California's Industrial Biotechnology Workforce: Creating Jobs and Leading Innovation

A recent survey of California’s pioneering industrial biotechnology sector shows that this sector has great potential for job growth in the state.

California’s industrial biotechnology industry increased employment by 632 percent in the past five years, according to a survey conducted by BayBio and BIOCOM, the leading biotechnology industry associations in the state, and Radford, a compensation consulting firm. California’s industrial biotechnology industry is creating new jobs for skilled workers and promises to benefit the world through new and sustainable fuel sources, feedstock, enzymes and green industrial chemicals.

With the proper investment in the workforce, and cooperation from the state government, the sector, like the life sciences industry before it, is poised to be a major employer and growing source of innovation in California for years to come.

It is the mission of both BayBio and BIOCOM to guide and inform relevant workforce training and to work with legislators to help create a regulatory and business environment that is conducive to the continued growth and success of the sector. The associations conducted the second annual statewide Industrial Biotechnology Workforce Survey to get a snapshot of the sector’s growth over the past few years and to identify areas where industry might better work with academia and industry to ensure that California remains a global leader in the space.

Among the 15 companies that reported having at least one employee in 2006, there was an aggregate increase of 75 percent in the total number of employees. Eighteen companies reported having no employees in 2006 and now account for 3,254 jobs.

“California has already emerged as the world’s innovative hub for industrial biotechnology, just as it is the global leader in the life sciences,” said Joe Panetta, President and CEO of BIOCOM, the largest regional life science trade association in the world. “Innovative technology from the state’s universities, a talented life science workforce and the supportive providers that fueled the growth of the life sciences here are also the foundation for new and emerging sectors. In the coming years, human capital will be a key factor in successfully growing the industrial biotechnology sector, and Radford’s demand-driven employment analysis is just what we need to proactively build our workforce and catalyze innovation in this field.”

Seventy eight percent of companies responding to the California Industrial Biotech Workforce Survey have their headquarters in California and 81 percent have their research and development facilities in the state. Only 45 percent of the respondents have located their pilot scale facilities in California, and an even smaller percent have built their commercial scale plants in the state, citing the cost of doing business and the regulatory environment.

As for jobs, the survey showed that it is no coincidence that the state that is home to the largest life science clusters has now given rise to the industrial biotechnology sector. Hiring for industrial biotechnology has focused on chemists, molecular and cell biologists, fermentation specialists and chemical engineers, according to the survey. Nearly 90 percent of the industrial biotechnology workforce worked in biotechnology prior to their current position. And in the future, the industry will be in need of workers with hands-on, commercial-scale experience in chemical processing, the survey showed.

“It’s evident that the California industrial biotechnology sector is a real job engine and we need competitive policies that will allow our state to grow and retain these companies,” said Gail Maderis, President and CEO of BayBio, the Northern California biotechnology industry trade association. “It is important for California’s policy makers and educational institutions to be aware of the challenges and opportunities facing these emerging companies in order to bolster the strength of California’s biotechnology industry and help bring innovative, environmentally advantageous products to market.”

Are you Building Global Mindset in your company and in your life? What is 'normal' anyway?

Cultural DNA

Michael Gates
Richard D Lewis •

When Wal-Mart announced a few years ago that it was pulling out of Germany, losing $1 billion along the way, critics said it failed to understand the culture. Its attempt to introduce ‘greeters’ to every store, with orders to smile at every customer, is said to have been particularly unpopular.

As we become more global the skill of seeing things from other cultures’ points of view is becoming vital. Not just for the success of corporations but also for individuals to pursue careers and, for those moving abroad, to lead happy lives as expatriates.

People are moving to live and work abroad at record rates according to UN figures. And even those who do not actually move, are coming into contact more and more with other cultures. But while this may make logical career and business sense, human beings defy logic.

By the age of seven or so we have silently absorbed different values – or prioritised them differently – from other cultures. So while a toothy grin may create a positive climate for business in the USA, in Germany it may be seen as a suspect intrusion of privacy.

The challenge is that we acquire our own culture so early we don’t realise we have it. And our behaviour reflects this: all we do and say sends out unintended messages to our new colleagues, acquaintances and neighbours.

A personal defining moment was on moving to Finland nearly 25 years ago when a “How are you today?” was met with the stony “You asked me that last week”.

We typically assume the worst and accuse the host culture of unfriendliness or irrationality. But we have to tease out the values beneath to know what is really going on.

In this Finnish case privacy, (“why should I tell you how I am if I hardly know you?”), and honesty (“if I say ‘fine, thanks’ and I am not, then I am lying…”).

We should also know our own values and where they may cause misunderstanding and loss of trust. Most of all we must realise that we are not normal. What is ‘normal’ anyway? We must also appreciate why we are as we are.

This requires us to consider our attitudes to time, space, truth, individuality, authority etc. and where they came from. Comparing how parents interact with children in the host and our own culture is not a bad place to start.

