3 Emerging Market Risks Companies Should Watch for in 2018

Harvard Business

They devote far more time to internal execution and competitive risks than to external risks that can change the playing field. This means that many emerging market risks get cut from the senior leadership agenda. At Frontier Strategy Group, we observed that in 2017, executives and boards paid the most attention to risks that dominated global headlines: Brexit, the Trump administration’s trade policy, cybersecurity, and, more recently, North Korea.

Venture Capitalists Are Looking for Failures

Women on Business

Let me first state that there are two types of failures, the first are those that do nothing and fail, the second are those that take a risk and end up failing. The fact is that businesses will not assume the risks necessary for innovation and development if they’re not ok with the idea of failing on some level. The problem with fearing failure is that you ultimately avoid risk, don’t bet on yourself or your business, and stunt your richest experiences.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

How CMOs and CROs Can Be Allies

Harvard Business Review

Chief Marketing Officers (CMOs) and Chief Risk Officers (CROs) may seem to have little in common. Both practices have long developed insights into their customers based on data and analytics. But in the aftermath of the financial crisis, risk managers have become increasingly involved in business strategy and decisions. Marketers recognize that buying behaviors change over time as customers get older, have children, switch jobs, build wealth, and retire.

Building a Minimum Viable Product? You're Probably Doing it Wrong

Harvard Business Review

For example, Drew Houston''s March 2008 Digg video for Dropbox generated 70K signups for a product that hadn''t been released yet — and went a long way in confirming product-market fit. While useful, invalidating MVPs are only possible when better products can be produced in small batches — making them difficult when product quality depends on scale of use or when low-quality alternatives abound in the market. Test market risk first.

Building a Minimum Viable Product? You’re Probably Doing it Wrong

Harvard Business Review

For example, Drew Houston’s March 2008 Digg video for Dropbox generated 70K signups for a product that hadn’t been released yet — and went a long way in confirming product-market fit. While useful, invalidating MVPs are only possible when better products can be produced in small batches — making them difficult when product quality depends on scale of use or when low-quality alternatives abound in the market. Test market risk first.

Benefits of Debriefing

Strategy Driven

market) risk obsolescence or irrelevance. It is vital to develop the capacity to learn from your environment. Keep your company fighter-pilot agile in any turbulent or changing market. In a complex world where predictability is impossible and innovation and risk are necessary to survive and thrive, mistakes are not only acceptable, but welcome. It helps us to continually revise our assumptions about the market, economy, and world.

Stop Trying to Predict Which New Products Will Succeed

Harvard Business Review

How you answer this question may be the most important factor in how you design your product development process — and, ultimately, in whether your business succeeds or fails. Is market performance predictable for a specific product or class of products? respectively, suggesting that market risk is the major driver of our inability to predict. Look at the variance of your new-market products. Product development

The Status Quo Is Risky, Too

Harvard Business Review

If your ideas are met with choruses of “that will never work,” “we can’t take that risk,” “let’s just stick with the plan,” your teammates are likely falling prey to a common decision making bias that former Rotman dean Roger Martin refers to as Underestimating the Risk of the Status Quo. Martin describes how executive teams carefully explore the risk of different courses of action, but neglect to make a similar assessment of the risk of staying the course.

When “Scratch Your Own Itch” Is Dangerous Advice for Entrepreneurs

Harvard Business Review

This approach to entrepreneurship increases your market knowledge: as a potential user, you know the problem, how you’re currently trying to solve it, and what dimensions of performance matter. And you can use this knowledge to avoid much of the market risk in building a new product. But only because Facebook felt that, despite being developed with existing customers in mind, the technology would be appealing to non-gamers for the purpose of messaging and social networking.

CRM 12

Can Your C-Suite Handle Big Data?

Harvard Business Review

Adding a chief marketing officer (CMO) became crucial as new channels and media raised the complexity of brand building, while Chief strategy officers (CSOs) joined top teams to help grapple with complex and fast-changing global markets. Because the new data analytics horizons typically span a range of functions, including marketing, risk, and operations, the C-suite evolution may take a variety of paths.

Why Sit on All that Cash? Firms Uncertain on Cost of Capital

Harvard Business Review

Only 46 percent use the perpetuity growth model, while 27 percent develop an explicit cash flow forecast for the entire life of a project. Fully 72 percent develop multiple cash flow scenarios representing the expected outcome as well as best- and worst-case outcomes, which are then discounted. Book vs. Market Weighting Factors Used for Debt and Equity in Calculation of WACC. . Current market debt/equity ratio. Current book debt/current market equity ratio.

Entrepreneurship: A Working Definition

Harvard Business Review

Because they are pursuing a novel opportunity while lacking access to required resources, entrepreneurs face considerable risk, which comes in four main types. Demand risk relates to prospective customers' willingness to adopt the solution envisioned by the entrepreneur. Technology risk is high when engineering or scientific breakthroughs are required to bring a solution to fruition. Financing risk relates to whether external capital will be available on reasonable terms.

Still Many Ways to Skin a Capital Cost

Harvard Business Review

When executives evaluate a potential investment, whether it's to build a new plant, enter a new market, or acquire a company, they weigh its cost against the future cash flows they expect will spring from it. The motivation behind it, as with many, many articles published over HBR's nearly 90-year history, was to take an effective practice developed in one corner of industry and spread it to managers everywhere.

DCF 14

Business Can't Solve the World's Problems — But Capitalism Can

Harvard Business Review

Even social business will not address those issues for which markets cannot be developed. Philanthropy is the market for love. This nonprofit rulebook discriminates against charities in at least five different areas: compensation, marketing, risk taking, time horizons, and capital itself. Amazon was permitted to forgo investor returns for six years to build market dominance.

GDP 12