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Contents
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Chief Strategy Officer looks at the changes that we are likely to see in strategy in 2014 Gary Cokins looks at the effects that business analytics can have on a company strategy We look at how and why shared workspaces are becoming a big deal in company strategies Falguni Desai takes a look at how companies need to be looking at versatile strategists to prosper Lisa Renner, acclaimed strategy author talks to us about the importance of strategic collaboration George Hill talks to Price Floyd from BAE about the rapidly changing digital communication landscape
Editor’s Letter
Letter From The Editor Welcome to the first edition of business world as companies Chief Strategy Officer of 2014. look to gain an edge over We want to use 2014 to build competitors. Lisa Renner on our success and help share talks to us about why this isn’t new strategic ideas and conducive to success and puts thinking to even more people. her case forward for wider Having gone from an idea in collaboration. We also talk to Price Floyd, VP of Communications at BAE about the use of digital media in modern communications and how a company like BAE We have kicked off this year uses it. with a bang and have some As always, if you have anything to say about the magazine great stories in this issue. Simon Barton looks at what or if you want to contribute, we think will be the biggest please contact me at changes in strategy in the ghill@theiegroup.com April last year to now working with a global readership in the tens of thousands, we hope to spread new strategic ideas even further.
next 12 months, including geographical targeting, wearable technologies and digital currencies.
We look at how the use of business analytics can have a dramatic effect on the ways that companies look at their strategies and how they are targeting customers.
George Hill Managing Editor
As shared workspaces become more popular in company strategies, we investigate the good and bad If you are looking to put your of this new working plan. products in front of key decision Collaboration is something makers, Contact Hannah at that is not necessarily always hsturgess@theiegroup.com looked at favourably in today’s for more details.
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Managing Editor George Hill President Josie King Art Director Gavin Bailey Assistant Editor Michaela JefferyMorrison Simon Barton Advertising Hannah Sturgess Contributors Falguni Desai Gary Cokins Richard Angus Yulia Ivanova All Enquiries ghill@theiegroup.com
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2014
Strategy in 2014 Yulia Ivanova Strategy Leader
2014
2013 was a year of change for digital strategists. Facebook’s domination was challenged by Instagram, Twitter and Tumblr, despite continuing to increase profits. This infusion led to companies implementing strategies across a diverse array of networks, as many new players saw upward swings in their popularity. Visual Marketing (videos, GIFs and pictures) also took off and was accelerated by Twitter adding Vine to its repertoire. With these channels expanding all the time, it will be essential that strategists in 2014 keep abreast of all new trends and apply strategies that allow them t o reach more potential customers.
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sumer. Coupled with the fact that 91% of adults in the USA are attached to their mobile phones for the majority of the day, handheld technologies are clearly already deemed a necessity by large sections of society and this has led to a high degree of dependence on them. In line with this increased dependance, we will see location based digital marketing strategies becoming increasingly tailored towards the user. By using GPS technologies, digital marketers will look to increase the amount of multimedia information supplied to consumers based on their geographical location.
