TEBR_JanFeb2022_zinio

TBEuuhrseoinpeesasn Mastering Board Governance Review in the Digital Age .................................................. January - February 2022 The Eight Enablers of a europeanbusinessreview.com Transnational Culture .................................................. The Cycle of ESG & Compliance .................................................. Opening Minds to Impact the World. Top Executive Education Featuring Antwerp Management School INTERVIEW WITH Mr. Kit Scott-Brown, Founder of WHEN THE OPPORTUNITIES ARE OUT OF PLAIN SIGHT eemmppoowweerriinngg ccoommmmuunniiccaattiioonn gglloobbaallllyy USA $22 EU €17.5 CAN $22 UK £15

A New Challenge? Unique Access to Confidential Opportunities InterExec is the global leader in enabling Top Executives to access £300k to £ 3m+ unadvertised vacancies worldwide. We act discreetly through a 15,000 strong international network. [email protected] www.interexec.net +44 (0)20 7256 5085

The European Business Review empowering communication globally JANUARY – FEBRUARY 2022 TALENT MANAGEMENT BRANDING 4 When the opportunities are out of plain sight 48 When Building-a-Brand is strategy? Interview with InterExec Founder, The Brand Based View Mr. Kit Scott-Brown Ashok Som and Kazuhiro Asakawa TOP EXECUTIVE EDUCATION LEADING IN THE POST COVID WORLD 8 Opening Minds to Impact the World 58 Building the strategic architecture of the Post Interview with Antwerp Management School's Pandemic Corporate Landscape Prof. Dr. Goran Milenković and Mark Esposito, Alessandro Lanteri, Terence Tse Prof. Dr. Steffi Weil STRATEGIC SPOTLIGHT FUTURE SERIES 76 Why invest in strategic foresight? 18 Mastering Board Governance in the Digital Age Nando Malmelin and Kalle Kantola The leading Board Portal provider in the Nordic region: Admincontrol RISK MANAGEMENT 80 The path forward to a unified risk framework ACCELERATOR SERIES 24 Don’t fear the black swan, take it as Kamil J. Mizgier an opportunity to soar MANAGEMENT Kevin Peters, NetNumber President and CEO 84 “Operation Boomerang” Let gracefulness activate STRATEGIC SPOTLIGHT good karma to bring them back to you 29 The eight Enablers of a Transformational Culture Avi Liran David Liddle, CEO of transformational culture PEOPLE MANAGEMENT consultancy The TCM Group 88 Old and new takes on Selection Interviews LEADING IN THE POST COVID WORLD Adrian Furnham 34 Breaking Down Business Resilience, Post-Pandemic FUTURE SERIES The data reveal surprises—and a blueprint for 94 The use of Dopamine to enhance resilience in a moving forward. Jacques Bughin and Francis Hintermann post COVID-19 era:Lessons from recent discoveries in neuroscience that helps sustain vigilance and SUSTAINABILITY productivity in life and work 40 The Cycle of ESG and Compliance Simon L. Dolan and Kyle M. Brykman Gerry Zack, CEO of Society of Corporate TECHNOLOGY Compliance and Ethics® (SCCE) & Health Care 108 Dealing with context in AI Compliance Association® (HCCA) Imène Brigui, PhD LEADERSHIP 44 New Leadership for a Sustainable Future DIGITAL TRANSFORMATION 111 How technology commons Matt Gitsham revolutionise industry foundations, The story of the Open Compute Project (OCP) Hervé Legenvre and Steve Helvie Production & Design: Angela Lamcaster Print Strategy: Stefan Newhart Production Accounts: Lynn Moses Editors: Elenora Elroy, David Lean Group Managing Editor: Jane Liu Editor in Chief: The European Business Review Publishing Oscar Daniel READERS PLEASE NOTE: The views expressed in articles are the authors' and not necessarily those of The European Business Review. Authors may have consulting or other business relationships with the companies they discuss. The European Business Review: 3 - 7 Sunnyhill Road, London SW16 2UG, Tel +44 (0)20 3598 5088, Fax +44 (0)20 7000 1252, [email protected], www.europeanbusinessreview.com No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without written permission. Copyright ©2022 EBR Media Ltd. All rights reserved. ISSN 1754-5501 empowering communication globally

TALENT MANAGEMENT Executives looking to progress their career face the problem that many of the best opportunities are not presented in plain sight. They are there – but reside in the unadvertised hidden market of executive vacancies. One company that specialises in connecting the right people with the right opportunities is InterExec. Here, founder Kit Scott-Brown explains how it works. WHEN THE OPPORTUNITIES ARE OUT OF PLAIN SIGHT Interview with Thank you for honouring us with your time, Mr Scott-Brown! Let’s start InterExec Founder, at the very beginning. Did you always see yourself having a coaching career? Mr. Kit Scott-Brown No, I never aspired to that and, indeed, InterExec is not in career coaching. I think of career coaching as providing theoretical advice, whereas InterExec provides exclusively practical assistance to our clients. Some 45 years ago, you were on the hunt for a professional organisa- tion that could undertake a job search for you, to enable you to focus 4 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

on your work without distraction. What was the been a history of learning and gaining knowledge and driving force that finally led you to establish experience over more than 45 years. InterExec that same year? I started out as a chartered accountant, but then InterExec specialises in delivering unique, set up a secondary bank, all of which exclusively client-centred services to executives who are lent money on second mortgages. seeking within the £200k/$300k When, in the mid 70s, property The history of to £2m/$3m+ range. Why would prices collapsed, I entered into you say this “hidden market”, in negotiations to sell the bank and InterExec has been a particular, inspires more interest? realised that I would need to find a history of learning and new role in life. I asked the advice gaining knowledge It is called a hidden market of the Institute of Chartered because opportunities seldom Accountants, who recommended and experience over appear in the public domain. me to a leading career counsellor. more than 45 years. In other words, they are rarely advertised, which gives the senior After five hours in a seminar, the MD of the career counsellor executive a particular problem in said to me, \"Now that you know all undertaking a search, particularly about it, go out and do it, dear boy, and good luck to if they want to achieve the best results by having a you.\" I pointed out to the Institute that, being busy and broad perspective of the opportunities and reward having no market experience, I needed someone who levels that may be available. would do it for me. They told me there was no such thing, so if I felt strongly I should set one up. So I entered this market not because I knew all about For those who may not be familiar with the it, but because I knew nothing about it and I could not concept, what does the “unadvertised world” mean recruit anyone who did. The history of InterExec has in the industry? www.europeanbusinessreview.com 5

TALENT MANAGEMENT Employers seldom want the world to be aware of affairs before we approach the market, and we may changes before they happen, particularly if the present talk to over 100 relevant search consultants in the incumbent is not aware. So they do not often advertise first two months thereafter, and support the client senior roles and, more often throughout. than not, they prefer a search However, ensuring it is consultant to identify a shortlist What we do is to ensure smooth is all down to the first with their specialist expertise. that our clients are known 20 hours of planning, to ensure confidentially to the search that all possible troughs are Each search consultant, envisaged and smoothed before unlike more junior recruiters, probably only secures about six consultants who have or exposing one’s reputation to the assignments a year, so they are are most likely to have market, and ensuring confiden- desperately keen to avoid anyone relevant vacancies and tiality throughout. else encroaching on that oppor- tunity before they earn their that our clients are appro- InterExec remains the commission. For this reason, priately recommended. only organisation to have they are not about to advertise it. Hence, the \"hidden market\". obtained the approval of the Department of Employment to comply with the Employment Agencies Act 1973. Could you elab- Changing employers can be a delicate transition orate on how this carries over into the work you for executives to make. What do you do for clients in do? What should clients know beforehand? order to ensure that the process remains smooth? We do not get paid for finding or seeking to find That is not easy to answer without being boring, clients jobs, since that is illegal in the UK. What we do because we spend about 20 hours on each client’s is to ensure that our clients are known confidentially 6 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

We work closely with each individual, understanding their specific strengths and, of course, weaknesses. The planning process inevitably leads to a stronger sense of personal preparation for the search ahead. to the search consultants who have or are most likely to Given that you work closely with over 15,000 have relevant vacancies and that our clients are appro- contacts from all over the world, how much of your priately recommended. process have you altered to fit the changing land- scape of a post-pandemic workforce? Aside from bringing more structure to career portfolios, InterExec also places emphasis on When we started InterExec, we had to have offices encouraging an overall sense of internal balance and all over the UK, because executives would not travel a higher quality of life. Can you give some examples for interview, let alone work more than a few miles of how this is done in practice? Do you go into specific from home. That has melted over the years, so that, areas of self-development, such as mindfulness? pre-pandemic, our clients were increasingly becoming international already, but there is no question that the We work closely with each individual, understanding process has been hastened over the last two years. their specific strengths and, of course, weaknesses. The planning process inevitably leads to a stronger sense of We have not had to change our processes to accom- personal preparation for the search ahead. modate this, but have concentrated on strengthening our overseas contacts and out-of-hours communica- tions staff. EXECUTIVE PROFILE KIT SCOTT-BROWN Kit originally trained as a Chartered Accountant but over 45 years ago he was hunting for a new challenge and discovered apart from recruiters with specific client mandates there was nowhere he could find to provide real support, planning and objective guidance on hunting for the ideal role. InterExec was born and since then has worked with several thousand Senior Executives in planning and presenting them to the confidential and often complex global market. The experience of Kits team and their worldwide network of over 15,000 Search Consultants has made them a unique organisation with an outstanding track record. www.europeanbusinessreview.com 7

TOP PROGRAMMES WITH THE BEST ROI Today's business world is a complex, difficult-to-understand space for executives. It's reasonable to suppose that good preparation for functioning effectively in such an environment might involve first understanding oneself. Here, Professors Goran Milenković and Steffi Weil of Antwerp Management School explain how the school's PhD and EMBA programmes place an emphasis on personal development. 8 THE EUROPEAN BBUUSSININEESSSRREEVVIEIEWW JAJANNUUAARRYY- -FEFEBBRRUUAARRYY2022022