In the USA children are generally taught to speak up for themselves and assert their individuality. Small wonder they develop into confident adults who believe ‘a fight is communication’.

And what are the origins of culture? What in our climate, history, religion and language made our ancestors start thinking and behaving differently?

It’s a fascinating voyage of discovery: like working out where your children’s physical and mental traits have come from. The difference being that this is not genetic but cultural DNA – something we have learned and share with other members of our cultural group.

Interest in cross-cultural issues has been growing, as increasingly we come into contact with people different from us. There are now some great books to help us see ourselves as others see us.

But how can we cope with the inevitable cultural differences we will come across?

First, it’s useful to get to grips with a general theory before trawling through lots of disparate trivia about different cultures. There are over 200 national cultures in the world, and we can’t hope to know everything.

One useful theory is the Lewis Model of culture, behind the CultureActive programme. Richard D Lewis classifies cultures into three main types – linear-active, multi-active and reactive – described in detail in the book When Cultures Collide. Other well-known models are by the authors Geert Hofstede and Fons Trompenaars. But the ultimate key has to be the ability to adapt how we communicate.

I was once on a Lufthansa flight where we suddenly experienced turbulence. The captain spoke first in German with an explanation of the cause; of the action he would take, and what he would do if this failed. He then gave relevant technical specifications. The Germans visibly relaxed.

There were also Brits and Americans on board. The captain changed into English and simply announced: “We’re on a bit of a roller-coaster, so just belt yourselves tight, sit back, and enjoy the ride!” We smiled and breathed a collective sigh of relief.

That’s what I call culturally-competent communication.

Michael Gates was a Scholar of St. Catherine’s College Oxford, where he gained an M.A. in English Language and Literature. He worked for five years in radio before he helped establish the Finnish office of Richard Lewis Communications, who give cross-cultural, communication skills and business language training world-wide

This article first appeared in the Daily Telegraph

RISKS – Companies now need to incorporate risks from workforce and people-management issues more fully into their overall risk-management

…the most extensive study to date

NEW YORK, July 11, 2011
“>According to a new report released by The Conference Board, companies need to incorporate risks from workforce and people-management issues more fully into their overall risk-management structures.

Based on a global survey of executives at 161 leading companies, Managing Human Capital Risk: A Call for a Partnership between Enterprise Risk Management and Human Resources, is the most extensive study to date on the role of human resources in the calculus and containment of enterprise risk.

The report was co-authored by Mary B. Young, principal researcher in human capital at The Conference Board, and Ellen S. Hexter, principal of Hexter & Company, a risk consulting firm, and the senior advisor for enterprise risk management at The Conference Board.

The report examines the current state of human capital risk management in companies in the U.S., Europe, and Asia.

At most companies, human capital accounts for at least half of operating costs and can have a significant impact on business results. However, the study finds that human capital risk (HCR) — which can range from unionization/labor relations to offshoring and outsourcing to staffing in a pandemic — tends to be siloed in human resources departments, away from the companywide assessment and mitigation processes of enterprise risk management (ERM). This arrangement prevents information about HCR from having a role in the comprehensive, aggregate view of risks, root causes, interactions, and impacts through which leaders set priorities and determine overall strategy.

Out of eleven risk categories, executives ranked HCR as having the fourth highest impact on business results, ahead of financial, reputational, supply chain, and IT risks.

This high ranking is evidence that HCR should be taken seriously as an enterprise risk. However, less than one-third (31 percent) of companies believe they effectively assess human capital risk, and 24 percent believe they do an ineffective job.

“Executives clearly recognize that human capital can have a make-or-break impact on business performance,” said Young. “Yet few companies have a systematic process or structure in place to ensure that the full spectrum of human capital risks — not just a few, top-of-the-house issues like succession planning or the leadership pipeline — is considered as part of enterprise-level risk assessment and management.”

The report also found the best-prepared companies were those with a formal process for assessing HCR, a board and CFO with deep understanding of human capital issues, and well developed capabilities in strategic workforce planning.

In addition, Asia-Pacific companies appear to be significantly better equipped to incorporate HCR at the core of their risk planning than firms headquartered in other regions.

Although any conclusions drawn are preliminary due to a small sample size, these regional differences are consistent with The Conference Board CEO Challenge 2011 , which found Asia-Pacific executives to be the most keenly focused on talent.

Managing Human Capital Risk concludes with a series of practical implications for companies looking to improve their risk-management processes.

As first steps, HR and ERM must begin a conversation, which in turn, means having a common language to describe human capital risk. “We hope this report will foster the conversation between HR and risk professionals,” Hexter said. “Most companies have a gap in their understanding of how critical human capital risks are to their ongoing success. It’s time to think about these workforce issues holistically.”

Source: Managing Human Capital Risk
A Call for Partnership Between Enterprise Risk Management and Human Resources
Research Report No. 1477-11-RR
The Conference Board

About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.