Content will continue to be king in 2014 and a driving force behind successful marketing strategies across all social media platforms. Visualized content generated engagement rates six times higher than that of traditional text content and this is likely to increase in 2014. In a similar vein to that of the Digital A significant Location based marketing strattrend in 2014 egies, personalization will be will be Locational Based Digital imperative and it will be essenMarketing. John Lewis predict- tial that companies place a real ed that the Christmas of 2013 emphasis on the personalization would be the United Kingdom’s of content. The development of first ‘mobile Christmas’ and this the GIF is likely to accelerate as came to light on Christmas day organisations look to reap the when internet traffic from mo- benefits of being able to probile phones and tablets overtook mote a range of products in a desktops. In 2014 this growth single image. Twitter’s incorpowill continue and will mean that ration of Vine will also coincide companies will increasingly have with companies using ‘vines’ to embrace the ‘always-on’ con- (short 15 second videos) in order
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2014
to promote their products and interact with their target demographics. In 2013 multinationals such as Oreo and Samsung developed successful marketing strategies around vines and the use of this should be a major trend in 2014. Many strategists have been unequivocal in their assertion that Big Data is going to increase in importance throughout 2014 with ‘The Internet of Things’ being somewhat of a catalyst. The stress on database systems however, will be extensive and this will mean that strategists will have to constantly rethink the way they store data. Companies will increasingly look to implement data management storage systems, such as Hierarchical Storage Management, to help with the issue. Additionally, as data storage needs increase, a significant proportion of companies experiencing data issues will look to the cloud to satisfy their storage and computing power needs. Wearable technologies, such as Google Glass, will become more prevalent in 2014. This will create another avenue for the creation of data and consequently will effect a number of prominent industries. Although it would be somewhat premature to rank them alongside smartphones and tablets in terms of impact, it’s projected that one-hundred and twenty five million devices
will be sold by 2017 (Strategy Analytics). Instead, 2014 will be the year where we see unprecedented growth in the awareness of these products, with Google Glass set to be the most marketed and recognizable product. The rise of wearable technologies will allow marketers to remove any element of doubt in regard to the targeted customer as previous assumptions are negated. For example, a fitness brand will be able to target people who work out regularly as opposed to people who have just bought gym memberships but only use it on an infrequent basis. Although developments such as this are unlikely to come to fruition in 2014, there will be an increase in their use and this will ultimately lead to more accurate data for strategists. As of January, major US retailer Overstock started accepting payments from Bitcoin, a new digital currency. In February last y e a r t h e
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cost of a single bitcoin stood at twenty dollars, now a single bitcoin costs one-hundred and fifty dollars. Despite this drastic increase in value and adoption from Overstock, it’s likely that strategists will approach bitcoin and other prospective digital currencies with a degree of apprehension going forward in 2014. Concerns have been raised about its potential use for illegal money transfers.
aspects such as wearable technologies will see an increase in awareness but are unlikely to enter the public domain with much force in 2014. The Internet of Things is an interesting phenomenon that will coincide with an influx in data, adding to the already significant amount processed by companies. Due to the nature of diversification within multichannel marketing, unpredictability will certainly be prevThere will be a plethora of trends alent and companies will have to in strategy in 2014, with digital remain vigilant in regard to new marketing strategies set to be developments if they want to central to all successful market- continue to target more specific ing strategies. Other interesting markets.
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Analytics Strategy
Business Analytics in Strategy Gary Cokins Founder, Analytics-Based Performance Management LLC
Analytics Strategy
Business analytics is creating a competitive edge for organizations. Once being a “niceto-have”, applying business analytics, especially its subset predictive business analytics, is now becoming mission-critical. The use of business analytics is a skill that is gaining mainstream value due to the increasingly thin margin for decision error. There is a requirement to gain insights, foresight and inferences from the treasure chest of raw transactional data (both internal and external) that many organizations now store (and will continue to store) in a digital format.
more complex in table requestions, ports and and more graphs as interesting a means questions. for queMore imr i e s p o r t a nt l y, and drill business downs. analytics But realso has the ports do power to annot simpliswer the quesfy data nor amplify its value. tions. Finally predicThey simply package tive business analytics can up the data so it can be con- display the probability of outsumed. comes based on the assumpIn contrast to BI, decisions tions of variables.
provide context for what to analyze. Work backwards with the end decision in mind. IdenBusiness in- tify the decisions that matter t e l l i g e n c e most to your organization and v e r s u s model what leads to making b u s i - those decisions. By undern e s s standing the type of decision a n a - needed, then the type of anall y t i c s ysis and its required source a n d data can be defined. d e c i - To clarify, BI consumes stored sions information. Analytics pro-
Here is a useful way to differentiate business intelligence (BI) from business analytics and decisions. Analytics simplify data to amplify its value. The power of analytics is to turn huge volumes of data into a much smaller amount of information and insight. BI mainly summarizes historical data typically
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duces new information. Predictive business analytics leverages data within an organizational function focused on analytics and possessing the mandate, skills, and competencies to drive better, faster, decisions and achieve targeted performance.