OPMENINIGNDS to Impact the World Interview with Antwerp Management School's Prof. Dr. Goran Milenković, Academic Director of the EMBA and Prof. Dr. Steffi Weil, Associate Dean for International Outreach & Academic Director (and Professor) Antwerp Good day, Professor Milenković and Professor Weil! Thank you for lending Management us your time and it’s a pleasure to speak with you both. How has the new year School been treating you so far? PROF. DR. GORAN MILENKOVIĆ Like all international business schools, we have entered the new year with challenges due to COVID. Nevertheless, our intake numbers look good, and our operations teams, faculty, and international partners are ensuring continued delivery of onshore and offshore modules. As we speak, our EMBA team is making final preparations for participants to visit MIT in the USA in January, and the American University in Cairo in February. Our intake in Moscow www.europeanbusinessreview.com 9

TOP PROGRAMMES WITH THE BEST ROI is also doing well and we have just recently launched Our motto, “Opening Minds to Impact the World”, our programme in Paris. For the latter two, we are very has influenced our approach to knowledge transfer since grateful to our local partners IBS/Ranepa in Russia and the very beginning. As a management school, we try to ESSCA School of Management in France. nurture future leaders in both industry and the social enterprise sector. We don’t subscribe PROF. DR. STEFFI WEIL to any one individual economic Thank you very much for this or social theory. We pass on the question. The year has started off As a management multitude of conceptual options very well. We have a lot of inter- school, we try to and views about management esting projects in the pipeline nurture future leaders challenges and allow participants and we have two PhD defences in to make their own choices. January. This energises me a lot. in both industry and For 60 years and counting, the social enterprise The AMS approach prides itself sector. We don’t on simplicity: the better you feel Antwerp Management School subscribe to any one as a person, the more confident has looked beyond the mere individual economic you are when dealing with compli- transfer of technical knowl- or social theory. cated business situations. How edge and imparted generations’ important is a healthy self-image worth of leadership wisdom. when it comes to being a leader? What would you say are the cornerstones of the university’s This is an interesting ques- teaching philosophy? tion and certainly made me reflect. 10 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

I am not an expert in healthy self-image but I luckily work for an organisation that puts a lot of emphasis on a healthy working environment. Healthy in the sense that we can identify with our work, that we enjoy what we are doing and that we can address issues that might become challenging. I think this kind of open working environment also has a positive impact on self- image and on leadership. To be able to discuss, reflect and brainstorm helps me to develop a positive self-image. To be able to “be who you are” makes for a good leader. A good leader is certainly not a perfect leader, but an environ- ment which allows for mistakes and critical reflection creates good leaders. Besides the core subjects present Executives who have successfully completed in all EMBA programmes, such as the EMBA programme describe it as “trans- strategy, leadership, finance, and formative” and “career-changing”. Do you so on, we pay special attention to recall a particular student’s success story or the career paths of some of your participants? the transitional challenges of global Our participants are typically 35-45 years business, including environmental, old. They are mature individuals with 15-plus societal, and governance issues. years of practical experience. All are profes- sionally successful. Deciding to do a degree programme at that stage of one’s life means that it is not just about acquiring additional knowledge. There is also an inner need to better understand Antwerp Management School is the only oneself in order to correctly shape the next stages of one’s Belgian business school to be included in career. That is why our programme includes an extensive the FT’s Top 100 list of Executive MBAs, personal development portfolio. In addition to the usual consequently earning you the top spot in all array of psychometric tests and individual coaching that are of Benelux. How does it feel to gain all this quite common nowadays, we are fortunate to have our own recognition? NeuroTraining Lab. For example, our participants don’t just discuss the links between personality types and leadership Of course, it’s a great honour. We are styles. In our lab, they observe their own brain activity and a medium-sized business school, and the recognise the influence of their own subconscious reactions Benelux is a small geographic space. To be in different situations, such as stress, conflict, and so on. recognised on a par with, or even better than This combination of soft and hard insights really improves other global institutions is flattering. Overall, personal effectiveness and communication. For many, it is we are ranked number 45 in the group of a real eye-opener and helps clarify personal ambitions and global EMBAs, but on our specialities, such as understanding of themselves. In our last survey, 78 per cent international diversity or ESG/CSR, we score in of participants said that they had achieved their goals for the top quintile. doing an EMBA within three years of graduation. www.europeanbusinessreview.com 11

TOP PROGRAMMES WITH THE BEST ROI With AMS now holding the highest Aside from its Executive MBA programmes, AMS also offers ranking ever achieved by a Belgian busi- a PhD programme for executives? Professor Weil, in your role ness school with its EMBA, what would you as academic director of the PhD programme, can you explain say are the programme’s unique features the programme to us? and highlights? The Positive Impact Project, for example, is a unique way of stimulating Yes, of course, with pleasure. I love talking about the PhD global challenges. programme, because it gives me so much joy to witness how our PhD candidates engage in this life-changing project with us. But Besides the core subjects present in all first things first – what is the PhD programme for executives? It EMBA programmes, such as strategy, lead- is a four-year programme that supports and guides executives/ ership, finance, and so on, we pay special managers to obtain a PhD degree. A PhD degree is a doctoral attention to the transitional challenges of global business, including environmental, societal, and governance issues. The latter is not positioned as a corporate responsi- bility, but rather as a deeply personal one. Future-oriented managers understand that responsible leadership is as much about ESG-related actions as it is about consistent behaviour. Our programme has ESG elements incorporated in every course and, on top of that, we ask our participants to do a hands-on Positive Impact Project. We are inspired by the notion that business and sustainability are not conflicting view- points. Rather, the world is still discovering how to combine the two. In total, we devote about 150 teaching hours to ESG-related topics and about 80 hours on fieldwork- Some participants focus on their local communities or their workplace. Others have crossed borders and even continents. We had participants working on initiatives reducing poverty, supporting the develop- ment of alternative energy sources, working in prisons, building schools, changing agro- forestry, tutoring children, or assisting single parents. This is not charity work. It pushes every student to seriously go outside their comfort zone, but use their talents, management experience, and knowledge to find opportunities to bring business and ESG closer together. Every project proposal is carefully reviewed and finally evaluated by a mixed panel. And the emphasis is always on ensuring both short-term and long-term impact. 12 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

degree, the highest academic title one can receive. Our programme runs in close collaboration with the University of Antwerp. This means that our PhD candidates Professor Milenković, you’ve mentioned that in order to fully step enjoy the full service of Antwerp into a leadership position, you may need to lose attachment with Management School while being certain functions of the model to welcome a broader sense of under- able to receive a fully fledged standing the bigger picture. For people intimidated by the volume PhD degree from the University of knowledge needed to start a business, how would you encourage of Antwerp. To obtain a PhD is a them to take that leap of faith? life-changing experience and we are very proud An EMBA is a “generalist” to offer a programme to We see a senior leading programme and designed for profes- senior executives who aim position as an enabler sionals wanting to move beyond the to fulfil their dream with to conduct research, confines of a single function or special- us. Our program is tailor- ised occupation. Moving out of the made around their needs. to publish and to “cosiness” of being an expert in a To hold an executive successfully graduate particular domain to becoming a general position in industry is chal- with a PhD degree. We manager can be daunting. But that does lenging and to write a PhD have witnessed that a not mean that everyone needs to be an alongside it is even more structured curriculum expert in everything. The EMBA gives challenging. We aimed to that educates our one the tools to analyse and rationalise, turn this challenge into candidates in research to understand the jargon of multiple a opportunity. We see a and writing skills functions, and to know what to ask if you senior leading position leads to success. don’t understand something. All general as an enabler to conduct managers go through this “functional research, to publish and to detachment” process. And an EMBA is successfully graduate with the quickest way to learn how to do it. a PhD degree. We have witnessed that a structured curriculum that educates What are the principal benefits that our candidates in research and executive education has to offer in the post-COVID environment? writing skills leads to success. The programme is now running in its COVID has brought a massive change to the way business is done, fifth year and we can honestly say the way customers behave, and the way managers need to lead. I like to that our bespoke programme really compare it to league football. We had sunshine for a while and now, due to works. We are immensely proud to call our graduates from all over the world “Doctor”! The degree itself, of course, opens new doors, not only intellectually but also career- wise and on a personal level. To be able to celebrate these successes with our candidates and to have the honour to get to know them personally during the four-year journey gives me a lot of posi- tive energy. I am also lucky to be surrounded by a strong team that supports the candidates during this exciting PhD journey. www.europeanbusinessreview.com 13

TOP PROGRAMMES WITH THE BEST ROI the pandemic, it is raining continuously. The fact that different from what we have been teaching during it is raining does not mean we stop training or playing the BC (“before COVID”) era. football. We must adapt how we train and what skills we train for. We already see that what is considered Professor Weil, as an “good leadership practice” We also see that company expert in Global Political is different when you cannot cultures are changing. I Economy it must be diffi- meet your colleagues face- live in Germany and, two cult to witness how the to-face. For example, our global arena has changed. experience confirms that years ago, you needed As Academic Director of informal leaders in virtual written permission to the China-Europe Business teams are elevated to that work from home. Now Master, would you be able position not by demon- to share your perspective strating traits of “a good you must get permission on the current global polit- leader prototype”, such as to come to the office. In ical economy? charisma, but rather by that situation, how does helping the dispersed team Yes indeed it is diffi- to be efficient and being one pass on a company cult to witness how political a worker bee themselves. culture or work ethic, and economic protectionist We also see that company which is often instilled behaviour is rising. It is cultures are changing. I live by replications, to new especially sad to watch how in Germany and, two years recruits who have never China has closed its borders ago, you needed written seen a colleague at work? to the outside world. This permission to work from has implications not only home. Now you must get for global supply chains permission to come to the but also for global politics. office. In that situation, how China remains a strong does one pass on a company global player, an important culture or work ethic, which is often instilled by stakeholder for international investments and global replications, to new recruits who have never seen a politics. The international community aims to have a colleague at work? There are answers. But they are two-tier approach: to remain open to China as a global economic actor, while addressing sensitive political issues in a relatively open manner. Yet, if I am very honest from an academic perspective, the current situation allows me to address very interesting research topics. We have learned that we cannot take liberalism or even democratic rights for granted. We should remain critical and learn how to ask different questions. We also address the new challenges and questions in our programmes. We have integrated new exciting topics on supply chain, global trade and the role of multiple international stakeholders into our lectures. It is exciting to discuss new questions that arise with our students and executive candidates. 14 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

