Blog #5 -The Evolution of Strategy

The Ever-growing Path of Strategy 

One day I aspire to own a Consulting Firm that specializes in Human Resource Consulting for, For-Profit Industries. The article "2018 Corporate Longevity Forecast: Creative Destruction is Accelerating" relates to my future business endeavor. The foundation of my business will consist of educating businesses on key HR functions and Information systems. Two of the five Trends Driving Market Turbulence will align with my business. (https://www.innosight.com/insight/creative-destruction/)

• The Rising dominance of digital technology platforms continues to shift massive market value
• Disruptive change across industries highlights the importance of continual business model innovation.    

Technology Platform Enhancement

After working in HR for almost ten years, I noticed the shift from paper-based processing to digital platforms. The digital platforms that are currently used for service in the industry are not user friendly. The platforms cause confusion with processing day-to-day tasks. Additionally, most companies' policies and procedure manuals are dates and lack updated HIPPA regulations. My business will teach Human Resource Organization basic level rules in regulations while offering an upsell for the HR Information System built from the firm. The "Twelve Forces That Will Radically Change How Organization Work" explains how I should keep all business models should be simple so staff and clients can understand the fundamentals of the business. (https://www.bcg.com/en-us/publications/2017/people-organization-strategy-twelve-forces-radically-change-organizations-work.aspx). The digital system provided with the upsell will be multifaceted, giving users the 24 hours of tech support.  

Elevating the Business Model 

The primary business function of the Consulting Firm will be HR Compliance. The goal of the firm will be to protect all clients from civil lawsuits and government penalties for HIPPA violations. The core mission of the company will not change how we provide the deliverable is where innovation will come in. The innovation will be how the service will be the HR Information System provided to the client. We will provide information systems that will analyze data to align the system transactions with real time updates of HIPPA guidelines. 

Blog #5: The Future of Strategy is a Present Strategy of Mutuality

            On first glance, Michael Porter and Mark Kramer’s argument for why companies need to shift from corporate social responsibility (CSR) to created shared value (CSV) seems almost as if it is a semantic argument. How is creating benefit all that different from creating benefit relative to cost? It seems as if the former was a simplistic version of the latter, where costs are always inherent in any action. However, through contextualization by other authors, CSV effectively takes the concept of mutuality and articulates its importance within the business world.

            Mutuality is a difficult concept to define but thankfully poet and philosopher David Whyte does a great job of describing its nuance in a poem called, “Working Together”.

 

We shape our self to fit this world
and by the world are shaped again.
The visible and the invisible working
together in common cause,
to produce the miraculous.
I am thinking of the way the intangible
air passed at speed round a shaped wing
easily holds our weight.
So may we, in this life trust
to those elements we have yet to see or imagine,
and look for the true shape of our own self,
by forming it well to the great
intangibles about us.

            Mutuality, as described by Whyte, is a dialectical relationship with the world, where you shape and are shaped. When it comes to business, Porter and Kramer effectively describe this in the section labeled “The Connection Between Competitive Advantage and Social Issues” by stating how a company’s efforts to invest in a wellness program eventually advantages them in that their employees become more healthy to work for them. Although implicit, CSV implies mutuality is inherently tied into a company’s wellbeing. We can explicate this relationship one step further by arguing Porter and Kramer, unknowingly, are acknowledging that the people serviced by companies, from consumers to stakeholders, are in the driver’s seat of how the company should behave. This is where I believe Porter and Kramer’s conception of CSV falls short, not due to their inability to conceive but rather their avoidance of explicitly stating the full conception of mutuality through CSV. Throughout their piece on Harvard Business Review (HBR) publication, the distinguished authors fail to state how companies are collective wills of the people for institutionalizing needs. In other words, companies are only as strong as the trust that people give it while serving their demands. This notion is corroborated by BCG, “culture based on shared values outperformed their competitors in revenue, profit, employment growth, and stock performance.” By the very things that companies are known for, they underperform when it lacks that mutuality, or shared values.

Therefore, I would argue that the capitalism need not be reinvented, as is Porter and Kramer’s thesis, but instead, using this new understanding of Porter and Kramer’s own concept of CSV, needs a return to its root. Even Adam Smith, who contextualized the ‘invisible hand’ in a larger book about government regulation, may be at odds with the way capitalism is practiced today. Capitalism, or any word you use in its place, will not be effective if it undermines the very intricate relationship that Porter and Kramer reiterate—one where business is integrated as part of and is of society. Possibly there are no better words than a poet’s in describing this intricate relationship, a fundamental understanding of what shared value, or mutuality is: “I am thinking of the way the intangible air passed at speed round a shaped wing easily holds our weight.”

