Category: Business Transformation & Success

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An Alternative World Cup

For the last month, the eyes of the sporting world have been fixed on a Middle Eastern Emirate, one-tenth of the size of New York State. In what has been the most political FIFA World Cup to date, the litany of controversies has, at times, threatened to overshadow the spectacle. Like most fans I’m thankful that sport has ultimately shone through; but like many others, I’m left uneasy at the wider context and particularly our willingness to wash over issues that we would not tolerate at home.

From media coverage in the run-up to the finals, I was surprised to learn that Qatar is effectively a modern creation, gaining independence as recently as 1971. It’s a ruling system, however, is nearer to medieval. The Emir (Sheik Tamim bin Hamad Al Thani) holds all power, appoints his own government, controls the courts… and no doubt sanctioned the bribes that allegedly secured the World Cup finals in the first place. In a country with a population of 2.5 million, fewer than 320,000 are citizens, enjoying a per capita income that’s the fourth highest in the world.

Qatar is Not Free

The quid pro quo for these native Qataris is the sacrifice of their freedom. They are caught in the classic position of a ‘complicit elite’, knowing their country is out of step with modern values but fearful that change would harm their privileged position. And so they — and to some extent, we too — live with the absurdity of hosting the showpiece of a sport that promotes diversity, inclusion, and opportunity in a tin-pot nation-state that does precisely the opposite.

Of course, not every nation in the World Cup finals has a liberal system of government. Of the 32 countries, less than a quarter are classified (albeit extremely toughly) as ‘full democracies’ by the longstanding Economist Intelligence Unit survey. More positively, the Freedom House Index would rate around three-quarters of free societies in the broadest sense. Notwithstanding the variance, there are a number of participants from what are clearly authoritarian regimes, including the hosts, Saudi Arabia and Iran.

FIFA Gives the Games on Human Rights & Democracy

Thinking about all this, I began daydreaming of an alternative format in which the games were decided on values rather than goals. In my imaginary world, FIFA stood for the International Federation of Freedom and Association — with contests that matched the countries on their human rights and democracy records, playing extra time with political engagement, empowerment of women, or lack of corruption. How might the teams do then I wondered, and who would reach the round of eight, semis, and ultimate play-off?

Looking at the various indices for democracy and freedom you could be forgiven for feeling depressed. Whole swathes of the world’s population live under repressive regimes or what is euphemistically described as ‘hybrid’ systems. The Middle East — except for Israel — is wall-to-wall autocracy; Africa has a few beacons of hope but is otherwise pretty bleak. And let’s not be complacent about those closer to home — to my mind, one of the greatest sadness of this century has been the retreat of democracy in countries such as Hungary, Turkey, and the majority of the Balkan States. 

But if this paints a gloomy picture, there is brighter news from my fantasy alternative…

For in fact, the results would not be that different to those which played out. In the real world England thrashed Iran and drew with the USA (seems about right?), Argentina beat Mexico, The Netherlands trounced Qatar, and Saudi Arabia failed to make it through the group stages. I’m cherry-picking here of course, but with a few exceptions (Canada and Switzerland really ought to have done better) and recognizing that there has to be victors, it’s been a strong World Cup for values.  Morocco has been the surprise and perhaps outlying team (they rate at best mid-range on most indices) — let’s hope their success on the field acts as a fillip for their country’s freedoms too. 

More Freedom Often Means More Talent

In many ways, these results should be no surprise. For there’s long been a proven correlation between liberal democracy and the unleashing of talent. Some — me included —would argue it is more causal in its nature. The very act of freeing people from restraints turbocharges the abilities and creativity we all possess in some measure. And from these richer pools of opportunity emerges, ultimately, the flair and genius that we see in Messi and Mbappé. Does anyone seriously think they would have been as likely to flourish in Russia?

This capacity transcends wealth too. Qatar and the Middle Eastern emirates are a-typical outliers in that other long-standing correlation — the one between freedom and prosperity. They may have the cash to build stadiums but until they change their systems, they’ll never have the capital to compete. In contrast, consider the progress of Croatia, a far from perfect or affluent nation, but it seems to me, one determined to look forward not back. In six World Cups, they’ve been runner-up twice and bronze medalist once. Don’t tell me that’s nothing to do with their history and struggle for independence.

And so to the final. For all that I am European by descent, I was neutral in the values stakes. On the one hand, we had France – arguably the cradle of modern democracy; on the other Argentina, a nation that, despite many issues, has transformed itself from the days of dictatorship and military juntas. It ranks second only to Uruguay in the Southern American democracy index. I was indifferent too on sporting grounds; may the best team win, I thought as the game kicked off. 

