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The Habits of Highly Effective Leaders

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The Habits of Highly Effective Leaders

How Strong Leadership Impacts the Bottom Line

Organizations of all shapes and sizes are under immense pressure to retain good talent.

High employee turnover can directly impact a company’s bottom line—with many studies suggesting poor leadership is one of the main causes.

Today’s infographic from Online PhD Degrees explores what it takes to be an strong leader, and the behaviors of poor leaders that should be avoided at all costs.

In today’s rapidly changing world, how can the qualities of a strong leader positively shape a company’s future?

The Benefits of Investing in Leadership

Effective leadership is worth its weight in gold, with 58% of employees claiming they would choose having a great boss over a higher salary.

Not only that, 94% of employees with great bosses feel passionate about their jobーnearly twice as many as those working for a bad boss. A strong leader increases employee loyalty, creating a conducive environment for reaching a company’s goals.

In fact, research shows that companies with strong leaders are crucial when it comes to outperforming industry competitors and are three times more prepared to react to the speed of change. Moreover, a company with a strong leader is almost five times more likely to have higher customer engagement and retention rates.

How to Lead Effectively

While each company has its own processes and demands different skill sets, there are core behaviors that separate leaders from managers:

  • Clear Purpose: Clearly articulating the company’s future vision to all levels of staff in a clear and concise way.
  • Contagious Passion: While managers light fires under people to motivate them, leaders light fires in people.
  • Self-Accountability: The expectation to work harder than employees and set a standard of excellence.
  • Flexible Determination: Leaders are agile and open to change.
  • Sustainable Outlook: Focusing on long-term goals proves to a team that a leader is invested in the long-haul.
  • Dual Focus: Beyond thinking big picture, leaders provide employees with a clear and actionable strategy for success.
    • Effective leaders are born from this combination of behaviors. However, one of them has the farthest-reaching impact, both on employees and a company’s bottom line: purpose.

      Purpose and Performance

      The Global Leadership Forecast finds that a strong and well-executed purpose can build organizational resilience and improve long-term financial performance.

      effective leadership purpose

      Leaders who amplify an organization’s purpose create a culture of optimism where employees feel safe in proposing new ideas that will shape the trajectory of a company.

      The Future of Leadership

      To stay competitive, continuous learning and re-skilling should be at the heart of every organization’s leadership strategy. Leaders of the future should possess the ability to redesign jobs in a more fluid way and lean in to the changing nature of work.

      “If we don’t disrupt our business, somebody else is going to do it for us.”

      —McKinsey Analysts

      While management is a foundational skill, organizations need to invest in their leaders to ensure constant growth. Embracing the traits of an effective leader can not only provide improved returns—it also empowers organizations to thrive in an uncertain future.

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Technology

10 Types of Innovation: The Art of Discovering a Breakthrough Product

How do companies like Amazon and Apple consistently make game-changing products? Here are 10 types of innovation, and the tactics that lead to big breakthroughs.

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The Art of Discovering Breakthrough Products

As venture capitalist Peter Thiel once put it, “competition is for losers”.

It’s inevitable that every company must be out there battling for market share, but you don’t really want to be in a situation where the competition is so stiff that any potential upside is eroded away in the process—―a scenario known as perfect competition in economics.

To avoid perfect competition, companies must strive to build an economic moat that gives them a sustainable competitive advantage over time. While these protective moats can arise from a number of different sources, in today’s information economy they most often arise from the power of innovation.

But where does innovation come from, and is there a universal framework that can be applied to help consistently make big breakthroughs?

The 10 Types of Innovation

In today’s infographic, we showcase the culmination of years of in-depth research from Doblin, an innovation-focused firm now owned by Deloitte.

After examining over 2,000 business innovations throughout history, Doblin uncovered that most breakthroughs don’t necessarily stem from engineering inventions or rare discoveries.

Instead, they observed that innovations can be categorized within a range of 10 distinct dimensions—and anyone can use the resulting strategic framework to analyze the competition, to stress test for product weaknesses, or to find new opportunities for their products.

Here are the 10 types of innovation:

#Innovation TypeDescription
1.Profit ModelHow you make money
2.NetworkConnections with others to create value
3.StructureAlignment of your talent and assets
4.ProcessSignature of superior methods for doing your work
5.Product PerformanceDistinguishing features and functionality
6.Product SystemComplementary products and services
7.ServiceSupport and enhancements that surround your offerings
8.ChannelHow your offerings are delivered to customers and users
9.BrandRepresentation of your offerings and business
10.Customer EngagementDistinctive interactions you foster

From Theory to Practice

What does innovation look like in practice?

