Category: work


A healthy economy

 How should a sustainable, universally economy look like?



 

“A healthy economy should be designed to thrive, not grow” sais Oxford economist, Kate Raworth.

 

 

 

Europe’s Road to Growth

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(https://on.ft.com/2J9CRe1The Financial Times is looking for 100 European companies, individuals and organisations that are taking advantage of new technologies in groundbreaking ways.

“There are fears that Europe is falling behind in digital transformation, just as the so-called fourth industrial evolution begins to change the business models of traditional industries in noticeable ways”, 

Patrick McGee wrote for the Digital Economy section in the Financial Times June edition. The predicted efficiency gains from the adoption of new technology are so great that, at first glance, they appear to be typos. PwC, for instance, forecasts the shift to contribute as much as 14 per cent to global GDP gains by 2030 — or “about $15tn in today’s value”.

However, digitalisation has so far been patchy. According to PwC, two-thirds of the 1,155 global manufacturing companies they surveyed “have just started or have not yet embarked on their digital transformation”.

Europe, in particular, is lagging behind: just 5 per cent of manufacturers in Europe, the Middle East and Africa (Emea) are “digital champions,” PwC says, versus 11 per cent in the Americas and 19 per cent in Asia-Pacific. On the other hand, Europe has strong foundations in fields such as artificial intelligence (AI) and cryptography, says Siraj Khaliq, a partner at Atomico, a technology investment group, which compiles an annual report, The State of European Tech.

Over the past two years, he says, industry has been increasingly tapping into these innovations with small acquisitions happening all the time.

The trajectory is very strong for these areas, especially with government policies of encouraging entrepreneurship with tax breaks and other measures,

Mr Khaliq adds.

More than 30 national and regional initiatives for digitalising industry have been launched across the continent over the past few years.

The FT is compiling a list of Europe’s best examples of digital transformation

Find out how to get involved.

Please see details below for how to nominate a digital transformation champion to be considered for this list on ft.com/2J9CRe1 #FTEuropeGrowth.”

 


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Windows of opportunity

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This world is moving away from a system of national markets

Isolated from one another by trade barriers, distance or culture, advances in technology and mass communication have made it possible, for people in one part of the world to watch happenings in far off places.

Theses are often used interchangeably but they refer to different processes. The process of integration on a worldwide scale of markets and production, has a single accepted definition used for it, globalisation.

For it, national boundaries are not important economically; free trade and movement of labour and other resources result in the breakdown of these boundaries and one big global marketplace.

On the other hand, referring to resources is internationalisation for which the increased links between nation states, with respect for trade and movement of this resources in participating and co-operating with other nation states to a common end.The regional trade agreements and regionalism are important in this process the EU is an example.

Hyperglobalisation – an extreme view process where the world market is a borderless global market.Consisting of powerless nation states and powerful multinational corporations.”

The process of globalisation brings changes in both the power of countries and companies and in national characteristics and culture, generally accepted in a view called transformationalism. The main international organisation concerned with globalisation are the World Trade Organisation, the International Monetary Fund, the World Bank and the OECD.

The OECD categories members into three bands high income countries, which include the EU, North America and Australia; middle income countries, which include East Asia and the Pacific Rim, and low-income countries, which include South Asia and Africa.

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Dealing With Diversity

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As a result of the suits and the publicity surrounding it, employee especially managers must attend sessions about the advantages of a multiracial clientele.

 

The reasons, over and above human decency, are pragmatic. One is the shifting face of the workforce, as white males, who used to be the dominant group, are becoming a minority.

 

A survey of several hundred American companies found that more than three-quarters of new employee were non white – a demographic shift that is also reflected to a large extend in the changing pool of customers.

 

Another reason is the increasing need for international companies to have employee who not only put any bias aside to appreciate people from diverse cultures (and markets) but also turn that appreciation to competitive advantage.


Workplace-Diversity


A third motivation is the potential fruit of diversity, in terms of heightened collective creativity and entrepreneurial energy.

 

All this means the culture of an organisation must change to foster tolerance, even if individual biases remain.