US Employers Expect to Add Voluntary Benefits to Their Plans

Colonial Life survey shows nearly half plan to include voluntary benefits in their 2012

COLUMBIA, S.C., Aug. 3, 2011 —-
Regulatory and economic issues are forcing many employers to make changes in their benefits plans. And one of the changes employers expect to make in the near future is to add voluntary benefits.

Almost half of employers (49 percent) surveyed last month by Colonial Life & Accident Insurance Company say they expect to add voluntary, employee-paid insurance benefits to their plans within the next year.

Colonial Life surveyed more than 750 human resource managers and benefits administrators at the annual conference of the Society for Human Resource Management in Las Vegas in July. Employers were asked about their employee benefits packages and benefits communications efforts.

Other changes employers say they plan to make to their benefits plans within the next year include:

* Increasing employees’ health insurance premiums (51 percent)

* Increasing employees’ health insurance deductibles and/or co-pays (49 percent)

“Not surprisingly, employee benefits have taken a hit as companies wrestle with the rising cost of providing health coverage to their workforce,” says Randy Horn, president and CEO of Colonial Life. “Offering voluntary products that complement core benefits can help companies better manage their costs. Voluntary plans can also give employees a convenient and affordable way to protect their families and lifestyles.”

Employers say benefits education is important … but are they doing a good job at it?

Virtually all employers (99.6 percent) surveyed agree their employees need guidance to make sound benefits decisions and education to help their workers understand changes in their benefits program. Yet only a quarter of employers (23 percent) believe their company’s current benefits education efforts are very effective.

“Employers see a need for more and better benefits education and communication,” says Horn. “Providing personal, one-to-one benefits counseling can close the communications gaps that often hinder employees from fully understanding and appreciating their benefits.”

About Colonial Life
Colonial Life & Accident Insurance Company is a market leader in providing insurance benefits for employees and their families through their workplace, along with individual benefits education, advanced yet simple-to-use enrollment technology and quality personal service.

Colonial Life offers disability, life and supplemental accident and health insurance policies in 49 states and the District of Columbia. Similar policies, if approved, are underwritten in New York by a Colonial Life affiliate, The Paul Revere Life Insurance Company, Worcester, Mass. Colonial Life is based in Columbia, S.C., and is a subsidiary of Unum Group, one of the world’s leading providers of employee benefits.

For more information about voluntary benefits, call Colonial Life at (803) 798-7000 or visit

Talent management top reason employers pursue Global Leveling

Challenges for implementing global grade structures significantly changing

New York, 14 September 2011 —
As organizations strive to maintain a competitive advantage in a changing global environment, many are turning their attention to some foundational tools. Global leveling – the process of systematically establishing the relative value of different jobs within an organization – provides a framework to effectively implement talent and compensation management across borders.

According to Mercer’s 2011 Global Leveling Survey, the primary objectives for evaluating jobs and implementing a global grade structure are to support the development and career paths of employees (68%) and to facilitate the implementation of a global pay or rewards programs (65%).

“Beyond simply helping with pay decisions, companies are seeking much more from their global leveling strategies, such as defining employee career paths, linking jobs to specific behavioral competencies and assessing pay equity,” said Darrell Cira, Partner with Mercer’s Human Capital consulting business.

Conducted this summer, the Survey examines trends in strategies around grading and job evaluation. It includes responses from more than 380 organizations across all industries throughout the US and Canada.

While global leveling has long been used for companies’ executive roles, an increasing number of organizations are implementing grade structures for their other employee groups. Mercer’s survey shows that 85% of organizations report grade structures for executives and just as many for managers and non-sales professionals.

“Years ago, only about half of multinational companies had global grade structures for employees that weren’t executives,” said Mr. Cira. “This increase in the use of global grading for populations other than executives is likely directly related to organizations’ focus on facilitating talent mobility and implementing meaningful career paths for their employees.”

Challenges of global leveling According to Mercer’s survey, more than one-third (36%) of organizations expect to modify their current approach to global leveling or implement a new compensation management structure in the next two years. Yet finding resources and time to do so may be challenging.

The biggest obstacle organizations face with employing a global grade structure is resources and time, reported by almost two-thirds (63%) of organizations. This challenge is followed by the absence of a global HRIS (40%) and resistance of leadership (38%).

“The barriers to implementing global grades have changed considerably,” said Mr. Cira. “While the absence of a strong business case and lack of support from corporate leadership were frequently identified as major challenges in the past, the value of having a global grading structure has clearly become more evident to business leaders today.”

About Mercer
Mercer is a global leader in human resource consulting, outsourcing and investment services. Mercer works with clients to solve their most complex benefit and human capital issues by designing, implementing and administering health, retirement and other benefit programs. Mercer’s investment services include investment consulting, implemented consulting and multi-manager investment management. Mercer’s 20,000 employees are based in more than 40 countries. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York and Chicago stock exchanges. For more information, visit

77 Percent of Workers Would Leave Their Current Position to Become an Independent Entrepreneur; says Aflac survey

Aflac Responds With Announcement of Sales Positions in 580 Markets Nationwide

COLUMBUS, GEORGIA, 2 September 2011 – – –
As summer comes to an end and the Labor Day holiday approaches, there is no question that our nation’s focus on the American workforce will continue to take center stage.

