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CHIEF STRATEGY OFFICER
JUNE 2016 | #20
How To Build A Strategic Narrative We look at the steps to build a successful narrative by choosing meaningful ways of communicating with your company and clients | 18
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22 Business Terms That Should Be Banned In Your Office How overused vocabulary can start playing on your nerves in the office | 12
Pipes Vs Platforms
We discuss the different ways of working on your business canvas by choosing and implementing the right business model | 9
Chief Strategy Officer Summit
SEPTEMBER 6 & 7, 2016 | SYDNEY
Previous speakers include
+6 128 011 3033 vhernandez@theiegroup.com theinnovationenterprise.com
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ISSUE 20
EDITOR’S LETTER Welcome to the 20th Edition of the Chief Strategy Officer Magazine
In business, everyone wants to be better than the competitors, but entrepreneurs are sometimes too focused on chasing their rival’s strategies. When we make decisions, we are often driven by the gut feeling that particular things are going to work, and by simply following your competitors. This is essentially copying their gut instinct. The idea of copying what others are doing is natural and ingrained in our psychology. It even has a scientific name, ‘social proof’, also known as the wisdom of crowds. But while incorporating different opinions into your strategy is always valuable, there is a danger in going too far. The key is to recognize when you should rely on someone else’s opinion, and when to trust your own. So, how can we recognize when to rely on someone’s opinion? There are two types of statements - those that describe reality, and those that create it. Let’s imagine an investment manager comes to you and says ’company X’ will make $200 million profit next year. This is purely descriptive, and can be either right
or wrong. However, if the same manager says ‘shares in company X are good value at $10’, the manager and others who have been informed will then go and buy them because they are good value. This is how bubbles are created. In the first instance, the information is going to be useful in your decision making process, the choice that the group of analysts made will be more useful. The wisdom of crowds is not only about making business decisions, it can also provide inspiration when building your strategy. Sometimes, customers are not only consumers but an additional source of ideas. They often help to find new products and suggest improvements in the processes which are most important for them. One example is Adidas Insiders, which started as a customer community in 2012. Consumers in the community are necessary for both the generation and testing of new ideas. Using your customer base as a daily source of inspiration is called crowdsourcing, and it helps to improve your relationships with
consumers. Even negative social proof experience can be useful. It can kill brands and damage sales if not acknowledged, but it can also be exploited to become a powerful selling tool when you learn from it. Ultimately, social proof exists because society is a group, and it functions best when it works as such. The group is an incredibly powerful force which influences our daily decisions, and companies would do well to recognize that without relying on it too much. We hope you enjoy reading this issue, it has been created to spread new ideas within corporate strategy, so if you have any comments or if you want to submit an article, please get in touch with me at anastasia@ theiegroup.com.
Anastasia Anokhina managing editor
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Inform. Inspire. Innovate Looking to find new ideas or share your own?
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contents 6 | HOW TO CLOSE THE GAP BETWEEN STRATEGY AND EXECUTION
18 | HOW TO BUILD A STRATEGIC NARRATIVE
We look at the steps to build a successful narrative by choosing meaningful ways of communicating with your company and clients
Execution of strategy can become less intimidating, but only if companies stick to their identity and start recognizing their strengths and weaknesses
22 | AMAZON’S MOVE INTO TRANSPORTATION SPELLS TROUBLE FOR SHIPPING COMPANIES
9 | PIPES VS PLATFORMS
We discuss the different ways of working on your business canvas by choosing and implementing the right business model
Amazon is conquering the field of transportation services. Does it mean that the era of the companies like FedEx and UPS is coming to an end?
12 | 22 BUSINESS TERMS THAT SHOULD BE BANNED IN YOUR OFFICE
25 | HOW TO BUILD A KILLER WORKPLACE CULTURE
How overused vocabulary can start playing on your nerves in the office
Happy employees are good employees and there are some important elements to concentrate on to create them
15 | IS BIRMINGHAM THE NEW LONDON?