World Cup 2022 Final

How appropriate then, that what followed was perhaps the greatest ever final — the old and new guards of footballing genius slugging it out over ninety minutes, the extra time, and eventually penalties. So good was the game, that in the end, for neutrals at least, the result was almost incidental. Because what had really won, was not just a team —and certainly not Qatar as a host — but the sport as a whole, and most importantly, the values it stands for. 

That is something for us all to celebrate.

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Reflections On a Lesser Known Wimbledon, by Jozef Opdeweegh

The London district of Wimbledon is synonymous with its namesake tournament and those two weeks in July when the world’s media and tennis fans turn their attention to this otherwise quiet suburb for the Wimbledon Open. Beyond the courts, the town is awash with boutiques and coffee bars; its young professionals, are no doubt attracted by its heritage as the home of my favorite
sport.


But wander just a mile or so from its high street, you’ll find a new and very different stadium that has an equally fascinating — and important —story to tell. It’s the home of AFC Wimbledon, a not-so-famous football team, that in a mere twenty years has risen, phoenix-like, from the ashes of a firestorm of dispute that destroyed a club and disenfranchised its followers.


The story of the original Wimbledon FC is the stuff of a comic book legend. After decades in the minor divisions, the team rose in consecutive seasons to the top tier, winning the FA Cup in 1998. Around the turn of the millennium, their fortunes declined, and lacking a permanent ground the owners summarily uprooted the club, moving it 60 miles north to Milton Keynes, a town with no previous connection. A new identity of Milton Keynes Dons was created, and today, they are solidly placed in League One of the English pyramid.


From my perspective, the interesting part of this story is not so much the fortunes of the football teams. Rather, it’s the decision of the owners to relocate a club with a hundred-year heritage to a town that wasn’t even built when it was first founded. At the time of the proposal, the Football Association approved the move, arguing that the owners could do as they wished — after all, it was their asset to manage or market as they saw fit.


The fans, however, saw things differently.


There’s a famous quote about soccer by Bill Shankly, a former manager of Liverpool FC. ‘Some people think football is a matter of life and death. I assure you, it’s much more serious than that.’ The point he was making is one that the owners of Wimbledon were tone-deaf to: that football is about more than a balance sheet; that the fans are as vital as the players; and that the values and heritage of a club can’t simply be traded like a commodity on the stock exchange.


In the case of Wimbledon FC, the fans turned their rage into a more constructive rebuilding,
founding a new club and eventually, crowdfunding a remarkable stadium. It’s a monument to passion and a belief in the interests of those who care most – the new club is controlled by a supporter’s trust, is embedded in its community, and its team has risen through the ranks to compete (ironically, alongside Milton Keynes) in leagues one and two of the English professional system.


The story though has wider relevance. It raises questions about the interests of stakeholders and the potential conflicts with owners and custodians. Consider the controversy over Elon Musk’s purchase of Twitter and the uproar from some quarters at his changes to policy and approach to free speech. The exodus of many users to the open-source alternative Mastodon has perhaps echoes of the response of those disenfranchised Wimbledon fans.


I’m not going to comment on the pros and cons of Musk’s takeover, not least because it’s
entangled with left and ring-wing politics, making any assessment too sensitive and subjective. But what’s clear, is that the millions of Twitter users can’t simply be ignored. Nor, as one of the leading social media platforms, should the wider implications of the company’s policy on freedom of expression, accountability under the law, or the ability to protest.


Listening to stakeholders in business doesn’t mean that change will always be watered down. It’s true that in many large organizations there can be institutional resistance to reform. But conversely, there are times when those employees closest to the coalface know that organizational transformation is necessary for long-term value. Nor does it mean that unpopular measures should be shirked — it’s worth acknowledging that in relation to my opening story, the town of Milton Keynes now has a thriving and well-supported football team.


What I’m really getting at here is being attentive to the importance of purpose and mission in those companies and organizations that play a significant role in our lives. We all know that businesses must make a profit, but that can’t today be the sole meaning of their existence. Equally, non-profit and public service ventures — in the arts, sport, and education — must balance their social objectives with a reality check on affordability and remember that the bigger goal is not so much their particular passion, as a healthy, diverse, and flourishing society.

I’m convinced that the key to navigating this maze is having a compass that’s sensitive to values that are commonly held by all involved — be those owners, employees, and customers, or governments, peoples, and their allies. For it is our shared beliefs, applied with some pragmatic flexibility, that bind us together in difficult times. Values can also — quite legitimately — be a way of establishing lines that others may choose not to cross. And that’s fine, so long as we are not mismatched in our understanding.