Blog #5: The Future of Strategy

The concluding theme for this course brings up an important aspect of what defines value currently and what it should ideally mean going forward. The article ‘Creating Shared Value’ by Michael E. Porter and Mark R. Kramer highlight that the recent capitalist model views value creation only in terms of economic value. In this model, value is calculated and expressed in terms of benefits relative to the costs situated in the near-term future, without due attention to the social and environmental aspects that unfold over a larger period of time. The duo proposes the idea of shared value, "which involves creating economic value in a way that also creates value for society by addressing its needs and challenges" (1). The ways in which this can be achieved are through the use of one or a combination of the following strategies (2) :

1.     Re-conceive products and markets,

2.     Redefine productivity in the value chain,

3.     Enable local cluster development to benefit society and not just shareholders

The current situation of the pandemic has highlighted a key concern for me with respect to the discourse of shared value. If working remote becomes the ‘new normal’, the ways in which companies would need to re-define their meaning of the term community. For example, in order to enable remote work for employees located thousands of miles away, the capacity of the servers and cloud would need to become multifold. As opposed to the common myths, the cloud actually lives on the ocean floor in the form of cables (3). These ‘physical cables that swiftly carry the information across continents or across require huge amounts of plastic, steel, tar, manpower and most importantly, disruption to the aquatic ecosystem. Applying the idea of shared value, the cost of environmental impact must also be included in a company’s strategy. Undeniably, this is not something that might be actionable in the near-term future but needs to an imperative consideration for value creation in the post COVID era. 

Would this call for the need for new material innovation for making the ‘cloud’ possible? Or would this consideration also mean a restructuring of the internal departments of a company? Or that there would be new kinds of public-private partnerships? It would remain to be seen whether that would that mean reconceiving products for some businesses and redefining productivity in the value chain for others, but the shared value would definitely be imperative in not letting data become the fossil fuel for the next generation.

References:

1.     “Creating Shared Value”. Michael E. Porter, Mark R. Kramer. Harvard Business Review, 2011

2.     “Creating Shared Value”. Michael E. Porter, Mark R. Kramer. Harvard Business Review, 2011

3.     ‘People think that data is in the cloud, but it’s not. It’s in the ocean.’ . The New York Times, March 2019

Blog #5 - Shared Value at the Core

This week’s blog post will be bringing the focus back to my bioremediation company, and specifically how shared value is at the heart of not only our product but our mission and all our future strategic initiatives. The article that really stood out to me this week was Michael Porter and Mark Kramer’s article on “Creating Shared Value.” I’d always had a barely-formed intuition that sustainable energy sources, re-using materials and investing in employee health and education had to be good for business. However, in this article, the father of modern competitive strategy confirms my beliefs by articulating how these are necessary to achieve sustained competitive advantage through “shared value.” The principle of shared value creates economic value in a way that also creates value for society by addressing its needs and challenges. It connects a company’s success with social progress.

My bioremediation company is in a unique position to create shared value even if we just focus on selling our product. In fact, one of the main reasons I jumped on this venture so quickly was the shared value creation that’s behind the product itself. We produce a non-toxic cleaning agent and bioremedial that actually de-toxifies natural resources like bodies of bodies and wells, and also facilitates the re-use of equipment through low-maintenance cleaning and non-toxic disposal of waste. Our production process itself is even non-toxic since we avoid the use of chemicals and harmful processes. Through our network, we can bring this product to the major petroleum companies. Our cost is competitive enough so these companies don’t have to sacrifice profits and simple enough to use so they don’t have to invest too much in training and new processes. At the same time, facilitating the use of our product at these major companies means our product will be helping to decontaminate and clean areas all around the globe and in many different situations. This is the basis of shared value: an innovation that achieves a competitive advantage for us and our clients while also creating social benefit.

The article contains a section on government involvement in shared value which also stood out to me. Regulations should be created to encourage companies to seek societal benefits with incentives and should not try to impose specific practices or stifle innovation. To help facilitate the synergy between government and industry, my team and I want to work with the Texas state government (where we have connections) to try and incubate regulations like these that encourage shared value and beneficial innovation. These could be incentive programs or tax cuts to companies that achieve certain decontamination standards. In addition to that, working with non-profits and NGO’s to emphasize non-toxic decontamination would be beneficial for the environment and individual health while at the same time creating demand for our product. Shared value is created.

Another section of the article that stood out to me was about “building supportive industry clusters at company locations.” In essence, it means investing in social progress with organizations and other companies in your geographic area. Our product is developed in a small town in Chihuahua, Mexico. We could invest in or partner with organizations to develop infrastructure and educational institutions in the area. This would help lower our shipping costs and encourage a more skilled work force. An initiative like this would also help us cut costs in a separate area that many companies don’t have to deal with, the cartel. The cartel imposes “taxes,” intimidates employees, and discourages other industries from entering the area. Aside from the obvious benefits, investing in infrastructure, local organizations and education would give locals more economic power and more options to avoid working for the cartel. These initiatives would be good for us and good for the area. Shared value is created.

While my team and I feel that shared value is at the heart of our product, we recognize there are other avenues to pursue that can create shared value. One of our missions is to change the world and improve the environment, and not in some cliché, PR-induced way, but in a way that’s at the heart of every one of our strategic initiatives and at the core of our business. I hope you’ve enjoyed reading the blog about my company as much as I’ve enjoyed writing it. Armed with my new strategy development skills, it’s time to bring our product to market and start changing the world!

Thank you for reading.

Blog #5 – Tech substitutes (NOT other airlines) poise the greatest threat to airline companies

Blog #5 – Tech substitutes (NOT other airlines) poise the greatest threat to airline companies

As airline companies brace to compete in a changing market they may be overlooking a major detail.  Future competition of the airline industry won’t be coming from other airline companies it will be as a result of technology companies.

