This presentation surveys one of the longest enduring debates in investment management: active vs. passive management. Expliciting and managing expectations from pension fund trustees and investment is the sensible route to take.
Can Traditional Active Management Be Saved?Clare Levy
Active managers need to start incorporating the lessons of behavioural science if they have a chance of reversing the flow of assets into passive investment vehicles. Eric Rovick highlights some of the areas of cognitive risk evident in active investment management and provides a managerial and operational framework for addressing them.
This document discusses the importance of strategic thinking for leaders and organizations. It finds that only 23% of US executives are strong strategic thinkers, and that poor strategy was the #1 cause of bankruptcy in nearly 50% of cases studied. It then discusses three disciplines of strategic thinking: 1) generating insights, 2) focusing resources through tradeoffs, and 3) executing strategy to achieve goals. Only about 30% of managers exhibit high levels of strategic thinking. The document argues regular practice of these three disciplines can help develop strategic thinking skills.
The document discusses knowledge management and the importance of intrinsic motivation for sharing tacit knowledge. It addresses some key points:
1) Technology should be seen as the infrastructure to enable knowledge sharing, not the focus of knowledge management itself, which is about people and culture.
2) Intrinsic motivation is important for sharing tacit knowledge that is difficult to codify. Extrinsic rewards can undermine intrinsic motivation if not carefully implemented.
3) Successful knowledge management relies on motivating employees to willingly share tacit knowledge through addressing their intrinsic needs for autonomy, competence and relatedness.
4 active vs passive advisor insert funds flows dfa (advisor present) p. 1-3, ...Weydert Wealth Management
This excellent article contains three key graphics illustrating how average investors flow into and out of investments at the wrong times and contrasts this with the average DFA investor who remains much more consistent and disciplined.
Strategic thinking involves generating business insights and opportunities to create a competitive advantage. It can be done individually or collaboratively, and involves considering different perspectives on critical issues. Strategic thinking is defined as a cognitive process that produces thought for achieving success, whereas strategic planning is a separate but related process that realizes strategies through integration back into the business. Key attributes of strategic thinkers include having a systems perspective, being intent-focused, thinking in time about past, present and future, being hypothesis-driven, and demonstrating intelligent opportunism.
This magazine article discusses various topics covered in the June 19, 2014 issue:
1) It discusses how different active investment strategies can be tailored to match different client personalities and risk tolerances.
2) It profiles investment advisor Carla Zevnik-Seufzer who emphasizes understanding each client's values and risk profile to develop customized plans using various active management approaches.
3) The article also briefly summarizes other pieces in the issue on rising oil prices and their potential economic impact, and how relying on outdated asset allocation models may not adequately address today's investment environment.
LP_Perspective_ on Emerging Managers_ReportTres Moore
We investigate this document which examines limited partners (LPs) that have invested in private equity funds managed by diverse general partners (GPs) such as women, minorities, and recent immigrants. The study uses two approaches: 1) A survey of National Association of Investment Company funds to identify LPs that have invested in diverse GPs over time. 2) Interviews with LPs to understand their experiences and perspectives. The findings provide insight into who the LPs are that invest in diverse GPs and why, as well as volatility in year-to-year capital flows. LPs expressed that investing in diverse GPs helps achieve true portfolio diversification and avoid herd behavior among larger firms. They view it as part of their fiduc
This presentation surveys one of the longest enduring debates in investment management: active vs. passive management. Expliciting and managing expectations from pension fund trustees and investment is the sensible route to take.
Can Traditional Active Management Be Saved?Clare Levy
Active managers need to start incorporating the lessons of behavioural science if they have a chance of reversing the flow of assets into passive investment vehicles. Eric Rovick highlights some of the areas of cognitive risk evident in active investment management and provides a managerial and operational framework for addressing them.
This document discusses the importance of strategic thinking for leaders and organizations. It finds that only 23% of US executives are strong strategic thinkers, and that poor strategy was the #1 cause of bankruptcy in nearly 50% of cases studied. It then discusses three disciplines of strategic thinking: 1) generating insights, 2) focusing resources through tradeoffs, and 3) executing strategy to achieve goals. Only about 30% of managers exhibit high levels of strategic thinking. The document argues regular practice of these three disciplines can help develop strategic thinking skills.
The document discusses knowledge management and the importance of intrinsic motivation for sharing tacit knowledge. It addresses some key points:
1) Technology should be seen as the infrastructure to enable knowledge sharing, not the focus of knowledge management itself, which is about people and culture.
2) Intrinsic motivation is important for sharing tacit knowledge that is difficult to codify. Extrinsic rewards can undermine intrinsic motivation if not carefully implemented.
3) Successful knowledge management relies on motivating employees to willingly share tacit knowledge through addressing their intrinsic needs for autonomy, competence and relatedness.
4 active vs passive advisor insert funds flows dfa (advisor present) p. 1-3, ...Weydert Wealth Management
This excellent article contains three key graphics illustrating how average investors flow into and out of investments at the wrong times and contrasts this with the average DFA investor who remains much more consistent and disciplined.
Strategic thinking involves generating business insights and opportunities to create a competitive advantage. It can be done individually or collaboratively, and involves considering different perspectives on critical issues. Strategic thinking is defined as a cognitive process that produces thought for achieving success, whereas strategic planning is a separate but related process that realizes strategies through integration back into the business. Key attributes of strategic thinkers include having a systems perspective, being intent-focused, thinking in time about past, present and future, being hypothesis-driven, and demonstrating intelligent opportunism.
This magazine article discusses various topics covered in the June 19, 2014 issue:
1) It discusses how different active investment strategies can be tailored to match different client personalities and risk tolerances.
2) It profiles investment advisor Carla Zevnik-Seufzer who emphasizes understanding each client's values and risk profile to develop customized plans using various active management approaches.
3) The article also briefly summarizes other pieces in the issue on rising oil prices and their potential economic impact, and how relying on outdated asset allocation models may not adequately address today's investment environment.
