Chief Strategy Officer, Issue 14

Issue 14 | theinnovationenterprise.com

the forces of driving change Taking you through the need for companies to be inventive in the face of today’s business environment

15

Global Gender Pay Equality Harriet Connolly explains how there’s still a lot of ground to make up within gender equality

9

The Diversity of Silicon Valley As the world’s most famous tech-hub, should Silicon Valley be doing more to drive equality initiatives?

letter from the editor

Welcome to the 14th edition of the

Many predicted that online

Chief Strategy Officer magazine.

shopping would take over bricks

This issue will attempt to answer some of the questions that strategists are faced with everyday.

and mortar retailers. Yet despite the increasing popularity of companies such as Amazon, the the shopping experience. In this edition we take a look at how the

together a section dedicated to

two environments can be fused to

workplace diversity which will look

benefit one another.

what companies should be doing to narrow the inequality gap which exists between certain sections of society.

Currently, only 4.8% of women hold the position of CEO in S&P 500 companies and Harriet Connolly takes us through the level of progress we’ve seen since the Beijing Declaration in 1995.

We hope you enjoy the magazine, it has been created to help spread new ideas within strategy, so if in touch with me at

Harriet Connolly

please share it.

George Hill

Simon Barton analyses the most prominent of these and determines how strategists can implement initiatives to help their companies thrive.

Max Bowen Michaela Jeffery-Morrison

Managing Editor

in front of key decision makers?

from a wide array of angles.

Chelsea Carpenter

Also, if you like the magazine,

impact that social media has had

been, with dangers appearing

Art Director

Contributors

Are you are looking to put your products

is more volatile than it’s ever

Simon Barton

ghill@theiegroup.com.

‘the customer is king’ and the

Today’s business environment

Editor

you have any feedback please get

Additionally, we examine the cliché

on consumers sphere of influence.

George Hill

high-street is still a central cog in

In this edition we have put

at equality in the workplace and

Managing Editor

For Advertising contact Emily at ekutchinsky@theiegroup.com

General Enquiries ghill@theiegroup.com

2015

contents

14 THE DIVERSITY OF SILICON VALLEY

As the world’s most famous tech-hub, should Silicon Valley be doing more to drive equality initiatives?

5

10

17

THE FORCES OF DRIVING CHANGE

GLOBAL GENDER PAY EQUALITY

CUSTOMER-LED DISRUPTION

We look at the need for companies to be inventive in the face of today’s business environment

Harriet Connolly explains how there’s still a lot of ground to make up in regard to gender equality

Who has more power? Customers or Companies?

20

24

THE CHALLENGES OF GLOBAL DIGITAL STRATEGY

THE IMPORTANCE OF OMNI-CHANNEL RETAILING

DO YOU WANT TO SEE YOURSELF HERE?

Digital Media is often talked about in a positive light, but can it affect companies negatively?

We see whether the bricks and mortar arena is still relevant for today’s retailers

If you want to contribute to our next issue, please contact: ghill@theiegroup.com

chief strategy officer

by falguni desai managing director, strategic planning,

bdo

e Sav

20%e: Cod

0

SPI2

STRATEGIC PLANNING INNOVATION SUMMIT 21—22 MAY 2015

| SAN FRANCISCO

+ 1 415 670 9814 epawlowski@theiegroup.com

ie.

5

the forces driving change by simon barton editor

the number of “with channels seemingly increasing all the time, the world of social media can be a space which companies are rightfully fearful of

” Today’s marketplace is

Whilst many companies

fraught with challenges for

become more accustomed to

organizations. Turbulence,

this new environment, strategy

defined as unpredictable

departments will be under

and swift changes in both a

increased pressure to create

company’s internal and external

inventive initiatives that allow

environment, means that

their companies to both side-

strategic planning is now more

step and embrace drivers

important to company success.

of change.