In seeking such constructive and cooperative outcomes, I believe it’s vital that no one version of the truth be allowed to ‘out-shout’ or cancel another. It’s an irony that those most vocal in calling for freedom of expression, or safe spaces for their views, are often deeply intolerant to alternative perspectives. More than that, it’s inefficiency and a fast track to failure, for in the long term there are no more static companies or countries than those who brook no dissent.


Every leader, no matter how sure of their strategy, should remember Lyndon Johnson’s epithet, ‘if you’re not listening, you’re not learning.’ And in doing so, train their ears to hear the notes that matter, filtering out the background noise to better recognize when their plans are out of key with others who care too. Thirty years into my career I’m more attentive than ever to those metaphorical sounds. Experience is a privilege and a powerful asset, but it’s nothing if applied without due regard for the values and purposes which underpin the more tangible measures of success.


This year, AFC Wimbledon met Milton Keynes Dons in the early rounds of the FA Cup. Despite some stirring of rivalry by the press, the match went off without rancor. In the twenty years since the upheaval, the Football Association has changed its rules and an owner can’t just uproot a club today; meanwhile, the respective fans have found a new focus and moved on from the past.


Wimbledon’s new stadium is called Plough Lane, the same name as the original club’s ground. It’s a fitting blend of the old and new, of learning from mistakes and looking to the future. And perhaps most of all, of holding true to the values that show how clubs, businesses, and communities of any sort, are more than the sum of their parts.

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4 Principles For Adaptive Leadership

When considering the qualities needed to lead an organization, especially in times of disruption and uncertainty, the ability to adapt is often one of the most coveted qualities for leaders. As such, I’ve reflected on the tremendous amount of change and adversity that we have collectively faced as a result of the challenging but necessary COVID-19 lockdowns. In the past months, just as businesses were on the cusp of returning to the office and resuming normal routines, the Delta variant quickly demanded laborers and managers to alter their course and reconsider how to keep employees safe.

This is only one of the more recent examples of the disruption we have experienced in the past two tumultuous years. Factors like variants and spikes in infections make it apparent that this need for an adaptable and responsive approach to leadership will continue to be the norm. But one thing that will impede progress and growth is panic. With this in mind, I believe that leaders and managers must take a step back to look at the full-wide picture before proceeding with new strategies moving forward. 

But simply being able to “adapt” or showing “adaptive actions” is not enough: organizations that wish to employ an adaptive leadership style must cultivate a few key characteristics to ensure optimal performance. In recent years, many business leaders have realized that the single-figure, top-down leadership model is outdated and impractical. No single person can solve every problem, which brings in the need for adaptive and collaborative leadership.

While leadership styles have been transformed over time throughout the years, adaptive leadership, in particular, embraces learning and continuous growth. Leaders shouldn’t be afraid to try new tactics to solve problems. They should also encourage innovation and creativity from their employees, even if the solutions don’t always work.

Let’s go over the 4 principles to guide adaptive leadership: 

  1. Leading Through Reflection

Reflection is both an internal and external process that promotes self-awareness, understanding, and improved critical thinking skills. Learning to be present, aware, and attentive to our experience and interactions with people throughout the day is an important element of adaptive leadership.

  1. Developing Clear Organizational Purpose

Studies and surveys demonstrate that organizations founded on strong social values have more engaged teams, attract talent at less cost, have increased employee retention rates, and enjoy more positive customer relations and brand reputation. Leadership in the next decade will require greater attention to these issues, not only as a requisite of political correctness but as a means to drive performance.

  1. Cultivating an Unbiased Mindset

An ideal group leader should take a selfless and unbiased approach to leadership and credit the company’s success to the contributions of every member and not himself alone. As such, leaders should never let personal desires and feelings interfere with decisions associated with the group and should source collective views from members of their team before taking any action.

  1. Leading With Empathy

Employees will be more committed to the success of the company if they feel inspired by leadership. A successful company generally boasts a roster of employees who enjoy working there. Giving employees a voice, equipping them with the knowledge they need to succeed, and inspiring them to drive the company forward is beneficial to the company at large. 

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How to Sell Your Business at the Most Attractive Valuation

Picture this: Your business has enjoyed an excellent run over the past couple of years. Revenue is following an upward trend, and EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) is keeping pace with your growth.

If a private equity fund owns the business you are running, there is a good chance the owners are contemplating a sale. A sale may be based on considerations such as how long the fund has owned the business and the perceived attractiveness to interested buyers.

On the other hand, if you personally own the business, you may be looking at bringing on fresh equity and operational know-how to expand your success.