Even with the current national unemployment rate hovering at just over nine percent, more than one-third (35 percent) of U.S. adults reported that the spirit of the U.S. workforce is broken, according to a new survey released today by Aflac, the No. 1 provider of supplemental and guaranteed-renewable insurance in the United States.

More than three quarters (69 percent) of employed adults reported that their paycheck is the majority of the reason they work.

Also, 77 percent of adults employed full/part time, and not currently self-employed, stated they would leave their current position to become an independent entrepreneur.

Ability to set one’s own hours, spend more time with friends and family, not have to deal with office politics, and/or not have to endure a daily commute, are just some of the many reasons they would be motivated to make a career change to become an independent entrepreneur.

Driven by increasing market demand for voluntary insurance today and in the future, Aflac is bolstering its nationwide independent sales agent network* in 580 markets, offering U.S. workers the opportunity to be their own boss, make their own schedule, and live what many would call the “American Dream.”

“This survey reaffirms that many Americans lack fulfillment and passion for their jobs, and struggle with work/life balance,” said Tom Giddens, senior vice president, director of U.S. Sales at Aflac. “With more than 72,000 entrepreneurs comprising our sales force, our organization believes strongly in workers’ pursuit of a career that not only supports their livelihood but that also brings joy and satisfaction.”

The online survey was conducted on Aflac’s behalf by Harris Interactive in August 2011, among 2,220 U.S. adults ages 18+, of whom 1,272 were employed, and is part of the 2011 Aflac WorkForces Report.

To learn more about the survey, visit, or to apply for an opportunity at Aflac, visit .

About the Aflac WorkForces Report
The Aflac WorkForces Report is an annual study analyzing the forces impacting the trends, attitudes and use of employee benefits. Surveying both American workers and business decision-makers, the Aflac WorkForces Report reconciles the perceptions and realities of benefits in the workplace. The insights aim to help businesses make informed decisions about benefits to better protect employees and their bottom line.

This survey was conducted online within the United States by Harris Interactive on behalf of Aflac from August 11–15, 2011, among 2,220 adults ages 18 and older, of whom 1,272 were employed. This online survey is not based on a probability sample and, therefore, no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Aflac Media Relations at or call 706-243-5543.

About Aflac
When a policyholder gets sick or hurt, Aflac pays cash benefits fast. For more than 55 years, Aflac insurance policies have helped provide a safety net and have given policyholders the opportunity to focus on recovery, not financial stress. In the United States, Aflac is the number one provider of guaranteed-renewable insurance. In Japan, Aflac is the number one insurance company in terms of individual insurance policies in force. Aflac insurance products provide protection to more than 50 million people worldwide. For five consecutive years, Aflac has been recognized by Ethisphere Magazine as one of the World’s Most Ethical Companies and by Forbes magazine as one of America’s Best-Managed Companies in the Insurance category. In 2011, Fortune magazine recognized Aflac as one of the 100 Best Companies to Work For in America for the 13th consecutive year. Also, Fortune magazine has included Aflac on its list of Most Admired Companies 10 times. Aflac Incorporated is a Fortune 500 company listed on the New York Stock Exchange under the symbol AFL. To find out more about Aflac, visit or

*Aflac agents are independent agents and are not employees of Aflac.

United Nations leader speaks-out…

Periods of global transition present huge challenges but also tremendous opportunities.


NEW YORK, Aug 19 2011 11:10AM – –
With the world facing a pivotal juncture in its history, the global need for the United Nations has never been greater in tackling multiple issues, from sustainable development to ensuring peace to mitigating mega-disasters, Secretary-General Ban Ki-moon says in a new report.

“Periods of global transition present huge challenges but also tremendous opportunities for advancing humanity’s progress. Together, no challenge is too large. Together, nothing is impossible,” he tells the 66th General Assembly in his annual report on the work of the Organization.

“Future generations are likely to describe this period as a pivotal juncture in world history when the status quo was irrevocably weakened and the contours of a new world began to emerge,” he writes, citing the widening and deepening impact of global food, fuel and economic shocks on populations around the world and revolution and the rebirth of grass-roots-led democratic movements in North Africa and the Middle East.

He also highlights the shifts in economic power as parts of Africa and Asia have emerged as new engines of global growth, and the rising incidence of “mega-disasters,” such as the devastating 2010 earthquakes in Haiti, this year’s quake, tsunami and nuclear crisis in Japan, and the massive flooding last year in Pakistan, with their huge costs in terms of lives, livelihoods and development.

“And we have seen the increasing salience of a set of global challenges that threaten the lives of people around the world and the sustainability of the planet,” he says.

He calls achieving sustainable development imperative, not only by redoubling efforts to meet the UN Millennium Development Goals (MDGs) to slash a host of social ills, such as poverty and hunger, infant and maternal mortality, disease, and lack of access to health care and education, all by the target date of 2015, but also to forge a vision and framework for post-2015 development.

