Leveraging Tech, Data, and AI: The New Paradigm Shift for Small Startup CEOs

This article explores the transformative impact of boutique growth strategy advisory firms on small startup CEOs, emphasizing the integration of technology, data, and AI. By adopting innovative strategies such as rapid, data-driven decision-making, personalized client engagement, continuous innovation, and scalable solutions, these firms provide a modern, agile alternative to traditional consultancies. Startups partnering with these firms can expect significant improvements in revenue growth, market share expansion, and productivity, achieving multipliers of 5x to 10x in their business outcomes.

#startups#growthadvisory#technologystrategy#10xoutcomes#digitaltransformation#strategyalternatives


In today’s rapidly evolving business landscape, small startups face unique challenges that demand innovative solutions. As they strive to accelerate revenue growth, expand market share, and boost productivity, traditional strategic approaches often fall short. Enter the Boutique Growth Strategy Advisory Firm—a new breed of consultancy dedicated to helping startups harness the power of technology, data, and artificial intelligence (AI). This article explores how these boutique firms differentiate themselves and the transformative impact they have on small startup CEO clients.

The Differentiators of a Boutique Growth Strategy Advisory Firm

1. Rapid, Data-Driven Decision Making

One of the standout features of boutique growth strategy firms is their emphasis on rapid, data-driven decision-making. Unlike traditional consultancies that may rely heavily on historical data and hierarchical decision processes, boutique firms use real-time analytics and AI to inform strategic choices. For instance, AI-driven customer behavior analysis can help startups identify and target high-value customers with personalized marketing, potentially improving sales conversion rates by 2x to 3x.

2. Embrace Cutting-Edge Technology

Boutique firms are at the forefront of integrating cutting-edge technology into all aspects of their clients’ businesses. By prioritizing research and development (R&D), these firms ensure their clients stay ahead of technological advancements. For example, integrating Internet of Things (IoT) sensors in manufacturing can reduce downtime and maintenance costs, increasing operational efficiency by 1.5x to 2x.

3. Personalized Client Engagement

In contrast to the standardized, process-driven engagements typical of traditional firms, boutique growth strategy advisors offer highly personalized and iterative engagement models. Utilizing AI chatbots for customer support interactions enhances customer satisfaction and retention, with potential improvements in retention rates by 1.5x to 2x.

4. Foster Continuous Innovation

Boutique firms foster a culture of continuous innovation, encouraging experimentation and calculated risk-taking. Establishing internal innovation labs helps startups accelerate the development of new products or services, reducing time to market by 2x to 4x.

5. Centralize Data Utilization

Making data central to decision-making processes is another key differentiator. By consolidating all data sources into a unified platform, startups can improve decision-making across departments. This approach can enhance decision-making speed and accuracy by 2x to 3x.

6. Agile Organizational Structure

Maintaining a flat, agile organizational structure enhances collaboration and speed. Boutique firms encourage cross-functional teams, leading to project completion times decreasing by 1.5x to 2x.

7. Adapt to Market Changes

High adaptability to market changes is crucial for startups. Boutique firms use real-time market analytics to monitor trends and competitor activities, enabling startups to adjust marketing and sales strategies quickly. This adaptability can improve market share growth by 1.5x to 3x.

8. Custom-Built Solutions

Leveraging AI and data analytics to provide tailored solutions for clients is a hallmark of boutique firms. Custom-built AI models designed to solve specific client problems can improve client satisfaction and retention by 2x to 3x.

9. Focus on Cost Efficiency

Utilizing technology-driven efficiencies helps maintain lean operations. Automating routine administrative tasks with Robotic Process Automation (RPA) frees up human resources for higher-value work, reducing operational costs by 1.5x to 2x.

10. Design for Scalability

Boutique firms help startups design business models and solutions that are easily scalable through technology and automation. Migrating services to the cloud, for example, allows for scalable resources on demand, improving scalability and growth capacity by 3x to 5x.

11. Use Advanced Performance Metrics

Implementing real-time KPI dashboards allows startups to measure performance and make informed strategic adjustments continuously. This real-time monitoring can improve performance and response times by 2x to 4x.

12. Proactive Risk Management

Employing predictive analytics and AI for risk assessment helps startups proactively manage risks. This approach can enhance risk mitigation effectiveness by 2x to 3x.

13. Develop Multi-Disciplinary Skills

Boutique firms emphasize hiring and developing tech-savvy, multi-disciplinary employees who can adapt to evolving roles and technologies. Continuous learning and development programs can improve employee productivity and innovation capacity by 1.5x to 2x.