A survey of executives shows that 55% of them believe that the most existential threats will come from within their industry.  The Innosight article points to the fact that this is misguided given that “nearly 50% of the current S&P 500 will be replaced over the next ten years.”[1]  This shows that, despite the many papers and books on disruption, executives have not latched onto the fact that disruption usually comes from small, unknown players.  The same bodes true for airlines.  Analysts are assuming that the airlines might be consolidated further to maintain profit margins similar to what happened after the 9-11 attack.[2]  Per the data provided by Innosight, consolidation won't protect them.  Instead, it makes more sense for the threat to come from substitutes than from airlines.  In this case, the threat will be video streaming or other communication technologies.

The argument that the airlines will be challenged by a movement outside of airlines is fortified by BCG’s paper Twelve Forces That Will Radically Change How Organizations Work.  In it, they argue that “Access to Information and Ideas” will be a large driver of change.[3]  This insight supports the fact that airlines will most likely be blind-sided by a technological innovation rather than an existing threat.

Finally, let’s take a look at how video streaming/conferencing services will take airlines by surprise.  In short, they will attack airline companies’ most profitable customer base – business travelers.  “Business travelers account for 12% percent of airlines' passengers, but they are typically twice as lucrative – accounting for as much as 75% of profits.”[4]  As stated above, many airlines might be looking at how other airline competitors will strategize to attract this customer segment but the true threat is streaming.  Popular video streaming service, Zoom, has seen its daily users expand from 10 million to 300 million in the last three months.[5]  Business people that once, might have traveled, are finding that there is an alternative that gets them 80% of the benefit of actually being onsite at a dramatically reduced cost.  This realization of businesses will be the silent killer of airline industries rather than any particular strategy of incumbents.

To conclude, in this post-COVID-19 world, airline companies are poised to be severely weakened by technological substitutes rather than incumbents within their industry.  Executives would benefit from crafting strategies that take this reality into account rather than merely fighting against their immediate competitors in the airline industry.

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[1] https://www.innosight.com/insight/creative-destruction/

[2] https://www.insider.com/how-coronavirus-will-affect-travel-future-2020-4

[3] https://www.bcg.com/en-us/publications/2017/people-organization-strategy-twelve-forces-radically-change-organizations-work.aspx

[4] https://www.investopedia.com/ask/answers/041315/how-much-revenue-airline-industry-comes-business-travelers-compared-leisure-travelers.asp

[5] https://venturebeat.com/2020/04/02/zooms-daily-active-users-jumped-from-10-million-to-over-200-million-in-3-months/

Blog #5 The Future of Strategy

How do we survive as a company? As reflected in [2], companies are going out of business more often than they have ever been. There has been a high turnover in the S&P 500 list.

What might be a cause of this change? How are several established companies unable to survive this change? As discussed in [1] and [2], disruptive change is an effective way in which a market weeds out its companies. It is almost synonymous with Darwin's "Survival of Fittest" principle. A company's survival in the market space depends on how they reinvent itself. As mentioned in [4], good companies are often victims of having a rigid structure in place that leads to success more often than not—although I do not agree with the notion stated in [4], which is a more subjective narrative rather than a narrative based on facts. It is valid to note that rigid structures do often hinder change and Innovation. The word "Innovation" is often misleading while used int his context. Innovation in the company not only pertains to the R&D and the Innovation of the product of the company but also means a disruptive nd an incremental change to the Business strategy. Not only is Technology changing at a rapid pace. Also, the customer has been changing as an effect of technological development. [2] focuses on a good point of a company having a dual transformation strategy. A dual transformation will allow a company not only to innovate in their core-competency but also to provide an opportunity to explore new avenues of the market that may have arisen with disruptive change.

Dual Transformations is not an entirely new concept. Several companies have started in a field but divested their time exploring different markets, which brought them great success. We can see several cases of this in the modern world. This strategy gives the company a safety net in case their core-competency suffers. This allows them to diversify income modes. Every good company invests in several different market spaces to not only have a foothold but also to position themselves from a possible fall. This might even have a draw-back on the other end of the spectrum, where the company is too diversified and not have a strong foothold in any of their markets.

Therefore, it is the responsibility of a company to being able to implement a business strategy that is both innovative and understanding of the trends of the market.

References:
1. Twelve Forces That Will Radically Change How Organizations Work (Bhalla, Dyrchs, and Strack, Boston Consulting Group, March 2017)
2. 2018 Corporate Longevity Forecast: Creative Destruction is Accelerating (Anthony, Viguerie, Schwartz, and Landeghem, Innosight, 2018)
3. Creating Shared Value (Porter and Kramer, Harvard Business Review, January- February 2011)
4. Why Good Companies Fail to Thrive in Fast Moving Industries and Discovering New and Emerging Markets (Christensen, Introduction to and Chapter 7 of The Innovator’s Dilemma, 1997)

Blog #5: Incorporating Altering Forces Into Your Business

The world is currently going through a very decisive period in which several forces and trends are bringing about changes to society – some gradual, others not so much – that have the power to shift the dynamics by which we conduct our activities. In this way, companies will have to be prepared to shape their strategy to address these changes ahead of time if they want to succeed. To that extent, the article Twelve Forces That Will Radically Shift How Organizations Work¹, by the Boston Consulting Group, provides a useful overview of the forces impacting our society right now, how they are changing the demand and supply for talent, and how some companies are successfully responding to these trends or even taking advantage of them to conduct their operations more efficiently.

