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
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‘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
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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
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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.
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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.
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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
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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
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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
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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
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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
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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.
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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.
”
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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
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THE IMPORTANCE OF OMNI-CHANNEL RETAILING
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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.
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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”
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