Queries using BI tools simply answer basic questions. Business analytics creates questions. Further, analytics then stimulate more questions,
The application of analytics was once the domain of “quants” and statistical geeks developing models in their cubicles. However, today it is becoming widely adopted for organizations with the conviction that senior executives will realize and utilize its potential value. An imperative to apply business analytics Today many businesspeople do not really know what predictive modeling, forecasting, design of experiments or mathematical optimization mean or do. However, over the next ten years the use of these powerful techniques will become standard. This is no different from applying
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Analytics Strategy
financial analysis and computers for businesses that want to thrive and survive in a highly competitive and regulated marketplace. Executives, managers and employee teams who do not understand, interpret and leverage these assets will be challenged to survive.
and to improve decision making.
One can make the case that i n c re a s i n g l y the primary source of attaining a c o m p e t i t i ve advantage will be an organization’s competence in mastering all flavors of analytics. If your management team is analytics-impaired, then your organization is at risk. Predictive In my co-authored book with business analytics is arguably Larry Maisel, Predictive Busi- the next wave for organizations ness Analytics, this topic is ad- to successfully compete. This will dressed with case studies, core result not only from being able to predict outcomes but also to principles, and inspiration. Case studies, including some in reach higher to optimize the use this book, demonstrate that for of their resources, assets and a company to use predictive trading partners. It may be that business analytics effectively the ultimate sustainable busiit must commit to a sustained ness strategy is to foster analytand rigorous process in order to ical competency and eventually achieve meaningful results. This mastery of analytics among an includes the ability to establish a organization’s work force. team of individuals with complementary skills and competencies; a repeatable set of practices, functional data and tools; and a management process to review its results and forge its decision making by leveraging these results and insights. Together, these are used to continuously analyze the right business and cost drivers and measures that have strong cause-and-effect relationships to gain insight to better manage the business
Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in advanced cost management and enterprise performance and risk management systems. He is the founder of Analytics-Based Performance Management LLC, His two most recent books are Performance Management: Finding the Missing Pieces to Close the Intelligence Gap (ISBN 0-47157690-5) and Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics (ISBN 978-0-470-44998-1). His most recent book is Predictive Business Analytics (ISBN 978-1-118-17556-9), published by John Wiley & Sons. Mr. Cokins can be contacted at gcokins@garycokins.com .
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DIGITAL STRATEGY INNOVATION SUMMIT Digital Strategy Formulation & Flawless Execution
19-20
MARCH NEW YORK MARRIOTT DOWNTOWN, 2014
For more information contact Pedro Yiakoumi +14159925658 pyiakoumi@theiegroup.com http://theinnovationenterprise.com/summits/digital-strategy-new-york-2014
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Shared Workspaces
Shared Workspaces Richard Angus Strategy Leader
Shared Workspaces
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The movement from walled individual workspaces has been something that companies have been looking at for decades, with most companies now seeing the value in open plan offices where communication between employees can be more effective. It is no longer a case of the bullpen being a derogatory place to sit, but instead the most productive and gives the best possibility to cross pollinate ideas. Working across projects within a company has obvious benefits as there is often synergy in processes that
would not be found in an environment where each individual was not working amongst their peers. This same theory was taking root at a time when the internet was allowing people to become truly mobile in their work habits, where working from home was a norm in companies rather than an anomaly. These two principles are polar opposites in theory. One is isolating yourself due to the mobility of modern day businesses, the other in bringing as many people as possible into one space to collaborate.
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Shared Workspaces
However, from these two sep- sharing. This may not be in arate movements came the the form of direct synergy but could be something as simple idea of co-working spaces. This is the idea that through as a different perspective on individuals from different a problem.
that can have a benefit on a project by project basis either.
The idea of these collaborative work spaces is that although there may not be the same end goal for all companies working in the space, there is likely to be areas of mutual collaboration and idea This is not simply a strategy
The benefit of this is mutual, with the Irish Times getting insights into areas that they want to work in from agile startups and the startups getting a boost from not having to source and pay for office
companies working remotely with their colleagues they can also work collaboratively with those from other organisations.