chief strategy officer

6

THE FORCES DRIVING CHANGE

These pressures are not

fore which demonstrate how

independent from one another,

damaging poor social media

far from it, they all w ork

campaigns can be to a company’s

together in unison, f eeding the

image. Therefore, it’s imperative

competitive environment in which

that marketing departments

organizations now operate.

understand their brand and the

The term, ‘digitalization,’ has been bandied about over the past five

consumers on specific channels.

years as the most prominent

As a driver of change, social media

driver of change, and whilst it has

has meant that companies have

been central, many argue that its

had to shift their focus when it

effect on the working environment

comes to customer interactions

has yet to scratch the surface.

as well, prioritizing personalization

The Internet of Things (IoT) is set to revolutionize the way organizations work, especially in manufacturing, energy and healthcare. Morgan Stanley predict that 75 billion devices will be

over mass-communication efforts.

It’s also meant that companies need to look at producing engaging content as consumers become more savvy and unwilling to be force-fed ‘click-bait’ articles.

connected to the internet by 2020,

As a function of social media,

meaning that companies will profit

globalization also represents

from more precise manufacturing,

another challenge, as major

predictive maintenance and an

companies are now forced

ability to track inventory in real-

to address issues that occur

time. With this in mind, the IoT is

internationally.

a trend which companies will have no choice to pick up on if they’re to maintain their competitve edge.

Aside from this, globalization affects treasury departments ability to create effective

Very much connected to

operational models and creates

digitalization and the IoT is

a wide range of new banking

the continual pressure that

protocols. This has meant that

organizations have to perform on

organisations have had to be

social media platforms.

more vigilant over the control of

With the number of channels seemingly increasing all the time, the world of social media can be a space which companies are rightfully fearful of. Numerous stories have come to the

chief strategy officer

ideals which resonate with their

their finances, and create effective strategies that decrease the chances of fraud and bankruptcy.

THE FORCES DRIVING CHANGE

7

Above all else, the sheer speed at which technology is developing, and the public’s continual acceptance of it, means that disruptors will forever be lurking in the shadows, ready to dethrone their larger rivals. Whether it’s the emergence of the cloud, robotics or the IoT, they all rely on innovators who want to build streamline strategies.

For strategy departments, it’s never been more important to be ready for whatever today’s marketplace has to offer.

Challenges and changes are difficult to predict, but which ever way you look at it, this is one of the most exciting but difficult times to be involved in a company’s strategy department.

chief strategy officer

IMPLEMENT INNOVATIVE STRATEGY

Save

20%

G USIN

N20 D L CSO

+ 44 (207) 193 1673 epawlowski@theiegroup.com ie.

CSO London www.theinnovationenterprise.com

9

diversity in the workplace

Workplace diversity continues to

and ethnic minority groups

be a sensitive issue.

in some of its organisations

Silicon Valley, often heralded

workforces.

as an innovation hub and home

This section of Chief Strategy

to some of the world’s most

Officer will look at this and also

powerful companies, has been

the wider implications of these

called out for the lack of women

issues.

chief strategy officer

10

global gender pay equality by harriet connolly director, strategy events

chief strategy officer

11

GLOBAL GENDER PAY EQUALITY

women “currently, hold a mere 4.8% of

CEO positions within S&P 500 companies, with only a handful of major companies, PepsiCo, general motors, HewlettPackard and Yahoo! opting for female leadership

”

Although it’s agreed that women’s

reform has yet to have much of an

standing in the workplace has

effect on the gender pay gap.

risen over the last 30-40 years, there is still a long way to go

When you consider that only 50%

before anyone can truly claim

of women around the world are

that females are given the same

in work, compared to 77% of men

opportunities as men to progress

and that 52% of women were in

in their careers.

work in 1996, it’s clear to see that

Currently, women hold a mere 4.8% of CEO positions within

been as influential as hoped.

