The prospect of a “smart home” with solutions such as automated lighting, 24/7 video recording and cloud-based HVAC management has sparked a frenzy of market activity. In the past year, multi-service operators (MSOs), telecommunication companies (telcos), original equipment manufacturers (OEMs), start-ups, and tech heavyweights have all entered the space with competing and complementary offerings. With so many players:
How can any one company differentiate itself from the pack and own the home?
Which specific strategies should companies adopt to ensure long-term success?
Where should Connected Home players look to drive sustainable revenue growth?
Communications industry CEOs are concerned about their company’s ability to keep up with the speed of technological change. And they’re looking to strategic alliances or joint ventures to propel growth, as shows the recently released CEO Survey.
Innovation still on top of CEO’s agenda
Communications industry CEOs know they need to innovate. Product/service innovation was selected by 41% of communications respondents when asked what they see as the main opportunity to grow their business (as compared with 35% of respondents from the global sample). And 49% of Communications industry CEOs said developing an innovation ecosystem that supports growth is a priority over the next three years.
Restructuring is top priority
In the last twelve months 62% of Communications industry CEOs entered into a strategic alliance or joint venture, compared with 34% from the global sample. More activity is on the horizon: 54% of Communications CEOs say they plan to enter into a new strategic alliance or joint venture in the coming twelve months.
Planning time horizon
When asked “what is your current planning time horizon?” 56% of communications industry CEOs answered “three years”. The industry is changing too quickly to predict what will happen in just five years.
Still confident on growth
72% of Communications industry CEOs are somewhat or very confident about their company’s prospects for revenue growth over the next twelve months. However, when asked about their confidence level about their company’s prospects for growth over the next three years, a stunning 90% said they are somewhat or very confident.
Considering the conclusion of this report, here are some cross-industry questions that would help us plan for the future:
What does the “right” innovation strategy for my own business look like? Do we want to keep everything in house? Create an incubator? Develop a JV?
The control-oriented management style that’s well suited for traditional connectivity services clashes with the fast-paced decision-making requirements of innovation today. So how can we best organize the business to foster innovation?
The market’s expectation of “anything, everywhere, anytime” combined with shifting profit pools across the content, application, services, and network value chains requires an examination of relevance in this rapidly evolving ecosystem. What is our response to these market changes?
The last Global entertainment and media outlook produced by PwC revealed some interesting insights. As media consumption fragments across devices, consumers increasingly want personalised experiences: their content on their chosen devices when they want it. This move to ‘my media’ can be seen in ‘cord-cutting’ where consumers abandon their pay TV subscriptions and instead access the content they want via cheaper, Internet-based content services. The cord-cutters are now being joined the ‘cord-nevers’, a younger generation who would never think of paying for TV. A further manifestation of ‘my media’ is consumers’ growing use of the ‘second screen’smartphones and tablets to comment on and share the experience of TV content with friends, often via social media.
Understanding new consumers is key
Over the next five years and beyond, all E&M businesses will increasingly engage with a new and more diverse global customer base, with different needs and expectations. According to the OECD, by 2030 two-thirds of the world’s population will be ‘middle class’, with a daily expenditure of US$10 to US$100. This new middle class will appear primarily in Asia Pacific-and the E&M industry needs to understand its needs and motivations to capture its spending power.
Economic growth + new middle class + mobile = ongoing digital growth
Economic studies in emerging markets show consistently that rising mobile and broadband penetration boost economic growth. But fibre networks and next-generation mobile broadband services demands heavy investment. So telcos will have to partner with one another to reduce network costs, and collaborate with ‘over-the-top’ content players to roll out new services. Going forward, the E&M companies that seize a profitable position in the new digital ecosystem will be those with the speed, flexibility and insight to engage and monetise an ever more diverse global base of connected consumers y delivering personalised, relevant, and ultimately indispensable content experiences.