14. Flexible Service Delivery

Offering tech-enabled, remote, and automated service options allows boutique firms to meet diverse client needs. Using video conferencing and collaborative tools can expand client reach and engagement by 2x to 3x.

15. Tailored Client Solutions

Boutique firms continuously adapt their offerings to align with the evolving needs and trends of their clients. Using AI to develop bespoke client solutions can improve client satisfaction and competitive advantage by 2x to 4x.

Transformative Impact on Small Startup CEOs

By adopting these key strategies, small startup CEOs can expect significant improvements in various business areas. The cumulative effect of these strategies can lead to an overall multiplier of 5x to 10x in terms of revenue growth, market share expansion, and productivity enhancement.

Revenue Growth

Leveraging data-driven decisions, personalized engagement, and custom-built solutions can lead to substantial revenue increases. Startups can realistically see revenue growth multipliers of 3x to 5x within a few years.

Market Share Expansion

Rapid adaptation to market changes, innovative solutions, and a scalable infrastructure can help startups capture larger market shares. Market share growth can multiply by 2x to 4x.

Productivity Enhancement

Automating tasks, developing multi-disciplinary skills, and using advanced performance metrics can significantly boost productivity. Overall productivity can increase by 1.5x to 3x.

Conclusion

The differentiators of boutique growth strategy advisory firms—rapid decision-making, technological integration, personalized engagement, continuous innovation, and scalability—equip small startup CEOs with the tools they need to thrive in a competitive market. By leveraging tech, data, and AI, these firms provide a modern, agile alternative to traditional consultancies, driving substantial business growth and success for their clients.

Economic Growth Strategy Options

During an uncertain year, firms can choose to hoard cash for financial stability, leverage investments and acquisitions for rapid growth, or invest in people, processes, and technology for long-term value and resilience. A balanced approach combines these strategies, maintaining cash reserves for flexibility, selectively acquiring strategic assets, and continuously improving talent and processes.

by Terry Coull, Chief Growth Officer @ 10Xnewco | Enterprise Digital Transformation

In our ongoing series on how firms can leverage technology for maximum growth, we discuss how firms operate, collaborate, and compete in order to grow revenue and market share. In this discussion, we share how firms can shape their future readiness and embrace 3 traditional strategies OR look at other balanced alternative strategies to achieve portfolio growth.

During an uncertain economic year, firms can choose among several growth strategies:

  1. hoarding cash,
  2. leveraging investments and acquisitions, and
  3. investing in people, processes, and technology

In summary these diverse growth strategies come with key advantages and disadvantages:

  1. hoarding cashprovides financial stability and flexibility but may result in missed growth opportunities.
  2. leveraging investments and acquisitionscan accelerate growth and provide a competitive edge but involves higher financial and integration risks.
  3. investing in people, processes, and technologybuilds long-term value and resilience, though it requires significant upfront costs and time for returns to materialize.

An alternative strategy for portfolio growth that unlocks the best of all three approaches is a balanced approach, which maintains sufficient cash reserves for flexibility, selectively invests in strategic acquisitions and technologies that offer immediate competitive advantages, and continuously invests in talent and process improvements to ensure sustainable growth and adaptability.

Alternative Strategies and Benefits:

  1. Strategic Partnerships and Alliances: Forming alliances with other companies to share resources, expertise, and market access. Benefits: Reduces risk, enhances innovation, and provides mutual growth opportunities without the full commitment of acquisitions.
  2. Incremental Innovation: Focusing on continuous, small-scale innovations rather than disruptive changes. Benefits: Manages risk while gradually improving products, services, and processes, ensuring steady growth.
  3. Diversification: Expanding into new markets or product lines to spread risk. Benefits: Reduces dependency on a single market or product, enhancing stability and growth potential.
  4. Customer-Centric Growth: Prioritizing customer satisfaction and loyalty through personalized services and improved customer experiences. Benefits: Increases customer retention and organic growth through word-of-mouth and repeat business.
  5. Lean and Agile Methodologies: Implementing lean and agile practices to improve efficiency and responsiveness. Benefits: Enhances adaptability to market changes and ensures efficient use of resources.

By combining these alternative strategies with a balanced approach to cash management, strategic investments, and continuous improvement, firms can navigate uncertainties and achieve robust, sustainable technology and firm growth.

Coopetition and Digital Transformation

10Xnewco

by Terry Coull, Chief Growth Officer @ 10Xnewco | Enterprise Digital Transformation

By embracing digital transformation practices that compliment “coopetition”; that includes an ecosystem of suppliers, collaborators, competitors, and clients, one can unlock; value creation, achieve mutual benefits, and maintain a competitive edge in the market.