There are areas where this kind of work is becoming popular such as San Francisco and London. This idea has become so popular in London that Google has created a Campus in the City to cater to these needs and reap the benefits of having creative minds working around the core team there.
Johnny Ryan, Chief Innovation Officer at the Irish Times has incorporated this idea into some of his programmes at the newspaper, allowing small startups to utilize the Irish Times’ office space to work amongst the staff.
Shared Workspaces
space. This kind of work is being seen not only in corporations and startups though, the UK government unveiled a scheme in June 2013 where 13 local authorities will work in and around central government offices, allowing both to gain insight in the successes and difficulties of the other whilst also making savings on workspaces. The benefits around this kind of work are obvious, with the additional insight of ‘untainted’ minds. Those who haven’t worked through the processes that those working within the company/project have. It means that they avoid the ‘can’t see the forest for the trees’ aspect that many tend to get when working extensively within a certain environment.
sharing is fantastic in terms of problem solving and issue identification within existing products. But in reality an inherent knowledge, combined team effort and collaborative end goal are necessary to create a successful product, these are always going to be best achieved through collaborative work within a team.
Therefore, the shared workspace should be a temporary trend for a company and in reality could never truly replace the traditional company spaces. That said, the benefits that can be gained from this work are not to be dismissed, the start of the year is always the time to think about improvements and experimentation, perhaps it could be beneficial to do this in a shared However, this strategy may be space and then take the ideas viable on the small scale with back to your desk? employees working away from a main company headquarters, but whether this is something that can be achieved as a large scale company wide strategy is yet to be seen. In reality something that makes an effective team effective, is the idea that they can work collaboratively and complement each others working styles. The idea behind shared work spaces and office
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29th-30th APRIL LONDON, 2014
Chief Strategy Officer Summit For more information contact Elliot Jay +44 (207) 193 1512 ejay@theiegroup.com http://theinnovationenterprise.com/summits/cso-ldn-2014
Versatile Strategists
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The Versatile Strategist Falguni Desai Managing Director, Strategic Development & Growth Planning BDO
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Versatile Strategists
Corporations have long recognized the benefits of having some type of strategy, even if it is formed through less than perfect processes. Strategic planning at corporations has taken hold in the form of Chief Strategy Officer roles and large planning teams which handle annual and multi-year goal setting and market entry analysis, along with having a hand in acquisitions and overall corporate portfolio management. In concert with the CFO, CEO and other C suite executives, the CSO today plays a critical role in synthesizing company objectives with market realities to create winning positions. This role has become all the more critical as globalization, new financing options and investor scrutiny have grown in recent decades. While corporations have filled the need for strategic planning through combinations of in-house teams and external consultancies, other firms have lagged in this regard – particularly professional services partnerships which practice law and accounting. Corporations and Partnerships When companies face a strategic dilemma or business problem, they either call on their in house CSO or hire a strategy consulting firm to tackle the issues and present a solution. Large corporations will generally have a consulting firm of record, which handles their strategy needs, while also having a large in-house strategy team. This,
in stark contrast to small and medium size accounting firms and law firms, most of which are governed through partnership structures. These firms may have a designated CFO or small suite of senior partners charged with important decisions, but lack substantive teams when it comes to marketing, technology, and strategy, favoring an outsourcing model which calls in such services as needed. While small partnerships of a few hundred might be able to survive, larger firms face the risk of monumental blunders without having well thought out strategic plans or analytical brain trusts, in an increasingly complex landscape. The lack of strategic planning, while risky at some level, has generally been brushed off by many small and medium size firms, as a “nice to have� function, with bankers and advisors playing pseudo-strategy roles, haphazardly. Large partnerships, have only recently introduced the strategy function into its executive ranks. The CSO role within law and accounting firms still remains ill-defined and challenged in its ability to truly impact