LP_Perspective_ on Emerging Managers_ReportTres Moore
We investigate this document which examines limited partners (LPs) that have invested in private equity funds managed by diverse general partners (GPs) such as women, minorities, and recent immigrants. The study uses two approaches: 1) A survey of National Association of Investment Company funds to identify LPs that have invested in diverse GPs over time. 2) Interviews with LPs to understand their experiences and perspectives. The findings provide insight into who the LPs are that invest in diverse GPs and why, as well as volatility in year-to-year capital flows. LPs expressed that investing in diverse GPs helps achieve true portfolio diversification and avoid herd behavior among larger firms. They view it as part of their fiduc
For more information contact: emailus@marcusevans.com
An interview with Bob Keller of Triumph Investment Managers, LLC, a private equity firm at the marcus evans Private Wealth Management Summit Spring 2013 talks about taking advantage of opportunities in the banking sector.
Join the 2014 Private Wealth Management Summit along with leading regional investors in an intimate environment for a highly focused discussion on the latest investment strategies in the market.
For more information contact: emailus@marcusevans.com
the Summary of The End of Competitive AdvantageUswatun Hasanah
This document provides an overview of Rita McGrath's expertise and the types of talks she gives on strategy, innovation, complexity/uncertainty, and organizational leadership/change. Some of her most popular talks discuss the end of sustainable competitive advantage and the need for a new dynamic strategy playbook, lessons from companies that achieved consistent growth, and frameworks for effectively disengaging from declining businesses to free up resources. The document lists recent client engagements and publications and provides a detailed table of contents for her various speech topics.
The document outlines a framework for strategic thinking and management. It discusses that business is as much an art as a science, involving creativity and intuition. It presents strategy as crafting unique solutions to market situations. Effective strategies combined with excellent execution are needed for long-term success. Industries require dominant innovators with competitive advantages based on passion, excellence, and economic models. Strategic thinking involves confronting facts, asking tough questions, and being willing to change.
This document provides an overview of the findings from a survey of over 100 private equity practitioners regarding human capital issues. Some key findings include:
- Respondents believe that poor company performance is often attributable to management issues. However, respondents were divided on whether management changes are made quickly and effectively post-deal.
- The main difficulties in assessing management teams pre-acquisition are limited time with management and the unreliability of references in gauging future performance.
- When evaluating potential portfolio companies, respondents focus on current/past performance and finding a collectively strong team, rather than individual star performers or professional networks.
- Post-deal, management is closely monitored through performance targets and incentives to ensure alignment,
3040414 pmi conference slides april 22-530pm v5Emma Dyson
This document discusses leadership challenges during mergers and acquisitions. It begins with an overview of a case study on leading a merger of equals transaction. It then outlines the key competencies needed for leadership during an M&A, including visionary leadership, driving results, and relationship building. The document notes that leadership comes in different forms and is a collective effort. It highlights that M&As often destroy leadership continuity in target companies for many years after a deal. Effective leadership during an M&A requires understanding different stakeholder perspectives and communicating a clear vision of the combined organization's future value.
Some great commentary highlighting the benefits of outsourcing investment management. While the article is geared towards family offices, it also has applicability to other investment advisors to include, banks, trust companies and other Registered Investment Advisors.
Risk Architecture and Financial Innovation October 2013Thomas Hu
This document discusses risk architecture and financial innovation in start-up investing. It covers several topics:
1) Financial technologies can facilitate goals but the industry should focus on goal facilitation, not wealth privatization. A feasible architecture relies on risk management.
2) Investing in start-ups requires understanding risk/return profiles and how firms allocate cash flows. Challenges include uncertainty, low frequency cash flows, and expectation shortfalls.
3) Value creation involves managing convexity and optionality for asymmetric payoffs skewed to the upside. Fostering environments for positive convexity and rare exponential growth is important.
“Strategic Thinking is a way of understanding the fundamental drivers of a Business and rigorously (and playfully) challenging conventional thinking about them.”
--> Focuses on finding and developing unique opportunities to create value for the organization
--> Takes into account: Products & offerings, Markets, Clients/Customers, Competitors, and Suppliers.
--> Input to strategic planning
--------------------------
The process of Strategic Thinking must ensure that business strategies are:
+ Aligned: fit with business’s Mission, Vision, Competitive Situation, and Operating Strategies
+ Goal-orientated: strategies’ outcomes must linked with business’s goals
+ Focused: points out exactly what should be prioritized
+ Implementable
This document provides an overview of strategic management and strategy. It discusses what strategy is, including definitions from military and management perspectives. It describes strategy as a plan for obtaining goals and positioning an organization uniquely. The document outlines the key elements of the strategic management process, including environmental scanning, strategy formulation, implementation, and evaluation. It also discusses some common misconceptions about strategy, distinguishing it from operational excellence and planning. Later sections cover topics like scanning the external and internal environment, different types of business and corporate strategies, and implementing and evaluating strategy.
Daniel Zachmann, head of research at Bedrock, seeks unconstrained fund managers that are not tied to benchmarks. He cites the Alken European equity fund and TCW Unconstrained Plus Bond fund as examples. Zachmann closely monitors funds' historical exposures and performance to ensure consistency and avoid style drift. He also considers recommendations from fund managers on new opportunities. Zachmann is excited about opportunities in peer-to-peer lending and alternatives despite these being nascent markets.
The document discusses strategies for successful collaboration between actuaries and underwriters. It outlines the benefits of joint goal setting and strategic planning, sharing tools and expertise, and regularly reviewing accounts together. When actuaries and underwriters work as an interdependent team, communicating frequently and understanding each other's roles, the business performs better than if they function in separate silos.
Ten slides in Ten minutes - A Perspective on Organisational DesignBill Graham CP.APMP
The 10-slide presentation provides an overview of organizational design and its importance for business sustainability. It discusses the need to align organizational structure, processes, culture and resources with strategy to maximize productivity and growth. Specifically, it notes that over-resourcing key business units can negatively impact productivity across the entire organization by requiring other business units to also be over-resourced to maintain optimal interaction levels. The presentation advocates analyzing differences in organizational design versus strategic needs to identify gaps and develop action plans for improvement.