Let’s see how well-known businesses have leveraged each of these 10 types of innovation in the past, while also diving into the tactics that modern businesses can use to consistently make new product breakthroughs:.

Innovation Types #1-4: “Configuration”

According to Doblin, the first four types of innovation center around the configuration of the company, and all the work that happens “behind the scenes”.

Although innovation types in this category are not directly customer-facing, as you can see in the examples below, they can still have an important impact on the customer experience. How your company and products are organized can have a crucial downstream effect, even enabling innovations in other categories.

Configuration innovation types

Two of the most interesting examples here are Google and McDonald’s. Both companies made internal innovations that empowered their people to make important advancements further on downstream.

In the case of McDonald’s, the franchisee insight that led to the introduction of the Egg McMuffin spearheaded the company’s entire breakfast offering, which now accounts for 25% of revenues. Breakfast is also now the company’s most profitable segment.

Innovation Types #5-6: “Offering”

When most people think of innovation, it’s likely the offering category that comes to mind.

Making improvements to product performance is an obvious but difficult type of innovation, and unless it’s accompanied by a deeply ingrained company culture towards technical innovation, such advancements may only create a temporary advantage against the competition.

This is the part of the reason that Doblin recommends that companies focus on combining multiple areas of innovation together—it creates a much more stable economic moat.

Offering innovation types

Apple has a reputation for innovation, but the product ecosystem highlighted above is an underappreciated piece of the company’s strategy. By putting thought into the ecosystem of products—and ensuring they work together flawlessly—additional utility is created, while also making it harder for customers to switch away from Apple products.

Innovation Types #7-10: “Experience”

These types of innovation are the most customer-facing, but this also makes them the most subject to interpretation.

While other innovations tend to occur upstream, innovations in experience all get trialed in the hands of customers. For this reason, intense care is needed in rolling out these ideas.

Experience innovation types

In the early days of the internet, online shipping was precarious at best—but Amazon’s introduction of Amazon Prime and free expedited shipping for all members has been a game-changer for e-commerce.

Executing on such a promise was no small task, but today there are 150 million users of Prime worldwide, including some in metro areas who can get items in as little as two hours.

Making Innovations Happen in Your Organization

How can organizations approach the 10 types of innovation from a more tactical perspective?

One useful resource is Doblin’s free public list of over 100 tactics that correspond with the aforementioned framework.

The one-pager PDF provides a range of typical dimensions for approaching each type of innovation. In essence, these are all different ways you could consider when trying to differentiate your product or service—and at the very least, it provides a useful thought experiment for managers and marketers.

For those interested in learning more on this topic, Doblin also has a highly-rated book as well as other accessories that leverage the above framework.

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Markets

What’s At Risk: An 18-Month View of a Post-COVID World

The WEF surveyed 347 risk analysts to uncover the most likely post-pandemic threats—and no area from the economy to the environment is untouched.

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What’s At Risk: An 18-Month View of a Post-COVID World

As the world continues to grapple with the effects of COVID-19, no part of society seems to be left unscathed. Fears are surmounting around the economy’s health, and dramatic changes in life as we know it are also underway.

In today’s graphic, we use data from a World Economic Forum survey of 347 risk analysts on how they rank the likelihood of major risks we face in the aftermath of the pandemic.

What are the most likely risks for the world over the next year and a half?

The Most Likely Risks

In the report, a “risk” is defined as an uncertain event or condition with the potential for significant negative impacts on various countries and industries. The 31 risks have been grouped into five major categories:

  • Economic: 10 risks
  • Societal: 9 risks
  • Geopolitical: 6 risks
  • Technological: 4 risks
  • Environmental: 2 risks

Among these, risk analysts rank economic factors high on their list, but the far-reaching impacts of the remaining factors are not to be overlooked either. Let’s dive deeper into each category.

Economic Shifts

The survey reveals that economic fallout poses the most likely threat in the near future, dominating four of the top five risks overall. With job losses felt the world over, a prolonged recession has 68.6% of experts feeling worried.