In particular, my experience as a freelance translator working remotely with an international company allowed me to witness some of these forces in action and to see how a business not only responds to but also incorporates such trends to work in their favor. The company I work with provides a variety of translation and subtitling services in almost every language to clients all

around the world and, acknowledging the limitations in the supply of local workforce – particularly for specialized talent –, the company developed its operations around a collaborative platform that can connect talent from all over the world. This way, they have the advantage of sourcing translators that are native speakers of the particular language they are looking to translate to. And even further, recognizing that skill imbalances are present and that training will have to happen in some form, this crowdsourcing approach gives them the benefit of only having to train the incoming freelance workers in one aspect – subtitling –, instead of having to train them in both the language and the subtitling aspects.

In addition, the online collaborative platform allows people to work remotely on every step of the workflow and automatically sends the task to the next worker down the chain once the previous one is finished. This not only makes the work more efficient but also makes troubleshooting easier than if each person was working on a software installed separately on their computer. Therefore, it also lowers the chances of mistakes occurring and ultimately reduces the overall time in which a file can be ready for the clients. Another good example of how the company is dealing with some of these forces is the implementation of an educational platform where translators can choose from courses on several topics to improve their subtitling skills and even acquire skills in new adjacent areas (such as closed captioning, for example).

It is even more important that companies adapt to these trends now that we are experiencing a global pandemic. This is because the current situation is accelerating or increasing the magnitude of some of these forces now that businesses are being forced to work remotely, and the companies that are not able to effectively address those will be left behind. To that extent, the initiatives listed here offer a good idea of how other companies (even from other industries) can respond to the changes driven by these different forces and even integrate them into their work processes with positive results.

¹ Bhalla, V., Dyrchs, S., & Strack, R. (2017). Twelve Forces That Will Radically Shift How Organizations Work. The Boston Consulting Group.

Blog Post #5: The Future of Strategy Is Green

                 In ten years, organizations will be operating in a way that we most likely will have a hard time envisioning now. With continued breakthroughs, access to new information, and increasing wealth across the world, firms will continue to innovate and be pushed to improve. These innovations will push down prices for consumers under the assumption that monopoly powers are successfully thwarted. However, some firms may strategically choose to increase prices and will see their success increase? How: Eco-friendly products.

               Boston Consulting Group partners Vikram Bhalla, Susanne Dyrchs, and Rainer Stack discuss the importance of understanding future trends in their article “Twelve Forces That Will Radically Change How Organizations Work.”[1] Here, Bhalla et al. discuss the reality that companies are now dealing with consumers who are more educated and more demanding. These demands are often focused on sustainability. In fact, almost 75 percent of American consumers are comfortable with the tradeoff of paying more for a product if it is packaged in a sustainable way.[2] These consumers are not receiving a higher-quality product or even a product delivered more quickly. They are willing to pay a premium simply for packaging, which they will likely throw away. These consumers skew significantly younger. In fact, Nielsen found that 73 percent of consumers willing to pay more for goods that are sustainable were born between 1977 and 1995.[3] As these consumers accumulate more wealth, their ideals will become even more important for firms to understand in order to capture value. Developing countries are even more inclined to support sustainability: 88 percent of Indian consumers and 85% of Brazilian consumers prefer purchasing sustainable goods, even at increased prices.[4]

               Firms can get ahead on this consumer demand by making significant investments in sustainability. Many firms have caught on to this trend: 63 investment companies signed a commitment to consider Environmental Social and Governance (ESG) goals into their investment decisions in 2006; twelve years later, the number of companies skyrocketed to over 1,700.[5] Firms that run the gamut from Patagonia to Accenture to L’Oreal have all made concrete steps to increase sustainability in their firms.[6] However, signaling to consumers that sustainability has increased is no longer sufficient to drive up demand. Consumers are wary of “greenwashing,” a practice where firms signal that they have increased sustainability without genuinely changing their operating models.[7] Nestle faced this problem when they claimed that their bottled water was “the most environmentally responsible consumer product in the world” and spent a significant amount of money on public outreach to celebrate their sustainability.[8] The backlash to this outreach was severe: protests erupted across the world, and Nestle was forced to spend even more money taking care of the PR nightmare that they caused. The high-level takeaway here: consumers care about sustainability, but they are no longer uninformed enough to accept a company’s word as bond. For firms that want to truly be successful long term, they must make genuine commitments to green practices, not just give them lip service.

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[1] Bhalla, V., et al. (2017). “Twelve Forces That Will Radically Change How Organizations Work.” BCG.

[2] Holbrook, Emily. (2020). “New Report Finds Overwhelming Majority of Consumers Are Willing to Pay More for Sustainable Packaging.” Environmental + Energy Leader.

[3] Curtin, Melanie. (2018). “73 Percent of Millennials Are Willing to Spend More Money on This 1 Type of Product.” Inc.

[4] “Report shows a third of consumers prefer sustainable brands.” (2017). Unilever.

[5] Eccles, R.G., and Svetlana Klimenko. (2019). “The Investor Revolution.” Harvard Business Review.

[6] Strauss, Karsten. (2019). “The Most Sustainable Companies in 2019.” Forbes.

[7] Watson, Bruce. (2016). “the troubling evolution of corporate greenwashing.” The Guardian.

[8] Ibid.