Versatile Strategists
decision-making, begging the questions: How should CSOs approach their roles in accounting and law firms? Can CSOs truly make a contribution in these settings? What are the governing factors for strategists to consider when operating inside a corporation vs. a partnership? Here, we’ll examine the versatile role of the strategist and dissect its effectiveness in both partnerships and corporations. Three factors shape how strategy professionals should approach their roles in these settings: Stakeholder Structures, Access to Capital, and Business Models. Stakeholder Structures Stakeholder and ownership structure is perhaps the most striking contrast, when looking at a corporation vs. a partnership. Take for instance, the partnership’s leadership selection process, generally done through a vote of existing partners, while CEO’s are selected by the Board of Directors, oftentimes consulting an executive search firm and weighing existing talent against a criteria list of skills and experience. Or consider the profit sharing and distribution requirements of a partnership, which differ from t h e
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retained earnings and resulting capital available for investment at corporations. Partnerships, by definition, are a collection of partners who own units in the firm, thus creating a paradigm which results in ownership, decision-making and operating rights, residing in the same set of individuals. Corporations, by contrast, have shareholders who sit outside the company and carry voting rights, a Board of Directors and executive management team, and business unit leaders and functional leaders who have responsibilities over large staff pools. What impact does the stakeholder structure have in strategic planning? In both settings, strategists must first convince the executive team of their plans and ideas. Generally this takes place annually in the form of a planning session with presentations and discussions. Thereafter, the executive team will usually message the strategy to the entire company, with a cascading flow of communications. In a partnership, the execution is then left to all of the partners in the firm, all of whom have a direct stake in the firm’s profits, but not always the interest or discipline to follow the stated strategy. While executing the strategy might be the right thing to do, partners are owners in the firm, and are free to choose their own course of action for their own fiefdoms within the partnership. In a 2012 ALM survey of AmLaw200 law firms,
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Versatile Strategists
80% of firms reported having a strategic plan, with execution metrics that the executive team was monitoring. However, only 48% of the other equity partners in these firms were monitoring or using these metrics to drive their practice areas. In these situations, the strategist must act as a storyteller to the partners, giving anecdotal examples, interpreting market trends, providing insights and updates throughout the year, in order to keep the partners engaged in executing the strategy. “Socializing” the strategy enables it to be heard, questioned, and evangelized throughout the firm. The art of persuasion becomes very important in this setting. Contrast this with public corporations, where even functional leaders and business unit managers, layers below the executive team, are habitually measured by metrics. Corporations are routinely tracking revenues, profits and other key performance indicators, not only for their internal management purposes, but for external shareholders and “Wall
Street” analysts. In this setting the strategist must become an analytical animal, proving to various functional leaders and business unit managers that the strategy is financially sound and will result in the promised returns to shareholders. Strategic planning takes on a very numbers-driven approach. An investment plan must be accompanied by a financial model and scenarios, acquisitions must be measured for ROI and synergies following a deal, and portfolio decisions must be based on rigorous profitability analysis. While persuasion remains an important factor, accountability and execution are heavily tied to incentives, target metrics, and continued employment. Strategic conviction is less dependent on emotional engagement. (Figure 1)
Versatile Strategists
Access to Capital
