About Strategy& foresight (Formerly Booz foresight)

Strategy& foresight (Formerly Booz foresight) is a quarterly e-mail newsletter containing the latest insights and most important perspectives from Strategy&. Selected by Tom Stewart – Former Chief Marketing & Knowledge Officer and former editor and managing director of Harvard Business Review – Strategy& foresight is an indispensable selection of our best, most provocative and timely work.


December 2013

New Worlds to Win

As business prepares to ring out 2013, I want to call your attention to recent articles that can help you make the most of three important issues in 2014.

Global competition. There’s a sense in which emerging-market companies have had it easy. Driven by the tailwinds of their fast-growing economies, sheltered by de jure or de facto protectionism that (for example) channeled government favors their way or limited foreign ownership in some industries, relatively unburdened by labor or environmental costs, they were able to run downwind as fast as they could.

Few of these companies paid heed to—or needed to care about—capabilities they’d need under less favorable conditions: the keel that would keep them straight in a cross-current, the skills they’d need to weather storms, the planning they’d need for the long haul.

Those days are gone. Emerging markets growth rates have slowed. Customers in developed markets have become pickier about quality and more demanding with respect to service. World-class rivals have set up significant operations that are, as GE executives put it, “in country, for country.” Cost gaps have narrowed. The year of the hare is over, and the tortoise is gaining ground.

Against that backdrop, Strategy& partner John Jullens has just published an important article in Harvard Business Review, “How Emerging Market Giants Can Take on the World.” Thanks to a special arrangement with HBR, we can offer a free download of the article to Booz Foresight readers who click here.

As John explains, many of these competitors are new companies in old, well-developed industries. As they emerge onto the global stage, they confront the fact that they are among some of the most sophisticated, capable outfits in the world, in an arena where it’s no longer enough to be fleet and cheap. How should these companies develop the capabilities they’ll need to continue to win? And how can their global rivals take advantage of a moment when emerging-market rivals may be uniquely vulnerable?

Innovation and digitization. Strategy&'s (Formerly Booz & Company) ongoing study of the practices of the most important innovators—the 1000 companies that collectively account for half of all R&D spending worldwide—this year focuses on the impact of digital tools and techniques on innovation.

Where digitization is concerned, common wisdom is that prophets are more visible than profits. The surprising evidence of this year’s Innovation 1000 study, however, is that digital enablers of innovation are already making a substantial contribution to the success of the companies that use them.

Tools like 3D printing and rapid prototyping, customer immersion labs, and product lifecycle management systems are a big deal: the companies that use them report sharply higher performance than companies that don’t.

That’s not to say there isn’t plenty of hype—and this year’s study reveals which digital tools have so far produced little value. But, as Strategy& partners Barry Jaruzelski, John Loehr, and Richard Holman show, “Digital tools are influencing every stage of the innovation life cycle: from collecting and analyzing customer insights, to generating and vetting ideas, to designing and manufacturing new products, and, finally, to tracking products’ success once launched.”

Culture. If culture is so important, why do companies manage it as an afterthought? That question came to mind when I read the findings of “Culture’s Role in Enabling Organizational Change” by DeAnne Aguirre, Rutger von Post, and Micah Alpern.

The report exposes frustration and ignorance in almost equal measure where culture is concerned:

  • 84 percent of executives said that culture is critically important to their business’s success. But only 45 percent say they manage culture well.
  • Just 47 percent say top management is paying enough attention to culture.
  • Executives report that the biggest obstacle to successful cultural change is a long history of previous failure. Yet a remarkably high number—44 percent—believe that major change can be accomplished in less than a year.

What’s underlying these disquieting numbers? Drawing on Strategy&’s large body of research and practice (including that of Jon Katzenbach), DeAnne, Rutger, and Micah conclude that many executives apply change-management models that tack culture onto the end of a process, and that they focus too much on top-down communication and not enough on identifying specific behaviors that, when changed, will start to move a culture in the right direction.

If culture’s not part of the process from the start, it will be the anchor that drags all change efforts to a halt—instead of what it can be, the wind in the sails moving you forward.

Best wishes for the year to come!

Tom Stewart
Former Chief Marketing & Knowledge Officer


In this issue

read more   How Emerging Market Giants Can Take on the World
by John Jullens
Many companies in emerging countries are so focused on chasing growth that they fail to invest in improving their organizational capabilities, which leaves them unprepared when growth slows and competition from increasingly savvy developed-world multinationals intensifies. It’s critical that the next generation of emerging-market corporations heed this lesson and develop enterprise capabilities from the very beginning—even as they battle for early advantage by seizing nascent business opportunities. This article lays out four steps that “emerging giants” must follow to build an organization that can excel over the long term. download (271kb, PDF) >


read more   The 2013 Global Innovation 1000 Study: Navigating the Digital Future
by Barry Jaruzelski, John Loehr, and Richard Holman
Booz & Company’s ninth annual study of innovation trends and spending shows that the world’s 1,000 largest public corporate R&D spenders invested US$638 billion in innovation this year, the highest level ever. But like those of previous years, the 2013 study demonstrates that it is not how much companies spend on research and development that determines success—what really matters is how companies invest those R&D funds in capabilities, talent, processes, and tools. This year’s study examines in depth the digital enablers of the innovation process: how the most successful companies are—and aren’t—using digital tools and processes to improve their efforts. read more >


read more   Culture’s Role in Enabling Organizational Change
by DeAnne Aguirre, Rutger von Post, and Micah Alpern
Culture is not only critical to business success, but also plays a pivotal role in effective, lasting change efforts – according to findings from our 2013 Culture & Change Management Survey. However, results also indicate a disparity between the way culture is seen and the way it is treated. read more >

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