For some years I’m coordinating an international team spread out in Europe, Middle East and India. Cultural differences, dissimilar time-zones and communication difficulties due to jarring accent of the English language are all granted. However, the major challenge does not appear here, nor in terms of technology, but rather in the area of personal motivation. I wrote a piece of article on managing a virtual team for HR Magazine which you can find online here. A copy of the printed version is here.
Unfortunately it is only in Romanian so my apologizes for my English readers. I’ll more likely come back with this subject at a later time.
A few days ago I was reading the interview that Don Tapscott, an adjunct professor at the University of Toronto, gave to McKinsey stating that email should be get rid of. I have to admit I agree with most of his statements but I don’t think killing email is the ultimate solution to internal communication platforms adoption nor the right way to embrace emergent technologies.
Besides having a communication channel outside the company, email does serve its internal purposes. I have looked over the emails I’ve sent and received during the last weeks. Indeed some of them could have been moved to our internal document collaboration platform but for many of them – I don’t think they should. Others are conversations with external providers which, from many reasons, it’s by far better to have them by email and have the output documented.
I do see the value of internal communication platforms. I’m a promoter of such a system but let’s not make the classical human mistake of making it the answer to all questions. It’s not.
There are many “soft” solutions to increasing internal platforms adoption. Why not move critical communication (e.g. bonus announcements) to the platform instead of email? Why not use gamification techniques and make it appealing?
Indeed, top management adoption is needed. Yes, we have to change the way we communicate and accept challenging open questions. The possibility to initiate, vote and debate new ideas should be easily available to all staff – this kind of discussions should indeed be stored in the internal communication platforms and even analysed in a structured way if possible. I would even support merging the two and have email as part of the internal communication platform – provided that security and functionality is being offered at the same level – but still, email would be, even then, a service on its own.
Instead of letting ourselves go with our human appetite for extremes, let’s make a smart use of existing and emerging technologies.
Each year I’m looking for the Global CEO Survey with great interest. Specifically this year I’m interested to see how risk management is affected by the global economic challenges. Communications CEOs are more worried not only about the global economic outlook, but also about several related risks. As the report shows, 45% are extremely concerned about the risk of economic volatility (versus 32% of the total sample). Similarly, 40% are extremely concerned about the measures highly indebted governments are taking to cut their fiscal deficits (versus 27%). Conversely, they’re more relaxed about the prospect of inflation. Only 19% of communications CEOs are somewhat concerned on this score (versus 31%).
Disruptive change is a constant feature of the communications industry and the results from this year’s survey indicate that CEOs see little sign of the pace and scale of change diminishing in the future. The rapid emergence and adoption of new technologies, devices and channels —from smartphones to tablets and Twitter to Groupon – can create overnight stars and catch the unprepared off guard. So it’s hardly surprising that 36% of communications CEOs are planning to make fundamental strategic changes in the next 12 months, compared to 13% across the rest of the survey population.
So how do communications CEOs propose to deal with these challenges?
They’re planning various strategic changes covering a wide range of financial and organisational areas over the next 12 months. Capital investment decisions and capital structuring activities feature prominently in their plans, for example: 31% intend to make major alterations to the former and 29% to the latter (versus 19% and 14%, respectively, of the total sample). And 29% expect to make major alterations in the way they manage risk, whereas the overall average is just 17%.
As well as changing their approach to investment and risk, communications CEOs say they’re likely to continue cutting costs. A full 90% have already implemented cost-reduction initiatives in the past 12 months, which is significantly more than the 75% who’ve done so in our entire survey sample. And 48% expect to outsource a business process or function in the next 12 months (compared to the overall average of 33%). Of course, outsourcing may be motivated by the need to reduce costs, but it’s also a component of the major organisational changes that two-fifths of communications CEOs expect to make in 2012.
Not surprisingly, since new technologies play such a key role in the sector, many communications CEOs are reconsidering how best to manage innovation, too. Communications CEOs are repositioning their portfolios to focus on developing new products and services, and fine-tuning existing products and services. But 60% also intend to adopt new business models in response to a fast-changing environment.