short-term. This obviously limAccess to capital varies for com- its capital intensive strategies panies based on their cred- and constrains the strategist it worthiness, but partnerships into suggesting short-term inand corporations are funda- itiatives which can be executmentally different in this regard. ed through bootstrapping. The While the corporation may have ALM survey showed that acquithe necessary cash on hand, sitions and opening new offices, through years of amassed prof- ranked among the 9th and 12th, its, partnerships, must distribute out of 12 different growth meththeir earnings to the partners of ods. Strategists would do well to the firm who own units. Raising explore joint ventures or alliancmore capital, would mean invit- es, which alleviate the need for ing more partners into the mix, large capital outlays. The stratwhich is generally not appealing egist must solve the mandate to existing partners. Partner- of growth through creative deal ships may take out loans, but structures, in effect playing the these are usually short-term and role of problem solver. Corporamay not provide enough capital tions have very large cash pools, for initiatives. Corporations, on and in recent years, much has the other hand, are able to raise been made of the large amounts debt or equity by accessing the of cash sitting on balance sheets public capital markets and in- of companies. In a recent Factcreasing the ownership pool, set study, as of end of Q3 2013, with little financial impact to the S&P500 companies had a combined total of $1.36 trillion in executives of the company. cash and marketable securities As a result of this setup, part- on their balance sheets. This ners will naturally be reluctant to represents 8.5% of the US GDP. give up a larger earnings draw With coffers full, corporate in the current year, to fund an investment which may take several years to bear fruit. This is almost c o u nt e r i nt u i tive, given that most would assume a private form of ownership alleviates the pressure to think
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Versatile Strategists
strategists are in a position to design a robust growth agenda which can range from organic investments and acquisitions, to geographic expansions and corporate venturing. The strategist can play the role of visionary dealmaker, architecting a portfolio of opportunities. The corporation must, however, report it’s success on these initiatives, as shareholders will have risk and return thresholds, which need to be met, if the share price is to increase. (Figure 2) Business Model Finally, there is the difference in business models. In any professional services partnership, the underlying business model is revenues generated based on hourly fees billed to clients. The model is basically one that drives the employees and partners of the firm to generate as m a n y hours of billable w o r k as possible. T h e f i r m is reliant on its
brand reputation and its talent base to generate fees, with the assumption that a smarter or more experienced talent base and a prestigious reputation will drive higher volumes of work at premium billing rates. These two assets, while intangible, are the key growth drivers in most partnerships. In this setting, the strategist must become the intangible asset steward. A partnership must consistently invest in public relations and talent development, in order to project a competent and prestigious image to its clients and prospects. Strategist should consider suggesting cutting edge leadership development programs, building attractive branding campaigns, implementing rigorous hiring standards and designing effective sales skills seminars to drive growth and win in the competitive field. Contrast this with a corporation which produces goods, transports resources, or provides online services. Assets are not only limited to brand and talent base, but can also include factories, machinery, patents, distribution facilities, software systems and product inventory. The corporate ecosystem includes multiple assets which can be improved in quality, refined for efficiency and increased in quantity to gain advantage over competitors or respond to customer needs. Strategists must see themselves as a portfolio manager that can leverage several different as-
Versatile Strategists
sets to meet the growth plan. In some cases, this might even involve divesting certain capabilities which aren’t core to the company or expanding capabilities by moving vertically in the value chain. Strategists need to consider competitor capabilities and innovations in the marketplace, which might deem their current assets outdated or inefficient. Multiple dimensions must be considered in order for the strategy to be effective. (Figure 3) Strategy, in any setting, is a difficult discipline. Professors and business moguls who have championed strategic planning recognize that it is a craft that faces many biases and politicking, leaving it misunderstood and sometimes used as propaganda.
However, strategic planning, when applied genuinely, can be a very educational and enlightening process which harmonizes the various assets and people within a company. Strategists must decipher their surroundings and company culture to play an effective role. And most importantly, they must realize that the most valuable skill they must develop is the art of persuasion, regardless of the setting.