In our ongoing series on firms leveraging technology for maximum growth, we discuss first how firms operate, collaborate, and compete in order to grow revenue and market share. In this discussion, we share how digital ecosystem transformation as a practice directly compliments the “coopetition” model. As a reference point, 10Xnewco is modeled, embraces and operates as a coopetition ecosystem player supporting technology innovation and growth strategy.

Coopetition model includes…

In the dynamic world of technology, innovation is often driven by the collaborative efforts of various entities within an ecosystem. These entities, which can include startups, established companies, research institutions, and even competitors, come together in a unique form of collaboration known as coopetition. Coopetition blends cooperation and competition, enabling entities to work together towards common goals while still maintaining their competitive edge.

Digital Ecosystem Transformation

Digital ecosystem transformation practice refers to the comprehensive integration of digital technologies and practices across an organization and its network of partners, suppliers, customers, and other stakeholders. This transformation aims to create a connected, agile, and innovative environment that leverages digital tools and platforms to enhance collaboration, efficiency, and value creation. Key components include:

  1. Digital Platforms: Implementing cloud-based platforms, data analytics, AI, and IoT to facilitate real-time data sharing, automation, and decision-making.
  2. Integrated Systems: Connecting disparate systems and processes to create seamless workflows and improve operational efficiency.
  3. Customer-Centric Approach: Using digital tools to better understand and meet customer needs through personalized experiences and enhanced service delivery.
  4. Innovation and Agility: Fostering a culture of continuous innovation and agility to quickly respond to market changes and opportunities.
  5. Data-Driven Insights: Leveraging data analytics to gain insights into market trends, customer behavior, and operational performance.

Digital Ecosystem Transformation and the Coopetition Model

In a coopetition model, where suppliers, collaborators, competitors, and clients coexist and engage in both cooperative and competitive activities, digital ecosystem transformation can significantly enhance the effectiveness and benefitsof this model.

Here’s how:

  1. Enhanced Collaboration; Shared Platforms: Digital platforms enable seamless collaboration among ecosystem participants by providing shared tools and resources for communication, project management, and data sharing. Real-Time Data Exchange: Facilitates real-time data exchange, improving coordination and collaboration on joint projects and initiatives.
  2. Increased Efficiency; Automated Processes: Automation of routine tasks and processes reduces operational costs and improves efficiency, benefiting all participants in the ecosystem. Integrated Supply Chains: Digital transformation enables better integration of supply chains, enhancing transparency, reducing delays, and optimizing inventory management.
  3. Innovation and Agility; Innovation Hubs: Digital ecosystems can create virtual innovation hubs where participants can collaborate on research and development, leveraging each other’s expertise and resources. Agile Response: Enhanced agility allows participants to quickly adapt to market changes, co-develop new products, and respond to customer needs more effectively.
  4. Customer Value; Personalized Experiences: Digital tools enable deeper insights into customer preferences, allowing for more personalized and value-added services. Enhanced Service Delivery: Improved coordination and data sharing enhance the overall customer experience, making the ecosystem more attractive to clients.
  5. Competitive Advantage; Data-Driven Decisions: Access to comprehensive data analytics enables participants to make informed decisions, gaining a competitive edge in the market. Innovation Sharing: While competing in core areas, participants can share innovations in non-core areas, driving overall market growth and benefits for all.
  6. Risk Management; Cybersecurity: Digital transformation includes robust cybersecurity measures that protect the entire ecosystem from data breaches and cyber threats. Risk Sharing: Participants can share risk management strategies and collaborate on mitigation efforts, reducing individual exposure to risks.

Compliments of Coopetition with Digital Ecosystem Transformation

Digital ecosystem transformation compliments the coopetition model by creating a more dynamic, interconnected, and efficient environment where collaboration and competition can thrive. Here are some specific ways it complements coopetition:

  1. Foster Open Innovation: Participants can collaboratively develop new technologies and solutions together, sharing knowledge while protecting proprietary competitive advantages.
  2. Optimizing Resources: Shared digital platforms and tools optimize the use of resources, reducing redundancy and costs for all participants.
  3. Enabling Scale: Digital ecosystems can scale more easily, allowing participants to expand their operations and market reach collaboratively and competitively.
  4. Create Synergies: Digital integration creates synergies that enhance overall productivity and innovation, benefiting the entire ecosystem.
  5. Facilitate Market Access: Participants can leverage the ecosystem to access new markets and customer segments more efficiently.