1) The article argues that the common view that strategy and execution are distinct, with strategy being formulated at the top and then executed below, is flawed.
2) It critiques the metaphor of the human body that underlies this view, where the brain chooses strategy and the body executes it.
3) The article presents an alternative metaphor of a white-water river, where choices cascade from broad upstream choices made at the top to more specific downstream choices made throughout the organization. This empowers employees to make choices tailored to their situation.
This document defines 278 investment terms commonly used in venture capital, such as accelerator, adviser charge, annual recurring revenue, angel investor, carried interest, and cap table. It provides concise explanations of each term, as well as examples and context where relevant. The terms were compiled based on the experience of MJ Hudson and Founders Intelligence in working with VC clients to demystify frequently used jargon in the industry.
Measuring The Intangibles A Schnur July2005AnthonySchnur
The document discusses the subjective factors that capital providers consider when evaluating potential investments. They look beyond quantifiable data to assess intangibles about management capability and the company-investor relationship. Capital providers form impressions throughout the acquisition process about what kind of client the company will be. They judge consistency, the ability to present a clear internal view, responsiveness to requests, and litigation history. How the company conducts itself in discussions conveys these intangibles that are important to securing funding.
This is a brief power point presentation by Omuse Frankline Oyese, a PhD student at Kenyatta university to colleague student in may 2018. It outlines the main elements strategic thinking.
2012 q2 McKinsey quarterly - Put your money where your strategy isAhmed Al Bilal
The document discusses corporate strategy and capital allocation. It summarizes several articles in the McKinsey Quarterly, including ones on overcoming strategic inertia by reallocating resources, using social media strategically, and leveraging social technologies internally. It also previews pieces on better listening skills for executives and harnessing the potential of social media. The introduction notes that many companies fail to change their capital allocation to business units from year to year, despite changing environments, showing stagnant strategies.
The document discusses various aspects of strategic thinking including defining strategic issues, domains, and sources of competitive advantage. It emphasizes that strategy is about creating value by leveraging knowledge and relationships. True strategic thinking requires considering opportunities and threats, strengths and weaknesses, organizational values, and stakeholder expectations. It also involves embracing change, leveraging core capabilities, and taking a systems perspective that considers interconnections over time. Democratic strategy making should involve diverse voices and perspectives to encourage unconventional options.
10 Questions to Ask at Your Next Board MeetingRoger Branch
This document provides 10 questions for company boards to focus on at meetings to drive strategic discussion and long-term performance. The questions are divided into 3 governance questions regarding key metrics, risk management, and board composition, and 7 strategic questions focused on market changes, growth plans, evaluating proposals, and balancing mission with sustainability. Addressing these questions is meant to help boards focus on strategic issues rather than getting bogged down in procedural activities.
Kelly Weath Management_White Paper_Independent Advice_MooreMatt Moore
This document discusses the differences between fiduciary advisors, brokers, and asset managers when providing investment advice. It states that while all three play important roles, clients should be aware of potential conflicts of interest. Asset managers focus solely on tactics within their mandate and have incentives to keep assets within their firm. Brokers/banks prioritize their own profits and manufacturers over a client's best interests due to conflicts. Registered Investment Advisors are fiduciaries legally obligated to put clients first without conflicts from proprietary products or compensation structures. Clients are encouraged to understand how their advisor is classified and operates.
1) Hedge funds are increasingly facing the challenge of succession planning as founders reach retirement age. While succession planning is common in large corporations, it has not been widely adopted by hedge funds.
2) There are several reasons why succession planning is difficult for hedge funds, including that founders are often sole proprietors who are not accustomed to delegating authority. Additionally, hedge funds typically do not have independent boards that oversee succession like corporations.
3) Successful succession at hedge funds requires choosing a successor well in advance and gradually transitioning them into the leadership role over several years to give investors confidence in the new leader. Proper timing and communication of the transition is important to reassure investors.
This document discusses the need for mergers and acquisitions to go beyond risk avoidance and focus on creating transformational value. It notes that traditional merger integration focuses too much on avoiding failure through strict processes and checklists, rather than identifying new sources of value. The document advocates that mergers should pursue both "combinational" synergies through standard best practices, as well as "transformational" opportunities that create breakthrough value through flexibility. It provides recommendations for mergers to take an expanded view of value opportunities, look beyond standard integration approaches, and fully commit to targeted transformational efforts in order to achieve the highest levels of value creation.
For more information contact: emailus@marcusevans.com
An interview with Bob Keller of Triumph Investment Managers, LLC, a private equity firm at the marcus evans Private Wealth Management Summit Spring 2013 talks about taking advantage of opportunities in the banking sector.
Join the 2014 Private Wealth Management Summit along with leading regional investors in an intimate environment for a highly focused discussion on the latest investment strategies in the market.
For more information contact: emailus@marcusevans.com
the Summary of The End of Competitive AdvantageUswatun Hasanah
This document provides an overview of Rita McGrath's expertise and the types of talks she gives on strategy, innovation, complexity/uncertainty, and organizational leadership/change. Some of her most popular talks discuss the end of sustainable competitive advantage and the need for a new dynamic strategy playbook, lessons from companies that achieved consistent growth, and frameworks for effectively disengaging from declining businesses to free up resources. The document lists recent client engagements and publications and provides a detailed table of contents for her various speech topics.
The document outlines a framework for strategic thinking and management. It discusses that business is as much an art as a science, involving creativity and intuition. It presents strategy as crafting unique solutions to market situations. Effective strategies combined with excellent execution are needed for long-term success. Industries require dominant innovators with competitive advantages based on passion, excellence, and economic models. Strategic thinking involves confronting facts, asking tough questions, and being willing to change.