This creates a wonderful and, I would even say, spar- What are the biggest challenges you have encoun- kling learning environment. But overall, I’m always tered in handling multicultural groups and addressing pleasantly surprised how relationships grow over the varying needs of business leaders across different time and how people from different backgrounds industries? How do you overcome them? and cultures are brought together through learning and, by graduation time, start Our typical cohort is very treating each other not as mixed. We have on average In our Global Leadership colleagues but as members of 15-20 nationalities, with people Skills track, we work an extended family. coming from 20-30 indus- tries. Around 40 per cent are with our students on That is a very good ques- women. This is a wonderful self-awareness, on how tion. In the executive PhD opportunity to listen to each programme, there are lesser other and discover each other’s to become global leaders challenges, because the research views and experiences. I really and global citizens, and of our candidates benefits from believe that about half of the societal consciousness. different perspectives and knowledge gained during our cultures. A number of our PhD programme comes from partic- In COVID times, skills candidates even conduct research ipant interaction and learning like this are particularly on multicultural aspects. Yet, from each other. Of course, we helpful and crucial. of course, there are challenges also have interesting discus- when working in a very interna- sions outside the classroom, tional environment such as ours. especially during or after joint We have students from all over dinners. Views are many and the world. We are very much widely varied. In addition, we spend about 20-25 days aware of this and we educate our students and staff on abroad during study visits to top academic institutions multicultural differences. In our Global Leadership Skills in Asia, Europe, the USA, and Africa. While there, our track, we work with our students on self-awareness, on students have joint sessions with EMBA counterparts how to become global leaders and global citizens, and and experience teaching styles different from ours. societal consciousness. In COVID times, skills like this www.europeanbusinessreview.com 15

TOP PROGRAMMES WITH THE BEST ROI are particularly helpful and crucial. The biggest There is no way around it – doing an EMBA challenge was when the students enjoyed their is a serious investment, in both time and money. semester in China The ROI should when the Chinese exceed the total government decided We find that the best indicator of opportunity cost. We to lock down the strongly encourage country. Thanks to a positive ROI is word-of-mouth all students to make our international recommendations by employers. We every effort and to network and our are very happy with the fact that use assignments and strong coaching and projects to solve their Global Leadership over 80 per cent of our participants own company-re- have partial or full employer backing, lated challenges. At Skills team, we when it comes to fees and study time the same time, we take a holistic view to were able to bridge ROI; that is, we value cultural differ- ences even during this constraining equally monetary period. The students and non-monetary grew stronger as a team. There was great mutual returns. Of course, it is not easy to measure understanding in a situation where students from non-financial impact. We find that the best multiple backgrounds were locked up together in indicator of a positive ROI is word-of-mouth student housing. recommendations by employers. We are very happy with the fact that over 80 per cent of our participants have partial or full employer It takes a certain level of commitment to backing, when it comes to fees and study time. pursue a postgraduate degree. How do you So, obviously, employers do see a positive ROI. make sure that the participants and their organisations gain the highest return on their investment in terms of knowledge acquisition, As the Academic Director of Antwerp career advancement, long-term profitability Management School’s EMBA, what do you find for the business, and other measures of ROI the most exciting when it comes to nurturing for executive education? the mind of an eager student? 16 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

We are excited to further The world is ever-changing. The role of leaders is ever- develop and implement our changing. I’m a great believer in William Gibson’s adage projects on sustainable that the future is already here, but that it’s transformation and unevenly distributed. We hope that our EMBA internationalisation. programme will continue to bring some of that future You will see exciting to our participants in more ways than one. new teaching and learning aspects, more What can we expect to see from Antwerp PhD candidates who Management School in 2022? will graduate, and new hybrid international For our EMBA programme, the biggest addition short programmes where will be the start of a fully fledged cohort in Paris. For we aim to combine our our school, however, a big step will be finalising prepa- domestic and international rations for Triple Crown accreditation and joining the ecosystem and expertise. 1 per cent of business schools that have achieved this distinction. For me personally, the biggest reward is the “twinkle in the eye” of a student that I see when a A lot of exciting things! In the last two years, we discussion or comment has made them think about have managed the COVID crisis quite well. This very a topic in a way other than what they are used to. unique situation also led to more innovation. We are excited to further develop and implement our projects What will future participants in the EMBA on sustainable transformation and internationalisa- programme be most interested in learning from it, tion. You will see exciting new teaching and learning in order to prepare them for this new world? aspects, more PhD candidates who will graduate, and new hybrid international short programmes where we aim to combine our domestic and international ecosystem and expertise. EXECUTIVE PROFILE PROF. DR. GORAN MILENKOVIĆ Goran Milenković is Professor of International Business and Academic Director of the AMS EMBA Portfolio. Prior to joining AMS, he spent 30 years collaborating with blue-chip companies such as DHL, Deutsche Post, Henkel, Stihl, and the American Management Association. He holds a DBA from the Henley Management College, a master’s degree from the American University in Beirut, and a BS from Belgrade University. PROF. DR. STEFFI WEIL Stefanie Weil is Associate Dean for International Outreach & Academic Director and Professor at Antwerp Management School. Before she started her academic career in 2007, she worked as managing director in various consulting companies in Germany, France and the UK. Prior to her current posts, she held positions of research fellow at the Brussels Institute for Contemporary China Studies (BICCS) and was Head of Business Department and Associate Dean at the Vesalius College/Free University Brussels. Moreover, she has worked as a research follow at Tong Ji University in Shanghai. She is specialised in international political economy and China’s foreign policies. She has published on comparative politics across China, the European Union and the United States, on lobbying in China, and on comparative Western-Chinese political concepts. www.europeanbusinessreview.com 17

FUTURE SERIES In the drive for digitalisation, the emphasis tends to be on the operational aspects of the business. But shouldn't there be benefits for the board, too? Are there steps that can be taken in order to facilitate the digital transformation at board level? And do the tools exist to help them? The answer to all these questions is: \"Of course!\" MASTERING BOARD GOVERNANCE IN THE DIGITAL AGE W ith the pandemic accelerating digi- The question to ask, then, isn’t about how fresh graduates are tal disruption around the world, to navigating this paradigm shift, but to what degree this rapid digitali- what extent has this carried over to sation has extended to board operations. the corporate minefield? This next normal has pushed organisations in almost every industry A new class of problem exists within this space of digitalisation, to seek to innovate and forced them to embrace where seasoned executives’ experiences with business management new, digital solutions. But while there’s been and monetising traditional assets don’t translate as well in these enough said about the impact of this indus- modern mediums. It can be quite intimidating to keep up with these try shift on employees, managers and admins, new growth drivers and competitors, with their rapid-fire funding there’s another critical demographic that’s gone cycles in Wall Street and other technology hotbeds and the emer- through a drastic metamorphosis overnight: gence of non-traditional risks. It leaves some board members rightly board members. feeling outmatched and overwhelmed. ACHIEVING DIGITAL LITERACY FOR ALL According to a 2018 study by McKinsey, up to 30 to 40 per cent of all workers in developed countries may need to move into new occu- pations or at least upgrade their skill sets significantly. Companies, managers or employees who don’t join the early adopters or innovate their talents to fit with the emerging curve may fall short of achieving digital growth. In an earlier study done in 2016, they found that 16 per cent of board directors had come to terms with the fact that industry dynamics were shifting. The pandemic has all but confirmed which direction most industries would need to flock to: digitalisation. The pace and scale of digital disruption – with all its risks of unem- ployment and growing income inequality – are as much a social and 18 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

and training in how to use it, it should definitely be possible to convince the more resilient board members about how easy – and fun – it can be to use modern digital tools. This will be for their own usage, as well as collaboration with other board members or stakeholders.” It's not difficult to see why a rising call to increase age diversity within boards has been more evident as of late. Currently, the “This is also about having average age of directors is still over 60, and it’s the right board members. widely acknowledged We see younger generations that this has led to a digital knowledge entering the board rooms, gap rampant in the and we also clearly see that workforce. A radical change in the way political challenge as a busi- digital tools add significant we approach digital- ness one. One can no longer value both to the board isation must occur simply turn a blind eye and members and the company if organisations are pretend to not see something they represent” to hold their own against the changing tides of the industry so transformative unfolding and Møyfrid Øygard, moving at breakneck changing the very fabric of working CEO of Admincontrol speed. The introduction society. The best option for compa- of disruptive thinking and nies right now is to plant themselves at the encouragement of an open the vanguard of change and be among the dialogue on challenging the status first few to make a positive societal impact, where quo wouldn’t hurt, either. they can then reap the greatest benefit after successfully transforming the A GAP-LESS, GENERATION-LESS workforce in the required way. FUTURE OF WORK “This is also about having the right board members. We see younger generations entering the board rooms, and we also clearly see that digital Digitalisation knows no age bounda- tools add significant value both to the board members and the company ries. There are still only a few boards they represent,” explains Møyfrid Øygard, CEO of the leading Board Portal with enough combined digital exper- provider in the Nordic region. “With a proper introduction of a digital tool, tise to have truly meaningful digital www.europeanbusinessreview.com 19