In conclusion, digital ecosystem transformation practice enhances the effectiveness of the coopetition model by providing the technological infrastructure and tools necessary for seamless collaboration, increased efficiency, and continuous innovation. By leveraging digital transformation, a free open ecosystem of suppliers, collaborators, competitors, and clients can maximize value creation, achieve mutual benefits, and maintain a competitive edge in the market.

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By embracing digital transformation practices that compliment “coopetition”; that includes an ecosystem of suppliers, collaborators, competitors, and clients, one can unlock; value creation, achieve mutual benefits, and maintain a competitive edge in the market.
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Growth strategy leveraging technology acquisitions

Growth strategy leveraging technology acquisitions

10Xnewco

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by Terry Coull, Chief Growth Officer @ 10Xnewco | Enterprise Digital Transformation

A trusted growth advisory service helps client businesses develop strategies to expand, grow revenue options through acquisitions, operations, increase market revenue, and improve overall performance.

  • Typically, an advisory service involves analyzing current firm and market trends, assessing the firm’s strengths and weaknesses, identifying growth opportunities, and providing recommendations for strategic portfolios.
  • Enterprise transformation is the process of fundamentally changing the way a clients business operates, often involving shifts in organizational structure, technology adoption, and business processes to adapt to changing market conditions or achieve strategic objectives.
  • Combining growth strategy with enterprise transformation advisory means we not only identify growth opportunities but also assist the organization in implementing changes necessary to realize those opportunities effectively. This may involve restructuring operations, adopting new technologies, improving efficiencies, or entering new markets.

When companies strategically acquire technology product firms to fuel their growth, they generally focus on a few pivotal approaches to ensure the acquisitions translate into value and sustained growth.

Here are the top growth approaches employed by companies that acquire technology product firms:

  1. Market Expansion and Diversification: By acquiring technology product firms, companies can quickly enter new markets or diversify their existing product lines. This approach allows a company to broaden its market presence and reach new customer segments without the lengthy process of organic product development. Acquisitions can provide immediate access to established products and customer bases in different regions or sectors, helping to scale operations rapidly and reduce market entry barriers.
  2. Innovation Through Acquisition: Acquiring firms with innovative technology products can significantly enhance the technological capabilities of the acquiring company. This strategy is often used to stay ahead of the competition in fast-evolving industries. It enables companies to incorporate cutting-edge technologies and expertise, potentially leading to the development of new products or the enhancement of existing ones. The focus here is on acquiring firms that offer unique technologies which can be integrated into the parent company’s offerings to create a more compelling value proposition.
  3. Operational Synergies and Efficiency: Acquisitions are also targeted to achieve operational synergies, where the combined operations of the acquiring and acquired firms can operate more efficiently than they would separately. This might involve consolidating operations, technology, streamlining supply chains, or integrating sales channels. Effective integration can lead to significant cost savings and efficiency improvements, which are crucial for driving profitability and competitive advantage.
  4. Leveraging Brand and Reputation: Acquiring a technology product firm can also be a strategic move to leverage the brand value and market reputation of the acquired firm. This is particularly valuable in industries where brand recognition and customer trust play a crucial role in purchasing decisions. By acquiring a well-regarded brand, a company can enhance its market credibility and attract a broader customer base.
  5. Talent Acquisition: Often, technology acquisitions are not just about products but also about acquiring skilled talent and leadership that can drive future innovation. This ‘hiring’ strategy is especially prevalent in high-tech industries where top talent is scarce and highly valued. The acquisition can bring in a team that has proven capabilities in specific technologies or industries, which can be pivotal for future growth and innovation.

These approaches are not mutually exclusive and are often pursued in tandem to maximize the strategic value of acquiring technology product firms. The ultimate goal is to ensure that each acquisition not only fits with the company’s broader strategic objectives but also adds substantial value to its operations and product portfolio.

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AI and Business Growth


AI says business growth is dominated by (60%)hashtagorganicgrowth and (20%) hashtagmarketexpansion (Growth to utilize internal process, people and technology) However, for 2024, 10Xnewco is observing an increase in hashtaggrowthstrategy by M&A, partnership and alliances. Reach us for this point of view.

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Growth Webinar Series 1

10Xnewco is hosting a free webinar “What is a growth strategy?” on Thursday May 16 at noon eastern.

Whether you are an established entrepreneur, a budding startup, or simply interested in the world of technology and innovation, this event is the perfect opportunity to connect with like-minded individuals and expand your network.