Blog #5: Refining market trends and strategy

This week’s theme is about how accelerated innovations are constantly redefining trends and impacting how organizations function. The key forces driving these innovations are technology advancements, changes in workforce demographics due to a rise in millennials and Gen Z individuals entering the workforce, and external market factors.[1][2][3] In reflecting upon the theme of these articles, I realized that the theme applies to the current times we are living in more than ever before. The articles are absolutely correct that external factors play a significant role in setting trends in innovations, defining which organizations will succeed versus fail, and shaping the way organizations function.

Keeping this theme in mind, I delved deeper to understand the current pandemic’s impact on: 1) innovations, and 2) how organizations will function differently going forward. For example, innovations in telehealth have been significantly accelerated. In fact, remote physician consultations are becoming the new norm in acute and primary care.[4] Secondly, companies are redesigning their supply chains to accommodate the current spike in demand, but more importantly, to be prepared for similar situations in the future. Experts forecast that the global supply chains of tomorrow will be less dependent on labor and will shift toward using autonomous vehicles and drone technology. Companies such as Draganfly and Terra Drone have accelerated efforts to improve their drone technology offerings to solve issues such as food delivery, crowd control and patient monitoring.[5] Additionally, there will be a shift to increasingly employing cloud-based services such as Azure and AWS to ensure remote access to critical servers and systems.[6]

COVID-19 is also redefining the way organizations will function going forward. The shift towards remote working may be the start of a more permanent change in the way organizations operate. Some major organizations are considering making remote working the new norm post-COVID. For example, Tata Consultancy Services, which is India’s largest IT service firm, announced last week about plans to have 75% of the company’s roughly 450K employees permanently work from home.[7] This shift toward remote working calls for a change in the way organizations operate. Since change starts at the top, going forward, leaders must enforce stronger communication and provide the necessary tools to make this possible. Leaders must also show respect for work-life balance as it gets increasingly difficult to define this boundary in remote work settings. Leaders should be more flexible with their employees’ schedules while setting policies in place to ensure work is still done in a timely fashion. To accommodate all these changes, leaders will also need to demonstrate increased trust, transparency and empathy to individuals’ personal situations.[8]

This pandemic has been eye-opening in many ways. It has revealed the degree to which environmental factors can impact market trends and organizational design. Prior to the pandemic, telehealth and remote working were not as prominent as they will be in the future. Going forward, companies that incorporate more technology-based strategies and flexible leadership styles will be the ones that succeed even during tough economic times.

Sources:

1. Article: Creating Shared Value (Porter and Kramer, Harvard Business Review, January-February 2011)
2. Twelve Forces That Will Radically Change How Organizations Work (Bhalla, Dyrchs, and Strack, Boston Consulting Group, March 2017); https://www.bcg.com/enus/publications/2017/people-organization-strategy-twelve-forces-radically-change-organizationswork.aspx
3. 2018 Corporate Longevity Forecast: Creative Destruction is Accelerating (Anthony, Viguerie, Schwartz and Landeghem, Innosight, 2018); https://www.innosight.com/insight/creative-destruction/
4. Marjanovic, and Sonja. “The Pandemic Has Sparked Innovation, Offering Lessons We Must Not Forget.” RAND Corporation, 1 Apr. 2020, www.rand.org/blog/2020/04/the-covid-19-crisis-has-sparked-innovation-and-offers.html.
5. “Drone Technology: A New Ally in the Fight against COVID-19.” MDLinx, www.mdlinx.com/internal-medicine/article/6767.
6. Sengupta, Amitava. “Impact Of COVID-19 On Global Supply Chains and Opportunities In the Post-COVID World.” Entrepreneur, 14 Apr. 2020, www.entrepreneur.com/article/349229.
7. “Post-COVID, 75% of 4.5 Lakh TCS Employees to Permanently Work from Home by '25; from 20%.” Business Today, 29 Apr. 2020, www.businesstoday.in/current/corporate/post-coronavirus-75-percent-of-3-5-lakh-tcs-employees-permanently-work-from-home-up-from-20-percent/story/401981.html.
8. Dishman, Lydia. “5 Changes to Expect in the Workplace after COVID-19.” Fast Company, Fast Company, 24 Apr. 2020, www.fastcompany.com/90496811/5-changes-to-expect-in-the-workplace-after-covid-19.

Blog #5: The Future of Strategy for Social Innovation

Having spent this mini developing & implementing solutions for a social innovation project in an agile 5-week sprint, I’d love to bring some of my learnings to the table and discuss future strategies in this area. This is a space where the implication of strategy trends such as digital productivity, simplicity in complexity, and resource distribution are the maker or breaker of the organization’s ability to thrive. These trends are discussed in BCG’s “Twelve Forces That Will Radically Change How Organizations Work” by Bhalla et al [1].

Our project sponsors for this project were two education nonprofits hoping to scale up, both through outreach and on an administrative level. As teachers suddenly in charge of running a program and managing volunteers during a pandemic, they assessed that their next strategy had to be related to digital technology. The main stakeholder, high school students, would likely be readily open to a digital solution, as long as it could be integrated into their lives easily and provide motivation for use. Without a way to reach the students at home and keep them engaged and collaborating, there would be no way to keep the two programs active and effective. Relating the case of the nonprofits to other organizations, having a dynamic digital strategy may be what allows an organization to be responsive to external influence. Future strategies to make digital platforms accessible and easy to operate, as well as conducive to anybody’s will to contribute will grow in prevalence, especially in this sphere.