Whatever the motives driving change may be, a tremendous amount of incremental value may be unlocked through the way you approach the process of selling your business. The most attractive valuation can be achieved by focusing on a number of key factors during preparation and execution of the sale.

Jozef Opdeweegh, a Miami businessman with over 17 years of experience as CEO, Chairman and Board Member of private and public companies discuss how to sell your business at the most attractive valuation.

7 Key factors for valuation

1. Timing

The right time to sell is when: (1) there are many prospective buyers, (2) there is a significant amount of private equity money (that has yet to be deployed and is actively pursuing new deals), (3) the IPO market is hot (if you are contemplating going public) and (4) the general economic climate is attractive (specifically in relation to the industry vertical(s) your company serves).

2. Business Performance Sustainability

Business performance in the years preceding the sale process is a main driver in maximizing enterprise value. Simply put, a buyer will only be willing to pay a certain multiple on your EBITDA if that buyer is sufficiently convinced the run-rate level of cash flow is sustainable in the future. By way of example, not a single buyer will pay a 10 times multiple of cash flow without conviction that the company will be able to generate that cash-flow level for at least 10 years.

3. Investment Bank Expertise

First, it is important to select an investment bank (or a broker) with a proven track record in your industry. When selecting an investment banker, exercise balanced judgment of your valuation expectation – do not simply pick the banker who promises the highest valuation.

Having access to a competitive set of bidders for your business will likely yield a positive impact on the obtainable valuation. Therefore, it is typically advisable to organize an auction with a broad set of participants.

4. Memorandum and Management Presentation Effectiveness

You will command the highest price if you spend a large amount of time on preparation. You simply need to produce the most comprehensive, compelling and best Information Memorandum and Management Presentation. You, along with your fellow presenters, should excel and be confident in front of an audience. Demonstrate knowledge of every detail related to the business, and be agile and quick in your thinking. Eloquently answer all the questions from the buyers’ community. Be enthusiastic, perseverant and energetic. It is a worthy investment to practice presentation skills with your team.

5. Team Strength and Cohesion

When you are selling your business, you are also selling your management team. It is important the buyers are exposed to the entire senior team at some point during the sale process. The management team should be fully aligned on culture, core behaviors and strategic vision. Any dissonance will be viewed as a weakness, which may negatively impact price. If you are planning on selling your business, avoid making meaningful management changes in the 12-months prior to the sale. A tenured leadership team reflects stability. It also reflects your ability to plan for the long run and to provide the best, most scalable team to a buyer.

6. Strategic Plan Integration

The ability to work well with a new ownership team depends on the business’s strategic plan. The sale process, which typically runs over an extended period, allows for extensive conversation around this topic. Therefore, the level of consensus surrounding the business’s strategic plan (post-ownership change) becomes clear.

If you, as the business owner, are in the position of being able to singlehandedly select the buyer, you can vigorously drive this point home. If you are running a company owned by a PE investor, you typically do not have the luxury of weighing in on the future ownership decision. In the latter scenario, spend sufficient time with the acquirer to demonstrate the merits of your strategic perspective and proposed direction.

7. Cultural Alignment

You and your new shareholders should share the same value set. Disparate perspective on culture and core behaviors will lead to significant future issues with your new shareholders. Often, this is the reason for failed acquisitions. Again, during the sale process, focus on corporate culture to assess alignment to maximize future success.

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7 Key Fixes to Transform a Floundering Business

All kinds of companies – both publicly and privately listed – fail to reach their full potential for a myriad of reasons. Perhaps the business is family owned, but the ownership group is content with generating an adequate level of recurring cash flow, despite underperforming against peer groups. Or, perhaps the business is publicly owned, but the management and the board are not incentivized to explore new avenues of growth and diversification. Rather, they are compensated to remain risk averse.

In both cases, there is the potential to unlock incremental shareholder value. And in the case of public companies, the board and the leadership team may even have a fiduciary obligation to do just that.

It can be empirically argued that for most businesses, there is a direct correlation between the size and level of diversification on one hand and the enterprise value of that organization on the other hand. Additionally, key drivers of shareholders’ wealth creation are cash-flow resilience and the comparative performance in terms of growth and profit margin versus direct competitors.

Common Business Issues & How to Successfully Address Them

1. No Well-Defined Strategic Plan

If a company does not have a clearly articulated strategic plan and a shared end goal, it is rudderless and its employees are unable to cooperatively work towards a future state.

An effective strategic plan describes what the company should ideally look like in a defined period (typically 5 years), and it sets key milestones.