FUTURE SERIES Going digital is no longer optional today. If you want to serve as an effective thought partner, boards must move beyond an arms- length working relationship conversations with senior management. The solu- with digital issues and tion to this particular dilemma is simple: it’s not put in the work towards about recruiting people who are younger or older, but simply making any of them digitally literate. understanding how to better Technology can be so far-reaching that the knowl- leverage technology. edge and experience needed goes beyond one or two tech-savvy people from both spectrums. It’s not enough to recruit one or two new directors and hope their combined knowledge endures throughout all these changes. Recognising that a digital knowledge gap exists between generations is only half the process of working towards destigmatising it, and hopefully finding meeting model long after the pandemic has a meaningful workaround that supports both parties. If you want died down. Data from Tricor Group implies to serve as an effective thought partner, boards must move beyond that going hybrid results in meetings that an arms-length working relationship with digital issues and put in are 30 per cent shorter, but with a significant the work towards understanding how to better leverage technology. increase in efficiency. It goes without saying that, while in-person meetings are still important, they aren’t regarded as the only option nowadays. STREAMLINING AND DIGITALISING BOARD WORK THE ACCELERATION OF DIGITAL COMPETENCY In a study done by HBR, the proportion of virtual board meetings pre-pandemic stood at 5 per cent. The number has since skyrocketed to Any successful integration into digitalisation a staggering 95 per cent, with a promise of half of them pursuing a hybrid wouldn’t be possible without first attaining digital competency. The lack of digital savvy and training around the impact of emerging digital tools, technologies, and business models can be a major hindrance to its assimilation. The pandemic has also increased the need for these skills at the board level. In the company's latest e-book, 3 steps to accelerating digital literacy in the boardroom, Øygard refers to “using a purpose built board portal so they can be more efficient, have better control and work in a secure envi- ronment if they manage to avoid sending emails to each other.” Now more than ever, companies need board directors who are digitally competent and understand the new technologies that are impacting business decisions. And that means both recruiting the right directors, and investing in continuous education for existing directors. 20 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

to feelings of frustration and alienation, as employees are unable to focus on a dry meeting within a virtual space. A fully functional crew either remotely managed or relying on digital governance is a collaborative effort from everyone; organisa- tions, teams, and non-profits will need to establish a Technology can be so digital governance team far-reaching – think if they are going to e-commerce, mobile, operate in the digital security, the Internet of space. This taskforce must be composed Things (IoT), of individuals and big data – that the who understand knowledge and experience technology, its benefits, and its risks. “I also think it is very relevant to needed goes beyond one or FINE-TUNE open up for feedback from all levels in two tech-savvy people ONBOARDING the organisation that a Board represents, from both spectrums. OF DIGITAL DIRECTORS since there are normally many clever minds In theory, the idea of board and good ideas among the employees,” she adds. members coexisting within a digital space is exciting. It doesn’t matter if you’re being run by the private ESTABLISHING A DIGITAL or public sector, being able to convene regardless of where you’re GOVERNANCE TEAM located in the world as a board member automatically removes the burden of being present in person. It emboldens organisations to tap into talent anywhere in the world, snipping that invisible thread of Adapting to the digital age requires more than propriety that has hitherto prevented organisations from branching just the participation of employees, but for organ- out due to geographical limitations. Businesses, teams, and profits isations to arm themselves with new capabilities. can leverage new technologies to streamline their organisation’s This may require going out of their comfort zone, processes and improve on their communication. or trying new things they’re not so familiar In an attempt to diversify or enrich ranks with tech talent, boards with. If properly done, digital meetings can may lean towards younger digital directors who have grown up be productive, efficient, and convenient. If with different organisational customs and may not hold the same improperly managed, board meetings can lead board experience prior to their appointment. The simple solution to remember is not just to diversify the talent pool. It needs to be made so that the executive talent search process is not limited to background and skills, but takes into serious consideration a candidate's temper- ament and ability to commit time. The latter is critical when board members are increasingly devoting two to three days a month of work, plus extra hours, to conference calls, retreats, and other check-ins. This onboarding process is crucial when it comes to bridging the digital-traditional gap. The induction of these digital directors must be handled with care, as they will be the ones to propel the organisation www.europeanbusinessreview.com 21

FUTURE SERIES For most companies like Admincontrol, it goes beyond the protective firewalls and antivirus suites. It’s about nurturing an open culture of dialogue where every board member feels safe to voice their concerns about going fully digital, or stepping into a medium they might not all be that familiar with. forward and through the many more MORE THAN JUST A SAFE DIGITAL SPACE digital disruptions that may occur. What is the digital age, really? Is it about simply mitigating cyber- “You need to have the right board risks and drawing up contingency plans in the likely event they become a members who are prepared not only reality? Is this what being safe in the cloud really means? For most companies to contribute with their competence like Admincontrol, it goes beyond the protective firewalls and antivirus suites. and ability to challenge and make It’s about nurturing an open culture of dialogue where every board member smart decisions on behalf of the feels safe to voice their concerns about going fully digital, or stepping into a company they represent, but just as medium they might not all be that familiar with. The concept of security goes much have the ability to adapt to new both ways, and it doesn’t just need to exist within the ether. technology,” Øygard emphasises. “They all need to be well prepared Møyfrid believes that encouraging “transparency, good and open-minded for the board meetings and the communication, as well as ambitions, and make sure that necessary and process that runs with it. Nowadays extensive documentation is in place are of great importance” when it comes to with an increasing amount of digital, maintaining a digital board. She also stresses that shifting into this new frontier as well as hybrid, meetings, it is also of work “demands strong communication and collaboration skills among the crucial to have the tools that provide leaders and the board of a company, as well as trust; these are all skills that are the necessary level of security, as of great importance if you want to empower decision-making.” well as offer better control of the documentation and efficiency to the As a final note, she observes: “The ability and will to improve, renew and board processes.” change when necessary is also crucial, and you should be prepared to be up to speed with your surroundings if you want to avoid falling behind – also in the decision-making and how this affects your business.” You can learn more about Admincontrol and their solution modern board work here. Admincontrol’s mission is to provide the ultimate solution for decision-makers. The company offers a smart and secure collaboration platform for boards, management and other stakeholders, where they can access, share, discuss and process information efficiently. Admincontrol has over 115,000 active users worldwide. 22 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022



ACCELERATOR SERIES When a black swan event, an unexpected occurrence that has a substantial impact on society and business, happens, businesses typically retrench, cut investment, freeze hiring and look to ride out the storm. However, for some businesses this is the wrong strategy. Counter-intuitively investing, restructuring and building for the future can be far more productive, delivering accelerated development and a transformed and rejuvenated business. DON’T FEAR THE BLACK SWAN, TAKE IT AS AN OPPORTUNITY TO SOAR by Kevin Peters, The COVID-19 pandemic provided exactly this President and CEO, situation, with the whole world hitting pause in NetNumber early 2020. Many companies assured their survival by furloughing workers, pausing investment in research and development and effectively mothballing their businesses, minimising operating costs while they wait for the business climate to stabilise. However, NetNumber, a provider of signalling control solutions that enable carriers to accelerate implementation of new services across multiple generations of networks, took the opposite approach. We identified the pandemic as an opportunity to accelerate our transformation into a cloud-based business that is better equipped to serve our telecoms-operator customers’ future needs. 24 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

We made a conscious decision to press TIME TO RETOOL AND RETHINK the accelerator rather than the brake, to neither hunker down to wait for the The leadership team had already identified future nor to maintain the status quo. Although the need to retool and rethink our offerings there was risk, there was an opportunity to take for the transforming telecoms market but was advantage of the downtime while everyone was keen to gain insights and advice from industry sequestered in their homes to do forward-look- outsiders, which is why I selected Blue Rocket to ing work. It was logical for us to double down on work with. Blue Rocket counts innovative SaaS our transformation journey. and IT companies such as Cisco, Google and We found ourselves particularly well posi- Salesforce among its customers, but it is not a tioned to maximise the opportunities. 5G and telecoms-focused organisation. This is exactly “cloudification” are trends circling our industry, what I wanted, in order that the transforma- but nobody knows when they are going to land, tion could be assessed and explored outside the so we needed to retool to be ready. We decided constraints of traditional telecoms. to take advantage of the situation to propel When you look at our leadership team, there’s ourselves forward. But the a lot of telecoms experi- bottom line is that if you We needed to transform the plat- ence, and I’m a seasoned decide to transform while telecoms industry veteran, there is chaos surrounding form, the process and the culture, so I didn’t need help with the business, you still have while keeping this tied to how the understanding traditional to keep the business afloat. industry might transform as 5G and telecoms and the trends We therefore shielded the in the market. I wanted a business from the future- greater cloud reliance continues. nimble partner that would be provocative and press facing work until it was necessary for people to us, and me in particular. engage in it. What was unique about That didn’t mean excluding our workers Blue Rocket was that they did it with us as if it from the transformation. In fact, the opposite was for their own company. happened, as our teams rallied round the trans- Our executive team worked closely with Blue formation projects. People want something to Rocket to identify which directions to take, and to attach to in challenging times and this was a define how to make the transformation a reality. challenge our employees could really engage in. It was clear that there were things that had to be In addition to being in an industry that is done and the pandemic was a good time to make changing, yet has a clearly set-out transfor- those changes, but it wasn’t a digital decision. mation journey, we were also well positioned We were still going to have to keep the old busi- at the start of the pandemic, because we had ness and, in the future, pivot to the new. To do already started our transformation, bringing in that, we needed to transform the platform, the consultancy Blue Rocket to help with both our process and the culture, while keeping this tied strategy and implementing the transformation. to how the industry might transform as 5G and Blue Rocket had been working with us to iden- greater cloud reliance continues. tify future strategic options and this head start A black swan event in executive leadership on the unexpectedly available time that resulted terms means you have to do something different; from the pandemic proved to be an enormous it’s an opportunity to change. How a company’s benefit. products are built, sold and deployed are all impacted. With the move to cloud in telecoms, www.europeanbusinessreview.com 25