S&P 500 companies, with only

Other major failings include the

a handful of major companies

motherhood pay gap. In the UK,

opting for female leadership.

women who have a child and then

These include:

return to work can expect to be paid less than a woman who’s

PepsiCo

childless. The difference in pay is

General Motors

not small either, women with two

Hewlett-Packard

children can expect to earn 25%

Yahoo!

less than women without children.

This inequality gap is not just prevalent at the higher echelons of major corporations, recent figures from the UN suggest that it will take around 70 years for the gender pay gap to close completely. This means that the equality acts passed around half a decade ago in the United States

This wasn’t the case in France and Italy however, where women with children normally earn slightly more than their childless counterparts. This goes to show the importance of legislation and the need for females to be protected when they have young children.

and the United Kingdom haven’t

Maternity leave also continues to

been able to solve the issues

be a major issue, with only 51% of

surrounding this sensitive area.

women protected by legislation.

The Beijing Declaration, a resolution adopted in 1995 by the United Nations at the Fourth World Conference on Women, was meant to be a groundbreaking reform that would help women Above % age of men and women CEO’s within S&P 500 companies

the Beijing Declaration has not

get better access to economic resources. Unfortunately, the

At the moment, 41% do not have adequate protection, meaning that they are expected to leave their jobs without pay in order to start a family. This is something that legislation must look at if we’re to truly live within an equal society.

To still be in a situation where women are punished for having

chief strategy officer

12

GLOBAL GENDER EQUALITY PAY

a child is quite embarrassing and

equality in the workplace. The

should be looked at with real

lack of progress since the

urgency not only by individual

Beijing Declaration signifies how

countries but the United Nations

entrenched sexism can be and

as well.

the fact that there is such a small

There has been a narrowing of the gap, but it hasn’t been to the level that we all expected. Guy Ryder, Director General at the International Labour Organisation sums this up well when he says, ‘Has this progress met our

amount of female representation at the CEO level proves that major companies need to put more faith in female leaders. It’ll only be then than inequality that exists between men and women decreases to the level it should be: 50/50.

expectations? The answer is decidedly no.’

What’s important now is to look at different forms of legislation and to make sure that there is the correct focus on gender

Above % age of men and women currently in work

chief strategy officer

Connect with Decision Makers THROUGH OUR ONLINE MARKETING SERVICES

http://channels.theinnovationenterprise.com/IE-Media-Pack.pdf

ggb@theiegroup.com

14

the diversity of silicon valley

Silicon Valley is a trendsetter for

When we are talking about

many aspects of business today.

technology and new ways of

From inventing and using the

approaching problems, it is

best computers, to creating new

almost always ahead of the

models through data, the ways

curve, when we are talking about

by george hill

that Silicon Valley works is often

equality though, it is well behind

managing editor

emulated by others across

the times.

the world.

chief strategy officer

15

THE DIVERSITY OF SILICON VALLEY

The truth is that racial minorities

programmes for black and latino

either Black or Latino, and only

are hugely under-represented

college engineering students.

20% of all jobs being held

at some of the most high tech companies in the world and are well behind the older and stuffier

To help with this Google has given $775,000 to set up the scheme.

industries when it comes to

It is telling that they helped to fund

diversity. A prime statistic for this

this after their first diversity report

is that there are only seven black

last year found that around two

people on Pinterest’s 450-person

thirds of their staff are men and

payroll. Only 11% of Silicon Valley

60% are white. It certainly makes

executives are women and only

for uncomfortable reading for

20% of software developers

one of the world’s most respected

are female.

companies, especially one who’s

It is not only in the numbers in

slogan is ‘Don’t be evil’.

work where inequality exists. The

The problem is not isolated

gender pay gap is pronounced

to Silicon Valley though, it is

throughout the US, men on

something seen in the tech

average earn 48% more than

industry throughout the world.

women, in Silicon Valley this number rises to 61%.

