Kill Your Business Model Before It Kills You

Harvard Business Review

Postal Service to stay in business. This vignette raises a key leadership question: Why do leaders wait too long to modify or abandon their business models? The Postal Service, even with the constraints of its government mandate, has known for years that its traditional model was coming apart; Kodak realized that film was being replaced by digital media long before it changed its investment strategy; AOL knew that dial-up subscriptions were fading years before it took action.

Kill Your Business Model Before It Kills You

Harvard Business Review

Postal Service to stay in business. This vignette raises a key leadership question: Why do leaders wait too long to modify or abandon their business models? The Postal Service, even with the constraints of its government mandate, has known for years that its traditional model was coming apart; Kodak realized that film was being replaced by digital media long before it changed its investment strategy; AOL knew that dial-up subscriptions were fading years before it took action.

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3 Ways to Get Your Own Digital Platform

Harvard Business

And despite their relatively short existences, digital platforms such as Uber, Airbnb, Pinterest, and Snapchat are wreaking havoc on traditional businesses. Network businesses have always been around, from matchmakers to real estate brokers, but it’s the move to digital platforms that has led to market-shaking effects. How Digital Business Models Are Changing. Social platforms Internet Business models Digital Article

How Big Companies Can (and do) Innovate Like a Start-Up

Leading Blog

When faced with a potential threat of technology or business model disruption, you need to consider two things. If you adopt the technology or business model, will you achieve a reasonable profit? For example, if the threat is highly likely (imminent) and the profits from it are at least as good as your current business, then jumping on the opportunity is the thing to do.

The Right Entry Point for Emerging Markets

Harvard Business Review

The topic — part of a series on innovation sponsored by Singapore's Economic Development Board and coordinated by Harvard Business Review — was "What's the Right Entry Point for Emerging Markets: Target Customers at the Bottom or the Middle of the Pyramid?". After all, the World Bank estimates that the number of middle class consumers in emerging markets will jump from 420 million today to more than 1.2 It depends on what "compromise on market research" means.

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Should Dual-Class Shares Be Banned?

Harvard Business

In our view, while the proposal to ban dual-class shares raises important issues, its implementation would do more harm than good, given the challenges from the digital revolution and the growing imperative for established firms to transform their business models. Some of the largest companies of recent times by market capitalization, such as Facebook, Alphabet, and Alibaba, carry dual class-shares. Financial markets Business law Policy Digital Article

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The Fastest-Growing Cause for Shareholders Is Sustainability

Harvard Business

Ask someone to name the demands that activist hedge funds make of companies and they’ll likely list corporate governance issues like board changes and executive compensation, or perhaps some form of restructuring. While activism takes many different forms, it usually begins with investors holding private conversations with company management on the need to change a process, business model, or management practice. Paul Garbett for HBR.

How B2B Software Vendors Can Help Their Customers Benchmark

Harvard Business

Today, the data to answer those questions exists — it’s captured by the software-as-a-service firms whose services companies use to run their businesses. We’ve already seen that it’s possible to use external data to evaluate firms on what business models they are employing, and what those business models mean for their valuations. Active investors such as hedge funds seek to outperform the market and index providers.

How Blockchain Is Changing Finance

Harvard Business

For the first time in human history, two or more parties, be they businesses or individuals who may not even know each other, can forge agreements, make transactions, and build value without relying on intermediaries (such as banks, rating agencies, and government bodies such as the U.S. Business in the Era of Blockchain. After all, how do you cut cost from a business or market whose structure has fundamentally changed?

How to Figure Out What Your Side Hustle Should Be

Harvard Business

Entrepreneurship, even in the form of part-time work to complement a traditional day job, can provide a useful hedge against economic uncertainty and a way to develop new skills. “I would rather stay in the company and start testing your hypothesis [about your business model],” he says. “Buying courses, joining a mastermind group, and having a business coach will all help,” he says. Yenpitsu Nemoto/Getty Images.