In the area of peace and security, he notes that the past five years have begun to witness the positive impact of strengthened UN prevention capacity when it is harnessed by Member States to help them defuse internal and cross-border tensions.

“We must continue to deepen and expand the preventive services that we are able to provide Member States,” he writes, citing the increasing complexity of peacekeeping operations that have stretched scarce resources to meet broad mandates.

“We are thinking creatively about how we can increase our agility and better leverage potential partnerships to ensure that we have the capacities necessary to meet needs on the ground,” he adds. “Our next challenge is to implement additional necessary changes to ensure that we are able to continue to provide peace and security to the people we serve.”

While noting steps already taken to tackle mega-disasters, he stresses the need to reshape response strategies and place a much higher premium on disaster risk reduction. To bolster its capacities, the UN has already started forging new types of partnerships with the business community and civil society and is trying out new technologies to coordinate responders and link them to victims.

“These efforts will need to be accelerated over the next five years if we are to meet the humanitarian challenges that are likely to be coming our way,” he warns.

Noting that the UN has supported calls for democracy in the Middle East and North Africa and urged the international community to protect civilians from “egregious violations” of their rights in Côte d’Ivoire and Libya, he stresses the “important positive impact that this advocacy work can have in supporting the people on the front lines fighting for human rights, the rule of law and democracy, as well as the responsibility to protect…

“As the next five years will be crucial in determining the path that many transitions will take, it is essential that we rapidly upgrade our abilities to support countries engaged in building democratic structures and processes,” he adds.

“The global challenges of the past decades – climate change, weapons proliferation, disease and terrorism – will not disappear,” he concludes.

“We will need to continue to strengthen and deepen the international collaboration that we have already forged. We must also, however, be ready for new challenges that we will have to face together, not least those posed by demographic patterns.”

ou Know It Ain’t Easy …“I didn’t even know what our business model was. But I’ve learned my lesson – whatever it is, beware of making changes to it”.

“We had no idea what we were getting into with this decision….”

George F. Brown, Jr.

…making changes to a firm’s business model…most frequent reason motivating changes in the business model is that the “Old business model is failing to deliver adequate growth”, followed closely by the “Old business model is failing to deliver adequate profits”.

“A new business model is required due to external changes (e.g., regulation, technology)” and “A new business model is required in a new market or product segment”.

Our consulting firm recently worked with a company that manufactures capital equipment used in many factories to produce products made of plastic and similar materials. Their technology offered many advantages over that included in competitor products, and they achieved substantial market share gains with larger businesses. Their targeted customers, however, included a large number of smaller firms, and they had very little success in gaining sales into the small and medium business segment.

Research identified the reason for that failure: these firms didn’t have the internal infrastructure needed to support the technology included in the products, and these firms were taking the “safe, familiar route” associated with competitor products. As a result, several years ago, the firm decided to create a customer service organization which would take on service responsibilities on behalf of smaller firms that purchased their equipment.

The implications of this decision were summarized by one of the firm’s senior executives:

“We had no idea what we were getting into with this decision. First of all, we learned that our customers assumed that we were available to provide service on a 24×7 basis. Our operations traditionally involved normal business hours – and we had assumed the same for the service arm we created. That was wrong, and a costly mistake as we had to add staff for the many hours we had assumed we didn’t need to cover.

“Second, we thought our responsibilities were tied to our products. This too was off the mark. More than half of the service calls that we got were associated with something that was at best peripheral to our products, some not in any way linked except in the minds of our customers. But we had to learn the larger systems in which our products were operating, and be able to steer our customers towards a solution to whatever problems they had. It just wouldn’t work to say that the issue wasn’t our issue – we tried that a couple of times and learned quickly never to do so again.

“And as one more illustration, we sell through a dealer network, a group of firms with which we’ve had great relationships over the years. I’ve never seen such a firestorm as occurred when our service people started working directly with the end customers. You would have thought we were the competition – at least that’s how the dealers reacted. It took us over a year to calm the waters with our dealers, and even today some of them still seem suspicious of us.”

This firm eventually enjoyed success with its service offering, gaining market share with the small and medium sized businesses in their target market. They even succeeded in implementing a fee-for-service program for these customers after the warranty period had elapsed, with the service business operating at a slightly better than breakeven basis at this time while continuing to bolster their ability to sell into the small business segment.

They also learned a lot about making changes to their business model in the process, and it is doubtful that this firm will ever again make similar changes – going from a product to service business, dealing directly with end customers instead of going through intermediaries, etc. – without a full understanding of their implications. The executive quoted above commented “I didn’t even know what our business model was. But I’ve learned my lesson – whatever it is, beware of making changes to it”.