Come prepared to hear the trends to leverage new and existing technology shaping the future. Share experience, seek advice, and explore potential partnerships in a welcoming environment that fosters growth and transformation. Don’t miss this chance to be a part of a dynamic community focused on driving innovation and success in the world of technology and entrepreneurship.

Hosted by Terry Coull this introduction and overview of growth strategy and the key objectives will include Types of growth, Purpose and justification, Goals, Timelines, and Funding and expected ROI
What is a growth strategy
https://lnkd.in/eMHYyWRm

The Chief Growth Officer: The Catalyst for “Future-ready” Business Growth

January 19, 2024

by Terry Coull, Chief Growth Officer @ 10Xnewco | Enterprise Digital Transformation


Introduction

As businesses worldwide navigate the uncertainties, and guarantees of becoming “future-ready”, the role of the Chief Growth Officer (CGO) has emerged as a linchpin in driving revenue, expanding market presence, and ensuring sustainable growth. In today’s rapidly evolving world, being “future-ready” for businesses extends beyond mere adaptability. It encompasses a proactive and holistic approach to anticipate and proactively embrace change, ensuring both resilience and sustainable growth. As Sarah McGrath, Editor at LinkedIn News, highlights, “Chief Growth Officer tops this year’s LinkedIn Jobs on the Rise list, — a data-backed ranking of the 25 fastest-growing jobs in the U.S. over the past five years. The role saw 175% YoY growth just last year, marking heightened demand as companies doubled down on efficiency, profitability, and sustainable growth.”

Why Chief Growth Officers are Essential in 2024

2024 presents a unique set of challenges and opportunities for businesses. The global landscape is marked by rapidly evolving technological advancements, geopolitical shifts, and economic fluctuations. Here’s why partnering with an expert growth strategist and firm is more critical than ever:

  • Adapting to Economic Realities: With varying inflation rates across countries and regions and the ongoing economic restructuring post-pandemic, businesses need strategies that are resilient and adaptive. CGOs are adept at formulating strategies that can navigate these complexities.
  • Embracing Technological Transformations: From generative AI to Web3, the technological landscape is evolving at an unprecedented pace. CGOs play a crucial role in integrating these technologies into business models to drive innovation and efficiency.
  • Driving Sustainable Growth: As businesses aim for recovery and resilience, CGOs are at the forefront of developing and implementing strategies that ensure long-term, sustainable growth.
  • Navigating Geopolitical and Economic Uncertainties: Amidst the backdrop of significant events worldwide, business leaders must be prepared for abrupt geopolitical shifts that can impact global business strategies. A CGO’s facilitation and expertise in identifying and mitigating risks in such volatile environments is invaluable.

The CGO’s Role in Collaborative Leadership

The role of a CGO transcends traditional boundaries, requiring collaboration with CDO’s, CTO’s, CIO’s, CSO’s, CFO’s and CEO’s. This collaborative approach ensures that growth strategies are integrated across all aspects of the business, from technology adoption to product portfolio rationalization, financial planning and risk management. As PwC’s 2024 agenda for CFOs suggests, embracing technology and modernizing business functions are key priorities for finance leaders, directly aligning with the CGO’s mandate.

Conclusion

As we move deeper into 2024, the CGO’s role becomes increasingly vital. They are not just strategists; they are the architects of a business’s future, capable of guiding and steering organizations through the complexities of the modern business world. For CDO’s, CTO’s, CIO’s, and CEO’s looking to thrive in this dynamic landscape, investing in a CGO is not just an option; it’s a necessity for sustainable success.