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6 2 5 2 h Marc 2014
Intercontinental Grand Stanford // HONG KO NG
Chief Strategy Officer Summit // Strategic Planning Innovation,
Formulation & Flawless Execution
For more information contact Ryan Yuan +852 8199 0121 ryuan@theiegroup.com http://theinnovationenterprise.com/summits/cso-hongkong-2014
Collaboration
Collaboration: An Interview with Lisa Renner, Author: “1+1=3 The New Math of Business Strategy� Simon Barton Assistant Editor
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Collaboration
I met up with Lisa Renner, collaboration expert and author of “1+1=3 The New Math of Business Strategy”. We discussed the strategic importance of collaboration. With ten years of experience as a CEO, Renner has built a successful family of six collaboratively owned companies. When asked if there is an industry that wouldn’t profit from collaboration, Lisa Renner states; ‘I haven’t found one’. She points to the Innovative Medicines Initiative (IMI) that helped stuttering pharmaceutical companies in the EU increase their productivity. By establishing a network of industrial and academic experts, pharmaceutical companies found themselves better prepared to combat the obstacles that exist when trying to bring a new medicine to the market. The results were faster, more innovative and cheaper. Prior to the IMI, an abundance of unorganised data existed, which made innovating a difficult process as Renner states; ‘Only one in ten-thousand new drugs ever make it through development and get regulatory approval to make it to the shelf.’ The implications of this were that pharmaceutical companies began to pull out of the drug development business due to the length of time required for approval and an average cost of one billion dollars per medicine. Renner argues that the collaborative
nature of the IMI stemmed this pattern and allowed for new, innovative medicines that have saved lives. Quite a testament to the power of collaboration. Outside of pharmaceuticals, Renner is unequivocal in her assertion that all companies should collaborate with their immediate competitors. She states that there are two simple reasons for this. Firstly, your immediate competitors are trying to solve the same problems as you and that secondly; nobody understands your company better than your immediate competitors. She recognises that executives often exude fear when confronted with collaboration strategies. The all-important competitive edge, especially in an industry inundated with competitors, is essential, but Renner feels that collaboration doesn’t eradicate a company’s edge; instead it strengthens it through innovation. Renner stresses the importance of leadership when creating both internal and external networks. She states; ‘In the new working environment, leaders have to do more than set direction and drive execution, they have to take on this third role of building and enabling employee networks’. She states there are three things that leaders can do to ensure network effectiveness. Focus on being an active model for network building and spend
Collaboration
time on connecting individuals, align and direct their network through communication and enable autonomy throughout the network. We then moved onto Social Media. After recognising its importance, she asks; “If the world around us has changed so drastically, doesn’t it mean our business strategies have to change too?”. She rarely finds a company that has gone beyond the occasional Tweet and Facebook page to fully embraced social media as a part of its business strategy. She notes that a leader’s power in the future will be measured not by who has the most employees or money, but by who has the largest network, this is a problem. Social Media opens up new possibilities for the network, opening up opportunities far outside the geographical boundaries that once restricted companies. For this reason, Renner is insistent that Social Media will only further facilitate the collaborative leader.
of products and services when they collaborate. She points to the once ultra-competitive carpet industry in the United States. When the cost of carpet became too expensive, the companies came together and collaborated to drive that cost down. Today, those companies are still collaborating and represent eleven billion dollars in buying power. Renner states that by collaborating, smaller companies also mitigate risk when venturing into new markets, as the partners can profit from each other’s experience and possible governmental ties.
Renner offers an interesting insight into the act of collaboration between competitors. Will collaboration be the fuel for businesses across a number of industries to foster innovation? She points to many examples where such an outcome has unfolded. Collaboration certainly can have an impact on the way we innovate, and with the digital age already Renner also feels collabora- upon us, it can only add to the tion strategies would be the tools already at our best course of action for small- disposal. er businesses, especially those of whom are struggling to compete with large multinationals that have considerable buying power. Smaller companies profit from economies of scale, increased purchasing power and an increased ability to negotiate and innovate across an array
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BAE
Communication Strategy at BAE: An Interview with Price Floyd, VP Communications George Hill Managing Editor Alexander Kuguchin / Shutterstock.com
BAE
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manage this transfer of communication power in a company - “If you can’t say something on the phone, you can’t say it on Social Media”. The concept at BAE therefore is simple, if you wouldn’t say it to somebody on a phone, face to face or in an email, then do not put it on social media. It is a refreshingly hands Therefore, it is surprising that off and trusting approach from Price Floyd, VP, Communica- a senior communications exections and Global Digital Strategy utive at one of the world’s most secretive companies. is speaking at the Digital Strategy Innovation summit, New York in March. It was even more surprising that a company with this kind of reputation were not only willing, but actively encouraging This an interview with us. Where I was expecting to have i s n ’ t a tightly controlled PR driven to say he interview, Price was very open, that the honest and actively encouraging takes of of pressing questions, perhaps spread media, the idea that BAE is a closed and social and the dangers distant company isn’t accurate? inherent with it, Given the importance of secrecy lightly. “The risk is in many of the projects that in- greater” according volve BAE, I was curious to find to Price. The speed out how the social media effect that a small mistake had worked at BAE. There have can snowball been well documented exam- into a full blown ples of employees using social PR meltdown is media in inappropriate ways at getting faster and other companies and if this hap- faster as we, as a pened at BAE, it may not just be society, become a red face for the company, but more connected putting lives at risk. to one another. with a Price believes that there is al- Especially ways a simple, hands off way to company that is targeted as much as BAE, this is BAE has always been seen as a controversial company given one of it’s primary roles as a manufacturer of military equipment. Given this background, it is natural to think that this is a company that needs to keep every door locked, every gap sealed and not to communicate with the outside world.