ACCELERATOR SERIES it’s an opportunity to change not just software, We took a calculated risk. It’s a bet between the but to accept the new reality and to change your result of doing nothing, which could be reduced business, and we made a bold commitment. sales and slowed innovation, or the potential Blue Rocket was able to map how software- reward for doubling down. We considered all as-a-service (SaaS) companies have moved to the options, but the black swan event was an cloud and how telecoms is also moving there. It opportunity to devote resources to transfor- was clear that the industry is not ready to accept mation, and doing nothing was not an option, 100% cloud solutions yet, but greater acceptance because you can’t survive if you can’t transform of cloud is underway and therefore hybrid cloud engineering and make the business more agile. solutions are needed. Because we were already For telecoms opera- With the move to cloud in telecoms, in flight with the transfor- tors, the mechanism is mation, we were lucky in similar but security and it’s an opportunity to change not terms of the timing setting ownership requirements just software, but to accept the new us up for success. I real- are different, because reality and to change your business, ised we had both the time operators work in regu- and the opportunity to go lated environments and and we made a bold commitment. forward. One of the challenges have a high-availability, high customer service for us is that our old mode mentality. Telecoms is a different animal, so of operation needs to be in place as we shift to the challenge was to find a way to build software the new. We are very aware that the arrival of that could be deployed anywhere, including in 5G, software-oriented networks and increased the cloud. virtualisation within telecoms are not overnight 26 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

sensations and it will take years for these We’ve benefited on the sales side, and also by dynamics to come through in their entirety. being able to get everyone across the company In addition, different operators will move at on board with the transformation, because they different paces, moving to new network tech- were involved with it on a day-to-day basis. The nologies and looking to take advantage of cloud efficiency of the organisation is amazing. opportunities when their I believe the company’s businesses and customers are During difficult times, look for overall transformation has ready. been accelerated thanks to A lot of vendors don’t want challenging and exciting work to turning a black swan event the baggage of the 3G and 4G propel you forward, because it into an opportunity. The worlds as they shift to 5G, but occupies you, advances you and alternative would have been we’re happy to move at the to come out of the pandemic pace customers want to. We is better for your customers. Be still retooling and still trying have pulled forward some of bold during tumultuous times. to formulate the company’s the older technologies into future state. Instead, we’ve the new capabilities we have. tried to do things to the 4G customers are going to be around for a while, benefit of customers by getting people to engage because large investments and deployments by and be productive. It has been a win-win situa- carriers don’t happen overnight. tion and I’m very proud of how NetNumber as a team has responded. OUTCOMES LESSONS SHARED The prime outcome of this work has been During difficult times, look for challenging and that our new TITAN.IUM framework is more exciting work to propel you forward, because it technologically advanced and able to support occupies you, advances you and is better for your 5G. It is the cloud-native companion to our customers. Be bold during tumultuous times. I’d TITAN product. like to say I knew this ahead of time but I didn’t; it is something I have learned during this latest A second result has been that we’ve trans- black swan event and it has been particularly formed our development approach. We’ve good to collaborate with Blue Rocket, because transformed our engineering teams into an they engaged full-throttle alongside our team. Agile shop at what I think is an unheard-of rate. We were both focused on what we’re doing and And, we’re delivering large, packaged software the outcomes have been highly positive. on time and on a consistent basis at a much faster level than we’re used to, so it’s a home run To read my expanded white paper, please visit on the engineering side of the business. www.netnumber.com. ABOUT THE AUTHOR Kevin Peters joined NetNumber, Inc. as President and Chief Executive Officer on February 1, 2018. He had been a member of the company’s board of directors since June 2016. Peters brings to NetNumber a wealth of leadership experience gained over the course of a 28-year career with AT&T, as well as broad industry and executive advisory experience across the global technology and telecom industries. Peters retired from AT&T in 2014 as the executive vice president of global business customer service, in which he led the company’s multinational customer service operation. www.europeanbusinessreview.com 27

Digital collaboration & document sharing Board work and due diligence Through our cloud-based solution, users can efficiently access, share, discuss and act on business-critical information. admincontrol.com

STRATEGIC SPOTLIGHT THE EIGHT ENABLERS OF A TRANSFORMATIONAL CULTURE by David Liddle CEO of transformational culture consultancy The TCM Group Culture is the greatest asset, or the greatest liability, an organisation has. Yet in many companies it is barely talked about and is the only asset, or liability, that no one has direct ownership of. It is widely misunderstood, routinely ignored, yet a potential source of riches when managed well. Agood company culture engenders trust, increasingly vocal and demanding employees, respect and engagement, and allows em- customers and stakeholders, to responding to ployees to be the best-possible versions global pressure to tackle the climate emergency of themselves. It creates a safe and healthy and social injustice. working environment and ensures that cus- tomers, investors and stakeholders are on the Today’s uncertain and constantly changing receiving end of the best-possible service and times call for transformational cultures – in outcomes. When cultures go wrong, however, other words, organisational cultures which are they can become a liability. They can be sti- fair, just, inclusive, sustainable and high-per- fling, toxic, dysfunctional, destructive, divisive, forming, and where the success of the employees fear-inducing and unsafe places to work in, or and that of the customers and stakeholders are do business with. inextricably linked. What \"good\" looks like will, of course, differ But what does a transformational culture look from business to business, but whatever the like, and what are the key elements that organisa- sector or circumstances, getting culture right tions need to focus on if they are to develop one? has never been more important. Organisations In my book Transformational Culture: Develop a are under unprecedented strain – from tackling people-centred organization for improved perfor- the challenges of COVID-19 and dealing with mance, I describe a powerful organisational change model, which is set out on Figure 1. www.europeanbusinessreview.com 29

STRATEGIC SPOTLIGHT 1 The Transformational Culture Model is a blend 1. Values First of interconnected elements which span an Values are the golden thread that runs through organisation’s entire ecosystem. It can be used an organisation. They bind a Transformational to support the process of designing, imple- Culture together by aligning an organisation’s menting and sustaining the changes which will purpose and strategy with its agreed behaviours lead to a fair, just, inclusive, sustainable and and overall customer and employee experience. high-performance culture. The application The values of your organisation are perhaps one of the model is supported through enhanced of its most valuable commodities and should be people processes, management systems and leadership strategies and behaviours. While 2carefully developed, designed and integrated offering a cultural framework, it is not prescrip- tive. The model is designed to adapt and flex to across the fabric of the business. meet the organisation’s unique sector, maturity, context, geography, needs and circumstances. 2. Evidence-based The use of data and evidence to inform a The following eight enablers are the central programme of cultural change is central to its part of the Transformational Culture Model success. Without the evidence base and data to and are the key areas that organisations need to help planning, it is like embarking on a journey focus on if they want to see a real difference. in the dead of night, in someone else’s car, not The values of your organisation are 3knowing where you are going, without a map perhaps one of its most valuable commodities and should be carefully and with a phone you forgot to charge! developed, designed and integrated across the fabric of the business. 3. The people and culture function This is a watershed moment for HR. HR poli- FIGURE 1 cies and procedures which once seemed solid The Transformational Culture ModelTM 30 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

are now being shown to be damaging. The HR held accountable for the choices they make. profession is perhaps one of the most trans- Leaders need courage to trust their people, listen formative within the organisation, so HR needs to them and empower them to be brilliant, irre- to quickly adapt to the new reality, rejecting spective of their background, beliefs, heritage the dogmas which have acted as a drag on its potential for too many years. This involves 5or personal circumstances. At the same time, 4HR transforming into the people and culture they need courage to respond with compassion, function, with potential to be one of the most listen and lead with values. strategically important functions in the modern organisation. 5. The Resolution Framework A Transformational Culture requires leaders, 4. Leadership and management managers and HR to eliminate their reliance The way in which a leader or manager behaves on traditional retributive-justice orthodoxies is perhaps the single biggest factor affecting (blame, shame and punish) and embrace a organisational culture, leaving unwritten new and exciting form of justice: transforma- cues and clues for the rest of the workforce. A tional justice. This brings together procedural Transformational Culture offers leaders a new justice (concerned with due process) and restor- set of cultural norms within which they can be ative justice (concerned with reducing harm, promoting dialogue and encouraging learning). A Transformational Culture offers The Resolution Framework replaces an organ- leaders a new set of cultural norms isation’s retributive-justice systems, including within which they can be held performance, discipline and grievance proce- accountable for the choices they dures, with a single, fully integrated structure make. for handling and resolving concerns, conduct, 6complaint and conflicts. Importantly, the frame- work is values-based and person-centred, with dialogue at the heart. 6. Well-being, engagement and inclusion These three huge concepts are so interconnected that, in my view, they should be considered as a single discipline. They are essential to overall employee experience (EX) and, as a result, hold the key to great customer experience (CX). To have a healthy workplace, we do not need ever-more-extravagant initiatives. We need to listen, be compassionate, have empathy, engage, 7understand and resolve. 7. Sustainability and social justice These two imperatives will become the defining characteristics of the 21st century and their impact on company culture must not be www.europeanbusinessreview.com 31

STRATEGIC SPOTLIGHT To have a healthy work- place, we do not need ever-more-extravagant initiatives. We need to listen, be compassionate, have empathy, engage, understand and resolve. 8underestimated. Widespread reorientation of culture is lived, it can quickly help stakeholders the employee relationship with the employer to form an opinion about the overall behaviours, and society at large is profoundly changing competencies and values of an organisation – company culture. CSR statements are no longer and therefore the degree of trust and repute in sufficient. The successful organisations of the which it is held. future will make sustainability and social justice a core focus. As our organisations strive to build back better, the cultural orthodoxies of yesterday will not be 8. Brand, Reputation and risk sufficient to resolve the challenges of tomorrow. Open any newsfeed and it is plain to see that Adopting a transformational culture will shape the culture of our organisations and the behav- the future of the organisation and will accel- iour of leaders can have a significant impact erate its growth, ensuring that it is able to on the reputation of companies, with careers attract the top talent, the top investors and the being ended in a blaze of media interest! Once a top customers. The Transformational Culture Model and the eight enablers of a transforma- ABOUT THE AUTHOR tional culture offer a flexible blueprint for a modern and progressive organisation. But for David Liddle is CEO of transformational culture it to deliver maximum and sustained impact, consultancy The TCM Group and author of the the model requires fresh thinking and, above Kogan Page book Transformational Culture: all, courage – on the part of our executives, Develop a People-Centred Organization for managers, HR professionals, unions and other Improved Performance. key stakeholders. 32 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

www.europeanbusinessreview.com 65

LEADING IN THE POST-C VID WORLD BREAKING DOWN BUSINESS RESILIENCE, POST-PANDEMIC The data reveal surprises—and a blueprint for moving forward. By Jacques Bughin and Francis Hintermann The global pandemic, in addition to generating massive harm to people’s health and communities, split the business world in two. Many companies soared to new heights; others struggled against forces well out of their control. 34 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