 

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There is an old-fashioned word for the body of skills. Character, writes Amitai Etzioni, the George Washington University, social theorist, is the

Psychological muscle that moral conduct requires.”

The bedrock of character is self-discipline, the virtuous life, since Aristotel have observed, is based on self-control. A related keystone of character is being able to motivate and guide ourselves, whether in doing homework, finishing a job, or getting up in the morning. As we have seen the ability to channel one’s urges to act is a basic emotional skill, one that in a former day was called will.

We need to be in control of ourselves – our appetites, our passions to do right by others”,

notes Tomas Lickona, writing about character education.

It takes will to keep emotion under the control of reason.”

Being able to put aside one’s self-centered focus and impulses has social benefits, opens the way to empathy, to real listening. to another person’s perspective. Empathy as we have seen, leads to caring, altruism and compassion.

Seeing things from another’s perspective breaks down biases stereotypes, and so breads tolerance and acceptance of differences.

These capacities are ever more called on in our increasingly pluralistic society, allowing people to live together in mutual respect and creating the possibility of productive public discourse. Theses are basic arts of democracy.


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If people’s long-held biases cannot be so easily weeded out what can be changed is what they do about them. But everything we know about the roots of prejudice and how to fight it effectively suggests that precisely this attitude, turning a blind eye to acts of bias allows discrimination to thrive. To do nothing, in the context, is an act of consequence in itself, letting the virus of prejudice spread unopposed.

More to the point than diversity training courses or perhaps essential to their having much effect,  is that the norms of a group be decisively changed by taking an active stance against any acts of discrimination, from the top echelons of management on down. Biases may not budge, but acts of prejudice can be quashed , if the climate is changed.

As an IBM executive put it,

“We don’t tolerate slights or insults in any way; respect for the individual is central to IBM’s culture.”

 

If research on prejudice has any lesson for making a corporate culture more tolerant , it is to encourage people to a peak out against even low-key acts of discrimination or harassment offensive jokes, say, or the posting of girlie calendars demeaning to women coworkers.

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To stop at battling prejudice in the workplace is to miss a greater opportunity; taking advantage of the creative and entrepreneurial possibilities that a diverse workforce can offer. As we shall see, a working group of varied strengths and perspectives, if it can operate in harmony, is likely to come to better, more creative and more effective solutions than those same people working in isolation.


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The Artful Critiques

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Consider the alternative

 

An artul critique can be one of the most helpful messages a manager can send. For example, what the contemptuous vice president could have told the software engineer – but did not- was something like:

 

” The main difficulty at this stage is that your plan will take too long and so escalate costs. I’d like you to think more about your proposal, especially the design specifications for software development, to see if you can figure out a way to do the same job more quickly.”

 

Such a message has the opposite impact of destructive critisism instead of creating helpessness, anger and rebellion, it holds out the hope of doing better and suggests the beggining of a plan for doing so.

As Larson observes,

 

“A character attack- calling someone stupid or incompetent- missed the point. You immediately put him on the defensive, so that he’s no longer receptive to what you have to tell him about how to do things better.”

 

The basic belif that leads to optimism, remember, is that swtbacks of failures are due to circumstances that we can do something about to change them for the better.

 

As as corporate consultant, Levinson gives the following advice on the art of critique, which is intricately entwined with the art of praise:

  1. Be specific
  2. Offer a solution
  3. Be present
  4. Be sensitive

 

Important for critisism are counceils as:

 

  1. See the criticism as valuable information about how to do better, not as a personal attack.
  2. Watch for impulse towards defensiveness instead of taking responsability.
  3. See criticism as an opportunity to work together with the critic to solve the problem, not as an adversarial situation.



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Contemporary Developments

News

 

 

 

Real-Time Insights

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Predicting and innovating faster for real time wave analytics

Using information, predicting and personalizing in a mobile way, by contextualize all data for device, customers and the location data connected in real-time.

 

Extending the value chains

On mobile communities for suppliers, partners and customers, and after all proactively driving the customer journey, it’s very, very powerful. A great example is what Caterpillar does by collecting data for such a long time.

But now, by collecting data not only for fluids and oils, tiers, pressures, the movement of the equipments, they are now taking that mobilising it, extending it to the next chain, and now being able to make more informed decisions in a predictable way.

