About Booz Foresight
Booz Foresight is a quarterly e-mail newsletter containing the latest insights and most important perspectives from Booz & Company. Selected by Tom Stewart – Booz & Company’s Chief Marketing & Knowledge Officer and former editor and managing director of Harvard Business Review – Booz Foresight is an indispensable selection of our best, most provocative and timely work.
New Worlds to Win
As business prepares to ring out 2013, I want to call your attention to recent articles that can help you make the most of three important issues in 2014.
Global competition. There’s a sense in which emerging-market companies have had it easy. Driven by the tailwinds of their fast-growing economies, sheltered by de jure or de facto protectionism that (for example) channeled government favors their way or limited foreign ownership in some industries, relatively unburdened by labor or environmental costs, they were able to run downwind as fast as they could.
Few of these companies paid heed to—or needed to care about—capabilities they’d need under less favorable conditions: the keel that would keep them straight in a cross-current, the skills they’d need to weather storms, the planning they’d need for the long haul.
Those days are gone. Emerging markets growth rates have slowed. Customers in developed markets have become pickier about quality and more demanding with respect to service. World-class rivals have set up significant operations that are, as GE executives put it, “in country, for country.” Cost gaps have narrowed. The year of the hare is over, and the tortoise is gaining ground.
Against that backdrop, Booz & Company partner John Jullens has just published an important article in Harvard Business Review, “How Emerging Market Giants Can Take on the World.” Thanks to a special arrangement with HBR, we can offer a free download of the article to Booz Foresight readers who click here.
As John explains, many of these competitors are new companies in old, well-developed industries. As they emerge onto the global stage, they confront the fact that they are among some of the most sophisticated, capable outfits in the world, in an arena where it’s no longer enough to be fleet and cheap. How should these companies develop the capabilities they’ll need to continue to win? And how can their global rivals take advantage of a moment when emerging-market rivals may be uniquely vulnerable?
Innovation and digitization. Booz & Company’s ongoing study of the practices of the most important innovators—the 1000 companies that collectively account for half of all R&D spending worldwide—this year focuses on the impact of digital tools and techniques on innovation.
Where digitization is concerned, common wisdom is that prophets are more visible than profits. The surprising evidence of this year’s Innovation 1000 study, however, is that digital enablers of innovation are already making a substantial contribution to the success of the companies that use them.
Tools like 3D printing and rapid prototyping, customer immersion labs, and product lifecycle management systems are a big deal: the companies that use them report sharply higher performance than companies that don’t.
That’s not to say there isn’t plenty of hype—and this year’s study reveals which digital tools have so far produced little value. But, as Booz partners Barry Jaruzelski, John Loehr, and Richard Holman show, “Digital tools are influencing every stage of the innovation life cycle: from collecting and analyzing customer insights, to generating and vetting ideas, to designing and manufacturing new products, and, finally, to tracking products’ success once launched.”
Culture. If culture is so important, why do companies manage it as an afterthought? That question came to mind when I read the findings of “Culture’s Role in Enabling Organizational Change” by DeAnne Aguirre, Rutger von Post, and Micah Alpern.
The report exposes frustration and ignorance in almost equal measure where culture is concerned:
What’s underlying these disquieting numbers? Drawing on Booz’s large body of research and practice (including that of Jon Katzenbach), DeAnne, Rutger, and Micah conclude that many executives apply change-management models that tack culture onto the end of a process, and that they focus too much on top-down communication and not enough on identifying specific behaviors that, when changed, will start to move a culture in the right direction.
If culture’s not part of the process from the start, it will be the anchor that drags all change efforts to a halt—instead of what it can be, the wind in the sails moving you forward.
Best wishes for the year to come!
Chief Marketing & Knowledge Officer
In This Issue