A superficial reading of markets might When we examined the other 3,755 compa- suggest that it was often a matter of be- nies, we saw that for many, the road to recovery ing in the right place at the right time. from such a big pandemic hit is not an easy or Of course, such reasoning goes, if you were in quick one: 78%, as of the end of 2020, said they health or life sciences, or digital products and did not foresee a return to their pre-crisis profit- services, you were on the right path to higher ability before April of this year (or one year after growth and profitability. covid-19 hit), and 70% believed that this would It’s not that simple. True, some companies still be true in September 2021, even if vaccina- charged into the opening created by the new envi- tions provide more room for recovery. ronment, providing home delivery of food and Looking at the mirror, predictions may have other goods; enabling people been overly cautious. After all, to work from home and find What those crises have also managers were surprised at new entertainment choices; or, the extent of the shock induced yes, developing a vaccine that taught us, is that the most by the pandemic. GDP activity would take down Covid. When complex challenge is recov- dropped more than in other we tried to figure out with our ering from the missed growth previous crises; US bankruptcy own research ( see end of text, filing increased by 200% for “about the research”), those busi- opportunities during the large corporations, and espe- nesses were a small subset: in collapse; in effect, the finan- cially it affected virtually all our sample of 4,100 companies cial crisis has only closed the firms worldwide in contrast to of the largest companies around other recent pandemics like the world, they represented just activity gap after 10 years. H1N1 that were more regional, and died out faster than covid. above 5% of the total. But when we match those predictions with the S&P 500 earnings evolution, BIG PANDEMIC HIT, BIG expectations were actually in the right blue- CONSEQUENCE park. US S&P earning for instance just delivered same level as pre-covid by June 2021, in line with the surveyed US firm executives who were What does the data tell us about the rest? This is anticipating recovery just a few months later a rather critical question as great companies are by sept 2021. Also, this prediction is not at odds not only those which can boost shareholder value; with other major economic crises, -such as the they are also those which have learned to last and 2000 internet bubble burst, or the 2008 finan- rebound forward from major turbulences. cial sub-prime collapse-, which have revealed www.europeanbusinessreview.com 35

LEADING IN THE POST-C VID WORLD that matching the same profitability takes time- UNCOVERING THE INGREDIENTS around 18-24 months. OF RESILIENCE What those crises have also taught us, is Evidently, the distribution of recovery is likely that the most complex challenge is recovering to span over the three scenarios, and the main from the missed growth opportunities during message is the likely important bifurcation the collapse; in effect, the financial crisis has between the have (rebounded) and the have not. only closed the activity gap after 10 years. In How can then one firm avoid to be on the wrong the covid case, while many firms—almost half— side of the bifurcation? were performing solidly before the pandemic, generating on average close to $1 billion of oper- A common theme of those able to reboot ating profit a year, the pandemic wiped out the and boost operating profit is that they are same amount of profit in only a matter of six not necessarily laggards in terms of “twin months into the pandemic. And the key issue transformation,” that is the ability to engage is how covid-19 has built a profit bifurcation in both digital transformation and sustaina- between the 30% recovered and the other 70% bility practices (Accenture research). Another of firms. commonality is one of organizational (i.e. A common theme of those able to reboot and boost oper- ating profit is that they are not necessarily laggards in terms of “twin transformation,” that is the ability to engage in both digital transformation and sustainability practices For those performing firms, going back to the same level of profit, (as the S&P 500 earnings have shown), has taken about 1,5 years. Those companies,- typically of smaller size, pinpointing to size reducing agility and resilience- expressed confidence that, absent a third wave of the pandemic, they would surpass pre-Covid levels of profit by end 2021, -catching up on the same long-term trajectory growth of the path, with profit growing at about 10% a year. But contrast this with the other 70%. The typical company stated that it will be barely reaching the bottom after 1,5 years—in the most optimistic case that the rebound has just been shifted, the company might be back on the same pre-covid trajectory by the last months of 2022; in a more probable case that the full recovery cycle will be delayed, the pre-covid trajectory may only be back by end of 2023. The worst case is that it may take up to after 2025, if one extrapolates the recovery based on the glimpse of expectations for the end of 2021. 36 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

their ability to reshuffle resources) and technical Second, another 36% in our analysis focused on (i.e, faster speed to actions) agility. Otherwise stated: generating disruptive innovations. Remarkably, a fast metabolic rate of shifting course is paramount more than half of this group of companies to resilience. suffered from performance below peers pre-covid. Rather than “let the crisis go to waste,” Besides these two common themes, we also found they significantly invested while others were two other factors that play a significant role, although retrenching and plan to further continue their with different weights for each company. The first theme investment to support their pivot to possibly is the perennial theme of innovativeness—firms that non-incremental growth areas. Industrial company have the ability to be innovative, preferably in a disrup- Honeywell is one example: at the outset, it tive way, and activate the capabilities to develop new worked quickly to produce tens of millions of N95 products and markets, often have been the long-term masks for frontline workers. Later, it introduced winners out of crisis. The same seems to play out for this an ultraviolet treatment system so that airlines pandemic. The second but new theme, is the ability to could quickly and effectively disinfect air cabins. compete through ecosystem plays. From the Amazon It also has developed products aimed at creating e-commerce marketplace to the Lego Ideas platform, healthy buildings, using technology to measure ecosystems are loose networks of multiple companies and improve indoor air quality and filtration. that complement each other to provide a new form of offering- while not new, ecosystems have come out of Third, 21% of companies in our sample, often found age, especially with the development of digital technolo- in the tech sector and manufacturing, aggressively gies, that make ecosystems more easy to scale. A fortiori, boosted their ecosystem play as a way to increase ecosystem makes a more agile way to evolve when major their profit. Those companies often use their turbulence such as a pandemic occurs. role as orchestrator platforms to shape their momentum. A classic example at the intersection FOUR CORPORATE PATHS of tech and automotive is the mobility platform. Companies such as GoTo Global or GreenCar have Given the four ingredients (innovation, ecosystem play, seen major increases in users and trips and have twin transformation, and agility), they might also be significantly beaten their goals of revenue growth different ways to combine and manage for resilience. and profitability. Most of those mobility platforms Our research has found four statistically distinct clus- reconfigured their trip offerings for grocery delivery ters of resilient companies. and will now expand this opportunity. First, “right time, right place” does explain just above A fourth group of 30% of companies is possibly 13% of companies on the profitable side of this the most interesting of all. They are fully loaded: equation. This includes a large part of companies rather than pick a path, this group is not choosing that often operate in consumer and health-life between ecosystem and innovation: it does science services—and managed to benefit from the both. Such companies are not laggards in twin right tailwind out of the pandemic. Another type of transformation and in agility, but rather, they companies appears to be pushing more than luck – push the frontier to excel at both. And our data they are leveraging ecosystem partnerships for their also show that those companies have found acceleration. A company like BioNTech, building on many synergies in the combination of agility, its investments in technology and mRNA expertise innovation, ecosystem, and twin transformation. over the previous decade, partnered with Pfizer to Schneider Electric’s ecosystem activities create the first mRNA Covid vaccine, and then rapidly related to twin transformation are telling. The retooled its production process and retrained staff at company has set up and is coordinating multiple its facilities to produce millions of vaccines. digital business ecosystems with the joint aim www.europeanbusinessreview.com 37

LEADING IN THE POST-C VID WORLD of better business performance and positive environmental impact. The Schneider Electric Exchange, launched less than two years ago (at Hannover Messe 2019), is core to its overall business strategy. It aims to deliver benefits to all stakeholders driving worldwide economies of scale for IoT solutions. Schneider is using published datasets and SaaS from the Schneider Electric Exchange partner Senseye, a technology company in predictive maintenance (UK), in one of its Smart Factory manufacturing plants, Le Vaudreuil. Likewise, Schneider is co-innovating a digital energy forecasting service offer for retail with the company Predictive Layer. It has also joined forces with Danfoss, and Somfy to create the Connectivity Ecosystem that will boost the adoption of connectivity technologies in the home for better and more sustainable living and working experiences for people. WHAT’S RIGHT FOR YOUR brings, a higher payoff than the others, in the range by end of 2021 COMPANY? of 5 extra more points of profit rate, or a few hundreds million added to the bottom-line. Yet, one word of caution: this is, by Clearly, the first thing a manager must recog- design, a complex play and require that capabilities to succeed nize is that the effect of sudden crises can be have long been established as routines. Indeed, this play is done such that every company may have to develop 50% more often by companies that had acquired those capabil- enough organizational ability to ensure they can ities before the crisis. Hence, each company must take the step quickly reallocate resources. The game is more to understand where it stands in relation to the four capability and more about agility, or multiple usage of ingredients. Where are its strengths, and where are gaps? This sunk resources. Likewise, twin transformation diagnosis will help a company prioritize its cluster play. has become table stakes, and corporate can’t afford to lag behind. More than that, the execution must be done superbly, if companies are to emerge from the pandemic stronger than Second, regarding the other mix of ingredi- before. While not exhaustive, here are a few key questions. If ents, it is important to realize that each ingredient the company should decide to be leading with “twin transfor- carries a different premium according to industry mation,” ask: Are we increasingly investing to scale frontier and market context. In automotive, for example, technology? To what extent do we deploy technology to enable an emerging dominant play is the development and scale our sustainability agenda? If the focus is innovation, of a mobility ecosystem around sustainability, ask: Are we increasing investment in innovation to create for both people and goods; in utilities, the major new disruptive growth opportunities (as opposed to realizing play is more about twin transformation, as util- incremental improvements)? When ecosystem is the critical ities have been lagging digitization and are now area, ask: To what extent to can we position ourselves as major on the hot spot to pivot to much stronger sustain- players or orchestrators of ecosystems in our key markets? ability practices. Finally, in general, the synergies among all those ingre- Third, the “fully loaded” strategy observed by dients are the little secret for outsized success: digitization 30% of resilient companies suggests and indeed has facilitated the emergence of platform-based ecosystem; 38 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

