether using new or traditional technology, the key to digital transformation is changing how the company operates and that is a management and people challenge, as much as a technology one.

The study highlights the external factors that are driving digital transformation. Pressure from competitors (72%) and customers (70%) were the biggest drivers of change, as companies strive to find new ways of ensuring competitive advantage and meet changing customer expectations. It also highlights the main internal barriers to achieving digital transformation: missing skills (77%), culture issues (55%), ineffective IT (50%).

Digital technology has the potential to improve corporate performance and reach radically, but this transformation will be as much about organizational change as it is about implementing new technologies. What this research has shown us is that while many are convinced of the power of digitally-enabled business practices, success will only come with strategic vision and leadership of a cohesive program of transformation.

Source: Capgemini

More: Digital Transformation: A Roadmap for Billion-Dollar Organizations

10 Trends in Social Media

From destination social to dispersed social: 10 trends in social media

Customer Centricity and Why it Matters

Starbucks and Apple stocks have been trading at record highs, but are these and other businesses doing everything they can to ensure growth over the long term? Peter Fader, Wharton marketing professor and co-director of The Wharton Customer Analytics Initiative, argues that too many companies are customer friendly, but not customer centric. In other words, they treat each customer the same, missing an opportunity to discover who their best customers are. Without that data, they cannot make their most valuable customers even more profitable to the firm. In his new book, Customer Centricity, part of the Wharton Executive Education Essentials Series, Fader describes what customer centricity is, what it isn't and why it matters. He also demystifies customer relationship management and emphasizes the importance of gathering customer data in meaningful ways.

International Trade and the WTO Still Matter as National Economies Recover

International trade is essential to global economic recovery and protectionism would be harmful, says Professor Jagdish Bhagwati of Columbia University, and author of In Defense of Globalization, in this interview with OECD.

Professor Bhagwati also challenges the idea that trade 'takes' jobs from developed countries, pointing out that firms from developing countries are now creating jobs in richer economies. He also explains the importance of the World Trade Organization (WTO) in applying rules to the global trading system.

Service 2020: Customer Service Megatrends for the Decade Ahead

What is your idea of perfect customer service? Responses from people will vary considerably, depending on the type of the transaction being conducted, whether it is shopping for clothes, trying to get an error corrected in a phone bill or seeking help from a supplier at work.

In some contexts, most people are more than happy with simply finding an item in stock at a reasonable price. In other contexts, a highly personalized experience might switch people off, perhaps because it feels like the provider somehow knows too much about a person. Sometimes many choices are required; in other environments, no choice at all can be perfectly blissful, such as when trying a chef’s tasting menu.

Despite these considerable variations, everyone knows good (or bad) service when they get it. But the factors driving change in customer service have shifted radically from just a decade ago. Most strikingly, technology is playing a huge role through the emergence of social media and the now ubiquitous mobile phone, for example. Equally, globalization has taken deeper hold, providing both significant new consumer markets and aggressive new global rivals.

Given these forces and others, how will customer service change in the coming decade? Gathering a deeper understanding of that question is the aim of a new report - ‘Service 2020’ from the Economist Intelligence Unit report, commissioned and sponsored by BDO.  The report captures the views of 479 business leaders.  Covering business-to-business and business-to-consumer models, the report explores how successful organizations have built and subsequently sustained excellent client service and, most excitingly, provides a blueprint for the prioritization of service development opportunities.  

In the future customers will select those organizations who can demonstrate they know them well and who offer service levels which stand out.  Organizations who fail to align their service to meet customers’ needs will risk losing future business. 

Although the kinds of customer service options and norms that might be encountered in 2020 cannot be so precisely predicted, it is possible to outline some of the factors driving change in the decade ahead. To this end, this report outlines eight megatrends that are likely be occur:

Global competition will drive up service standards

This megatrend explores how customer service will be used by a rising number of firms as a competitive differentiator in order to challenge the increasingly global marketplace and aggressive new emerging market rivals.

Companies must maintain service standards in the face of the need for speed

Speed has become a differentiator. Firms that will be able to help their customers save time will leverage this to stand out from their rivals.

Firms must learn to use the increased transparency brought by social media to their advantage

Social media is changing the way consumers select products and services, based on the real-time views of others.  The influence of social media will develop and expand further in the coming decade as it replaces the press as the primary consumer watchdog.

Companies must use new sources and types of data to rethink the way they track and personalize their service

A range of new data, sourced from customers’ social media feeds, smart phones, and other sources, will change the way that firms track their customer feedback and complaints.

Good employees will remain fundamental to good service but with technology as an enabler

While some industries have automated aspects of their service needs - allowing passengers to check themselves in for a flight, for example - good staff are far and away the most crucial element of good service.  Nearly seven in 10 respondents chose people as what matters most in delivering good service.

More firms will outsource aspects of customer service to new kinds of specialists

Today, nearly all firms (87%) take care of their service offering in-house. In the decade ahead, however, specialist outsourced customer service providers are likely to be in demand.

The rise of the mass affluent and other customer segments will force companies to find new product or service niches

Booming emerging market economies have done a lot to raise the incomes of the poor across much of the world, making the 'middle class' a synonym for new opportunities, especially in emerging markets.  By 2030, the World Bank estimates there will be some 1.2 billion middleclass consumers globally and overall emerging markets will play a larger role.

Customer expectations, including the purpose of the store, are evolving with new technology

Mobile devices are leading the way in changing customer expectations. By always being able to access any information, at anytime, people will increasingly expect this throughout their lives. Almost a third of respondents say their customers expect to be able to get in touch with them 24/7. 