Increasing simplicity without getting rid of complexity is another concept that applied to my social innovation project. If a digital platform manages to make tasks simpler for stakeholders, then the leaders should hopefully be able to manage more. My project’s final prototype was a method for human resource management to be able to effectively let volunteers do work for the two nonprofits. Having that system in place would ideally cause the impact of more volunteers doing more tasks, as well as the nonprofit leaders having time to create content, organize and plan events, and lead other strategy for the group.

Lastly, innovation for resource distribution is going to be increasingly important for social innovation groups, particularly for those who aim to provide this specific benefit to groups. There will be new types of resources (for example, training, information, other kinds of development) and hopefully we will find more effective ways to get those to the right people. Other elements of resource distribution [1], such as shifting economic power and getting various things to people across demographics, have purpose within both the missions of the organizations and in the management as described by Bhalla et al. Digital technology can be tied in here for faster distribution of resources: an example might be integration with more popular platforms. What if volunteers could be recruited through Instagram? With the agile project format, there was a shift in thinking as we knew the first prototype had to be straightforward and efficient.

For social innovation to take advantage of the direction people are moving toward in the future, many groups could benefit from retaining and utilizing talent that levels up technology being used. Specific, technology solutions that can provide more opportunity for engagement, simplicity in streamlining administrative work and organizing human capital, and outreach to get resources to the right people, even in challenging times.

[1] https://www.bcg.com/en-us/publications/2017/people-organization-strategy-twelve-forces-radically-change-organizations-work.aspx

Blog #5: The Future of Strategy

As we end the semester, we conclude on thinking about the future of business planning and blueprinting future strategies. I’d like to start by highlighting 2018 Corporate Longevity Forecast: Creative Destruction is Accelerating by Anthony,Viguerie, Schwartz and Landeghem. The article begins by highlighting the decline in the average lifespan of a company. It also shows the drastic change in the top companies in the past 20 years. Industry leaders like General Electric, ExxonMobil, Pfizer, and Citigroup were your top companies in 2000, but today we see domination from digital platform companies such as Apple, Alphabet/Google, Microsoft, and Amazon. This goes to show that digital technology is the future and is a key factor to how businesses think about their strategies now days. Everything is moving so much faster now days which causes quicker shifts and changes, but can also be a negative to companies as your next market disruption or competitor is always right around the corner. It doesn’t take long for something to get outdated in today’s world and therefore companies can peak and decline a lot quicker. The article also talks about how it is essential to always be thinking about tomorrow and your customer’s future needs. This is a major change in historical business strategy as companies were always thinking of how to keep customers happy and keep business strong. Today you almost have to be willing to take risks even before the pressure hits and be ready to make changes even when everything is going perfectly fine just to stay ahead of the times.

Creating Shared Value by Porter and Kramer, and Twelve Forces That Will Radically Change How Organizations Work by Bhalla, Dyrchs, and Strack both touch on social responsibilities in their reporting of the future of business. As someone studied economists such as Milton Freidman and worked for businesses with old school conservative values, this is something I feel is essential and very important to the future of business and strategic planning. Old business thinking and companies that I previously worked for believed in focusing solely on maximizing profits of your business. They believed focusing on social responsibilities such as charities, the environment, diversity and employee recognition was nice but it is not the responsibility of the business. They believed people had responsibility and social values, but the company’s responsibility was profit and charity should come from individuals personally. Even when I worked for a couple of restaurants, they did not believe in minimum wage, diversity amongst their servers, diverse dietary options (gluten free) or getting involved in community fundraisers. Both of these articles show that times are changing and companies may need to start considering these things as customers value your values. Changing your workforce cultures and values is essential in today’s business as not only can it help benefit production, customers actually take this into consideration when choosing a company. Also, I feel that by placing more resources and value into your employees compared to things like ads and shareholders, you can benefit your business as these are the people actually upholding your product and creating new ideas.

Blog#5: Future of strategy: Social media

Social media is used by billions of people around the world and has fast become one of the defining technologies of our time. Globally, the total number of social media users is estimated to grow to 3.29 billion users in 2022, which will be 42.3% of the world’s population [1]. Firms are realising the importance of fusing their strategies on to social media platforms. May it be advertising, marketing, operations, or sales.

Tesla, a name thats synonymous with innovation in energy and automotive industry does not spend a singe dime on print or television adertising. But it relies on twitter to make a splash whenenever a new product is ready for release or an upgrade is soon to be deployed. This unique strategy appears to have been working well for the firm. By mid 2017, Tesla launched its low cost high volume Model 3 and achieved its goal. Nearly 200,000 Model 3 cars were pre ordered in just 2 days with no commerical advertising, Tesla was able to ship 400,000 Model 3s by 2020. This shook auto giants such as Mercedes and BMW which invest heavily in print and media marketing strategy.