This document provides an overview of the findings from a survey of over 100 private equity practitioners regarding human capital issues. Some key findings include:
- Respondents believe that poor company performance is often attributable to management issues. However, respondents were divided on whether management changes are made quickly and effectively post-deal.
- The main difficulties in assessing management teams pre-acquisition are limited time with management and the unreliability of references in gauging future performance.
- When evaluating potential portfolio companies, respondents focus on current/past performance and finding a collectively strong team, rather than individual star performers or professional networks.
- Post-deal, management is closely monitored through performance targets and incentives to ensure alignment,
3040414 pmi conference slides april 22-530pm v5Emma Dyson
This document discusses leadership challenges during mergers and acquisitions. It begins with an overview of a case study on leading a merger of equals transaction. It then outlines the key competencies needed for leadership during an M&A, including visionary leadership, driving results, and relationship building. The document notes that leadership comes in different forms and is a collective effort. It highlights that M&As often destroy leadership continuity in target companies for many years after a deal. Effective leadership during an M&A requires understanding different stakeholder perspectives and communicating a clear vision of the combined organization's future value.
Some great commentary highlighting the benefits of outsourcing investment management. While the article is geared towards family offices, it also has applicability to other investment advisors to include, banks, trust companies and other Registered Investment Advisors.
Risk Architecture and Financial Innovation October 2013Thomas Hu
This document discusses risk architecture and financial innovation in start-up investing. It covers several topics:
1) Financial technologies can facilitate goals but the industry should focus on goal facilitation, not wealth privatization. A feasible architecture relies on risk management.
2) Investing in start-ups requires understanding risk/return profiles and how firms allocate cash flows. Challenges include uncertainty, low frequency cash flows, and expectation shortfalls.
3) Value creation involves managing convexity and optionality for asymmetric payoffs skewed to the upside. Fostering environments for positive convexity and rare exponential growth is important.
“Strategic Thinking is a way of understanding the fundamental drivers of a Business and rigorously (and playfully) challenging conventional thinking about them.”
--> Focuses on finding and developing unique opportunities to create value for the organization
--> Takes into account: Products & offerings, Markets, Clients/Customers, Competitors, and Suppliers.
--> Input to strategic planning
--------------------------
The process of Strategic Thinking must ensure that business strategies are:
+ Aligned: fit with business’s Mission, Vision, Competitive Situation, and Operating Strategies
+ Goal-orientated: strategies’ outcomes must linked with business’s goals
+ Focused: points out exactly what should be prioritized
+ Implementable
This document provides an overview of strategic management and strategy. It discusses what strategy is, including definitions from military and management perspectives. It describes strategy as a plan for obtaining goals and positioning an organization uniquely. The document outlines the key elements of the strategic management process, including environmental scanning, strategy formulation, implementation, and evaluation. It also discusses some common misconceptions about strategy, distinguishing it from operational excellence and planning. Later sections cover topics like scanning the external and internal environment, different types of business and corporate strategies, and implementing and evaluating strategy.
Daniel Zachmann, head of research at Bedrock, seeks unconstrained fund managers that are not tied to benchmarks. He cites the Alken European equity fund and TCW Unconstrained Plus Bond fund as examples. Zachmann closely monitors funds' historical exposures and performance to ensure consistency and avoid style drift. He also considers recommendations from fund managers on new opportunities. Zachmann is excited about opportunities in peer-to-peer lending and alternatives despite these being nascent markets.
The document discusses strategies for successful collaboration between actuaries and underwriters. It outlines the benefits of joint goal setting and strategic planning, sharing tools and expertise, and regularly reviewing accounts together. When actuaries and underwriters work as an interdependent team, communicating frequently and understanding each other's roles, the business performs better than if they function in separate silos.
Ten slides in Ten minutes - A Perspective on Organisational DesignBill Graham CP.APMP
The 10-slide presentation provides an overview of organizational design and its importance for business sustainability. It discusses the need to align organizational structure, processes, culture and resources with strategy to maximize productivity and growth. Specifically, it notes that over-resourcing key business units can negatively impact productivity across the entire organization by requiring other business units to also be over-resourced to maintain optimal interaction levels. The presentation advocates analyzing differences in organizational design versus strategic needs to identify gaps and develop action plans for improvement.
1) The article argues that the common view that strategy and execution are distinct, with strategy being formulated at the top and then executed below, is flawed.
2) It critiques the metaphor of the human body that underlies this view, where the brain chooses strategy and the body executes it.
3) The article presents an alternative metaphor of a white-water river, where choices cascade from broad upstream choices made at the top to more specific downstream choices made throughout the organization. This empowers employees to make choices tailored to their situation.
This document defines 278 investment terms commonly used in venture capital, such as accelerator, adviser charge, annual recurring revenue, angel investor, carried interest, and cap table. It provides concise explanations of each term, as well as examples and context where relevant. The terms were compiled based on the experience of MJ Hudson and Founders Intelligence in working with VC clients to demystify frequently used jargon in the industry.
Measuring The Intangibles A Schnur July2005AnthonySchnur
The document discusses the subjective factors that capital providers consider when evaluating potential investments. They look beyond quantifiable data to assess intangibles about management capability and the company-investor relationship. Capital providers form impressions throughout the acquisition process about what kind of client the company will be. They judge consistency, the ability to present a clear internal view, responsiveness to requests, and litigation history. How the company conducts itself in discussions conveys these intangibles that are important to securing funding.
This is a brief power point presentation by Omuse Frankline Oyese, a PhD student at Kenyatta university to colleague student in may 2018. It outlines the main elements strategic thinking.
2012 q2 McKinsey quarterly - Put your money where your strategy isAhmed Al Bilal
The document discusses corporate strategy and capital allocation. It summarizes several articles in the McKinsey Quarterly, including ones on overcoming strategic inertia by reallocating resources, using social media strategically, and leveraging social technologies internally. It also previews pieces on better listening skills for executives and harnessing the potential of social media. The introduction notes that many companies fail to change their capital allocation to business units from year to year, despite changing environments, showing stagnant strategies.