Best Synergies of Integrating Product Firms

Integrating product firms can lead to various synergies that enhance efficiency, competitiveness, and overall business performance. The success of integration often depends on the specific circumstances, industries, and business strategies involved. Here are some potential synergies that can arise from integrating product firms:
    1. Cost Synergies:
      • Economies of Scale: Combining production capabilities and increasing output can lead to economies of scale, resulting in lower per-unit production costs.
      • Supply Chain Optimization: Streamlining supply chains by consolidating procurement and distribution processes can reduce overall logistics costs.
    2. Operational Synergies:
      • Standardization of Processes: Integration allows for the standardization of processes and workflows, leading to increased efficiency and reduced operational complexities.
      • Shared Resources: Sharing resources such as manufacturing facilities, warehouses, and distribution networks can optimize resource utilization.
    3. Technological Synergies:
      • R&D Collaboration: Integrating product firms can facilitate collaboration in research and development, leading to the sharing of technology and innovation.
      • Technology Transfer: The integration of firms with complementary technologies can result in the transfer of knowledge and expertise between teams.
    4. Market Synergies:
      • Expanded Market Reach: Combining product portfolios can lead to expanded market reach and access to a broader customer base.
      • Cross-Selling Opportunities: Offering integrated products or bundled solutions can create new cross-selling opportunities and increase customer loyalty.
    5. Brand Synergies:
      • Brand Strength: Combining the strengths of each brand can enhance overall brand equity and create a more powerful market presence.
      • Brand Extension: Integration can provide opportunities for brand extension, allowing firms to enter new product categories or market segments.
    6. Talent Synergies:
      • Skill and Knowledge Transfer: Integration can facilitate the exchange of skills and knowledge among employees, fostering a culture of continuous learning.
      • Optimized Workforce: Consolidating functions can lead to a more optimized and specialized workforce, reducing redundancies.
    7. Financial Synergies:
      • Improved Financial Performance: Integration can lead to improved financial performance through increased revenue, cost savings, and improved profitability.
      • Risk Diversification: Diversifying product lines and markets can help mitigate risks associated with economic fluctuations or industry-specific challenges.
    8. Customer Synergies:
      • Enhanced Customer Experience: Combining product offerings can lead to a more comprehensive and satisfying customer experience.
      • Customer Retention: Integrated product solutions may increase customer loyalty and retention as customers find value in a broader range of offerings.
    9. Regulatory Synergies:
      • Compliance and Standards: Integration can lead to improved compliance with industry standards and regulations, reducing regulatory risks.
    10. Environmental and Social Synergies:
      • Sustainability Efforts: Integration can allow firms to combine efforts in sustainability initiatives, reducing environmental impact and meeting corporate social responsibility goals.

Successful integration depends on thorough due diligence, effective change management, and a clear understanding of the synergies that can be realized. It’s essential for leadership to communicate the strategic vision, address cultural differences, and actively manage the integration process to maximize the benefits.

Why leaders need a long-term view…

In boardroom discussions, the focus should be on how strategies today can help predict behaviors tomorrow.  by Harry Kraemer

When a business is going well, I’ve seen leadership teams conform to an unwritten 80-20 rule of thumb: They spend about 80 percent of their time focused on growth for the long term and only 20 percent managing the short term. But when things are not going well, I’ve observed the opposite: The temptation is to focus almost exclusively on the short term, with leaders spending a mere fraction of their time looking ahead.

An ultra-short-term focus, however, is not sustainable. As pressing as today’s demands are, as businesses continue to struggle with impact of COVID-19 and economic uncertainty, leaders should strive for balance between the short term and long term to produce value that benefits all stakeholders.

Admittedly, maintaining a long-term view has been challenging for business leaders who, over the course of the last year, were confronted by a pandemic and an economic crisis. In the early days of the pandemic, I witnessed the short term becoming the center of attention for leaders of companies where I am a board member, as well as at other firms. It’s a natural reaction during turbulent times when so much is changing day to day.

Consider dental supply companies, whose sales in the U.S. were cut by 50 percent or more in the second quarter of 2020 as dental offices closed and the provision of oral care plummeted. Similarly, as travel came to a virtual halt, the hospitality industry suffered. Accor, a global hospitality group with more than 5,000 properties and 10,000 food and beverage venues in 110 countries, reported a precipitous drop in its revenues — down 88.2 percent in the second quarter of 2020 on a “like-for-like” basis, and off 62.8 percent in the third quarter. Though business prospects have since improved across all industries, nearly half of the financial executives surveyed by PwC last summer said they expected revenues to decline by more than 10 percent in 2020.

At the other end of the spectrum, there has been dramatic growth in areas such as telehealth, which was projected to see a 65 percent increase in demand in 2020 alone. Even this positive scenario can cause management to concentrate almost exclusively on short-term opportunities to capture market share rather than on anticipating future customer requirements.

Absent a long-term view, leaders may inadvertently shortchange future prospects and value creation.

Generating value

In good times and in challenging ones, business leaders need to allocate capital and people for the benefit of all major stakeholders — employees, customers, shareholders, and society in general. As my colleagues and I wrote in a recent article in the Journal of Applied Corporate Finance, leaders have a responsibility to produce “sustainable increases in long-run value, and then help the stock market reflect, or prospective buyers recognize, that value.” A key practice in establishing long-term value creation is to use the net present value (NPV) test. In financial terms, an investment passes the NPV test when the discounted present value of its projected cash flows over time is greater than the cost of producing those cash flows.