IanC66 / Shutterstock.com
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BAE
increasingly important and the only real way to avoid this is through efficient and effective training.
discussing what the company is doing, there are now communities all discussing what is happening.
In this there is a certain familiarity between BAE and more traditional privatised industries. Despite the clear differences in clients and trade secrets, Price maintains that there are some key areas where BAE and others working within the private sector share some key issues.
Price’s experiences span both public and private sectors, having worked for senior government officials in previous roles. This has given him a unique perspective on the roles of social media and digital communications. He believes that this new approach to communications has allowed people to engage with figures who were previously seen as exclusive or difficult to connect with. He gives s p e c i a l mention to the
For instance both BAE and more traditional private companies face the issues related to communicating with a diverse audiences through social media. No longer is there a single voice
BAE
FCO in the UK, who were early adopters of social media, “some of the ambassadors were prolific” in terms of tweeting, which allowed them to engage with people in ways that they hadn’t before. He recognises that despite governments normally being relatively slow on the uptake for new technologies, in this case they were quick and reaped the rewards of this speed. Having worked within digital communications for a while, I was curious to see what Price thought would happen to digital communications within the next 5 years. Going along the lines of “Epidemiological modeling of online social network dynamics” a study by John Cannarella and Joshua A. Spechler, he agrees that social networks as we see them today are likely to haemorrhage users, in the case of this report a reported 80% loss of Facebook users by 2017. He believes that
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there will be a considerable move towards more localised networks, with people who are already connected connecting further. There will also be a further emphasis on content with the “build it and they will come” theory behind websites becoming nullified and instead an emphasis on what the website provides for the users. This may therefore see a particular emphasis on demographics and the desired individuals as opposed to a one size fits all approach. Price is in a unique position to discuss the future of digital communications given the amount of change that he has worked through during his career. For instance one of the most important changes that he highlights is the speed in which engagements happen - “everything is so much faster, people talk back to you and you have to respond”. This has created a situation where leaders can change and adapt their strategies based on these interactions. This has meant that the more dynamic companies are reaping the rewards of listening to their customers. He discusses a time when he tweeted a question as to whether the US Marines should have a presence on Social Media. Thinking he would get an overwhelming response in favour of Marines having access. It turned
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BAE
out that people felt there were certain risks for Marines being present on social media. The response therefore influenced the way Floyd discussed the subject and allowed him to have a better interaction with his followers. This interaction with followers is something that many would consider to be something that BAE would need to avoid con-
sidering the controversial aspects of some of their products, however Price believes that this isn’t the case. In fact he believes that there is little difference between BAE and other companies in that there are aspects of the company that can be communicated and others that cannot. The key to this is making sure that employees know which is which and that they do not make mistakes when communicating through these ways. This comes down as much to trust as it does to training.
stance most companies would not want to discuss HR issues over social media and others would not want to disclose the secrets that give them a competitive edge. Regardless of how the company communicates in the future, Price seems the man to deal with it and given his experiences working through multiWhat I really gathered from ple changes in the way talking to Price was that de- that people communicate spite the image of BAE in many online, he is well equipped areas, it is not that different to to do so. most companies. It has things that the public can know and others that it cannot. For in-
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