The document discusses various aspects of strategic thinking including defining strategic issues, domains, and sources of competitive advantage. It emphasizes that strategy is about creating value by leveraging knowledge and relationships. True strategic thinking requires considering opportunities and threats, strengths and weaknesses, organizational values, and stakeholder expectations. It also involves embracing change, leveraging core capabilities, and taking a systems perspective that considers interconnections over time. Democratic strategy making should involve diverse voices and perspectives to encourage unconventional options.
10 Questions to Ask at Your Next Board MeetingRoger Branch
This document provides 10 questions for company boards to focus on at meetings to drive strategic discussion and long-term performance. The questions are divided into 3 governance questions regarding key metrics, risk management, and board composition, and 7 strategic questions focused on market changes, growth plans, evaluating proposals, and balancing mission with sustainability. Addressing these questions is meant to help boards focus on strategic issues rather than getting bogged down in procedural activities.
Kelly Weath Management_White Paper_Independent Advice_MooreMatt Moore
This document discusses the differences between fiduciary advisors, brokers, and asset managers when providing investment advice. It states that while all three play important roles, clients should be aware of potential conflicts of interest. Asset managers focus solely on tactics within their mandate and have incentives to keep assets within their firm. Brokers/banks prioritize their own profits and manufacturers over a client's best interests due to conflicts. Registered Investment Advisors are fiduciaries legally obligated to put clients first without conflicts from proprietary products or compensation structures. Clients are encouraged to understand how their advisor is classified and operates.
1) Hedge funds are increasingly facing the challenge of succession planning as founders reach retirement age. While succession planning is common in large corporations, it has not been widely adopted by hedge funds.
2) There are several reasons why succession planning is difficult for hedge funds, including that founders are often sole proprietors who are not accustomed to delegating authority. Additionally, hedge funds typically do not have independent boards that oversee succession like corporations.
3) Successful succession at hedge funds requires choosing a successor well in advance and gradually transitioning them into the leadership role over several years to give investors confidence in the new leader. Proper timing and communication of the transition is important to reassure investors.
This document discusses the need for mergers and acquisitions to go beyond risk avoidance and focus on creating transformational value. It notes that traditional merger integration focuses too much on avoiding failure through strict processes and checklists, rather than identifying new sources of value. The document advocates that mergers should pursue both "combinational" synergies through standard best practices, as well as "transformational" opportunities that create breakthrough value through flexibility. It provides recommendations for mergers to take an expanded view of value opportunities, look beyond standard integration approaches, and fully commit to targeted transformational efforts in order to achieve the highest levels of value creation.
This document summarizes a research study from 1994 that examined employee motivation at a UK defense systems manufacturer. The study aimed to understand motivation from the employees' perspective. A survey was administered to 51 employees across levels and departments. The results showed that while the company created a mostly positive work environment, employees gave very low scores for feelings of warmth and support from leadership. Further analysis revealed deep issues in how operators and engineers experienced leadership. The study highlights the importance of understanding employee perceptions in order to close gaps between reality and company goals/philosophy regarding culture and motivation.
long term business benefits of integrated dataStrategic thinking .pdfanandinternational01
long term business benefits of integrated data:
Strategic thinking is a powerful leadership tool that gives organizations the foresight and insight
needed to succeed in the long term, especially when applied throughout the organization.
The Power of Strategic Thinking
There is power in strategic thinking and it is available to everyone. When organizations begin to
think strategically, they gain:
* Insight, or problem solving skills, that help them intuitively make sense of chaos in their
environment.
* The ability to see emerging conditions that could potentially provide long-term competitive
advantage.
* The skill of visualizing, interpreting and scanning the environment for information about the
organization’s present and future.
* The ability to identify new market opportunities and create real solutions that advance
business.
* The ability to understand the importance of relationship building and its interconnectedness
with business goals.
Insight and Foresight
In their article, Managing strategic planning paradigms in China, Liu and Roos (2006) explain
what happened in 2005 when the Chinese government became the third largest trading nation in
the world. Foreign investors who wanted to trade in the Chinese market had to give up partial
ownership of their companies. They also had to give up the right to offer insight or foresight
about the future of their companies. Many companies agreed to do this because they realized that
they did not know their new environment and needed to depend on others to build the necessary
relationships to achieve success in China. Now that these investors are familiar with the Chinese
markets and culture, they are causing what Andrew Grove calls “a strategic inflection point” or a
fundamentally big change in their business environment. Having regained their freedom, it will
be those companies who exercise their strategic thinking muscles that will succeed in the long
run.
Everyone can be a Strategic Thinker
Many organizations do not involve all levels of employees in strategic thinking. They believe
that regular employees are not capable of strategic thinking and that only executives can
visualize, interpret and scan the environment for information about the organization’s present
and future. How wrong they are!
Another reason why organizations don’t employ strategic thinking is that company hiring
processes are often flawed. People are hired because of who they know and the agenda they are
bringing to the table. This means that valuable strategic thinking skills such as insight and
foresight are overlooked and replaced with nepotism and government control.
Finding New Opportunities
What does your organization stand to gain from teaching everyone to become a strategic thinker?
Another example of insight came from the mind of William Coleman. Coleman, a 58 year old
billionaire and former co-founder of BEA Systems, has created a new company called Cassatt
(Lyons, 2006). He came up with the simple concept of the .
How do i_create_a_distinctive_performance_cultureSudeep Majumdar
The document discusses how to create a distinctive performance culture through a three step process of diagnosing cultural opportunities and barriers, designing cultural interventions focused on a few key themes, and managing an integrated program using leadership levers to influence culture and deliver business impacts. It provides examples of how companies have applied a rigorous problem-solving approach to cultural issues to improve engagement, innovation, and financial results.
A superior new replacement to traditional discounted cash flow valuation models
In the aftermath of the financial meltdown, the models commonly used for discounted cash flow valuation have become outdated, practically overnight. To meet the demand for an authoritative guidebook to the new economy, internationally recognized expert Kenneth Hackel has written Security Valuation and Risk Analysis.