The strategic plan needs to be simple, focused on no more than 5 key criteria, and it should be universally understood throughout the organization. It is imperative for the leadership to actively go out to its workforce to explain the strategic plan, its merits for all involved, and the importance of the contribution of each employee to the achievement of the end goal.

2. Lack of Organic Growth

Companies that fail to grow organically will risk a weakening of their position in the marketplace. For many organizations, mediocre performance essentially becomes institutionalized. The sales force lacks the right sales playbook because these companies fail to sufficiently invest in the training and assessment of their sales force, and they have incentive schemes that do not incent the right behaviors.

Key to turning around the revenue trend of an organization is the continuous comparative assessment of salespeople based on objective criteria, combined with (1) tailored sales force training, (2) a redesigned and simple incentive opportunity, and (3) a clear program of relevant KPIs to assess performance quality. In a situation where the sales force as a whole is underperforming and requires upgrading, forced ranking of talent with predetermined levels of attrition and inflow of new talent may offer an effective tool to enhance the overall quality of the sales effort.

3. Outgrowing the Leadership Talent

As a company grows and becomes more diversified in terms of its product/service offerings and geography, it is certainly not unusual to have to upgrade the leadership team in tandem. The demands on the executive team of a small and geographically concentrated business are vastly different from those imposed on the leadership of a rapidly growing and geographically expanding organization. It is important to ensure the quality of the leadership team is in sync with the ambitions of the company. The recruiting policy must be such that the talent attracted is scalable to lead the company through the 5-year horizon of its strategic plan.

4. Lack of Aligned Culture and Core Values

Once a company has clearly defined its mission, its vision, and the supporting behaviors through a process of consultation, it is imperative that the leaders of the organization demonstrate those behaviors in their professional and personal lives. Any form of lack of adherence or dissenting behavior should be addressed in a direct conversation. If the individual continues to openly or otherwise fight the agreed-upon core behaviors, the individual should be let go (in a fair and respectful manner). The biggest threat to the strategic plan is to allow festering passive-aggressive behavior – especially at the leadership level. While cultural alignment is extremely important between the associates, it is equally important that this alignment extends to the board and, in the case of a privately owned corporation, the shareholders of the company. Too often a cultural divide, and not the performance of the team and the company, inspires ownership groups or their representatives to make impulsive management changes.

5. Inconsistent Quality in Operations

The long-term future of a business is negatively impacted if it does not provide world-class levels of quality in its products and services. The company should develop a detailed operating system that is prescriptive in nature and that defines how its facilities and back-office functions should operate across each geography or location. Such a system will guarantee a predictable and excellent customer experience. The operating system should focus heavily on concepts of lean manufacturing, six sigma, continuous flow and first-time-through quality.

6. Lagging IT Infrastructure and Business Analytics

Any business benefits greatly from a thorough and modern ERP solution that covers the entire spectrum of financial accounting, distribution or supply chain management, manufacturing, human resources and CRM. Businesses also benefit from access to relevant business analytics in each of these areas. While boards are often reluctant to implement a new ERP solution (it can be costly and can cause distracting business interruption), the ERP solution is truly the engine of the business. Not only should a business invest in modern ERP solutions, it should also expect to constantly reinvest in modernization and to upgrade every 10 to 15 years.

7. SG&A Overhang

A company needs to identify how much it is willing to spend on the sum of support functions, based on a comparison to its peer group and its strategic ambitions. It also needs to institutionalize the notion that SG&A is scalable, up and down, and to think of it as a semi-variable expense. When a company hits a rough patch, the impact on its cash flow – and even its survival – is often defined by its ability to scale down SG&A. Conversely, when a company grows, it should take advantage of the scalability of support function. SG&A-costs, expressed as a percentage of sales, should decrease as the company grows.

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7 Fixes to Help an Underperforming Business

All kinds of companies – both publicly and privately listed – fail to reach their full potential for a myriad of reasons. Perhaps the business is family-owned, but the ownership group is content with generating an adequate level of recurring cash flow, despite underperforming against peer groups. Or, perhaps the business is publicly owned, but the management and the board are not incentivized to explore new avenues of growth and diversification. Rather, they are compensated for remaining risk-averse.

In both cases, there is the potential to unlock incremental shareholder value. And in the case of public companies, the board and the leadership team may even have a fiduciary obligation to do just that.

It can be empirically argued that for most businesses, there is a direct correlation between the size and level of diversification on the one hand and the enterprise value of that organization on the other hand. Additionally, key drivers of shareholders’ wealth creation are cash-flow resilience and comparative performance in terms of growth and profit margin versus direct competitors.