Business Model Changes: Motivation and Difficulty

Despite that advice, making changes to a firm’s business model has become a high-frequency activity. In a recent survey of business executives, we heard of four reasons that have motivated making changes to a firm’s business model. The two primary motivations are performance problems. The most frequent reason motivating changes in the business model is that the “Old business model is failing to deliver adequate growth”, followed closely by the “Old business model is failing to deliver adequate profits”.

External motivations are also important in many cases. While trailing the above performance-related motivations, two other factors were recognized as important in decisions about changes to business models:

“A new business model is required due to external changes (e.g., regulation, technology)” and “A new business model is required in a new market or product segment”.

All four of the motivations cited above scored above 3.8 on a scale that ranged from 1, meaning “Rarely a factor” to 5, meaning “Frequently a factor”.

Changes to a firm’s business model, while not an everyday thing, are a common enough occurrence that they warrant executive attention. The comments of two executives who contributed to this survey provide a good perspective. One executive from the packaging industry noted: “I’ve come to think about strategy in terms of business model changes. Whether we can successfully make the changes needed is the litmus test of whether a strategy proposal makes sense.”

A similar perspective was offered by an executive from the electrical products industry:“One thing I’ve learned is that the implementation challenges are centered on changes to the business model. We don’t fail at product development, we’re good at pricing appropriately, our sales team knows their customers. It’s when we venture into the unknown with some element of the business model that we get into trouble.”

Like many firms that have suffered the pains of changing elements of their business model, this executive says that he is now very quick to say …“Wait a minute – have you thought out the implications of what you are proposing in terms of changes to our familiar business model?”

Our research identified fourteen key dimensions of changes to business models. While there were differences among them, a basic finding was that all posed a substantial degree of difficulty in implementation, with every one of the fourteen scored above the midpoint on a scale that ranged from “Not Very Demanding” to “Extremely Demanding”.

Looking at the rankings is best done while listening to The Ballad of John and Yoko: “You know it ain’t easy. You know how hard it can be.” Any change to a firm’s business model is going to be taxing – and, as will later be discussed, has a great potential for going badly.

The changes that were ranked as most demanding were ones associated with newly targeted markets.

Ranked most difficult was “Shifts from a domestic business to a global business”, followed closely by “Shifts between a business market and a consumer market”.

Requirements for such business model changes are included in the growth plans of most businesses today, especially those associated with new global market opportunities. It’s rare to find a firm not looking at opportunities in emerging markets like China, India, or Brazil. They should be forewarned that, according to this research, such plans involve the most demanding of all possible changes to the business model. One executive commented on an element of his firm’s globalization plan by saying …

“It took us five years to learn what we didn’t know that we didn’t know.” Another reflected that “The list of things we did wrong out of habit is far longer than the list of things that transferred correctly.”

Not too far behind in assessed degree of difficulty were “Shifts in the focus between small customers and large customers”, “Shifts between a product business and a service business”, and “Shifts from a bricks-and-mortar business to an ‘e’ business”.

What comes across from this survey and the comments of the executives who participated is that each of these changes requires competencies that might be in scarce supply within the firm.

The case study presented at the beginning of this article illustrated the challenges of moving into a service business and of expanding the reach to smaller customers.

Several other observations provide further illustration as to the demands associated with these business model changes. A senior executive in a major distributor that had implemented a new ‘e’ business platform provided this retrospective: “I gained a whole new appreciation for our sales force in this process. It took us months just to catalog our product line – no one actually knew what all we sold. And that was just a start. I couldn’t imagine how much information we had to assemble to offer a credible ‘e’ business platform to our customers. Take my worst imagination on how demanding this change would be, multiply it up a couple of dozen times, and you’re still short of the mark.”

The case examples that were offered relating to business model changes go on and on. Even for some of the changes that were ranked as less difficult to implement (a careful choice of words, as all were ranked as difficult, none as easy), the examples that were cited fully passed any test needed to rank them as challenging. One instrument manufacturer implemented a change that required a production to order business model, whereas their firm has previously only produced to stock. An executive in this firm commented that “I had no idea we could have been doing so many things wrong, at least for our new custom offerings. We had pride in having optimized our operations, and I guess we had done so for our traditional stock products, but we had to go back to square zero and rethink how we did everything from order taking to quality control.”

A firm in the telecommunications industry had a strong track record of managing the short life cycles of its products. When it did an acquisition of a firm in an adjacent space that managed products with long life cycles, it learned, according to a senior executive, that “Even our compensation systems were wrong, as we had bonuses tied to sales of new products. That was one of the easier changes to recognize and address. Some of the others, to be honest, we’re still working two years after the acquisition to understand and resolve.”

Avoiding Disappointment

Changes to a firm’s business model are thus frequent, typically motivated by sound strategic thinking, and in essentially all cases, a challenge to implement. That reality underscores the importance of the following finding from our research. By a very substantial margin, the two reasons cited as responsible for situations in which the new business model failed to deliver the hoped-for results were “Implementation process was poorly managed” and “Internal resistance to the new business model”.Those two factors emerged from a long list of problems that spanned a spectrum from a flawed strategy to customer resistance to competitor responses.