We investigate whether London has lost its business appeal, and whether companies prefer basing themselves outside the capital
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creative director oliver godwin-brown contributors allie laurent emily kutchinsky, nathan edwards, mark ross smith, afolabi opedare, harriet connolly
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^ ^ ^ ^ ^
How To Close The Gap Between Strategy And Execution james Ovenden Assistant Editor
IN THE WORLD OF CORPORATE STRATEGY, ideas are not enough. It’s true to say that leaders get to where they are on the back of good ideas, but underpinning this is the ability to make their vision a reality. The rapidly changing nature of the digital world has not really rendered any strategy obsolete, rather it has increased the need for company culture to rule. The best strategists are those that develop strategies that are closely entwined with company / 06
values, and then get staff on side to execute as a team. Paul Leinwand said at a recent book launch that ‘the biggest threat to your strategy is your leadership’, and it is the job of executives to close the gulf that often exists between strategic planning and implementation. PwC Strategy& surveyed 2,800 executives from a vast range of companies of different sizes, industries and business models about their faith
Your culture has to support your strategy and staying true to your value proposition is essential.
in their own corporate strategy. The results reflected not just a frustration with the difficulty of effectively executing strategy, but a more general distrust of their own plans. Despite all of the writing around the creation of a successful strategy, execution remains a largely misunderstood task. Over half of the respondents did not think their company had a strategy that would lead to success, while exactly half of the respondents believed it to be a considerable challenge serving a clear and differentiating strategy. One positive would be that nearly half believed they had a workable strategy, however it is clear that strategy is facing a period of low confidence. An overwhelming majority (82%) believe that growth initiatives ‘lead to waste, at least some of the time.’ This is misleading to an extent. Strategy itself can indeed be wasteful, yes, but only if the company’s strategic implementation is some way off of the intent. PwC summarises that many companies’ strategies ‘are not differentiating and are not focused on what the companies are truly good at.’ And this is one of the key reasons for the gap between strategy and execution - a strategy should both serve and be served by the company’s strengths. To focus too much time and energy on areas outside of these strengths is to create a strategy that doesn’t fit, and implementation will naturally suffer as a result. These alignment gaps can be damaging. Only 54% of those polled believe their strategy has been ‘sufficiently translated into clear actions that will achieve their objectives.’ And, perhaps more importantly, only 37% ‘believe there are clear consequences for anyone who failed to ‘live’ the identified critical behaviors’ of the strategy day by day. The report drew some interesting conclusions; the characteristics shared by companies that deploy working strategies. The recurrent theme is one of identity. ‘Your cul-
ture has to support your strategy’, Leinwand says, and staying ‘true to your value proposition’ is essential. Where strategies fail is in focusing on growth over objectives that actually fit the company; a business should not only accept its limitations, but focus on what it does well and fit these things into its strategic goals. Be selective. Take Apple, for example, who managed to overcome Microsoft in an all-out battle for supremacy by applying their culture and identity to everything they did. Leinwand adds that: ‘Strategy is deciding who we want to be and then doing it’ - execution of strategy is smoothest when the company has a clear image of who and what they are, and knows not only what they want to achieve, but how. Cutbacks should reflect this, too. Wholesale reductions ignore the fact that, like it or not, some areas of your company are more vital than others. Invest intelligently, i.e. doubling down on a few areas that matter most, and delicately reducing everything else. When building a strategy, consider not just what you want to be but what you already are - what can you do that no one else can? What other capabilities would aid us to do those things? Execution and strategy should be closely integrated in every decision. Stick to your identity, recognize your strengths and weaknesses, and have faith in your culture. The gap between strategy and execution exists primarily thanks to weak leadership - close it.