In the UK, companies like Decoded are looking to empower women

When you think of the power

to reach their potential at tech

players in the tech world, the

companies through teaching code

major CEOs are almost exclusively

and technology engineering. It

men, Tim Cook, Mark Zuckerberg,

is something that we are seeing

Evan Spiegel. In fact the only well

more frequently throughout the

known female CEO is Marissa

world as the power of high tech

Mayer at Yahoo!. There was even

and online companies increases

sexism rife with her recently when

and the potential for career

she came back to work after only

progression grows within

two weeks off after giving birth to

the industry.

her first child.

The kind of work being done by

However, this is something that

decoded and Code 2040 are

some companies have realized

unfortunately necessary, but with

and are taking steps to rectify.

companies appearing to support

Code 2040 are one of these companies and through their work they are attempting to change this situation through free training

by women.

them, hopefully this problem can be fixed. It certainly needs to, as recent reports have claimed that as few as 4% of engineers at Twitter, Google and Facebook at

chief strategy officer

For the Leading Global Voice in Strategy How strategy leaders execute on big projects to achieve great results

ie.

channels.theinnovationenterprise.com/strategy Or Contact Emily Kutchinsky for more information about our Digital Services + 1 415 800 3661 US + 44 207 193 1269 UK

ekutchinsky@theiegroup.com

17

customer-led disruption by max bowen director, strategy events

Despite being a corporate cliché,

The customer was still king 10-20

only a small group, the people

the phrase ‘the customer is king’

years ago, it’s just that their power

which they can influence.

can still be heard in boardrooms

of influence was confined to a

around the world. Although it

smaller amount of people. If a

might make some cringe, the

customer was unhappy with a

premise behind it, namely that

company’s offering they would

a company is defined by its

either never shop there again,

customers, continues to ring

or worse, tell their friends and

true. In fact, social media has

family about their experience.

meant that customers are now

For local shop owners this could

more powerful than they have

be disastrous, but for bigger

ever been.

companies only a small issue if it was isolated.

For companies operating in today’s business climate, customer complaints are far more dangerous than they used to be. Social media has given customers a platform to vent their frustrations in an open, shareable environment, all unfolding in front of millions of people.

An unforgiving environment for organizations, there’s no room

In this regard, the customer has

to ignore anyone, as an

always been king because they’re

unanswered tweet can pick up

the ones who decide whether

steam and put whoever reads it off

they’ll buy something or if they’re

your company.

going to spread positive or negative word of mouth. But this power alone makes them king of

This is uncharted territory for many organizations and often

chief strategy officer

18

CUSTOMER-LED DISRUPTION

slips them up. Bank of America’s

a company’s target audience will

The customer is now in the

use of bots to answer all its

normally be met with praise, so it’s

driving seat and this is only likely

customer tweets with the same

important this is acted upon.

to be accentuated in the coming

response - ‘we’d be happy to review your account account with you to discuss any concerns’ is a good example of an established company not taking a new platform seriously and irritating its customers in the process.

As mentioned before, this is unchartered territory for many companies. Whereas strategies were once designed to communicate to the masses, the customer-led revolution has meant that companies have had to

Simply putting someone’s name

rethink their strategies to increase

at the start of an automated

individual engagement.

comment does not make the response user-specific. It comes across as the company not caring about their customer queries and makes it seem as if they are not listening. This means that organizations shouldn’t make their social networks self-serving, but instead, fun and engagement seeking.

On the flip side, the customer-led economy isn’t just about everyone complaining, consumers want to praise brands they like and often take to social media to do this. For companies, praise directly from their customers is the best kind of advertising.

Organizations that release quality content are often in the best position to get this acclaim on social media. Companies like IBM are a good example of this, with its ‘Rethink your customer campaign’ demonstrating that content which is not just concerned with selling and is relevant and interesting to

chief strategy officer

Although companies are undecided on how to best deal with this increased individuality, there’s no doubt that technology has been the main enabler of it.

Cloud-based applications and mobile will maintain this trend and when coupled with social media’s continual development, it will only serve to empower customers even further.