Lessons from Service Leaders

If customer service is going to be increasingly important in the decade ahead, what are the leading practitioners already doing differently today? In the survey, about 16% of executives describe their firms as “excellent” at customer service, relative to their peers. Segmenting these firms against those that rate themselves as merely average, or below average, yields some insights into how some leading customer service practitioners are working:

• While the average firms of today compete primarily on quality, service leaders unsurprisingly already prioritize customer service as their competitive differentiator, far ahead of cost. In line with this, these firms are far more systematic about implementing proper systems for tracking customer feedback and complaints, as well as identifying potential service weaknesses. Nearly 50% more have these in place, ahead of weaker rivals.
• Three quarters of customer service leaders have empowered their staff to make decisions when resolving customer issues, compared with less than half among average firms. And while weaker firms are investing more heavily in standardized service processes, leading firms are prioritizing staff training and development, and also working harder to define service standards and goals.
• While both strong and weak service firms see information-enabled consumers as a major driver for change in recent years, weaker firms think communications technology is the primary driver, while leaders see competition as the defining force.
• Service leaders are more focused on social media already: they monitor it more closely, use it more often to connect with clients and generally collect more external data to feed into their tracking systems. Related to this, a far higher proportion of leaders say their firms are excellent, or above average, at using technology to understand their customers.
• Finally, while service leaders expect to use service to stand out from the crowd, it is largely only the weaker firms that expect typically to charge a premium for this service.

Source: BDO

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One in Six Workers Successfully Used Social Networks to Get Hired

A new national survey from Jobvite reveals more than 22 million Americans used social networks to find their most recent job opportunity – up 7.7 million from last year’s survey. One in six members of the workforce say an online social network was one of the sources they used to find a job, and those with more contacts get better results. With the national unemployment rate at 9.0% in October, fierce competition has 54% of all job seekers using Facebook, LinkedIn or Twitter in their hunt for work.

Jobvite’s Social Job Seeker Survey 2011 polled more than 1,200 members of the workforce in a national online survey. More than two-thirds (69%) are job seekers – people either actively looking for work or employed but open to a new job. The survey provides the first in-depth look at which networks get the most job hunting activity, how the power of being social can lead to employment and which job seekers make the most of social networking.

Facebook Has More Job Seeking Volume Overall, LinkedIn and Twitter See Higher Engagement Rate for Job Hunting

Nearly nine out of 10 job seekers (86%) have a social media profile. Facebook has the majority with 84% of job seekers, followed by 39% using Twitter and 35% using LinkedIn. Nearly 1/3 of job seekers (31%) have a profile on all three networks.

Facebook has the highest volume of job seeking activity overall, with more people receiving job referrals, updating profiles and making new professional connections. But more than 1/3 of job seekers that have a Facebook profile don’t use it in any way to look for work. On the other hand, nearly all job seekers with a profile on LinkedIn and almost ¾ of those on Twitter leverage their networks for job hunting.

Job Seeking on Facebook:

• When using Facebook, employees automatically see notifications about friends who match open jobs based on the professional and educational information in their profiles.
• They can search their networks for matches to jobs at their companies, invite friends to apply, refer friends and automatically get credit for referrals.

Jobseekers can find referrals for jobs

• 48% of all job seekers (63% of those with a profile) have done at least one social job hunting activity on Facebook in the last year.
• One in five job seekers added professional information to their Facebook profile in the past year.
• 16% received a job referral from a Facebook friend.
• 18.4 Million Americans credit Facebook as a source that led to their current job.
• 56% of Facebook-using job seekers are male, 64% are under the age of 40, 36% earn more than $75,000 and 42% are college graduates.

Job Seeking on LinkedIn:

• 26% of all job seekers (88% of those with a profile) have used LinkedIn to hunt for work in the past year.
• 15% have updated LinkedIn with professional information.
• 9% received a job referral from a LinkedIn contact.
• 10.2 Million Americans credit LinkedIn as a source that led to their current job.
• 69% of LinkedIn-using job seekers are male, 53% are under the age of 40, 54% earn more than $75,000 and 58% are college graduates.

Job Seeking on Twitter:

• 23% of all job seekers (71% of those with a profile) have leveraged Twitter in their job hunt.
• 8% have updated Twitter with professional information.
• 6% received a job referral through Twitter.
• 8 Million Americans credit Twitter as a source that led to their current job
• 65% of Twitter-using job seekers are male, 69% are under the age of 40, 48% earn more than $75,000 and 49% are college graduates.

“Super Social” Job Seekers with More Contacts Get Better Results

The Social Job Seeker Survey found a marked difference in job hunting activities and success when job seekers were “super social” – having more than 150 contacts on any single network. More than four out of 10 job seekers (41%) are super social on at least one network (mainly Facebook), and they do more social job hunting and get better results than their less social counterparts. More than ¼ (28%) of these super social job seekers found a job through online social networking.

• 37% of all job seekers are “super social” on Facebook, 10% on LinkedIn and 11% on Twitter.
• 58% of LinkedIn’s super social job seekers updated their profiles with professional information, 35% of Facebook’s and 35% of Twitter’s.
• 43% of LinkedIn’s super social job seekers received a job referral on the network, 32% of Twitter’s and 25% of Facebook’s.
• 51% of all super socials are male, 62% are under the age of 40, 42% earn more than $75,000 annually and 40% have a college degree.

Source: Jobvite

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