The best strategists are those that develop strategies that are closely entwined with company values, and then get staff on side to execute as a team. / 07
Gain greater insight with strategic planning
JUNE 29 & 30, 2016 | SINGAPORE
Chief Strategy Officer Summit /8
+852 8199 0121 ryuan@theiegroup.com theinnovationenterprise.com
The most common mistake companies make is being based on a platform model but using pipe thinking. This is a recipe for failure
Pipes Vs Platforms Anastasia Anokhina Managing Editor
WORKING ON YOUR BUSINESS MODEL is not always an easy task. There are a number of business models available but there are two in particular which are worth looking at in depth. One is the a pipe model. The idea behind it is quite straightforward - you create a product, push it out and eventually sell it to customers. Value is produced upstream and consumed downstream, producing a linear flow, much like water flowing through a pipe. The model used to be dominant and one of the reasons for that is because there is nothing complicated about it. Almost every manufacturing and broadcast service we see today runs on the pipe model. It can be applied online as well, so there are multiple advantages of using it. It has been used since the industrial age and possesses two main components for success: unique access to resources or labor, and the efficient delivery of the product or service to customers. Technology was, and remains, the essential element of it. In regard to
the Internet, blogs run on the pipe model as do e-commerce providers like Zappos. Even though the model proved itself to be efficient and reliable, models based on some digital platforms have a different approach. Unlike pipes, you don’t just create a product and push it out. Platforms allow you to both produce and consume value. This is a tremendous shift from any form of business we have / 09
One of the crucial strategic elements you need to think about is how monetization works in both case scenarios
known. In the construction world, a platform lifts you up and is something on which others can stand. It works in a similar way when applied to business. By building a digital platform, other businesses can easily connect theirs to yours and develop their products and services. There are three defined building blocks when talking about a successful platform strategy. First of all, there is a toolbox which creates a connection by making it easy for others to plug into your platform. The second is a magnet which creates a pull that attracts both producers and consumers to the platform with something called social gravity. The last, but not least, is the matchmaker element which fosters the flow of value by making connections between producers and consumers. For instance, Google matches the supply and demand of online content, while eBay, matches relevant buyers to relevant products. The vast majority of companies use the pipe model, although many specialists advise startup entrepreneurs to build their business on the platform model otherwise they might be disrupted by those that do. However, there is a trap there that you have to be careful of. The most
common mistake companies make is being based on a platform model but using pipe thinking. This is a recipe for failure. Before choosing one business model over another, we have to be aware of the differences between them. There are three elements which have to be taken into consideration when deciding on your model. The first to bear in mind is user acquisition in both models. In a pipe model, the focus should solely be on converting shoppers into buyers. Whereas in platform thinking, your attention has to be concentrated on attracting consumers and producers, stimulating producers to produce, and consumers to buy. Referring to product design, platform based enterprises have to make sure that their product is attractive for both producers and consumers. The situation is a bit different in a pipe model where the focus is mainly on offering a product which is attractive to consumers. One of the crucial strategic elements you need to think about is how monetization works in both scenarios. It is quite straightfoward in a pipeline, where it is done by determining what the costs are to get the product through the pipeline and charge the consumer enough for that and make a profit. However, in platform, it is a little bit more complicated. We need to determine whether monetization comes from both consumers and producers and whether one subsidizes another. Also, consider any third party revenue source such as API fees or advertising. Platforms and pipes are very different, thus they don’t suit all types of enterprises. You shouldn’t apply a particular model just because you can. Only ability to distinguish models from each other can help to make the right choice and apply a model to your business canvas.
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Brand Strategy Innovation Summit
SEPTEMBER 15 & 16, 2016 LOS ANGELES
Speakers include +1 415 670 9064 nedwards@theiegroup.com theinnovationenterprise.com / 11
Action plan
End of play
Empower
Glocal
With all due respect
Price poin Think outside the box
Price point
Pick up and run with it
We’ll run that idea up the flagpole
Synergize
Action plan
Low hanging fruit
Core Competen
Touch base
Empowe Innovate
Core ompetency Glocal Thanks in advance
Open door policy
Get my manage blessing We’ll run that idea up the flagpole
22 Business Terms That Should Be Banned In Your Office Emily Kutchinsky Strategy Commentator
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BUSINESS JARGON IS ONE OF THE MOST irritating aspects of office life. Workplaces are hard enough without people obscuring what they’re actually saying with misused,meaningless or unnecessary words. If you want a happy and motivated workforce, one of the places to begin is removing this ’business talk’ from your daily vocabulary:
nt
ncy
er
er’s
Price point
Touch base
What you mean to say is ‘price’. Just ‘price.’ The ‘point’ adds nothing and is only being used to make someone feel more like a business big shot who knows what they’re talking about. In reality, it only makes them look like they’ve got no idea.