“

senior management teams are aware of this as well, with an economist intelligence unit report identifying that 80% of all executives found that their customer experience was enhanced by focussing on individuals.

”

years. Customers demand a tailored approach and this should be central to an organisation’s strategic endeavours going forward.

e Sav

20% :

e Cod 0 2 CSO

CHIEF STRATEGY OFFICER SUMMIT 21—22 MAY 2015

| SAN FRANCISCO

+ 1 415 670 9814 epawlowski@theiegroup.com

ie.

20

the challenges of global digital strategy

by michaela jeffery-morrison head of strategy channel chief strategy officer

21

THE CHALLENGES OF GLOBAL DIGITAL STRATEGY

The accessibility that digital media

possible for smaller companies to

including Coca-Cola, have feeds

brings to organizations has gone

compete with multinationals, even

that only tweet in languages other

some way to levelling a playing

if only within localized areas.

than English.

As smaller companies tend to

Marcos de Quinto, the Chief

concentrate their efforts in a

Marketing Officer of Coca-Cola,

particular country or region,

has his own feed which is entirely

incorporating a global strategy

in Spanish, and whilst his tweets

is something which isn’t part of

are not all about Coca-Cola, a good

their thinking. Instead, smaller

proportion are, providing a good

companies often benefit from a

source of information for people in

localized approach, which sees

Spain and South America.

field which was once completed skewed in the favour of larger companies. Whereas the limited resources of smaller companies used to prohibit them from developing substantial marketing departments, digital media has meant that reaching out to thousands of people is as easy as setting-up a Twitter account and building a following who are interested in what you have to say.

Of course, this is easier said than done, but there’s no doubt that in terms of finance, digital media has lowered boundaries and made it

their content tailored to fit to a certain section of society.

In regards to Twitter, many will point to the fact that language de

Global companies rarely operate

facto of the network is English,

solely in English, whether it’s

with the USA, India and the UK,

Spanish or Mandarin, people want

three of the most active users.

to read content that’s in their

Due to this, it’s become essential

language and many companies,

for companies to look beyond

course, this is “of easier said than

done, but there’s no doubt that in terms of finance, digital media has lowered boundaries and made it possible for smaller companies to compete with multinationals, even if only in localized areas.

”

chief strategy officer

22

CHALLENGES OF GLOBAL DIGITAL STRATEGY

“More than anything, a global digital media strategy necessitates that companies keep a strict eye on their brand’s consistency.”

Twitter and to expand to localized

Additionally, it only takes a re-

a by-product of the globalized

networks to make sure that

tweet from a celebrity with a

economy they operate in and

their outputs are reaching every

following of 500K for a small

profit from. Global companies

nation that they sell to. Tuenti,

company to get their message

won’t be resting easy however,

for example, is the most popular

out to a huge pool of people, so

they’ll be more than aware that

social media platform in Spain,

quality content, not financial clout,

their smaller counterparts will be

and Coca-Cola have had particular

is becoming the currency of choice

on their heels trying to outdo their

success in building a following

for digital media.

digital endeavours every step of

on there.

More than anything, a global digital

New market entrants can now

media strategy necessitates that

scale up their operations far

companies keep a strict eye on

quicker than they used to, which is

their brand’s consistency. With

a major worry for multinationals,

the amount of platforms that a

as it encourages a ‘plug and play’

global strategies insists upon, it’s

environment where digital experts

important that different cultures

from smaller companies can

don’t stand in the way of a

amass a solid following that can

consistent brand image.

compete with major corporations in specific regions.

These challenges shouldn’t necessarily be viewed in a negative light by multinationals, but just

chief strategy officer

the way.

NEED TO TRANSLATE YOUR BRAND STRATEGY?

Brand ie.