Common Business Issues & How to Successfully Address Them

1. No Well-Defined Strategic Plan

If a company does not have a clearly articulated strategic plan and a shared end goal, it is rudderless, and its employees are unable to cooperatively work towards a future state.

An effective strategic plan describes what the company should ideally look like in a defined period (typically 5 years), and it sets key milestones.

The strategic plan needs to be simple, focused on no more than 5 key criteria, and it should be universally understood throughout the organization. It is imperative for the leadership to actively go out to its workforce to explain the strategic plan, its merits for all involved, and the importance of the contribution of each employee to the achievement of the end goal.

2. Lack of Organic Growth

Companies that fail to grow organically will risk a weakening of their position in the marketplace. For many organizations, mediocre performance essentially becomes institutionalized. The sales force lacks the right sales playbook because these companies fail to sufficiently invest in the training and assessment of their sales force, and they have incentive schemes that do not incent the right behaviors.

Key to turning around the revenue trend of an organization is the continuous comparative assessment of salespeople based on objective criteria, combined with (1) tailored sales force training, (2) a redesigned and simple incentive opportunity, and (3) a clear program of relevant KPIs to assess performance quality. In a situation where the sales force as a whole is underperforming and requires upgrading, forced ranking of talent with predetermined levels of attrition and inflow of new talent may offer an effective tool to enhance the overall quality of the sales effort.

3. Outgrowing the Leadership Talent

As a company grows and becomes more diversified in terms of its product/service offerings and geography, it is certainly not unusual to have to upgrade the leadership team in tandem. The demands on the executive team of a small and geographically concentrated business are vastly different from those imposed on the leadership of a rapidly growing and geographically expanding organization. It is important to ensure the quality of the leadership team is in sync with the ambitions of the company. The recruiting policy must be such that the talent attracted is scalable to lead the company through the 5-year horizon of its strategic plan.

4. Lack of Aligned Culture and Core Values

Once a company has clearly defined its mission, its vision, and the supporting behaviors through a process of consultation, it is imperative that the leaders of the organization demonstrate those behaviors in their professional and personal lives. Any form of lack of adherence or dissenting behavior should be addressed in a direct conversation. If the individual continues to openly or otherwise fight the agreed-upon core behaviors, the individual should be let go (in a fair and respectful manner). The biggest threat to the strategic plan is to allow festering passive-aggressive behavior – especially at the leadership level. While cultural alignment is extremely important between the associates, it is equally important that this alignment extends to the board and, in the case of a privately owned corporation, the shareholders of the company. Too often, a cultural divide, and not the performance of the team and the company, inspires ownership groups or their representatives to make impulsive management changes.

5. Inconsistent Quality in Operations

The long-term future of a business is negatively impacted if it does not provide world-class levels of quality in its products and services. The company should develop a detailed operating system that is prescriptive in nature, and that defines how its facilities and back-office functions should operate across each geography or location. Such a system will guarantee a predictable and excellent customer experience. The operating system should focus heavily on concepts of lean manufacturing, six sigma, continuous flow, and first-time-through quality.

6. Lagging IT Infrastructure and Business Analytics

Any business benefits greatly from a thorough and modern ERP solution that covers the entire spectrum of financial accounting, distribution or supply chain management, manufacturing, human resources, and CRM. Businesses also benefit from access to relevant business analytics in each of these areas. While boards are often reluctant to implement a new ERP solution (it can be costly and can cause distracting business interruption), the ERP solution is truly the engine of the business. Not only should a business invest in modern ERP solutions, it should also expect to constantly reinvest in modernization and upgrade every 10 to 15 years.

7. SG&A Overhang

A company needs to identify how much it is willing to spend on the sum of support functions based on a comparison to its peer group and its strategic ambitions. It also needs to institutionalize the notion that SG&A is scalable, up and down, and to think of it as a semi-variable expense. When a company hits a rough patch, the impact on its cash flow – and even its survival – is often defined by its ability to scale down SG&A. Conversely, when a company grows, it should take advantage of the scalability of support function. SG&A costs, expressed as a percentage of sales, should decrease as the company grows.


Jozef Opdeweegh

About Jozef:

Jozef Opdeweegh, also known as Jos, has served as CEO for over 17 years of global technology, distribution, and supply chain optimization companies with 5,000 to 20,000 employees, public or privately held. Opdeweegh has extensive board membership experience on 4 continents with related and unrelated companies.