Predictably, perhaps, many communications CEOs are pinning their hopes for future growth on the emerging markets rather than the developed markets—as, indeed, are their peers in other sectors. And while most CEOs with plans to expand abroad are focusing on China, communications CEOs prefer Brazil: 26% believe it will be a key growth market in the next 12 months (versus 15%).
The full report on Communications CEO survey is available here.
A recent study – “CSR Trends” reviewed 602 companies listed in five Standard & Poor’s indices, as well as private companies and crown corporations. The survey does not evaluate the accuracy of the information being reported in the documents or a company’s compliance with any regulation but rather how effective companies have been in communicating their CSR strategies and performance.
The results show that CSR has changed from a nice activity to a core business value that defines the most significant businesses in the world. There are, however, differences in the way CSR results are communicated and here are some key findings:
– 81% of companies have CSR information on their websites but only 50% consider this information sufficiently important to deserve a link on the corporate home page;
– 80% of the companies, many of them worldwide brands such as Coca Cola, Nike, IBM, provide comprehensive explanations of their business activities. Surprisingly, 20% of the companies, many of them smaller and less well known than the multinationals mentioned above, did not provide a profile, essentially eliminating the context of their CSR strategies and achievements;
– Targets that are specific, measurable and have a deadline are significantly more meaningful than a general statement of good intend. Nevertheless, only 65% of companies seamed to realise that and include a summary of objectives on a dedicated space inside the report and only 27% of those objectives have been quantified.
– CSR is an interactive endeavour that requires constant communication with stakeholders. However, only 24% of companies use social media such as Twitter or Facebook to communicate their CSR activities.
This survey’s research was conducted jointly by PricewaterhouseCoopers’ Sustainable Business Solutions practice and Craib Design & Communications. The entire report can be downloaded here.
• Have you thought about how best to minimise the negative impact of restructuring on your employment brand values?
• Do you need to reinvigorate your employment brand initiatives for future talent acquisition?
• Do managers know what you are expecting of them when it comes to maintaining the equity of your employment brand?
• Do all your stakeholders (shareholders, employees, suppliers, community) know what your vision is for the organisation going forward?
• Is the message clear and supportive to your business plans?
• Have you considered the customer perception of your restructuring actions?
• Have you considered what your employee relations strategy needs to be during a restructuring phase?
• Have you built in the time necessary for consultation in all the markets in which your business operates?
• Do you need the approval of any employment inspectorates before you implement your restructuring proposals?
• Are you prepared to stop external hiring to ensure that future employment opportunities are available to your existing employees first?
• Are you required to stop hiring in some markets where you are implementing compulsory redundancies?
• Are you going to police the consistent application of any hiring freeze you announce?
A recent McKinsey survey show that among companies whose primary market is in the European Union or the United States, less than a quarter of respondents say their companies are effective at developing and executing strategies for engaging with all relevant government stakeholders.
The results show that government actions have a significant effect on companies’ economic value: 34% of respondents say 10% or more of their operating income is at stake. Some government actions, such as providing infrastructure and access to capital, are likelier to have a positive than a negative effect on company finances. However, passing laws and setting policies—the actions executives say most often affect their companies’ economic value—have an overall negative effect. Respondents whose primary markets are in developing economies are more positive than others, however, about the effect of government actions, such as the passage of laws and enforcement of rules.
Given this value at risk, it’s promising that 71% of respondents say companies should proactively and regularly engage with government, but it’s less encouraging that only 43% say their companies actually do so.
Some of the reasons for the relative lack of engagement may be executives’ own views of government. More than 75% agree that business must be actively involved in shaping government policy to succeed and that it’s beneficial for companies to be as transparent as possible with government, but large shares also express frustration with government along various dimensions.
When companies do engage with government, executives indicate they’re not particularly good at it. Engaging with the governments of their companies’ primary-market countries is a top-three priority for only 30% of CEOs—although the figure rises to nearly 60% in China. More are involved in overseeing their companies’ efforts to engage: almost two-thirds of respondents say their CEOs either sponsor those efforts personally or oversee the group that does so.