The Ford Fiesta Movement campaign is another example of social media strategy success. Ford decided to lend 100 Fiestas for six months to customers who would use social media to post their experiences in an authentic, direct way. It held an online contest to select candidates, carefully choosing drivers with large social media followings. Ford designed a schedule for postings. Within six months the drivers had posted more than 50,000 items, gathering millions of clicks. The $5 million campaign created a prelaunch brand awareness rate of 37% among Millennials, generated 50,000 sales leads to new customers, a level of results that might be expected from a traditional campaign costing tens of millions of dollars [2]


While I focus on marketing strategy alone in the above examples, there are other areas such as opertions and workflow integration strategy areas that social media can play a big role. I believe that firms - both big and small must integrate social media in their strategy to thrive in the new age digital world

References:
[1] The future of social media in marketing by Gil Appel, Lauren Grewal, Springr, 2020
[2]  What’s Your Social Media Strategy? by H. James Wilson , PJ Guinan , Salvatore Parise and Bruce D. Weinberg, Harvard Business Review, 2011

Blog #5 - The Future of Strategy for In-House Lawyers

Starting in the 1980's, attorneys at law firms began transitioning to in-house counsel positions for  a variety of companies. Businesses knew that hiring their own lawyers instead of sourcing from outside law firms, was more sustainable for their company in the long term. With a change in the scope of their job duties, lawyers with foundational business skills are needed more than ever as multi-service consulting firms have moved to offer their clients packaged service bundles, including legal services.

Law firms face stiff competition from consulting firms like Deloitte with a legal management consulting department. Similar to how companies have been pushed out of the S&P 500 because of emerging competitors with new products or business models, multi-service firms are capturing customers in part of the legal market by expanding into legal services. Customers now have to opportunity to purchase all of their needs from a one-stop shop business. In-house counsel lawyers will likely transition to consulting firms offering legal services instead of law firms who can only deal with legal matters that impact a business.

In-house counsel lawyers also see benefit from the technology consulting services offered by multi-service firms, something many law firms struggle with. 77% of respondents in a 2016 in-house counsel attorney survey noted that technology had not yet replaced some of their traditional legal tasks, but 52% reported that it will likely happen in the next five years. Technology and digital productivity are major forces that will likely revolutionize how organizations function, so it is crucial for legal businesses to stay ahead of any possible digital disruption in the market. One possible cause for the lack of preparedness is the lack of training that has impacted the available supply of talent. For example, 131 of the 195 law schools do not have a course teaching the foundations of law office management and only seven schools offer a course in law and technology. The current workforce of in-house attorneys are not adequately trained to handle technology disruptions that could impact the longevity of their business. 

Fortunately, the technology is available. With adequate training and by identifying the best tools appropriate for the needs of the company, legal management consultants can train in-house counsel attorneys to deal with changes in the industry. For example, consultants can help the legal business automate contract management processes, digitize documentation, and develop an e-billing platform. In addition, analytics have helped “legal departments to predict areas of exposure and risk—in advance of an issue occurring.

Finally, in-house counsel lawyers must recenter their shared value in the legal practice. Many law firm attorneys struggle with centering their shared values that brought many people to pursue law in the first place. The ability to leverage the law towards justice and fairness should be inherent shared values that can propel the legal business forward. Law is a service-oriented occupation and in-house counsel attorneys should recognize their commitment to generate profit for the company, but also remember their dedication to the needs of their client, regardless if it's a person or a company. 

Blog #5: The Rise of the Resale Industry

The readings for this past week were, once again, very insightful and a great set of articles to tie up the readings for this semester. The first two, Forces That Will Radically Change How Organizations Work by Bhalla, Dyrchs et al and Corporate Longevity Forecast by Anthony, Vigueire et al were both familiar to me. Some of this is as a result of shared themes with other texts we have explored in the class. Additionally, some of the content discussed relate to strategies and shifts in corporate strategies that I have seen first hand at the different companies I have worked at. The latter article did bring to light some very interesting statistics and data concerning the trends surrounding companies being dethroned and losing their slots in the S&P 500 over time- I enjoyed reading that very much thus I will like to focus a bit more on that article in this blog post. Nonetheless, the Porter and Kramer article Creating Shared Value was also particularly insightful to me in many different ways.

As was articulated in the Corporate Longevity Forecast, one of the main catalysts in the market turbulence we've witnessed over the past few years is that of the digital disruption in retail. Various ways in which this trend manifests itself are through some of the unicorns like Airbnb and Uber which own no real estate or vehicles respectively. I would like to focus on a slightly different market segment that is also experiencing disruption due to the same retail disruption - clothing and personal items. Over the last few years we have witnessed many companies emerge in the clothing industry which facilitate peer to peer buying and selling of clothing items between users. These platforms own no inventory but provide a platform through which people can buy and sell used clothes easily. One of the most popular platforms, Poshmark, was able to pay out a whopping "$2 billion in revenue to its community of 7 million sellers" just last year [1]. Clearly, there is value to be unlocked within this digital resale economy.

Given the current global state of the economy, it is getting more and more clear that life post COVID-19 may look a bit different that it did before. Dutch fashion and design trend forecaster, Li Edelkoort, shares her thoughts that during this pandemic, the world will experience "a quarantine of consumption [as] people would have to get used to living with fewer possessions and traveling less" [2]. If this trend is to continue post-pandemic, lots of shifts are likely to occur within the consumer markets specifically. Perhaps, individuals will be more satisfied with owning less and will turn to renting different consumer products more often instead of buying them. Additionally, in the case they want to purchase items, it is not a long shot to stipulate that individuals will be more likely to purchase items being resold by others through platforms like Poshmark instead of patronizing products directly from manufacturers.