Innovation Summit

Save

20%

G USIN

d20 Bran

SEPTEMBER 10—11 2015 | LOS ANGELES + 415 670 9814 epawlowski@theiegroup.com IE Brand Strategy www.theinnovationenterprise.com

24 by simon barton editor

THE IMPORTANCE OF OMNI-CHANNEL RETAILING

chief strategy officer

25

THE IMPORTANCE OF OMNI-CHANNEL RETAILING

Business people have a

Back in the early 2000s, many

special relationship with

publications claimed that bricks

buzzwords. Often initially

and mortar stores would cease to

embraced, many of them are

exist and that consumers would

quickly forgotten, labeled as

only be interested in online brands

clichés which by themselves,

who could broswe their websites

have very little meaning.

from the comfort of their homes.

Some however are accepted,

Predominantly, this hasn’t come

with the terms ‘Big Data’,

to fruition. It’s true that certain

‘Innovation’ and more recently

industries, like music and film,

‘Omni-channel Retailing’ now

have seen their physical stores

commonly used without a

become less successful, but this

second’s thought. Although

has been more to do with the

some still use the terms

rise of MP3 and the convenience

incorrectly, they have come

of downloading sites than the

to mean something that’s

brilliance of online retailers

quantifiable and more

like Play.com.

importantly, essential for companies if they’re to succeed.

Online retailing has however become an important facet for companies who also have physical stores, but there’s not doubting the high-street remains an integral part of the shopping experience.

Despite this, in the UK it was recently reported that almost a third of all clothes, furniture and appliances are bought online.

Many customer surveys have stated that convenience is the main reason why consumers have started to opt for more online shopping. Due to this, it’s essential that companies implement the correct technologies to blend the two spaces together.

chief strategy officer

26

THE IMPORTANCE OF OMNI-CHANNEL RETAILING

Convenience is the driving force

As a way of saving physical stores,

to deal with its hassles. The times

behind the success of online

some application developers are

are changing and it will be up to

retailing, and whilst it hasn’t taken

looking to build a service which

physical retailers to change

over the bricks and mortar arena,

allows customers to join a queue

with them.

it has put considerable pressure

whilst they’re at home, meaning

on it.

that they bypass lengthy lines.

Consumers do not like to wait in queues, with it being claimed that a line that’s over 5 minutes and 54 seconds will be long enough

This is something that’s still in development, but it’s an exciting space and could help physical stores prolong their relevance.

to put customers off. Online

The rise of Omni-channel retailing

shopping eliminates queuing and

has meant that the importance

the fact that goods have to be

placed on RFID and streamlining

shipped has yet to put people off.

services have increased

This is especially true now with

significantly. Although far from

companies like Amazon offering

being the end of the road for the

one-day delivery as part of their

bricks and mortar world, we’re

Prime service.

coming to a stage where people are becoming less and less willing

“in the UK it was recently reported that almost a third of all clothes, furniture and appliances are bought online, accounting for around 30% of all purchases made outside of groceries”

chief strategy officer

Disruptive Strategy with

Clayton Christensen

Build a team of strategic thinkers with HBX's interactive, online, team-based course.

Disruptive Strategy, provides a framework and a common language to help your team make better strategic decisions.

Designed to produce actionable results, the program is: Flexible

Run the course on your schedule.

Scalable

Engage your entire team in a common approach.

High-Impact

Create an actionable strategic plan.

The framework of Disruptive Strategy helps you to make strategic thinking something that you do every day, as opposed to an exercise to get a strategic plan put together.

RAJNEESH GUPTA Vice President of Strategy, M&A, and Analytics of the ProTax Group at Intuit

Clay Christensen Author of 'The Innovator's Dilemma', twice named world's most influential business thinker.

For more information, visit http://hbxdisruptivestrategy.com/iesummit Š Copyright 2015. President and Fellow of Harvard College. All Rights Reserved.

Access the Minds of Industry Experts www.ieondemand.com Over 4000 hours of on-demand content

Stay on the cutting edge Innovative convenient content updated regularly with the latest ideas from the sharpest minds in your industry.

Gain Insight. Optimize results.

sforeman@theiegroup.com

+ 44 (207) 193 1655