• • Academy ol Managemenf Executive. 2001. Vol 15. NoCreat.docxoswald1horne84988
• • Academy ol Managemenf Executive. 2001. Vol 15. No
Creating wealth in
organizations: The role of
strategic leadership
W. Glenn Rowe
Executive Overview
Wealth creation in entrepreneurial and established orgcrnfzafion.i is a complex,
challenging task in today's global and technologically advancing business
environment. Strategic leadership enhances the wealth-creation process in
enfrepreneuriai and established organizations, and leads to above-average returns.
On the other hand, managerial leadership will likely lead to average returns at best,
but is most likely to achieve below-average returns and destroy wealth. Organizations
led by visionaries who are not properly supported by strong managerial leadership
may destroy wealth even more quickly than organizations led by managerial leaders.
This article defines strategic leadership, differentiates among the concepts of
strategic, visionary, and managerial leadership, and examines the differential links
between the three types of leadership and wealth creation. When organizations
restore strategic control and allow the development of a critical mass of strategic
leaders, these leaders will be a source of above-average returns. The result will be
wealth creation for the employees, customers, suppliers, and shareholders of
entrepreneurial and established organizations.
Without effective strategic leadership, the
probability that a firm can achieve superior or
even satisfactory performance when confront-
ing the challenges of the global economy will
be greatly reduced.
^R. Duane Ireland and Michael A. Hitt'
As the entrepreneurial CEO of Starbucks,
Howard Schultz's strategic choices have com-
pletely changed the gourmet coffee market in
which Starbucks operates.^ When he bought
Starbucks from its original owners in 1987. there
were six stores and 100 employees. By 1996, Star-
bucks had grown to 1,300 stores and 25,000 em-
ployees, and was operating in North America
and Japan. By the end of fiscal year 1999, Star-
bucks had 2,498 stores (363 were licensed stores
and the rest company-owned) and 35,620 employ-
ees, with operations expanded into Canada and
the United Kingdom. Sales and profits grew by
more than 50 percent per year for six consecutive
years, and stock price rose tenfold from 1992 to
1997. These growth rates have slowed since 1997,
but are still impressive, with sales and profits
increasing 29 percent and 50 percent, respec-
tively, from 1998 to 1999, Schultz's philosophies
exemplify those of a strategic leader. His number
one priority is to take care of his employees,
since they are responsible for communicating
passion to Starbucks' customers. He believes
that if his employees do this well, Starbucks will
accomplish its mission of educating consumers
everywhere about fine coffee and creating an
atmosphere that will draw people into their
stores and "give them a sense of wonder and
romance in the midst of a harried life."^ In addi-
tion, the firm will provide long-term growth.
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Capitalist Dilemma
1. 1 LongBrand
Solving the Capitalist’s Dilemma
A Review of Clayton Christensen’s HBR Paper
July, 2014
2. “Just as abundant, cheap fast food helped create an epidemic in obesity and
diabetes, the popularity of spreadsheets has given rise to an unhealthy dependence on
metrics like return on invested capital and internal rate of return.
“Armed with this tool, a 26 year old Wall Street analyst could explain that ‘the market’
would punish the CEO and tell her how to run her company. Not only that, the analyst
could explain that ‘the market’ would punish the CEO if she did not follow the
orthodoxies of new finance.
2 LongBrand
Prof. Clayton Christensen
Kim B Clark Professor of Business
Harvard Business School
orthodoxies of new finance.
In a very real sense, too many executives have outsourced the job of managerial
judgement and decision making to the convenient- but ultimately unnutritious- tool.”
3. • Clayton Christensen’s paper reveals the systematic decline of meaning and context in modern
finance which perpetuates myopic investment and resource allocation processes. It is perhaps
the first major influential voice which lays bare the machinery of finance and its tyrannical
influence on business and capitalism at large..
• In our decade long journey, LongBrand has regularly observed similar symptoms inside
companies and systematically unraveled the knots with which management had tied themselves
with. Every engagement provided management with an alternative thesis of how capital can be
deployed behind intangible assets which in turn could drive Long-term Value.
• We couldn’t agree more with Prof Christensen that these orthodoxies which govern finance are
3 LongBrand
• We couldn’t agree more with Prof Christensen that these orthodoxies which govern finance are
deeply entrenched and hold back ‘market creating innovations’ . However, the waters run far
deeper. In almost every company we have assessed, the invisible reservoir of brand led
intangibles (human capability, stakeholder relationships, trust and IP) which represents the
bulwark of long-term value was unwittingly being sacrificed at the altar of short-term returns and
Quarterly Capitalism.
•These tendencies are so compelling when linked to management compensation/perks that it
becomes a fait accompli even if a well meaning manager chooses to raise a dissenting voice.
They have hardened into covert mental models which have taken over companies at a deep and
fundamental level. These unquestioned axioms represent the root cause of decline in great
institutions and implosions which fell successful firms.
4. • Professor Christensen’s Dilemma on Capitalism could be better characterized as a Crisis of
Wealth Durability. This is Capitalism’s moment of truth posing serious questions that could
undermine free society itself. There is a need to address these paradoxes with clarity and a
sense of urgency.
• Post 2008, many radical intellectuals and economists are advancing revolutionary theories
which claim that the Capitalistic system is broken beyond repair. Their views are akin to throwing
the baby out with the bathwater. Side by side, Capitalists seem to be in deep stupor incapacitated
by their own erroneous ways to launch a collective introspection and save themselves from self-
inflicted demise.
• In the ultimate analysis, the ability of each side to seize the imagination of the larger public
4 LongBrand
• In the ultimate analysis, the ability of each side to seize the imagination of the larger public
through their narrative and actions will have far reaching consequences for freedom &
democracy.
• The stakes couldn’t be higher for Capitalists might care to imagine. It is up to right thinking
leaders and managers to retrieve the high ground of liberal arts and social value that
management of businesses once represented.