In baseball terms, to ‘touch base’ is something you do to make a run legal. When people say it in a business context, however, they essentially mean ‘let’s talk about this’. Which not only means someone has appropriated a sports phrase for the office - annoying enough as that is anyway - but they’re also suck out of it all of its original meaning. Use instead: Let’s talk.
Get my manager’s blessing & singing from the same hymn sheet Religious phrases should equally be avoided. They’re liable to cause offense, and they sound dated.
With all due respect ‘I’m about to say you’re wrong and patronize you.’ Don’t say anything in place of ‘with all due respect’, just say what you want to say.
Low hanging fruit Overused.
Connect I’m a human being, not a piece of lego. If you want to talk to me, just say you want to talk to me.
Synergize In Stephen Covey’s inexplicably popular ‘7 Habits of Highly Successful People’, Covey defined his sixth habit ‘synergize’ as meaning that ‘two heads are better than one.’ The habit he must have meant to put was ’pretend to invent already well-established concepts like cooperation by giving them a new name.’
Empower Business speak for ‘do something outside of your job description for me’, which is annoying in and of itself, but also implies that they’re the real brains behind the task and you’re only able to do it because they’ve had the good grace to deign empowerment upon. If you ever feel like telling someone you’re going to empower them, try just asking them instead.
End of play & Pick up and run with it Just don’t use sports terms in business. Whether this is touching base, end of play, pick up and run with it, or calling someone a quarterback. Use any other words instead, even if they’ve got nothing to do with business.
Thanks in advance Presumptuousness is not an attractive quality. Say instead: ’I’ll be really grateful if you could do this for me.’ Thanks in advance.
Glocal A confusing and essentially meaningless word for ‘local marketing campaigns’.
Innovate Innovate is not an intrinsically annoying word. Its overuse and misuse has made it so, one of the biggest issues is the propensity to set it as a business goal, rather than a process. See also, Disruption
If you want a happy and motivated workforce, one of the places to begin is removing the ’business talk’ from your daily vocabulary
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Presumptuousness is not an attractive quality
Open door policy
Core Competency
Just say you can always talk to me, a literal open door policy sounds unsafe.
Competent, as defined in the dictionary, means ‘having the necessary ability, knowledge, or skill to do something successfully.’ In the business world, however, it seems to gets translated to mean a firm’s or a person’s fundamental strength. Praising someone for being ‘competent’ at their job, is like giving a dog a biscuit for sleeping. Just say core strengths.
We’ll run that idea up the flagpole What on Earth does this even mean?
Think outside the box Action plan Needless. A good idea is a good idea wherever it’s come from. ’Think about a solution to this problem’ is perfect acceptable as a replacement.
As opposed to a passive plan? An inaction plan? All plans are action plans, so just say plan.
Reach out If you want to talk to someone, just ask.
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Is Birmingham The New London?