Why the U.S. Needs More Worker-Owned Companies

Harvard Business

Workers and employees have more opportunities today than ever before to become capitalists and invest in the businesses that employ them. Baby Boomers at or near retirement age own nearly half of the privately held businesses in the United States. More than half of these owners expect to retire in the next 10 years, and one-quarter wish to transfer ownership of their companies to a business partner or their employees. Klaus Meinhardt/Getty Images.

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U.S. Corporations Don’t Need Tax Breaks on Foreign Profits

Harvard Business Review

Now, in a New York Times op-ed , Carl Icahn, the billionaire corporate raider turned hedge fund activist, has joined the chorus. As I argued in my Harvard Business Review article “Profits Without Prosperity,” U.S. The hedge fund activist wants Apple to double its stock price , with massive buybacks as the lever. Economics & Society Financial markets Government Economy Articlebabo schokker.

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Robo-Advisers Are Coming to Consulting and Corporate Strategy

Harvard Business

Robo-advisors, which were introduced in 2008 , are steadily eating up market share from their human counterparts much the way that Amazon and Netflix have taken share from Walmart and Regal Cinemas. This makes corporate strategy an enormous and untapped prize for “robos” and “AI-enabled” expert advice across the entire enterprise; this market is ripe for disruption much the way the financial investing industry was in 2008.

7 Skills That Aren’t About to Be Automated

Harvard Business

These advances all point toward the total automation of our lives, including the way we work and do business. It’s no wonder, then, that young people are anxious about their ability to compete in the job market. Likewise, understanding the context, business model, competition, and leadership of a client or an employer makes your understanding of content more useful. How do you catalyze breakthrough performance in your business? John Fedele/Getty Images.

What Initial Coin Offerings Are, and Why VC Firms Care

Harvard Business

ICOs present both benefits and disadvantages, as well as threats and opportunities, to the traditional venture capital business model. Then, via price dynamics determined by market supply and demand, the value is settled on by the network of participants, rather than by a central authority or government. Business in the Era of Blockchain. As of March 2017, the market capitalization of the ether token was more than $4 billion.).

McDonald’s Has to Do More than Manipulate Its Stock Price

Harvard Business Review

Wall Street investment banks and hedge fund activists, some of whom began targeting McDonald’s a decade ago , also gain from the temporary boosts that buybacks produce. ” Kroc, who led the company until his death in 1984, was a pioneer in making a franchise a potentially lucrative business opportunity for a small investor, who would actively manage his or her family enterprise. Financial markets National competitiveness Financial management North America

How Large Food Retailers Can Help Solve the Food Waste Crisis

Harvard Business

And because the traditional supermarket industry is highly concentrated (for example, in the UK, the top seven food retailers account for 87% of the grocery market), retailers have considerable market power to make change. However, their high volume–low margin business model also makes them vulnerable to threats such as competition, increasing wholesale prices, and changing consumer demands. Tara Moore/Getty Images.

Why Apple’s New HQ Is Nothing Like the Rest of Silicon Valley

Harvard Business

They acquire huge customer bases and receive staggering market valuations while employing a relatively small number of people. Their business models are fluid. The model emerging to support them is a network of corporate offices distributed among the commercial shops and public spaces of a neighborhood community. Understandably, they want to hedge against unpredictability and rapid change. It is not a hedge.

The Disruption of Venture Capital

Harvard Business Review

Graham argued that the proliferation of money combined with the decreasing costs to start a business were making the VC job more difficult, prophesying significant changes for the industry. Hedge fund investors who deploy capital in large and liquid markets can scale their time well. Bill Ackman's hedge fund Pershing Square, for example, has $9 billion in assets under management and fewer than ten investment professionals.

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Five Rules for Innovating in a Shaky Economy

Harvard Business Review

When stock markets gyrate and growth prospects darken, it's tempting to rein in innovation programs and hoard cash. While businesses shouldn't react to economic uncertainty in knee-jerk fashion, the recent tumble in equity prices cannot be ignored. Companies can do five things to hedge their bets in turbulent times while opening up options for the future: 1. Quite few have a business model innovation process, or even a single person dedicated to this function.