5. • The following is a series of LongBrand views expressed in the context of excerpts drawn from
Professor Christensen’s paper (in italics) which aims at highlighting potential solutions to
sharply identified paradoxes and challenges of Capitalism.
• The LongBrand solutions framework begins with reinterpreting and freeing ‘brand’ from its
orthodox meaning which lies fossilized in the ‘React’ & ‘Anticipate’ levels and immerse in its
deeper layers in the “Design’ & ‘Purpose’ levels. (Refer Ways to Understand ‘Brand’)
• Basis this understanding, we propose the ‘TotalBrand’ paradigm which acts as a central axis
to unite purpose with strategic opportunities and in turn with synchronized execution and long-
5 LongBrand
to unite purpose with strategic opportunities and in turn with synchronized execution and long-
term value. (Refer Singularity of the “TotalBrand”)
6. Ways to understand ‘Brand’
External Projection - Image, PR, Logo
Reactionary ‘Brand’
Analytics/Models – piecemeal measures of
satisfaction, equity, NPS etc
IncreasedLeverage&Opportunity
termValuefrom‘Brand’
6 LongBrand
Anticipatory ‘Brand’ Intelligence
Systemic Structures – Central Organizing
Principle to synchronize intangibles
‘TotalBrand’ led Business Design
Collective Consciousness – Introspection
about leadership mental models which holds
true business potential hostage
Purposeful Wealth Creation
IncreasedLeverage&Opportunity
tocreateLong-termValuefrom‘Brand’
7. The Singularity of the ‘TotalBrand’
Quest for a
Higher Purpose
Coherence of
Intangibles
Piecing the
Added Value
Jigsaw
Non-Linear
Finance
Introspection Meaningful
Opportunities
Synchronized
Execution
Long-term
Wealth Creation
Axis of
Unity
7 LongBrand
Jigsaw
8. ‘ We need new tools for managing the resources that are scarce and costly.’
LongBrand View – Businesses have been blind sided by the swift rise and increasing dominance of
brand led intangibles and their impact on wealth creation. In today’s world, soft assets like reputation,
human capabilities, intellectual property & stakeholder relationships are so scarce and potent, that they
drive efficient and effective use of capital.
8 LongBrand
Management has little or no visibility to direct investments into future value-producing activities driven
by brands and intangible assets. Consequently, they remain overbalanced towards short-term fire
fighting priorities . This has a debilitating effect on their ability to release the true business potential
through innovation and optimal use of established reputation and relationships.
The impact of Brand & Intangible assets on Long-term Value is virtually unknown in most boardrooms
save through intuition and gut feel of senior leaders/owners. This a significant governance gap
allowing short-term tendencies triggered by Quarterly Capitalism to take over the cognitive construct of
the firm.
9. ‘We should no longer husband capital. It is abundant and cheap. We should use it
no hoard it’
LongBrand View –
One major reason why even senior managers do not, as a rule, understand the limits of financial capital
as a means to securing long-term value is their mistaken notion that conventional accounting data and
financial analysis/ratios gives them a strategic picture. They completely miss brand and intangible value
9 LongBrand
financial analysis/ratios gives them a strategic picture. They completely miss brand and intangible value
drivers and their implications from a long run risk/reward perspective.
By better appreciating the real value of these potent invisible assets, companies can deliver
significantly higher returns on capital both in the short-term as well the long run. Only then capital
can be given a worthy goal which is goes much farther than cost cutting or driving out efficiencies.
10. ‘We need new ways to asses investments in innovation.’
LongBrand View - Too often tactical measures on intangibles are tracked by companies across
customer loyalty/employee morale/innovation/brand equity in the hope that such measures can provide
a guidance into the future. Our experiences show that no silver bullet piece meal measure can explain
causal pathways that drive the whole body of intangibles together. Further, conventional ‘brand and
intangible asset’ valuations produced for accounting and financial purposes have little strategic utility
10 LongBrand
intangible asset’ valuations produced for accounting and financial purposes have little strategic utility
beyond ascribing a static valuation.
It is critical to bear in mind that unlike tangible assets which work well as discrete entities, intangibles
require a very high degree of synchronisation to deliver their full potential. In other words, intangibles
need to be studied through a singular axis and mutually reinforcing coherence.
A purpose led intangibles architecture has the ability to piece the long-term value creation jigsaw
together. Without this lens, senior managers will find it next to impossible to visualise the fuzzy
interplay of customers, employees, innovation and IP inside firms. Studying them in isolation will lead to
erroneous and damaging conclusions however rigorous the piecemeal analysis is.
11. ‘ Repurposing Capital – Capital itself is highly malleable in that certain policies can
convince capital that it wants to do thing differently. Today much of capital is what
we call migratory. It lacks a home’
LongBrand View –The flow of capital guided by special purpose gives a shape and form to the
intangible architecture of a firm can deliver extraordinary financial returns. Only Purpose driven
capital can break away from the gravitational pull exerted beyond the exigencies of short-term financial
metrics. Unless such a breakthrough argument is fully visualised and adopted, capital cannot
11 LongBrand
metrics. Unless such a breakthrough argument is fully visualised and adopted, capital cannot
meaningfully anchor into any enterprise.
The onus of creating that cogent argument around the true potential of a firm squarely rests on the
stewards of the company. There are no significant gains to be had in criticizing the migratory nature of
capital, invoking taxes or to that matter rewarding shareholders through voting powers.
The owners need to marshal their long-term value creation thesis which attracts the right kind of capital
and thereafter convince them about the merits to participate for the full potential from the purpose led
intangibles. There can be no greater argument which compels any right thinking capital provider than a
Purpose led Wealth Creation model.