Absent a long-term view, leaders may inadvertently shortchange future prospects and value creation.

What sounds straightforward becomes far more difficult if management is not investing enough of its energy and focus on the long term. Of course, any crisis and its impact must be managed in the short term — for example, controlling costs, avoiding supply chain disruptions, and rightsizing the workforce. Value creation, however, requires a longer-term view.

What leaders can do

In a world of uncertainty, company leaders and boards of directors need to keep perspective by balancing the short and long term. Here are some suggestions.

Focus on the known. Management and boards need to focus on what is known. For example, the pandemic is not going to last forever, nor will it be over within a few weeks. The latest projections from the World Health Organization are that COVID-19 vaccines will likely not be widely available until mid-2021 in developed economies, and it will be 2022 before the rest of the world gets vaccinated. Based on these projections, how would a company’s business be affected in the next three to four months, six to 12 months, or one to two years? By running various scenarios, management can decide on the best responses to both crisis and opportunity, which is especially helpful in capturing a stronger competitive advantage as the pandemic subsides and the next business conditions emerge.

Rightsize human capital. One reason a company grows faster than its competitors is that it has the best people and a low turnover rate. Amid a crisis, however, focusing almost exclusively on the short term may lead to decisions to lay off massive numbers of people without considering the cost of finding the right talent in the future or the implications of the best people being hired by competitors. Though layoffs and furloughs are often unavoidable during severe downturns, cutting costs in other areas such as office space and travel can help maintain the workforce so that mission-critical staff are not lost.

Keep a balanced perspective. As business resumes and evolves, companies can get back on track with a balanced perspective — which can be gained by extrapolating lessons learned in the short term for the long term. Airbnb, for example, saw an opportunity to switch its strategy, redesigning its website and its algorithm to show prospective travelers accommodations that were closer to home, so people could vacation without flying. Wayfair, the Boston-based e-commerce retailer of furniture and home goods, saw the crisis-accelerated trend toward more online purchasing as an opportunity. Restaurants also bore the brunt of the COVID-19 fallout and resulting changes in consumer behavior. Those that stayed afloat pivoted quickly, in some instances by offering curbside pickup and delivery. Now, leaders in the restaurant industry are looking forward and projecting behavior among post-pandemic consumers who will likely have high expectations for cleanliness and sanitation for on-site dining, while continuing to rely on drive-through, curbside pickup, delivery options, and touchless kiosks and ordering systems.

Although the future seems uncertain, that doesn’t mean business leaders cannot plan for it. Leaders can focus on the major areas that impact shareholder value: growth, profitability, capital requirements, and cash flow. Focusing on value creation for the long term will help companies weather the current storm and emerge even stronger.

Author profile:

    • Harry Kraemer is professor of leadership at Northwestern University’s Kellogg School of Management and a best-selling author of books on values-based leadership. An executive partner of one of the largest private equity firms in the U.S., he is an executive consultant and serves as a board member for numerous private and public companies.

Three turtles on a team rock

I regularly take photos of natural wonders. Recently, I witnessed teaming in a natural setting. About a month ago, while walking through a park, I crossed a bridge spanning a large pond and saw three turtles sitting on a rock basking in the sun. What was amazing about this was that all three turtles sat completely motionless without making any sound. I took a long-range picture, but it was blurry and I decided to get a closer shot. As I got to within 10 feet of them, they suddenly all dived into the pond at the same time. Now, ordinarily this would seem normal, but what I noticed was the split second decisiveness of their entry into the water. They were synchronized in their movement, it was almost as if they were “subliminally coordinated” to take flight at exactly the same time.

Subliminal Coordination: what does it mean?

In the animal kingdom, and in nature in general, there is a tendency for people and animals to team together by communicating and collaborating, but what if no words need to be spoken, or any sounds uttered to signal an outcome or event? I observed this a number of years ago when my son was playing a video game with his cousin. The two boys were playing a simulation video game that required them to team, as military soldiers, and score points every time they eliminated an alien species. Neither of the boys uttered a word as they silently went about the business in a coordinated synchronized manner moving through the game’s walled passages, scoring points by protecting each other, navigating and challenging the enemy together. What became obvious was that by consistently moving through the game they were demonstrating consistent teaming attributes. They did this by understanding each other’s tactics, intuitively and seamlessly becoming comfortable with each other’s style. This allowed them to repetitively practice each scenario simulation, repeat and mentally learn what mistakes they each made, as well as what made them successful as a team. Eerily as this sounds, it was almost as if both boys had a sixth sense, as they were connected without the use of voice, or sound, but had actually mastered the art of sharing visual cues and mental telepathy from each other.