Website – https://josopdeweegh.com/
LinkedIn – https://www.linkedin.com/in/jos-jozef-j-opdeweegh-13986b70/
Related Articles: Jozef Opdeweegh- 6 Core Organizational Values and the Importance of Corporate Culture
Jozef Opdeweegh – 9 Key Characteristics of a Successful Distribution Business


Jozef Opdeweegh

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The Role of Analysis and Creativity in Business Innovation

“Trust…but verify.” The phrase famously used by US President Ronald Reagan at the 1986 Reykjavik Summit, serves to illustrate that a counterintuitive tension is often the most effective way to break down barriers that prevent progress. This type of wisdom is now commonplace in business, aided by the growth of technology that gives confidence to efficiency arrangements between established partners.

Drawing inspiration from the ideal of trust, Jozef “Jos” Opdeweegh, a seasoned C-suite executive with over 20 years of experience developing, leading, and growing public and private global companies, shared his insight on what teams can do to foster their relationships and excel in an environment that supports further progress.

As someone with a true passion for talent development and business transformation, Jos Opdeweegh has demonstrated and repeated success in complex business and cultural transformations where strong teamwork mechanisms are essential. His commitment to finding the right balance in his work has been fundamental in the striking success of his career. This balance has come from finding enough room for both innovation and data to grow together and complement as a one…rather than siloed approaches.

“Fresh thinking is essential to human flourishing”, Opdeweegh assured. “Without it, we stagnate, our horizons narrow and in business, our competitors overtake us”. For Opdeweegh, when innovation becomes absent or curtailed by strict guidelines and dogmas, there is more likeliness for the environment to feel enclosed — or immersed in the ‘dark ages’ as he pointed out — and stagnant from new fresh ideas.

But the reality is that when it comes to our own circumstances, creative leaps can be scary, evoking the sequence of “disruption, resistance and uncertainty” which characterized progress in the scientific and industrial revolutions. Today, that same pattern continues, most obviously in the digital sphere, which has supercharged the speed, reach, and risks of creative innovation.

It is a mistake, however, to think of creativity purely in terms of inspirational genius. Opdeweegh has closely observed patterns of creative pioneers and leaders in various industries such as the prominent engineer and inventor, James Dyson, whom he recalls pointing out that “practical progress is seldom made in the manner of Isaac Newton under the apple tree”. Rather, it’s an iterative journey, which sharpens our notions and intuition through a process of trial and error. For Opdeweegh, Dyson’s brilliance isn’t just his creative vision, it’s also his commitment to testing, adjustment, and utilizing data to analyze and solve problems.

Opdeweegh also agrees that achieving progress is often subtly different than reinvention, and it requires a blend of aspirational and logical mindsets.

“Under this model, the creative and analytic approaches work together to make marginal gains with measurable impact by repeating the process time and again,” Opdeweegh noted. “I’ve seen this in practice, and would observe that the most analytical people I’ve worked with are among the best innovators, while almost all creatives I know are deeply analytical in their approach.”

Moreover, Opdeweegh also remarked how Dyson allowed innovation to flourish under an atmosphere of creative tension, where ideas are robustly and competitively challenged, in pursuit of a common goal. For Opdeweegh, he agrees to this proposition after experiencing this firsthand with his teams who have most effectively come up with the most productive ideas when being subject to the same standards.

The relevance for business leaders is that innovation works best when creativity and analytics are integral to, and not isolated from, the day to day realities of the organization.

“Analysis is, therefore, the bedfellow and not the bugaboo of practical creativity,” says Opdeweegh. “By measuring and learning, not only do we sort the wheat from the chaff, we also help the good become great – or more often, just that little bit better.”

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Twenty Twenty Vision

Has it really been twenty years since we were celebrating a new Millennium? Depending on your perspective, that milestone might seem like yesterday or an age away — given the pace of change, it can feel like both. Across societies worldwide there’s a cultural tradition of acknowledging significant anniversaries and using these as a time to reflect on the past and set new goals. And so, as we enter the third decade of the century, it’s perhaps an appropriate moment to consider the road we’ve travelled and the forces and challenges that are likely to lie ahead.

From a leadership perspective, looking back on the last twenty years, the landscape is in many respects still recognizable — the basics of balanced analytical judgement, good people skills, team building and empowerment are little different, if probably more nuanced. But the changes wrought by technology, increasing globalization, public sentiment and the sheer improvements to our understanding of how we best work together — have inexorably transformed the way organizations navigate their routes to success.

My chief interest lies in the impact these developments — and many others — will have on the demands of senior leadership in the decade ahead. Of course, cultural trends don’t fit neatly into ten-year cycles, but for the sake of convenience — and with a heavy caveat that ‘futurology’ is out of date the moment it’s voiced- here are my thoughts on some the issues that may most significantly impact the leadership agenda over the next ten years.