So, that’s more powerful than just looking at your internal back to your insight vs looking outside.



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Infinite Map

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The dividend policy

A company will have a direct impact on the amount of retained earning available for investment. A company which consistently pays out a high proportion of distributable profits as dividends will not have much by way of retained earnings and so is likely to use a higher proportion of external finance when funding investment projects.

“Corporations with more diverse boards of directors are less prone to take risks and more likely to pay dividends to stockholders than firms whose boards are more homogenous.”

Firms need to take risks to run business. However, excessive risk taking may endanger their survival. Therefore, investors and regulators have broadened the board’s role to include corporate risk oversight, especially since the wake of the financial crisis in the late 2000s.

Most research on board diversity has focused only on gender diversity.
We used a broader-than-normal definition of diversity, encompassing gender, race, age, experience, tenure and expertise.

We looked at company records and employed five variables to measure risk: capital expenditures, research and development expenses, acquisition spending, the volatility of stock returns and the volatility of accounting returns.
The first three variables are direct measures of corporate risk as firms can adjust risk by directly altering their investment policies and spending. The last two variables measure corporate risk taking using the volatility of firms’ market and accounting performances.

“Firms with more diverse boards spend less on capital expenditure, R&D and acquisitions, and exhibit lower volatilities of stock returns than those with less diverse boards.”

Additional analysis showed that companies with more diverse boards were more likely to pay dividends and to pay a greater amount of dividend per share than corporations with less diverse boards. In general, risk-averse firms are more likely to avoid investment projects with uncertain outcomes and return cash to shareholders in the form of dividends.
Having this insight can help avoid costly cultural mistakes at both large corporations and small businesses. Studies showes that most corporate boards are relatively homogenous in gender and race – being mostly white and male. There was, however, considerably more diversity when we factored in characteristics such as age, experience, tenure and expertise.

Measuring diversity based only on gender misrepresents the actual diversity in corporate boardrooms.
On the one hand, diverse boards could reduce the level of corporate risk taking, discouraging innovative and risky projects.

On the other hand, if firm management is overly aggressive in its use of corporate funds for investing in risky projects, our results suggest that more diverse boards could perform better oversight of corporate risk taking than less diverse boards.
Rini Laksmana, associate professor of accounting at Kent State University, and Agus Harjoto, associate professor of finance at Pepperdine University, collaborated on the research for the project reviews.


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Help Ecosystems

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Executive sponsorship

In order to change management to help the entire organisation uses marketing people alignment because timing is everything.

Corporate venture capital is picking up speed in the investment industry, as large companies start setting aside funds for external investment in fledgling companies or startups. Tech giants like Intel, Dell and AMD all have strong track records with their proprietary funds, and more companies like Microsoft and Salesforce are now entering the venture-fund game.

During the past four years more than 475 corporate venture funds have started, bringing the worldwide total to more than 1,100, according to Global Corporate Venturing. With this surge comes a lot of uncertainty.

 

How will corporate venture-capital players influence the funding ecosystem?

Entrepreneurs need to know when choosing between corporate and traditional venture-capital partnership. Large companies can be slow moving and bulky, making it tricky to come up with innovative products or services. That’s especially true for the pharmaceutical, technology and telecommunications industries where internal R&D usually means more hiring, higher capital expenditures and increased fixed operating costs, all without the guarantee of a return.

A corporate venture fund, however, provides an opportunity for innovation without paying high R&D costs or incurring too much risk. Corporate venture capital also lets large companies operate on a smaller scale, which lets them innovate faster, conduct research on disruptive technologies and pre-empt competitors. And it’s an efficient way for companies to explore potential acquisition targets.

Data from Crunchbase shows that about one-third of corporate venture-backed startups have been acquired, versus 10 percent of startups with funding only from private venture capital.

Corporations can use their venture arms to influence their industry’s ecosystem by identifying new markets and building up their existing businesses. According to a recent Volans report,

“Corporate venture capital accounted for 1,068 investment deals worth $19.6 billion last year.”