RankEconomic Risk%
#1Prolonged recession of the global economy68.6%
#2Surge in bankruptcies (big firms and SMEs) and a wave of industry consolidation56.8%
#3Failure of industries or sectors in certain countries to properly recover55.9%
#4High levels of structural unemployment (especially youth)49.3%
#6Weakening of fiscal positions in major economies45.8%
#7Protracted disruption of global supply chains42.1%
#8Economic collapse of an emerging market or developing economy38.0%
#16Sharp increase in inflation globally20.2%
#20Massive capital outflows and slowdown in foreign direct investment17.9%
#21Sharp underfunding of retirement due to pension fund devaluation17.6%

The pandemic has accelerated structural change in the global economic system, but this does not come without consequences. As central banks offer trillions of dollars worth in response packages and policies, this may inadvertently burden countries with even more debt.

Another concern is that COVID-19 is now hitting developing economies hard, critically stalling the progress they’ve been making on the world stage. For this reason, 38% of the survey respondents anticipate this may cause these markets to collapse.

Social Anxieties

High on everyone’s mind is also the possibility of another COVID-19 outbreak, despite global efforts to flatten the curve of infections.

RankSocietal Risk%
#10Another global outbreak of COVID-19 or different infectious disease30.8%
#13Governmental retention of emergency powers and/or erosion of civil liberties23.3%
#14Exacerbation of mental health issues21.9%
#15Fresh surge in inequality and social divisions21.3%
#18Anger with political leaders and distrust of government18.4%
#23Weakened capacity or collapse of national social security systems16.4%
#24Healthcare becomes prohibitively expensive or ineffective14.7%
#26Failure of education and training systems to adapt to a protracted crisis12.1%
#30Spike in anti-business sentiment3.2%

With many countries moving to reopen, a few more intertwined risks come into play. 21.3% of analysts believe social inequality will be worsened, while 16.4% predict that national social safety nets could be under pressure.

Geopolitical Troubles

Further restrictions on trade and travel movements are an alarm bell for 48.7% of risk analysts—these relationships were already fraught to begin with.

RankGeopolitical Risk%
#5Tighter restrictions on the cross-border movement of people and goods48.7%
#12Exploitation of COVID-19 crisis for geopolitical advantage24.2%
#17Humanitarian crises exacerbated by reduction in foreign aid19.6%
#22Nationalization of strategic industries in certain countries17.0%
#27Failure to support and invest in multilateral organizations for global crisis response7.8%
#31Exacerbation of long-standing military conflicts2.3%

In fact, global trade could drop sharply by 13-32% while foreign direct investment (FDI) is projected to decline by an additional 30-40% in 2020.

The drop in foreign aid could also put even more stress on existing humanitarian issues, such as food insecurity in conflict-ridden parts of the world.

Technology Overload

Technology has enabled a significant number of people to cope with the impact and spread of COVID-19. An increased dependence on digital tools has enabled wide-scale remote working for business—but for many more without this option, this accelerated adoption has hindered rather than helped.

RankTechnological Risk%
#9Cyberattacks and data fraud due to sustained shift in working patterns37.8%
#11Additional unemployment from accelerated workforce automation24.8%
#25Abrupt adoption and regulation of technologies (e.g. e-voting, telemedicine, surveillance)13.8%
#28Breakdown of IT infrastructure and networks6.9%

Over a third of the surveyed risk analysts see the emergence of cyberattacks due to remote working as a rising concern. Another near 25% see the threat of rapid automation as a drawback, especially for those in occupations that do not allow for remote work.

Environmental Setbacks

Last but certainly not least, COVID-19 is also potentially halting progress on climate action. While there were initial drops in pollution and emissions due to lockdown, some estimate there could be a severe bounce-back effect on the environment as economies reboot.

RankEnvironmental Risk%
#19Higher risk of failing to invest enough in climate resilience and adaptation18.2%
#29Sharp erosion of global decarbonization efforts4.6%

As a result of the more immediate concerns, sustainability may take a back seat. But with environmental issues considered the biggest global risk this year, these delayed investments and missed climate targets could put the Earth further behind on action.

Which Risks Are of the Greatest Concern?

The risk analysts were also asked which of these risks they considered to be of the greatest concern for the world. The responses to this metric varied, with societal and geopolitical factors taking on more importance.

VC_What's-at-Risk-v5-supp

In particular, concerns around another disease outbreak weighed highly at 40.1%, and tighter cross-border movement came in at 34%.

On the bright side, many experts are also looking to this recovery trajectory as an opportunity for a “great reset” of our global systems.

This is a virus that doesn’t respect borders: it crosses borders. And as long as it is in full strength in any part of the world, it’s affecting everybody else. So it requires global cooperation to deal with it.

——Gita Gopinath, IMF Chief Economist

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