Organizational Purpose

The idea of organizational purpose has been gaining ground for some time. It’s understood that businesses must make a profit to survive, but beyond this there lies an increasingly powerful sentiment that organizations need to play a clearer and more positive role, not only for their direct stakeholders but also in wider society. The growing B Corp movement , which accredits businesses on social and environmental factors, has to date been seen as somewhat ‘alternative’ — but its core message, which envisions business as a force for good while campaigning for a more balanced assessment of positive impacts than profit alone, is increasingly influencing mainstream thinking. Evidence shows that organizations founded on strong social values have more engaged colleagues, attract talent at less cost and enjoy stronger customer relations and brand reputations. Leadership in the next decade will require greater attention to these issues, not as a requisite of political correctness, but as a means to drive performance.

Organizational Sustainability

No organization of size can ignore sustainability in the coming decade. From an environmental perspective, the pressures are literally rapidly warming up — and with them a need for greater vision and bolder solutions. Pressure groups demanding targets that would appear, by conventional standards, to be unachievable and unrealistic, are nonetheless impacting public sentiment and with that shaping the policy and legislative agendas. The challenge for many leaders will be that adopting a ‘road to Damascus’ eco-conversion will be as impractical as continuing to ignore the underlying realities. My expectation is that a combination of technological solutions and ever more stringent legislation (particularly to ensure level playing fields) will help — but, regardless of the detail, it is clear that we will require leaders to step up with urgency and place these issues at the center of our planning.

Organizational Transparency

The last two decades have seen an unprecedented increase in the scope of corporate reporting. Financial performance, though remaining pre-eminent, is now only one among many of the measures that organizations must account for: gender diversity, pay ratios, executive incentives, environmental emissions, health & safety… This wider assessment of organizational competence will only increase, as will the transparency of data comparison between organizations.

To some extent, what we have seen is a shift to ‘compliance reporting’, by which organizations have sought to meet the formal requirements but then limited further comment. I sense is that we will see the pendulum swing the other way, with a greater demand for leaders to provide more detailed narratives that are answerable to (and tested by) the ever-increasing transparency of the data. Accountability and transparency go hand in hand, so we should expect leaders to be more answerable to their stakeholders than ever before.

Organizational Collectivity

One thing that isn’t going to happen is life becoming simpler. Complexity will necessarily increase as a consequence of the challenges above, and it’s as true as ever that ‘ what got us to here, will not take us to where we need to go’. In this environment, leadership that’s focused on a single individual, however charismatic or talented, will not be sufficient — and even a united senior team is unlikely to deliver the transformational change that some organizations will require. The most successful companies already devolve decision making, but simply segmenting responsibility (by, for example, allocating Values to HR or Efficiencies to Operations) will also not be enough. As complexity increases the role of leadership must shift even further from a focus on decision making and control, to that of engendering a collective ownership of direction and priorities. In short, leadership will increasingly be about demonstrably living the organization’s collective values and goals as much as setting them.

Organizational Courage

The average lifespan of a business is shortening — it’s currently somewhere around 10 years — and most of those long-standing companies that continue to thrive do so by continual adaptation if not entire reinvention. We all know that the last decade has hit the retail sector particularly hard but arguably greater and more fundamental challenges lie ahead for others — consider the challenges facing the leaders in say, heavy engineering, hi-tech manufacturing, distribution, combustible engine manufacturing…

For many businesses — be they start-ups or global giants — the next decade is likely to involve some truly critical calls. Leaders will need to listen, to delegate, to set goals — all that we have considered so far — but they must also have courage, since many of the key decisions will require acting on beliefs in the absence of certainty. The word courage has its origins in the old French and Latin words for ‘heart’ or ‘seat of our feelings’ — and in that sense, it is subtly different to bravery or resolve. These qualities will be helpful too, for boldness and determination are how we must put our beliefs into practice, and acting together, they will be as fundamental to success as any analysis or epiphany.

Zest

I was tempted to title this last section ‘fun’, for enjoyment in the task is surely essential in any leader, whatever their era. But in zest I am hinting at something more. For if we bring energy and enthusiasm to the mix — ideally in a manner that’s infectious to others — then what’s daunting becomes exciting; what seems an obstacle becomes an opportunity — and thereby all the more achievable.

Leaders must not fear the challenges of the next ten years — rather, they should see them as a golden chance: unique, inspiring and seminal to our futures. Leadership in this context is a privilege and remembering as much, every time we turn up for our colleagues or ourselves, is a challenge we should all look forward too.

Happy new year — and here’s to a Roaring Twenties!