Allie Laurent Strategy Commentator
HSBC’S ANNOUNCEMENT last year that it is to relocate its headquarters from Canary Wharf in London to Birmingham raised eyebrows, with some in the financial sector critical of the decision. It has, however, provoked a fresh wave of curiosity around whether Birmingham can become a new business and financial hub for the UK. The benefits for Birmingham’s economy are clear, with the bank announcing plans to move a thousand jobs up to the new offices in
Arena Central, Birmingham’s central enterprise zone. Some experts and the banks rivals assume that the decision is linked to cutting costs, with London famous for its unjustifiably expensive lifestyle. However, HSBC has explained that Birmingham was chosen after considering all options in the country, and the bank does have historical links to the city. In 1836, Birmingham and Midlands Bank was established by Charles Geach in Birmingham. In 1992, it was fully acquired by HSBC,
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Birmingham is going through a revitalization that makes it an attractive destination for businesses and people
thus, going back to roots may be another reason. Birmingham is the second largest city in the country, and is growing rapidly, with flourishing infrastructure and a good business environment. HSBC is not the only bank to decide to expand outside London. More and more banks and companies are thinking to make such move in future. Antonio Simoes, head of HSBC UK, believes that Birmingham is going through a revitalization that makes it an attractive destination for businesses and people. Something else that can shed light around Birmingham’s new appeal is the fact that all big banks in Britain are tied up with specific regulations. Banks have been forced to separate their UK units into ring-fenced entities with separate funding and leadership from their other riskier activities. As a result, other big banks could see this enforced separation as an opportunity to follow the example of HSBC by moving outside the capital. One such rival is Deutsche Bank, which has already decided to relocate its trading operations to Birmingham. The German Bank has explained that the reason for expansion in Birmingham was due to cost-effective ways to serve its mid-market clients, as it allowed the bank to ‘cover clients that would be uneconomical to service out of London’. Deutsche Bank’s repre/ 16
sentatives believe that the city offers a strong talent base with cheaper housing and short commutes for its staff. However, other big banks such as Lloyds, Barclays and Royal Bank of Scotland have indicated that at the moment, no decisions were made on this subject and they are unlikely to move their ringfenced UK operations outside London. Over the years, Birmingham has maintained a reputation for being one of the best cities in Europe to do business - Cusham & Wakefield’s European Cities Monitor has it in their top 20. With the current economic challenges facing Europe, it is in a strong position, and is a solid bet for businesses looking to locate. According to the Office of National Statistics, a record number of 30-39-year-olds left London in 2013. People have settled in Birmingham, Bristol, Manchester and Oxford. One of the reasons why people are so attracted to move is the capital's comparative expence. People have become tired of working long hours and earning average wages, which can only offer a rather modest lifestyle. The average wage for London is £33,000 and in Milton Keynes, for example, it is £28,600. Unfortunately, it appears to be an illusion that people feel better financially in the capital. First of all, London is one of the most expensive places in the world to buy a property. The capital and its property investors
have created a sizeable bubble, and there are no longer affordable places to buy/rent. The cost of living is also prohibitive. According to Alan Manning, from the London School of Economics, London allowances for public sector workers are no longer sufficient, making the situation even worse.
The short term forecast is positive, with investment, new enterprises and jobs all growing. However, it also means that cities like Birmingham will need thousands of houses built to accommodate the new arrivals, and if it doesn’t keep up with demand there is likely to be an increase in housing prices.
A record number of 30-39-year-olds left London in 2013. People have settled in Birmingham, Bristol, Manchester and Oxford
This flight of people from the capital to earn less money means there is a possibility that eventually, the country’s GDP will be affected. In the United States, a 2014 study by the University of California showed that a lack of affordable houses in America’s strongest performing cities between 1964 and 2009 cost national output 13%, and there is a good chance the same could happen in the UK.
In the 1960s, the UK had the so-called ‘Birmingham problem’ which meant the city was too big, there were too many people living there. It was creating too many jobs and was in high demand. As Birmingham was the center of the manufacturing sector, wages there were higher than in London. The fact that Birmingham was attracting more people than it could handle caused a deficit in housing and shortage in labor. In the end, Birmingham went into decline because hundreds of industrial firms were relocated to other areas. The city was left with an unemployment rate that had risen from almost 0% to 20%. In a couple of decades, Bir-
mingham had turned from the strategic heart of a fast growing Britain to an unfashionable wasteland that served as an unpleasant reminder of its industrial failures.