Real world context: how do we team?

Throughout history, we have witnessed in military, sports, entertainment and business environments, simulations practiced in scenarios that represent real-life situations, where team members have intuitively shown understanding and become familiar with the habits and styles of each other to produce an outcome. Teams are made up of individuals, whose strengths are willingly contributed, making each member both unique and complimentary to the team. Since the advent of mobile devices, application software and communication channels such as texting, diagrammatic representations, video and workflow, we have started to see more examples of subliminal teaming. Subliminal teaming is where members get to know each other and make informed decisions, resulting in synergistically speeding up the process and timing of team deliverables. Constant chatter is eliminated as members get more comfortable with decision making and collaborating online, resulting in actions flowing more seamlessly in a trusting, empowered networked environment. Teams have starting using video gaming, and an entire team can focus on a topic, becoming syncronized with each other through role-playing and visual interactions in their teaming and knowledge sharing tactics.

Rock star vs rock-stars

What we experience in business, politics, the entertainment industry, and the media, is individuals are judged and positioned on the merits of what they individually represent, how they get personified into icons are aggrandized and get perceived as “rock-stars”. Most businesses pride themselves on hiring “rock stars”, with the assumption that if they staff multiple rock-stars, all would be well and all deliverables would be met. In reality, it is often the case where individual rock-stars don’t necessarily make good team leads, or where teams (band members) don’t always cooperate, collaborate and make beautiful music together. In a typical rock-band, if all the members were rock-stars, there would be no concert, as each member would be looking for his or her “minute of fame”, there would be a lot of noise, as no-one would be able to play their unique specific instrument. The rock star focus should be the rock-stars, a team.

Teaming demands coordination, mutual consent and subliminal cooperation from every band member to be able to promote and produce songs. In other words, it takes an entire band to perform consistently, and one rock-star is only as good as the collective contribution and practice from the entire group.

The problem with team structures

So why do we focus so much attention on the individual? Why do we paint this one-ness picture in every real-life teaming situation? Why do we credential individuals to the point of ignoring the most important attributes of teaming, and spend so much time making sure individuals are all as competent as the other team members. Is team success equally important or even more important than individual success? 

One of the factors that tends to discourage teaming is the fact that in today’s corporate environment, people are rewarded as individuals within the confines and goals of supporting a functional role only, and not contributions to a project based role. Furthermore, rewards are not often given to teams, where team members get rewarded for team outcomes or deliverables.

Another example is where the traditional recruiting game is played by credentialing each person based on a set of requirements to fulfill a specific role, but what is often overlooked is the critical teaming capabilities each individual should possess and demonstrate in order to ensure teams are complimented with a diverse set of members to be successful.

How teams can be more successful

  • It takes a group of willing and able team members to respect and trust one another
  • It takes a behavioral change to empower and encourage team contribution
  • It takes an incentive to shift from mostly individual compensation to incentivize team success
  • Team goals, objectives and outcomes should be given more definition to be more easily adopted into existing structures
  • Assume all members in the team are rock-stars, and deserve to be treated as such
  • Encourage team-building, and informally promote rotational team roles for ongoing learning and cooperation
  • Promote open communication and collaboration, and explore subliminal coordination among members
  • Actively seek ways for team members to be in sync, simulate scenarios and role play when brain-storming ideas, solutions and outcomes
  • Respect individual contributions and proactively encourage member strengths as you treat each member as a “different piece in the team puzzle”
  • Open up all channels of communication, allowing members to openly interact and share experiences based on repetitive situations
  • Break-down barriers and encourage an open team communication environment
  • Make sure the team members intuitively get to understand and become familiar with the habits and styles of each other
  • Encourage synchronized simulation of solution development, design thinking and agile knowledge sharing

A Teaming example

In agile sprint meetings teams meet on a daily basis and get comfortable with collective member activities as the entire team transparently shares ideas, actions and concerns. This trusting environment promotes collaboration and cohesion between members. Agile teams often have to deal with complex or uncertain task assignments, but through a repetitive process, non threatening approach, they quickly learn to work as a team and intuitively collaborate to produce outcomes, solve problems and learn. This focus on the behavior of selfless teaming, collective member contribution, and thoughtful sharing of problems as well as successes, proves that teaming is very much alive today, and is not just another management fad.

Written by Terry Coull. Terry is a management consultant focusing on transformation and continuous improvement in technology today. This is part 5 of a series of informative team-centric leading practice white-papers.