Universities Are Missing Out on an Explosive Growth Sector: Their Own

Harvard Business Review

One representative example: April’s Education Innovation Summit , where more than 2,000 people energetically discussed how technology and markets are charting the future of education globally. The business models of universities are being challenged, and it looks like the universities are out to lunch. The transformation in education technology and markets is happening with the business leaders and money-men of higher education barely present.

?Numbers Show Apple Shareholders Have Already Gotten Plenty

Harvard Business Review

9, armed with about 1% of Apple’s outstanding stock, the hedge-fund activist published an open letter to Apple CEO Tim Cook, urging him to accelerate the company’s stock repurchases by making a tender offer. Icahn later reduced his buyback request to $50 billion, and in April 2014 Apple’s board approved a $30 billion program to be carried out by repurchasing its shares on the open market — either by just buying shares outright or doing it indirectly via accelerated share repurchases.

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Let Data Ask Questions, Not Just Answer Them

Harvard Business Review

Global enterprises and entrepreneurs alike will be able to use big datasets to generate business hypotheses around innovation and new value creation. Similarly, you can be sure that many — if not most — highly-secretive quantitative hedge funds have highly proprietary AH engines relentlessly recommending trading strategies and investment themes that lend themselves to review and refinement. But that’s just a business hypothesis.

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Six Strategy Insights RIM's New CEO Can Use

Harvard Business Review

Trend lines, market sizing, and competitive benchmarks that served companies well during periods of gradual market evolution do little good in industries where new technologies create seismic shifts, demand is uncertain, and rivals emerge from left field. It involves too many people When a strategic plan needs to finely calibrate the moves of loosely controlled business units and achieve consensus, then it often makes sense to include a wide range of stakeholders in the discussions.

What Good Is Impact Investing?

Harvard Business Review

It’s interesting to see the WEF, the organization best known for its annual Davos summit of business leaders, government officials, and other luminaries, adopting impact investing as a cause. The other extreme is, “I have no intentions but look I’ve created jobs, ex post ,” and that is the post-rationalization of an economics-only business model. Both the customer and the business evolve positively together. Impact investing is on the rise. But, um, what is it?

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The World Just Got More Uncertain and Your Strategy Needs to Adjust

Harvard Business

But now that we have a clear outcome, it’s time to move forward and assess the implications for business and society. One thing we can say with confidence is that uncertainty will remain high for some time in politics, macroeconomics, and business, at both global and national levels. There will be fewer and fewer highly predictable environments in which businesses can rely on this. Donald Trump’s unexpected win in the U.S.

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Case Study: A Short-Seller Crashes the Party

Harvard Business Review

When the well-known hedge fund manager and short-seller Jeremiah Hughes first put Terranola in the spotlight, issuing ominous warnings about unsold products, a looming patent expiration, and flawed growth projections, the considered judgment of the executive team was to do nothing. “I Editor’s Note: This fictionalized case study will appear in a forthcoming issue of Harvard Business Review, along with commentary from experts and readers. Terranola’s market cap skyrocketed to $8.1

Stop Assuming Your Data Will Bring You Riches

Harvard Business Review

Hedge Funds will love our data — they will practically buy any set of data that might give them a potential edge”. These are just a sample of thoughts from clients in recent months who were excited about the prospect of creating new businesses and new sources of revenue in what seems to be a lucrative new area. The innovation consulting firm Innosight often refers to “$50 million in 5 years” as a reasonable target for a brand new business.

End the Religion of ROE

Harvard Business Review

Conversely, why market cigarettes? We think there's more to business success — and that something as straightforward as a simple equation could put capitalism on a better path. To an extent not widely recognized, it was an equation in the first place that gave ROE the power to dominate not just investment decisions, but an entire business culture. Just as electronic commerce would later sweep business, mass production came to one industry after another.

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