The advantage of wealth spreading outside London is that other cities will become better places for businesses to set up. However, it also means that cities like Birmingham are more likely to see similar problems to those that exist in London.
At the moment, we can see the situation is changing to Birmingham’s advantage, and companies moving their HQs from London to the city should provide an economic stimulus. Hopefully, Birmingham has learnt a lesson from the past and is now strong enough to handle its growth and possible problems it may cause.
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HOW TO BUILD A STRATEGIC NARRATIVE
Nathan Edwards Strategy Analyst
WITH MANY CHANGES COMING from many directions these days, such as consumer behavior, technology trends and competition, it's crucial to have your content sound unique and engaging rather than generic and outdated. When it comes to strategic narrative, the first thing you have to do is understand what it is and make sure that your target audience is enlightened. Choosing meaningful methods of communication within your company and with your clients, and avoiding confusion is a good recipe for building a good strategy.
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One of the ingredients is human context. Whether it's employees or potential customers, it’s essential that both are inspired and attracted to something that has an individual, rather than a personal voice. The effect of that shouldn't be underestimated. It works well when you approach your audience as if your company was a person rather than a soulless system. It doesn't necessarily mean that you have to tell a story using physical presence. We now have an opportunity to communicate using artificial intelligence, which might sound
futuristic but let's face it, the future is here. AI in everyday life gives us a chance to witness communications becoming more interconnected, instrumented and intelligent. One of the key examples is IBM's ‘Building a Smarter Planet,' which has united the company's mission and marketing by offering a number of lessons on positioning, advertising, content creation and social behavior to the marketers. It has managed to take business ideas and bring them to life in the form of distributed content, generating experiences, utility and platforms, and social engagement which encourages participation. However, in order to get the best performance, we have to bear in mind that such an approach has to
Choosing meaningful methods of communication within your company and with your clients, and avoiding confusion is a good recipe for building a good strategy
be carefully organized and maintained, with strong attention to detail. For instance, a less successful example belongs to Microsoft, which has recently experienced some embarrassing difficulties in AI design with its chat bot ‘Tay’, operating on Twitter. Microsoft admitted making a mistake in security which has resulted in various attacks on ‘Tay’ forcing ‘her’ to post inappropriate offensive comments visible to all users. ‘Tay’ was inspired by ‘her’ successful Chinese sister called ‘Xiaoice’, which has 20 million registered users. Both chat bots have specific target audiences and are able to learn about users and produce natural language conversation. Another useful method of effective communication with your audience is through live-streaming. It hasn't won everyone's heart yet, but it is about to take its place in a world of content which tends to go viral. One of the new breed of apps is Twitter's Periscope. At first sight it might seem like nothing more than another entertaining tool for generation Y, but it helps to dramatically
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Due to constant changes and innovation flow, we now have an opportunity to communicate using artificial intelligence, which might sound futuristic but let’s face it, the future is here
improve your online presence. Sometimes, popular platforms have used it to promote their products and services. Integrated with the most popular social media channels, it allows users to watch live-streams of events, discussions and interviews. The most visible advantage of it is that it doesn't require a lot of financial investment. In this case, the exclusivity always wins over quality. Sometimes, it costs companies millions of dollars to produce successful adverts, YouTube-quality videos and similar content. Moreover, there is always a risk that something thought to be a brilliant idea may simply not work, leaving you with bitter disappointment and wasted money. There are several examples where live-streaming was cleverly used by popular brands such as: Red Bull, Doritos, DKNY and GoPro. There is also another good example that deserves attention; The recent campaign by Kohl's. While ordinary people can usually only see one, heavily edited, cut of the Academy Awards, Kohl's broke the bound/ 20
aries by bringing everyone closer to the action by live-streaming it. When cameras were off and there were traditional commercial breaks, the brand partnered with a famous comedian and streamed everything behind the scenes, including afterparties. That particular move managed to attract many users, who were also able to provide their own thank you speeches during the stream. An efficient strategic narrative is a crucial component for successful content delivery and keeping your audience engaged with what you do. Whether it's artificial intelligence, engagement through live-streams, or just communication through social media channels, it always works when your message is being put across with a personal touch. Being creative whilst listening to your audience’s needs and interests makes a strategic narrative sound less intimidating to build and more fun to develop.
