Beware going global!

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Also at the SMS conference, Pankaj Ghemawat reviewed some of the recession’s impact on globalisation trends, a talk that included a useful warning. Big indicators, like the rate of Foreign Direct Investment, have slowed sharply with the down-turn, but no worse than last time. But he warned of some additional dangers this time:

  • a risk of more protectionism due to more widespread job losses and distrust of business
  • massive public debt slowing recovery
  • shortage of finance

The intriguing content concerned the still remarkably ...

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The Growth/Share matrix lives!

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Offspring of the BCG matrix [and McKinsey/GE versions] are alive and well it seems – over 60% of top global companies actively use such tools, though not quite as in the 70s. Dieter Heuskel of BCG chaired a good session on this at the SMS conference this week. [See Managing for Value for example of his + colleagues’ work.] The panel showed early research findings on the matrices’ usage – which shows two key changes: 

  1. They are more sophisticated ...
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The strategy profession

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Great to see SMS ask if there should be Certification in strategic management. I’ve raise before the need for this to be a truly professional discipline, so we can nail what should be expected of robust leadership of this critical role. A conference session will ask some intriguing questions:

  • Is there demand for such a credential? From whom? How large?
  • Is the knowledge base of the field sufficiently developed and established to offer a certificate?
  • What is the expected value-added?
  • Should different levels of ...
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De-skilling globalising law firms

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Yet another great piece at SMS – also not yet published – from Susan Segal-Horn and Alison Dean. What happens when corporate law-firms go international? Seems from in-depth research on their reports that – amongst other things – they start de-skilling, with a larger proportion of work being done by non-qualified lawyers [paralegals etc.], and start reporting their performance differently. Instead of reporting ‘profit per equity partner’ they focus on profit per partner [all types] and ...

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Why has Amazon.com been so unsuccessful?

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The SMS conference reminds me of a long-standing puzzle. We have known for decades that investors value growth in earnings – because they either get rising dividends or a rising stock price they can sell on. Profitability – return on sales or on assets – is only of interest insofar as it enables future earnings growth. So how come the strategy field is obsessed with ‘explaining’ why some firms are more profitable than others, when investors aren’t interested and management does ...

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