Since 5,753 venture-capital transactions worth $48.5 billion occurred in 2013, corporate ventures comprised nearly 20 percent of all deals and 40 percent of transaction value worldwide.

A traditional venture-capital firm raises money primarily from institutional investors and high-net-worth individuals, while corporate venture capital uses cash reserves from a parent company to fund new endeavors. This difference is significant because it means more external pressure is typically put on independent venture-capital firms to generate above-average returns.

Since corporate ventures are typically considered R&D alternatives, expenses are already built into the business structure. And separate revenue-generating businesses help offset any corporate venture-capital losses. That’s a safety net that traditional venture-capital firms don’t have. Corporate venture-capital efforts also have the advantage of involvement with startups at the early stages, when they can most benefit from access to a large, established customer base, credibility through brand association and a larger network of partner companies and advisors.

Corporate venture-capital efforts can make good co-investment partners with traditional venture capital firms because each brings different expertise to the table. Venture-capital firms have the drive and know-how to realize financial results while corporate-venture capital groups provide industry knowledge and a talent pool.

 

Given all these advantages, why isn’t a larger proportion of total deals in the venture-capital space taken up by corporate funds?

For one, independent venture-capital firms still hold a competitive advantage over their corporate counterparts due to their flexibility, speed and experience in helping companies succeed financially. Corporate venture-capital firms that benefit from high cash flows might be willing to spread out their investments over a few similar companies and take a back seat in terms of driving their growth, while a venture-capital firm is typically motivated to take a more focused and hands-on approach for its portfolio companies.

Corporations have been actively investing in venture capital since the mid-1960s, when the venture capital industry itself was just emerging. But as more corporations become involved, the emphasis on how to build the next generation of businesses could shift away from high valuations and quick exits to creating a nurturing environment for bigger and better ideas.


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The first big management idea to reach a mass audience it swept through corporate America in the early years of the 20th century and much management thinking since has been either a reaction to it or a development of it.

At the core of scientific management lie four principles:

Replace rule-of-thumb methods of doing work with ones based on scientific study of the tasks to be carried out.

Select and train individuals for specific tasks.

Give individuals clear instructions on what they have to do, then supervise them while they do it.

Divide work between managers and workers, so that the managers plan “scientifically” what is to be done, and the workers then do it.

Peter Drucker once wrote that:

Taylor was the first man in history who did not take work for granted, but looked at it and studied it. His approach to work is still the basic foundation”.

The trade union movement, however, always hated it. A union officer once said:

No tyrant or slave driver in the ecstasy of his most delirious dream ever sought to place upon abject slaves a condition more repugnant.

There is little space for Taylor’s ideas in today’s world of freewheeling teamwork. But the writings of people such as Michael Porter and Michael Hammer, with their emphasis on breaking business down into measurable (and controllable) activities, hold more than a faint echo of Taylor’s ideas.


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Entitlements

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As the holiday season approaches, you may be thinking about employee gifts. While everyone appreciates a holiday treat, Cindy Ventrice, author of Make Their Day! Employee Recognition that Works (Berrett-Koehler Publishers, 2009) says holiday gifts and bonuses are now considered an entitlement in many organizations rather than a reward for hard work. People bank on their holiday bonuses.

“They plan their vacations, their gift giving, some plan it right into their income in terms of paying their bills. So, there is no appreciation element in many cases. They’re not seeing it as the reward. They see it as a piece of their compensation,”

says Ventrice.

While Ventrice is clear that companies shouldn’t do away with the holiday bonus, she argues that true recognition is not given through a one-time bonus check. Here are four things to consider when deciding how to thank your employees.

1. Include a personal message

“We often overlook the strength of written praise,”

says Ventrice.

She gives the example of an employee who kept handwritten notes of praise for years, pulling them out when they needed a confidence boost.

When you take a little bit of extra effort to put it in writing, it pays you back many times over. People read that over and over again,”

she says.

Messages should include specifics about the employee’s work and what was appreciated. They can be included in employee’s bonus envelopes or made into a group experience, such as a message board handwritten notes highlighting at least one thing that you value about each employee.