Leading Change Driving Growth
OCTOBER 19 & 20, 2016 | LONDON
Chief Strategy Officer Summit
+44 203 868 0339 nedwards@theiegroup.com theinnovationenterprise.com / 21
Amazon’s Move Into Transportation Spells Trouble For Shipping Companies
Afolabi Opedare Strategy Writer
AMAZON’S SUCCESS HAS, in large part, been driven by its excellent supply chain. Its same-day delivery offering has revolutionized the e-commerce industry and raised customer expectations dramatically, leaving other retailers scrambling to keep up. And it appears that they’re not the only ones who should be worried; it looks like packaging companies should also be looking in their rear view. Despite its protests to the contrary, Amazon’s recent moves into transportation services seem a sure sign that they’re looking to push companies like FedEx and UPS out of the equation. The retail giant’s announcement last month of a lease agreement with Air Transport Services for 20 cargo planes is just the latest in a series of indicators they are trying to take total
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control of their supply chain. Amazon’s most publicized attempt to run its own transportation network is its experiments with drone technology, and in the longer term it has been
Amazon’s recent moves into transportation services seem a sure sign that they’re looking to push companies like FedEx and UPS out of the equation
looking at the potential of autonomous vehicles. In the nearer term, it has been quietly inviting drivers in the US to join its new on-demand delivery service for some time now, and has made a number of investments into delivery firms across the globe. According to The Seattle Times, Amazon will buy French parcel delivery company, Colis Privé, outright within the next three months, having originally acquired a 25% stake in 2014. In Germany, its second-largest market, it opened a new parcel sorting center outside of Munich late last year, and plans to open more similar centers outside the country’s major cities this year. It used to be that Amazon packaged items for delivery and then left them to be picked up at the fulfillment center for delivery by the likes of UPS, FedEx, the US Postal Service. Now, in many parts of the US, Amazon packages customers’ orders, sorts them by ZIP code and trucks the sorted packages to a nearby US Postal Service facility, which takes care of the final leg of the delivery. It is this final leg that Amazon wants to take control of. There are a number of advantages to this. Fundamentally, the longer they keep packages in their network, the cheaper it is for them. Building freight transportation capacity will
also help ‘create deeper customer relationships,’ and keep carriers ‘honest’ around pricing and service. According to shipping industry analyst RBC’s John Barnes, the move accomplishes two things: reducing costs in any way possible and ensuring that customers receive goods in a timely manner yearround. Perhaps most importantly, it provides Amazon’s technology systems with information regarding efficiency for customer service and insights into cost savings that they can leverage without having to rely on third parties. According to The Wall Street Journal, there is also a fear among Amazon executives that the huband-spoke distribution model used by UPS/FedEx is growing obsolete. And when the major tech companies say that an established industry’s working practices are growing outdated, this usually means they’re readying themselves to tear it apart. And the impact could be devastating for the packaging industry. In Germany, approximately one in seven of the 1.15 billion parcels
When the major tech companies say that an established industry’s working practices are growing outdated, this usually means they’re readying themselves to tear it apart / 23
There are many risks with Amazon’s move.‘It should be added that owning stuff is great as long as it provides a return
delivered to households every year are dispatched from Amazon, and DHL delivers most of those. Amazon is also UPS’ biggest customer, accounting for over 6% of its business in 2015. It’s unlikely that Amazon would just stop at delivering its own packages as well, and will probably eat far more into their market share than 6 or 7%. This is not to say that DHL and UPS should just pack it in now though. There are many risks with Amazon’s move. Mark Heckman, principal at Mark Heckman Consulting, notes that ‘it should be added that owning stuff is great as long as it provides a return. The fact that even the great behemoth Walmart is closing stores this year should be fair warning to Amazon that what might appear to be wise today could be tomorrow’s regret.’ Other analysts also express
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doubts that it is the company’s intention to properly take over from the likes of FedEx and UPS, and Amazon itself has denied that they will stop using DHL completely in Germany. However, as automated cars and drone technology matures, it could be that Amazon is really just positioning itself to fully exploit these opportunities as they arise, and other packaging companies need to be on their toes if they are to prevent Amazon from outmaneuvering them as they have so many other industries.