12. ‘Rebalancing Business Schools – Much as it pains us to say it, a lot of the blame for the
capitalist’s dilemma rests with our great schools of business including our own. In mapping
the terrain of business and management we have routinely separated disciplines that can only
be properly understood in terms of their interactions with one another and we have advanced
success metrics that are at best superficial and at worst harmful’
LongBrand View – The industrial age value creation logic which worked well with inanimate tangible
assets has cast a long shadow on how management is taught in business schools. It excelled in a
12 LongBrand
assets has cast a long shadow on how management is taught in business schools. It excelled in a
mechanistic world view of breaking problems down through Cartesian logic. Little wonder a Harvard
student invented the excel sheet, the epitome of linear value creation approaches.
The soft humanity based assets of companies behave in ways radically different , demanding less
command and control and more interconnectedness, meaning and purpose. They also tend to work
in tandem almost in harmony than merely standalone efficiency. Most importantly, their value
creation ‘models’ are fuzzy with non-linear characteristics.
Business schools will do well to start integrating philosophy, humanities and arts into their curriculum to
foster multidisciplinary capabilities. Linear analysis needs to be married with Non-linear holistic mental
frameworks.
13. ‘Realigning Strategy & Resource Allocation – If we are realistic about the true cost of capital
investing in the long-term becomes easier’
LongBrand View - Enterprises are paid to create wealth from business assets, not simply control costs.
But that obvious fact is not reflected in financial and MIS systems available inside most companies today.
Due to the legacy from the tangible-asset-heavy era, information required to make informed judgments
about how brands, customers and innovation add economic value remains hazy at best.
Our experience shows that transparency of information to gain visibility into brand and intangible
economics can be significantly improved and requires three sets of diagnostic tools:
Foundational information: This is basic information pertaining to brands / products / stock keeping
13 LongBrand
Foundational information: This is basic information pertaining to brands / products / stock keeping
units (SKUs) /customer segments / innovation projects to construct a true and comprehensive financial
position of the economic value creating unit.
Productivity information: This is the business output information derived from foundational
information across brands / products / SKUs / customer segments / innovation projects.
Resource allocation sensitivity: This acts as a decision making tool for allocation of capital and
management resources, with better clarity as to where /to what extent long-term value is resident in
brands / products / SKUs / customer segments/ innovation projects.
14. ‘Emancipating Management– Many managers yearn to focus on the long-term but don’t think
it is an option. The job of a manager is thus reduced to sourcing, assembling and shipping the
numbers that deliver short-term gains’
LongBrand View – Long-term Value in Intangibles (LTVI) is able to articulate future scenarios and
their drivers with economic rewards / penalties attached to them. Often, it is only when the true
potential at stake is completely understood and internalised that organisational functions galvanise
around a common axis for coherence and interconnectedness.
Boards need to have a deep engagement with these long-term value creation scenarios. Their deepest
14 LongBrand
Boards need to have a deep engagement with these long-term value creation scenarios. Their deepest
responsibility is to ensure that the company’s most valuable assets are held together by a well-tested
strategy.
The next most important responsibility is to ensure that performance management systems and
compensation for the senior executive team are aligned to the long-term sustainable value of the
business, rather than just short-term financial results.
Boards are inescapably about risk management, and the risk to humanity based assets should surely
rise to the top of their agenda. Locating the stewardship of these precious assets to secure corporate
sustainability cannot and should not be postponed.
16. 16
Management hinge assumptionshinge assumptionshinge assumptionshinge assumptions and mental modelsand mental modelsand mental modelsand mental models often lead
them to believe that more nearmore nearmore nearmore near---- term revenues/profits areterm revenues/profits areterm revenues/profits areterm revenues/profits are being made at less risk,less risk,less risk,less risk,
but in reality,but in reality,but in reality,but in reality,
16 LongBrand
but in reality,but in reality,but in reality,but in reality,
firms have disproportionately smaller longhave disproportionately smaller longhave disproportionately smaller longhave disproportionately smaller long----term revenues/profitsterm revenues/profitsterm revenues/profitsterm revenues/profits
at significantly larger riskssignificantly larger riskssignificantly larger riskssignificantly larger risks
17. • The whole firm does not function as a whole; it is a set of separate functions/fiefdoms
• Loss of unity leading to disintegration of culture, values
• Yawning coherence gaps through which ‘Vital Value’ of brand & intangibles bleeds out
• Short-termism, self deception, poor ‘bad news’ flow
THE BODIES BURIED
UNDER THE GROUND..
17 LongBrand
• Owner, boards and management teams work in isolation
• No meta model to forge these connections to comprehend the whole problem
18. • Transition Generation – we are traveling through it now
• A real opportunity make a clean break and start afresh
• Significant value creation implications (risk/reward) for firms
• Complexity and change force us to go back to the drawing board
NEVER WASTE A GOOD
CRISIS!
18 LongBrand
• Complexity and change force us to go back to the drawing board
19. Very interesting….Your proposal of Long- term wealth creation is
hitting the nail on its head.
A long time ago a ceo asked me the following question “what do you do if
you are far out on the sea in a rowing boat full of gold and it is
leaking with many holes….what should I do?”……..
Companies have to understand the difference of gold and real wealth.
Real wealth, is in the form of a water pump or small lifeboat
19 LongBrand
Geir Berthelsen
Founder
Real wealth, is in the form of a water pump or small lifeboat
outboard motor.
A shift from the gold standard/currency to the wealth standard is
a thought that makes sense now.
20. Christensen's paper has likely created a thought vacuum for many
business people and finance practitioners It is critical to quickly breathe
fresh new ideas into that vacuum.
I think your powerful ideas about brand and long-term wealth creation
are the very resonance needed to solve the capitalist's dilemma.
It is critical for businesses to have an axis around which all things
20 LongBrand
Jason Apollo Voss
Director, CFA Institute, NYC
It is critical for businesses to have an axis around which all things
revolve. This, of course, is the central identity, or brand.
22. Consciousness of Long-term Value
=
Brand led Intangible Architecture
=
Unity of Purpose for Coherent Enterprises
22 LongBrand
Unity of Purpose for Coherent Enterprises
The Conscience Keeper of a firm!