Seven themes were frequently mentioned by executives as tools for ensuring success with changes to the business model. The two most frequently mentioned were oriented towards the challenge of internal resistance to the new business model. There is no question that executives understand the possibility of a disappointing outcome that reflects Pogo’s famous saying that “We have met the enemy and he is us”. Their insights can help others avoid that unfortunate outcome.

“Leadership Buy-in and Involvement” was at the top of the list of the frequent recommendations to overcome internal resistance. There was no lack of clarity about the importance given to this by the executives who contributed insights on this topic. The message was that approval wasn’t adequate, that what was needed was meaningful involvement.

Some of the observations of executives on this factor included: “C-Level commitment is critical. Senior executives have to understand the plan, be able to explain it, and even pass the test of being able to sell it to employees and customers.” “Problem solving has to come from the most senior levels of the corporation. That’s the only place where roadblocks can be overcome, where options can be approved.” “When internal resistance occurs, it will become the undoing of a project unless the corporate executives take prompt action, perhaps getting rid of those who can’t agree with the new directions.”

“Communication”, the second most frequently cited priority, goes hand in hand with leadership involvement. As one of the quotes above suggested, communications is one of the responsibilities that executives must assume. But the recommendations go far beyond that.

One of the points frequently made involved selling the changes to external audiences – not just customers, but also distributors, suppliers, and others. This requires the ability to translate the changes from the firm’s own perspective to those relevant to the external audiences. “Make sure your customer agrees to what you are doing, or you will never be successful” was the advice provided by one executive.

Other recommendations were focused on achieving success with the implementation process. “Testing, Risk Identification, and Adequate Funding”, reflected responses that cited “the unknowns” as the key source of implementation failures. One executive emphasized the need for some version of beta testing, from both an internal and an external perspective, of the planned changes before wholesale implementation was approved. He argues that there will always be surprises, and that you can often learn them through some form of beta testing. Another executive tied together the concepts of risk assessment and adequate funding. This individual argues that no plan ever goes as planned, but that funding levels typically assume a smooth path from start to finish. A third recommendation within this category emphasized the need to pre-test key systems and processes within the company. This executive noted that while the change might be centered elsewhere, virtually every change these days impacts on financial systems, enterprise IT systems, fulfillment systems, etc. Unless the implementation team can be confident that key systems are “change-ready”, the likelihood of problems is high.

Many arguments were provided in support of the need for a “Detailed, Fact-Based Strategy”. One argument began by noting that off-the-cuff strategies have such a high failure rate that it’s impossible to discern exactly where things went wrong. But when the strategy is defined in careful details that lead to a meaningful “What-Who-When” action plan, the implementation team has a genuine roadmap to follow and a basis for assessing progress and problems. Another executive noted that a good strategy will not only say what to do, but also what not to do – a tool that can be critical in helping the project team avoid heading down blind alleys.

And another set of recommendations advocated a “Full Time Project Team with the Right Skills”. Quite frequently, we heard examples of failures due to the fact that there was no time to manage the implementation project due to the commitments of “day jobs” or the “real jobs” held by project team members. “If it’s important enough to do, it’s important enough to put people on the project full time” was one executive’s observation. The “right skills” was another important theme. One executive observed that it was often the case that the new business model required skills not resident in the firm. But too many firms assume that these skills can be quickly learned, and fail to source individuals with the necessary expertise to be successful. This executive emphasized the need to think through the team’s composition and be realistic about whether the available talent pool is up to the task.

“Monitoring, Learning, and Removing Barriers” was cited as important from two main perspectives. The first is that no major project goes without surprises, and best practices dictate the need for processes to identify and overcome such surprises. The second is that monitoring processes typically ensure the involvement of key members of the management team, which is essential when barriers need to be removed. One piece of advice emphasized the need for learning and evolution: “Keep true to the vision, but be prepared to alter course…”.

Observations related to the importance of “Best-in-Class Project Management” emphasize the fact that the skills and competencies associated with implementation are every bit as demanding and complex as those associated with strategy development. Those firms that develop these skills within their firms will be well-equipped to manage complex changes to business models required from time to time. Specific recommendations involved almost every phase of project management, but the one given most weight was developing metrics through which progress can be measured and managed. One executive commented “If there is ever a time for a dashboard, this is it. You’re going to have ‘red light situations’ for sure, so you need a process that spotlights them early and allows you to address them.”


Elements of your growth strategy and of your strategy to improve results in an underperforming division are inevitably going to require that you define and implement changes to your firm’s existing business model. You can’t avoid them – and probably don’t want to avoid them in your efforts to drive growth and improve profitability.

Tell yourself and your management team that “You know it ain’t easy”, as that is a fact of life associated with essentially every dimension of change to a business model that can be identified. And recognize that at the top of the list as to why “you know how hard it can be” are things you can control – the implementation process and internal responses to the change. The results can be all that you had hoped for when you defined your strategy to drive growth and improve profitability, but that will only happen if you and your executive team take on the major responsibility of managing a change in your firm’s business model.