How To Build A Killer Workplace Culture
Harriet Connolly Head of Strategy
THESE DAYS, FORWARD-THINKING CEOS REALIZE that their employees are the most powerful and valuable investment they make. However, in order to benefit from this, they have to make sure they are comfortable and motivated enough to perform well. An effective workplace goes beyond the structural and hierachical supports that serve an organization, and focuses more on individuals. The key principles when developing an effective workplace is communication and building good relationships
within a team. Creating a good environment within your office can take time but it will eventually pay off because success comes to those who are patient. When creating a workplace culture, you need to be aware that a / 25
Creating a good environment within your office can take time but it will eventually pay off because success comes to those who are patient
certain approach can benefit one company but it doesn’t mean that it will definitely work for you. That is why it is crucial to listen carefully to all the needs and interests of your employees rather than using generic case studies. However, checking on others would not harm you but will give you ideas which you can later consider for the workplace culture improvement. Some people may think that an efficient workplace culture strongly depends on big financial investments. This is not completely true. The key element that will always work for any type of organization is simply a friendly approach. Make sure there is no room for grumpiness and that employees truly enjoy communicating within their team. For instance, Twitter employees can’t stop raving about how good it is to work there. It is undeniable that Twitter does a lot to ensure there are countless events and opportunities organized, so all employees always look forward to something. However, the main advantage of Twitter’s workplace culture is that workers feel that they are welcome and thus, they are genuinely friendly to each other and nothing can beat this.
It may seem that it is relatively easy for Twitter to set up this culture because the company itself is all about communication and socializing. However, it can happen in any company, even one that occasionally receives negative PR. Chevron is a multinational energy corporation which deals with oil and gas industries and looks after its employees. While these kinds of companies are the primary targets for public ire, the company’s employees responded very well to its culture. The main principles Chevron sets for its employees are dedicated to health, safety and looking after each other. For example, it provides health and fitness centres on site as well as offering various health programs such as personal training and massages. The company also insists that workers take regular breaks. Through these actions Chevron is doing its best to ensure its employees are healthy, relaxed and feel valued. Looking closer at the workplace cultural structure, there is an approach which can boost your team’s creativity and improve their social skills. Try to relocate people in the office, blending them within
When creating a workplace culture, you need to be aware that a certain approach can benefit one company but it doesn’t mean that it will definitely work for you
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The key element that will always work for any type of organization is simply a friendly approach
different departments or mixing age groups. For instance, it is worth experimenting with combining Baby Boomers with millennials so they can share thoughts and experience on their work. Sometimes, especially in large organizations, some groups of employees don’t cross paths due to specific department allocation. Giving them an opportunity to occasionally work side-by-side improves their creative thinking and encourages them to learn how to socialize. People are not perfect, which means they have different personalities and ways of acclimatizing to their working environment. However, there can also be cases when employees can’t fit your workplace culture due to some of their personal qualities.
To avoid disappointment, as a part of your workplace culture organization, it’s worth using personality tests during the recruitment processes. There shouldn’t be any concerns about discrimination claims as those tests don’t intend to work against the candidate. They are designed to tell you the work preferences and attitudes of people you are hiring. However, focusing solely on how your employees would fit a particular culture, can cause an issue. One day, it can become difficult to hire and welcome new staff who might be different from the prevailing culture, even if they would be a valuable addition to your company.
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