In the event that these stipulations come to pass, we are likely to see a huge impact on the structure of various industries. This may include the upending of some incumbents within the fashion/retail industries and the rise of underdogs whose business models revolve around resales or rentals. Analogous to the unicorns Airbnb and Uber within hospitality and transport, the coronavirus may be the final catalyst to birthing new unicorns within the fashion and retail industries. Doing so would inevitably speed up the rate at which the fashion landscape changes and perhaps even introduce a rental platform company into the ranks of the S&P 500 elite.

[1] https://www.fastcompany.com/90409133/poshmark-doubles-its-revenues-from-1b-to-2b-in-a-year
[2] https://www.dezeen.com/2020/03/09/li-edelkoort-coronavirus-reset/

Blog #5 : The Future of Strategy

The rise of electric vehicles (EV) is a good example of this week’s topic. It’s innovative enough to jump out of the field of traditional gasoline-powered cars and use completely different energy -electricity. Since it’s a new field, the “dual transformation” mentioned in the article is very necessary.[1]  Automobile companies need to make their core business, car producing and selling, be prepared for the electrification trend, and also take electrification as a new way of future growth. For existed car brands, their manufacturing capability, brand influence, and market share help the transformation to electrification. But it is still a challenge. Updating manufacturing plants and process, improving technology, developing charging infrastructure and many other actions require the company to redistribute its resources.

But the huge investment is worthy. Take the American market as an example, the number of EV unites sold was doubled to 360, 000 in 2018.[2] Tesla’s sales performance was excellent and its Model 3 EV took over about 40 percent market share in the United States.[3] Its sales performance was also comparable to a gasoline-powered car. There are many other evidences prove that EV has a strong market potential and could be an attractive alternative to traditional cars.

EVs could be the future since it embraces a shared value – sustainable development. A lot of companies advertise their electrification by claiming “zero emission”. Although the emission during the process of battery producing is controversial, it shows a direction towards the sustainable development. Transforming from gasoline to electricity is essential to the achievement of carbon dioxide emission target.

The development of EVs need corporation between companies and governments. Relative policies and regulations could help the EV industry grow as well. Chine provides one of the highest subsidies for EVs in the world. EVs are exempt from license-plate lotteries or has higher quotas than gasoline-powered cars in some cities, such as Beijing. It reduces consumer concerns about the price and encourage. Now, China has become the largest market for EVs. Moreover, building charging infrastructures can’t only be a mission of companies. The government should introduce more policies to further develop EVs.

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[1] Scott D. Anthony, S. Patrick Viguerie, Evan I. Schwartz, and John Van Landeghem, “2018 Corporate Longevity Forecast: Creative Destruction is Accelerating”, INNOSIGHT, https://www.innosight.com/insight/creative-destruction/.

[2] Patrick Hertzke, Nicolai Müller, Patrick Schaufuss, Stephanie Schenk, and Ting Wu, “Expanding electric-vehicle adoption despite early growing pains”, McKinsey, https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/expanding-electric-vehicle-adoption-despite-early-growing-pains.

[3] Ibid.

B-Corps and Patagonia, the epitome of shared value

The article "Creating Shared Value" discussed the relatively-current shortcomings of capitalism in society by highlighting recent, as to 2011, company strategy trends that did not take into account their impact on local, national, and global societies - such as "shifting activities to locations with ever lower wages," as well as "externalities" that arise "when firms create social costs that they do not have to bear, such as pollution" (1).   To rebuild societal trust in companies, the article discusses that preconceived notions of trade-offs need to be abandoned to reach a shared-value-approach, "which involves creating economic value in a way that also creates value for society by addressing its needs and challenges" (1). 

To achieve shared value, companies can (a) re-conceive products and markets, (b) redefine productivity in the value chain, and/or (c) enable local cluster development to benefit society, and not just shareholders (1).  The article discusses a variety of aspects of shared-value creation, such as the blurring of for-profit with non-profit activities (1), but surpirsingly, it makes no reference to B Corporations, which have been around since 2007, and now comprise of more than 2,500 companies across 50 companies (2).

Certified B Corporations "are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy." (2)  The thought is that the use of third party validation, public transparency, and legal requirements and accountability help these companies build trust and value. 

One of the more famous B Corps is Patagonia (3). Patagonia sought this status to ensure the company remains focused on its mission through succession, capital raises, and ownership changes (3).   Patagonia creates shared value by committing its mission to save the planet (3), by taxing themselves a self-imposed Earth tax to support environmental non-profits (4), and by utilizing eco-friendlier  clothes-making processes and materials, many of which are recycled.  Patagonia also restructured their departmental structure; they dissolved their sustainability department, but rather than getting rid of them, housed them directly into their materials department, their production and design departments, and other mainstream operations (6). These practices have helped cause Patagonia's revenues to quadruple over a 10-year period (5). 

I'd like to think if Porter and Kramer updated their 2011 article, they would focus a lot of their attention on B Corps and Patagonia in particular, as perfect examples of shared value success.


1. "Creating Shared Value." Porter and Kramer, Harvard Business Review, Jan. - Feb 2011
(2) https://bcorporation.net/about-b-corps
(3) https://www.patagonia.com/b-lab.html
(4) https://www.patagonia.com/activism/
(5)https://www.businessinsider.com/patagonia-mission-environmentalism-good-for-business-2018-12
(6) https://socialoutcomes.com.au/patagonia-and-unilever-demonstrate-businesses-increasing-interest-in-shared-value/