George F. Brown, Jr. is the CEO and cofounder of Blue Canyon Partners, Inc., a strategy consulting firm working with leading business suppliers on growth strategy. Along with Atlee Valentine Pope, he is also the author of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs, published by Greenleaf Book Group Press of Austin, TX. See for more details.

Global Team-Building Best-Practice Tips for Navigating, Managing, Leading in this Era of Unrest in the MidEast and other areas

Managing cross-functional, multicultural teams amid dynamic change, economic uncertainty

HOUSTON, July 6, 2011 —
“Building Effective Global Teams” is an article written by CHRONOS CONSULTING Managing Principal, Imaad Mahfooz, describing how organizations can ensure that their cross-functional, multicultural teams are successful, despite a volatile financial environment and continuing global unrest, particularly in the Middle East.

To do this, senior-level human resources leaders must take a custom-tailored and nuanced approach to managing these teams.

Chronos Consulting is based in Houston and is a firm that specializes in significantly improving business results for organizations across the globe, particularly in the areas of human capital management, global, cross-functional and virtual team-building, customer service and support and shared services. Its goal is to assist clients in areas of strong expertise and achieve break-through business results in compressed timeframes. Mr. Mahfooz has extensive experience and expertise in managing cross-functional and multicultural teams on complex business and IT projects. Please direct inquiries to: Imaad Mahfooz;

“The past few years have brought with them some unprecedented turbulence in locations around the world,” Mr. Mahfooz said. “This article speaks to the fact that there are measures HR leaders can take to help global teams achieve maximum success, even while they face new challenges.”

This is especially relevant for organizations involved in restructuring and downsizing HR, while attempting to retain their most important human capital.

According to the article, organizations need to take an approach that considers the various business and social challenges of managing teams worldwide.

This requires working with cross-functional teams, made up of employees from different functions within an organization, as well as multicultural teams consisting of individuals from varying backgrounds and cultures.

In order for global teams to flourish, Mahfooz writes that they must:

• Agree on project goals, plans and definitions

• Conduct a review of working styles and team composition

• Achieve team cohesion and work towards a shared vision

• Address multicultural and cross-functional communication issues

• Define acceptable behavior

• Receive top management support

“With cooperative, involved management from senior HR executives, global teams can gain the knowledge and confidence to collaborate effectively within a new environment through the self-creation of shared and actionable project plans,” Mahfooz writes in the article. In this way, HR executives can help their entire organizations better understand best practices in global team-building.

UK's Cambridge University and the Edmond de Rothschild Foundation use Social Entrepreneurship to Improve Jewish-Muslim Relations

The Programme’s core components:
– Business skills training

– Providing scholarship on the history and politics between Jews and Muslims including issues of identity, foundations of Zionism, and contemporary Islamist movements

– Practical dialogue workshops

LONDON UK, July 27, 2011 —
The Ariane de Rothschild Fellowship (AdR) has brought together Muslim and Jewish social entrepreneurs from the UK, France, and the US to participate in a groundbreaking programme that combined cross-cultural dialogue with business skills development. It was held July 15-29 2011.

The AdR programme purpose is to foster a shared civic identity and enables participants to support one another in creating sustainable social change.

The AdR includes a humanities component delivered by the Centre for History and Economics, King’s College. Cambridge’s Judge Business School hosts the programme and has a social entrepreneurship component delivered by Business School faculty members who are engaged in social enterprise and community development research. Their involvement ensures academic rigor and relevance and builds on the School’s strength and commitment to research, policy and practice in this field.

24 international social entrepreneurs across the fields of conflict resolution, third world development, interfaith, business and the arts participated this year.

The teaching model was developed by leading academics including Patrice Brodeur, Canada Research Chair in Islam at University of Montreal, Professor Bruce Kogut of Columbia Business School, and Gareth Stedman Jones, Director, Centre of History and Economics at Kings College, Cambridge.

The programme included tutorial sessions at Cambridge’s Muslim College with Dr Tim Winters, hailed as Britain’s most influential Muslim by the Royal Islamic Strategic Studies Centre.

The Programme’s core components:

– Business skills training

– Providing scholarship on the history and politics between Jews and Muslims including issues of identity, foundations of Zionism, and contemporary Islamist movements

– Practical dialogue workshops

Firoz Ladak, Executive Director of the Edmond de Rothschild Foundation: “The Fellowship takes a unique approach to building cross cultural relations, by moving away from conventional discourse that focused only on religious and cultural themes, to building an action driven network of social entrepreneurs.”

Stephen Shashoua, 2010 Fellowand Director of Three Faiths Forum: “The fellowship brings together diverse social entrepreneurs and enables us to work together beyond dialogue.”

Mussurut Zia, 2010 Fellow and Director of Practical Solutions, a UK organisation dealing with forced marriage and honour based violence: “The Fellowship helped me see other fellows as more than just Jews or Muslims, but as people united by the desire to promote social justice.”