2. Know your audience

Ventrice says it’s difficult to come up with best practices when it comes to employee gifts because rewards will mean different things to different groups. Understanding what will make your staff enthusiastic is the first step in determining appropriate rewards.

“Know your staff – who they are and what they’re going to value,”

says Ventrice.

While a white water rafting adventure may be the perfect team-building reward for a young, fun office, a formal dinner at a fancy restaurant may be more suitable for a serious work culture.

3. Offer non-monetary compensation

Ventrice surveyed over 200 employees from 98 companies to find out what rewards they valued the most.

Across all ages and cultures, time off was absolutely number one,”

she says.

Flex time given for a specific accomplishment in the form of a longer lunch hour or going home early is a great way to show appreciation for a job well done.
The study confirmed that the cost of recognition awards has only minimal impact on employee perception of appreciation. Fifty-seven percent reported that the most meaningful recognition was free.Other forms of recognition that scored high included opportunities to learn from senior staff or take a course that wasn’t offered to everyone, and being given challenging assignments.

“Programs run by managers who know what makes recognition meaningful and know how to provide it translate into higher engagement, retention, loyalty and productivity,”

says Ventrice.


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Leadership Capabilities

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Organisational challenges, tasks and decisions are distinguishing the long term direction for:

🔹The companies activity & scope

🔹Advantages

🔹A strategic fit with the business environment

🔹The organisations resource and competence

🔹The values and expectations

As an adapted article from “The Economist Guide to Management Ideas and Gurus”, by Tim Hindle in The Economist Magazine suggested that:

Scientific management was the first big management idea to reach a mass audience. It swept through corporate America in the early years of the 20th century, and much management thinking since has been either a reaction to it or a development of it.”

The idea was first propounded by Frederick Winslow Taylor, partly in response to a motivational problem, which at the time was called “soldiering”—the attempt among workers to do the least amount of work in the longest amount of time. To counter this, Taylor proposed that managers should scientifically measure productivity and set high targets for workers to achieve. This was in contrast to the alternative method, known as initiative and incentive, in which workers were rewarded with higher wages or promotion. Taylor described this method as “poisonous.

Scientific management required managers to walk around with stop watches and note pads carrying out time-and-motion studies on workers in different departments. It led to the piece-rate system in which workers were paid for their output, not for their time. Taylor’s first publication, which came out in 1895, was called “A Piece-Rate System”.
He believed that,

the principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity of each employee.”

The interests of management, workers and owners were, he maintained, intertwined. He wanted to remove “all possible brain work” from the shop floor, handing all action, as far as possible, over to machines.

“In the past, the man has been first; in the future the machine must be first,”

he was fond of saying.

He ignited a debate about man versus machine that continued far into the 20th century. The famous book in which he enunciated his theories, “The Principles of Scientific Management”, had a strong impact on subsequent management thinking. It influenced such people as Frank and Lillian Gilbreth, American time-and-motion experts; it influenced industrial psychologists, many of whom saw it as an insult to the human spirit and set out to show that allowing free rein to human initiative produced superior results; and it influenced industrialists like the Michelin brothers (of tyre fame).
At the core of scientific management lie four principles:

1. Replace rule-of-thumb methods of doing work with ones based on scientific study of the tasks to be carried out.

2. Select and train individuals for specific tasks.

3. Give individuals clear instructions on what they have to do, then supervise them while they do it.

4. Divide work between managers and workers, so that the managers plan “scientifically” what is to be done, and the workers then do it.

Peter Drucker once wrote that Taylor was,

the first man in history who did not take work for granted, but looked at it and studied it. His approach to work is still the basic foundation.”

The trade union movement, however, always hated it. A union officer once said:

“No tyrant or slave driver in the ecstasy of his most delirious dream ever sought to place upon abject slaves a condition more repugnant.”

There is little space for Taylor’s ideas in today’s world of freewheeling teamwork. But the writings of people such as Michael Porter and Michael Hammer, with their emphasis on breaking business down into measurable (and controllable) activities, hold more than a faint echo of Taylor’s ideas.

It led to the piece-rate system in which workers were paid for their output, not for their time. Taylor’s first publication, which came out in 1895, was called “A Piece-Rate System”.


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