innovative products have ABOUT THE RESEARCH made sustainability a prof- itable path, and agility has The research is based on questions launched online towards top management of large global been boosted by digital companies worldwide (revenue above $5 billion) by the end of 2020, including the two main protocols such as DevOps waves of the covid-19 pandemic. The sample was stratified to be representative of industry and others. The play is as mix in core countries such as US, UK, France, Germany or China. The final sample includes much about excellence in 4100 respondents (one per firm), of which 1/3 is located in Europe, as well as in the US. capabilities as in excellence A special care was made to secure a representative non-biased sample. For this aim, tests in the best capability port- of common variance have not shown any common answers bias, and survey responses folio play. were tested against aggregate key statistics. For example, about 40% of companies are not returning profit in our sample in line with World Bank that less than half of companies should be profit making from the impact of covid-19 in 2020. The S&P 500 aggregate earning just fell short of reaching the same level as made pre-covid by June 2021, while average profit recovery happens one quarter later for our global sample. By the mid-year of 2021, The sample reveals that managers from industries such as utilities and natural resources, or automotive and transport were not expecting to be in full recovery mode, as opposed to respondents from industries with favourable tail-winds include food retail, software, and pharmaceuticals. This picture follows the same industry pattern as in other industry research. For additional test of sample representativeness, see Bughin et al. (2021). The analysis from which this research is based on is also unique in scope, and uses some of the most sophisticated data techniques available to date. The model on how corporate capabilities affect corporate revenue and profit dynamics, either directly or through amplification responses by firms during the pandemic has been identified thanks to a meta- analysis of the academic and management literature. The resilience drivers as well as the segmentation of resilient firms in the text comes from applying advanced machine learning techniques such as Random Forest and statistical clustering. Random Forest resilience prediction accuracy was more than 80%, and higher than prediction based on traditional regression techniques. Using parametric technique, each resilient driver and each factor within a cluster is statistically significant, with more than a 99/100 chance of being accurate. Finally, the base line model was tested for robustness on multiple dimensions, -industry versus all sample, profit recovery distribution shifted by +/-10%, removal of top 5% outliers, etc. Results remain qualitatively the same. ACKNOWLEDGEMENT We thank Yuhui Xiong and Sybille Berjoan from Accenture Research for excellent research lead underpinning this article. ABOUT THE AUTHORS Jacques Bughin is a professor of Francis Hintermann is Management, Chaire Gillet of Management Global Managing Director Practice, at the Solvay Brussels School of of Accenture Research. Economics and Management at Université Accenture Research is an libre de Bruxelles (ULB), and among others, Accenture’s entity which a former Director of McKinsey and of the McKinsey Global identifies and anticipates game changing busi- Institute. He advises Antler and Fortino Capital, two major ness, market and technology trends through VC/PE firms, and serves on the Board of multiple companies. thought leadership & Strategic Research. www.europeanbusinessreview.com 39

SUSTAINABILITY Environmental, social, and governance (ESG) issues have been around for many years under a variety of different names (e.g., sustainability, etc.). Until recently, ESG was often considered to be a public relations function, as corporations sought to enhance their reputations by serving as good corporate citizens, mostly through environmental or social causes. But consideration of ESG as a set of compliance issues is a more recent development fueled by several circumstances. THE CYCLE OF ESG AND COMPLIANCE by Gerry Zack Chief Executive Officer Society of Corporate Compliance and Ethics® (SCCE) & Health Care Compliance Association® (HCCA) 40 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

Traditionally, the compliance, or compliance defined to also include other non-statutory require- and ethics, function has been thought of as ments, the profession has evolved to a point that a one that focuses on preventing, finding, and consistent framework can be applied to successfully fixing problems stemming from violations of laws manage these compliance risks. This framework, and regulations. In some cases, the scope is narrower, when properly applied, can be very effective at dealing only with specific areas of the law, like cor- managing compliance risks and contribute to the ruption or antitrust. In oth- value that an organiza- ers, a program may address tion strives to achieve. a wide array of applicable What started out as goals that an At the same time laws. Either way, the focus is organization would voluntarily that the compliance and on laws and regulations that ethics profession was an organization is required to announce, became expectations evolving and maturing, comply with as a result of the and commitments to which external the field of ESG was nature of business it is in. stakeholders would hold them. ESG going through its own maturation, and astute Compliance and ethics programs also sometimes became much more than a public companies were recog- address other requirements relations function. There could be nizing its importance that come along as condi- real consequences for failures. and value. Suddenly, tions of engaging in certain what started out as types of activities—condi- goals that an organiza- tions that don’t emanate tion would voluntarily from laws or regulations. For example, compliance announce, became expectations and commitments with provisions of contracts or with professional, to which external stakeholders would hold them. ESG but non-statutory, standards that may apply to parts became much more than a public relations function. of its operations. Conflicts of interest is another There could be real consequences for failures. area commonly addressed in compliance and ethics It’s no coincidence that this development coin- programs, even when they are not considered to cided with the increased level of collaboration violate any laws. between ESG and compliance functions. Most Regardless of whether the scope of a compliance often, ESG remains a separate function, but it and ethics program is defined narrowly to address works closely with or at least consults with compli- only certain laws and regulations or more broadly ance. In some cases, ESG and compliance are part www.europeanbusinessreview.com 41

SUSTAINABILITY of the same team. And in other cases, compliance strength and value of the compliance team is in actually is in charge of ESG. taking that expertise, disseminating it, and ensuring There isn’t really a universally correct or incor- that there are proper processes in place to effectively rect way of structuring the relationship between manage the risk. To use the example of anti-corrup- ESG and compliance. Several models can work well. tion law, the compliance team’s focus is on ensuring However, application of the that the requirements of the same framework that compli- UK Bribery Act and other ance has developed and used The people who are in the ESG applicable laws are under- to manage compliance risk department possess the technical stood by the business unit makes a lot of sense. For many expertise on each ESG risk that and there is a framework of years, compliance has utilized the organization has. But the adequate controls in place to a framework involving the compliance team possesses the help prevent and catch any performance of a risk assess- wrongdoing. ment, development of policies This same logic often and procedures, training requisite skills and knowledge applies to ESG risks. The and communications, moni- for applying the compliance people who are in the ESG toring and auditing, creation framework to these ESG risks. department possess the tech- of a culture of compliance nical expertise on each ESG awareness, and utilization Thus, collaboration makes sense. risk that the organization of a governance structure has. But the compliance to manage risk. These same team possesses the requi- elements, when applied site skills and knowledge appropriately to ESG risks, can result in a similar for applying the compliance framework to these level of effectiveness. ESG risks. Thus, collaboration makes sense. And The compliance team is not always subject this trend towards varying levels of collaboration matter experts on every last detail of the underlying between ESG and compliance will continue and compliance requirements. That expertise is likely most certainly increase. found in the legal department, or in some cases the The next steps in the evolution of ESG and compli- business unit, in which the risk is prevalent. The ance will likely see a continuance and increased pace 42 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

of some of the developments we have seen in recent deceptive marketing practices, mostly involving years. Two such developments, in particular, warrant dubious or outright false claims about ESG-related the attention of organizations. achievements. For example, in 2020, the Advertising First, many aspects of ESG will become required Standards Authority found that Ryanair violated by law. ESG goals usually begin with organizations the United Kingdom Code of Non-broadcast desiring to abide by an expectation that goes above Advertising, Sales Promotion and Direct Marketing and beyond what the law requires. But, governments, with its advertising claims about CO2 emissions. seeing what organizations are capable of and the Other cases, such as the September 2021 cases benefits to society that can be achieved, have begun brought by a German environmental organization putting some of these same expectations into the law. against BMW and Mercedes-Benz AG, focus on basic What began as a voluntary commitment to certain human rights—in this case a fundamental right that citi- goals become law. A good zens have to climate protection example of this is the law which is infringed upon when a passed in 2021 in Germany Whether it’s environmental, company falls short of agreed- requiring many companies social, or governance issues, the upon carbon goals. to incorporate human rights Whether it’s environ- and environmental consider- direct financial and non-financial mental, social, or governance ations into the due diligence risks that companies are exposed issues, the direct financial within their supply chains. to is likely to continue increasing. and non-financial risks that This is something that some companies are exposed to is companies had already likely to continue increasing. begun doing as part of their And these risks will exist not ESG commitments, and now it has become law. The only with respect to the direct activities carried out German law is one of several that have done similar by companies, but also as a result of their relation- things and this trend will continue. ships with suppliers and other third parties. No The other trend that is likely to continue is liti- approach to managing these risks is better suited gation aimed at companies associated with ESG for the job than the well-established compliance issues. Some of these cases are consumer protec- framework that has been successfully applied by so tion actions taken by governments focused on many organizations. ABOUT THE AUTHOR Gerry Zack is the CEO of Society of Corporate Compliance and Ethics® (SCCE) & Health Care Compliance Association® (HCCA). He leads the global strategy and activities of SCCE & HCCA and its 18,500 members across 100 countries. He has more than 35 years of experience providing preventive, detective, and investigative services involving fraud, corruption, and compliance matters. He has worked in more than 25 countries with businesses of all sizes and in many industries, as well as with nonprofit and nongovernmental organizations and government agencies. Prior to joining SCCE & HCCA in 2017, Gerry held positions with global accounting and consulting firms and founded his own forensic investigations and advisory firm. He also served as global chair of the Board of Regents of the Association of Certified Fraud Examiners. www.europeanbusinessreview.com 43

LEADERSHIP At the close of COP26, an article in the Financial Times reported that although global executives welcomed the deal reached at the close of the UN summit, many felt that it didn't go far enough. Indeed, the article continued, business leaders pointed out that some companies are showing greater urgency than governments when it comes to global warming. The fact that there was a significant CEO presence at COP26 underlines recent research conducted at Hult, which shows that a new type of business leader is beginning to emerge. NEW LEADERSHIP FOR A SUSTAINABLE FUTURE The research, which involved interviews by Matt get involved would be a distraction, would lack with CEOs at the forefront of this trend, Gitsham legitimacy and would end up adding cost to the suggests that many of today's business bottom line. leaders have come to recognise they need a dif- ferent mindset and skillset to their predecessors. But in today’s world, many business leaders have come to realize they need a different A NEW LEADERSHIP ROLE mindset to be successful. They need to see addressing societal and sustainability chal- A generation ago, a leader’s role was to keep lenges as at the heart of their job description their head down and focus on the numbers. – it is core to their job to be playing a leader- Challenges in society were the job of political ship role—alongside civil society and political and activist leaders. For business leaders to leaders—on tackling global challenges. And doing so is core to how they create and add value for their organizations, their investors, and their other stakeholders. They are leaders in society 44 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

as much as leaders of the business. Rather than A BROADER LEADERSHIP ROLE – seeing a trade-off between doing good and LEADING CHANGE AMONG making money, leaders need to aim to achieve CUSTOMERS, SUPPLIERS, COMPE- each through the other. TITORS AND POLICYMAKERS This shift in thinking about the scope of the leadership role of today’s senior executive leads But our interviews showed that senior executives to a shift in emphasis regarding the kinds of activ- are also realising they have a leadership role in the ities business leaders devote time and energy wider ecosystem around their organization. They too, both inside and outside the organization. shouldn’t just take their external environment as a given they have to respond to, but something they have a role and responsibility to actively shape, LEADING CULTURE CHANGE proactively leading change in consumer and IN ORGANISATIONS TO EMBED supplier behaviour, industry norms and govern- SUSTAINABILITY ment policy. Some are leading collaboratively with industry competitors, NGOs and government where challenges need to be tackled and only Many leadership teams have been putting action collective, systemic solutions will do. on global sustainability challenges at the heart This new horizon to their role has required of their corporate strategies. leaders to develop skill in Bringing such strategies Many leadership teams have been areas that historically have to life requires substantial not been a conventional part cultural change in organisa- putting action on global sustain- of their repertoire; contrib- tions that have been geared ability challenges at the heart of uting to public debate with toward maximising short- their corporate strategies. an informed point of view, term returns to shareholders relating well with multiple above all else. This creates a constituencies, engaging leadership requirement for in dialogue to understand helping facilitate the kind of cultural change and emphathize with groups and communities that helps all employees across an organisation with perspectives different1,0 to their own, and 0,8 0,6 0,4 0,2 0,0 put prioritising action on sustainability at the engaging in multi-stakeholder collaboration heart of their work. with unconventional partners. The chief executives we spoke to talked of Take consumer goods giant Unilever for seeing their own role in influencing change in example. Former CEO Paul Polman launched their organisations in terms of opening up Unilever’s Sustainable Living Plan in 2010, a the space for others to behave differently – ten-year strategy to double the size of the through the goals they articulated and the business by 2020 by setting targets such rationales they developed for pursuing as helping a billion people improve their them, the stories and people they cele- hygiene habits, bringing safe drinking brated, the conversations they started, water to 500 million people, doubling the the questions they asked, what they were proportion of the food portfolio meeting seen to spend their own time doing, and stringent nutrition standards, halving the which individuals and groups got recog- greenhouse gas impact of Unilever products nised and rewarded and for what. All of this across their lifecycle and sourcing 100 per cent helped create the space and safety for others in of raw materials sustainably. the organization to depart from the norm and Over the ten years of the implementation of embrace action that helped achieve sustaina- this strategy, many of these targets were met and bility goals. good progress was made on many others, and www.europeanbusinessreview.com 45

LEADERSHIP Unilever has become a benchmark for others out fossil fuel power generation – Unilever exec- to emulate. A corporate strategy with goals like utives have a leadership role to help encourage this has required leading cultural change within that government to happen. the organisation, but also leading change in consumer behaviour, leading change among It is because more and more busi- suppliers and competitors across ness leaders are embracing this new industry sectors and engaging with governments to lead kind of leadership role that we see change in policy frameworks. them turning up at COP26 and other UN summits, pushing Take the goal to halve the governments to be more greenhouse gas impact of ambitious, and criticising Unilever products across them when they are not. their lifecycle, and think about laundry detergents for 1,0 example. Part of achieving 0,8 that goal is within Unilever’s 0,6 control, through for example 0,4 reducing energy usage in the 0,2 manufacturing process of the 0,0 laundry detergent, and inno- vating in product design to bring to LEADERSHIP market detergents that work well at SELECTION AND lower washing temperatures, reducing DEVELOPMENT the carbon footprint of heating water during the consumer use phase. But consumers still But whether or not an organ- need to be influenced and persuaded to switch isation ends up with senior to washing at lower temperatures – influencing executives willing to embrace that behaviour change is part of the leadership this new kind of leadership role role senior executives must now embrace. And has tended to happen more by chance both Unilever’s own manufacturing facilities and than design. With the pressures now pushing consumers’ washing machines rely on electricity organisations to embrace the sustainability supplied through national infrastructure – for agenda, there is a need to be more deliberate in Unilever to achieve its own goal of halving carbon consciously looking for these kinds of outlooks footprint across the product lifecycle, they need and skills in recruitment and succession plan- governments to act to boost renewables and phase ning, and nurturing them through leadership development and executive education. It is time for more business leaders to step up and play their part in developing a sustain- able, responsible future for us all. REFERENCE https://www.ft.com/content/a0c01a33-fda3-4918-bead-dba61265ec48 ABOUT THE AUTHOR Matt Gitsham is Professor of Sustainable Development and Director of the Centre for Business and Sustainability, Hult International Business School (Ashridge). Matt has led numerous research projects on business and sustainable development over nearly two decades. Recent projects include exploring CEO perspectives on the implications of sustainability for business leadership, CEO lobbying for more ambitious public policy on sustainable development and the role of business in shaping the UN Sustainable Development Goals (SDGs). He has worked closely with networks including the UN Global Compact and Business in the Community, and companies including Unilever, IBM, HSBC, GSK, De Beers, Cemex and Pearson. Matt leads courses on Business and Global Society on the Hult MBA and Global Human Rights on the Hult undergraduate program. 46 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

SCCE’s 10th Annual ECEI European Compliance & Ethics Institute In-person Virtual 14–16 March 2022 22–23 March 2022 Amsterdam Get guidance and insight from today’s industry leaders and learn practical solutions you can use to mitigate risk in your organization and strengthen a global compliance and ethics program. • Anti-corruption • ESG • Investigations • Data privacy and data • Conflict of interest • Whistleblowing protection • Implementing global • Crisis management • Healthcare compliance trade compliance • Risk management Learn more corporatecompliance.org/2022ECEI

BRANDING Most managers have been enamoured by continuously focusing on resource allocation and optimization in defining the strategies of their corporations. Alarmed by the loss of efficiency, speed and flexibility, they have continuously invested significant amounts of resources and time to align their operations. However, in most cases all they have done is to focus on the immediate advantages that have brought them only some breathing time. Once the environment readjusted itself as during the pandemic, they had to fall into the trap of going back to resource optimization. To succeed, corporations need to look beyond their traditional resource based strategies and move into developing their brand, migrating into brand based strategies. This choice needs to be made right. WHEN BUILDING- A-BRAND IS STRATEGY? THE BRAND BASED VIEW by Ashok Once the brand based view is integrated as a sure-fire way to achieve brand success. The Som and and aligned with the business strategy father of RBV approach had aptly referred that, Kazuhiro we argue that it can provide sustained Asakawa competitive advantage for considerable period In the end, this discussion reminds us that of time. sustained competitive advantage cannot be created simply by evaluating environmental opportunities THE RESOURCE BASES VIEW: and threats, and then conducting businesses only in A TRADITIONAL PERSPECTIVE high-opportunity, low-threat environments. Rather, creating sustained competitive advantage depends Most focus has been on traditional means of on the unique resources and capabilities that a value creation, such as the advantages provided firm brings to competition in its environment. To through the superiority and monopolization discover these resources and capabilities, managers of resources. For many decades, the Resource must look inside their firm for valuable, rare and Based View (RBV) was the most widely used stra- costly-to-imitate resources, and then exploit these tegic approach. The tool brought an easy way to resources through their organization” Jay Barney maximize the value of the product. It was seen [AME, 1995 (9:4)] 1 48 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022

STAGES OF THE RESOURCE BASED VIEW ACTIONS NEEDED Acquire Resources Analyze the gap in the market by performing market research. Develop Competencies from Resources Define individual, standardized skill and knowledge requirements Define Core Competence (CCs) required for organizational success Outline Competitive Advan-tage acquired from CCs Isolate and preserve unique, key abilities and hone them into organi- zational strengths Ensure the delivery of greater value so as to sustainably outperform competitors The Strategy Orient strategy to tap into competitive advantage provided by the unique, rare and difficult to imitate CCs. It used to hold true during the age of close innovation and restricted organization boundaries before but with time resource depreciates, migrates, gets diluted and difficult to remain sustainable. www.europeanbusinessreview.com 49

BRANDING Following in the footsteps, strategy consulting This approach rests on internal perspective firms expanded this notion rapidly and achieved The resulting sustained competitive advantage widespread recognition. Historically, it has been transpires when a firm implements this unique observed that easily copied sources of advantage value-creating strategy. are being irreversibly eroded. The survivors are those that are harnessing their advantage by the Valuable resources however, can take a power that brand commands within the busi- variety of forms. Many of these are overlooked ness landscape. by the traditional definition of core compe- tence. These may not necessarily be physical BEYOND THE TRADITIONAL RBV resources. Some intangible resources, such as knowledge of the product from a cultural stand- Most major changes in strategy are quickly point, or technical expertise handed down from rejected. Traditionalists hold fast to established generation to generation, cannot be classified as models of strategy, sometimes only to yield luke- a conventional resource. Or, the resource could warm results. Whether intended to improve even be the firm’s organizational structure. quality, raise productivity to create a new corpo- Entry barriers are sometimes merely resource rate culture, the new is often discarded for the barriers. An example of this is acquisition of safe bets or incremental approach. And for many core suppliers into the vertical value chain. decades, the RBV was the most widely used stra- tegic approach. The tool brought an easy way to The mandate to re-invest in strategic resources maximize product value, and was seen as the path may seem obvious. Potentially, both the tangible to achieving success in a competitive environment. and intangible aspects of brand may create this value. A brand may derive its value from its The traditional resource based view sees the physical resources. Or, valuable resources may firm as a collection of unique resource and capa- emerge in the form of organizational capabili- bility pools that, if utilized in a distinctive way, ties. Competitive advantage, whatever its source, can be employed to drive competitive advantage. is ultimately attributed to the ownership of such a resource- one that allows it to outperform its competitors. Whether these resources are quanti- fiable or not is up to the strategist to define. 50 THE EUROPEAN BUSINESS REVIEW JANUARY - FEBRUARY 2022