A break in the rain for what feels like our last day of summer. So i thought i’d write this from the garden. Let’s jump in.
Spotlight
Industry
Logistics -Getir’s corporate restructure.
In the corporate world, one of the key levers to cost reduction often seems to be reducing the number of employees. However, as we reflect on the continuous transformation and growth journey of businesses, it becomes evident that headcount reduction must be seen as a final measure, not an immediate solution.
Why the Last Resort?
Headcount reduction is not just about numbers, these are people we’re talking about; therefore it's an action that bears significant implications. Firstly, it often leads to a decline in morale and productivity among the remaining workforce, breeding a culture of insecurity. Secondly, it can result in a loss of valuable institutional knowledge and expertise. Lastly, it may tarnish the company's reputation, making talent acquisition and retention an even more challenging task.
Strategising Before Cutting Headcount
It’s therefore wise to consider other avenues to enhance efficiency and reduce costs before making the drastic decision of headcount reduction. Here's a look at the potential alternative strategies:
Trimming Non-Essential Expenses: Re-evaluating budgets and cutting back on non-essential costs like travel and entertainment can create a significant impact.
Renegotiating Supplier Contracts: Engaging suppliers to renegotiate terms can lead to cost savings without impacting the core structure of the organisation.
Streamlining Processes: By eliminating redundant processes and improving workflows, companies can increase efficiency without compromising human capital.
Technology Investments: Deploying technology to automate and optimise can generate long-term efficiency gains.
When the difficult decision to reduce headcount does become necessary, it must be undertaken with empathy and fairness, with proper severance and support to assist the affected employees. Something we seem to have forgot in the last 18 months.
A Closer Look at Getir's Restructuring
Getir, the Turkish grocery delivery service, recently announced a workforce reduction of 10%, or 2,500 jobs, as part of its restructuring. This decision, as stated by the CEO Nazim Salur, is aimed at positioning the company for long-term growth, by investing in technology and entering new markets.
The context of increased competition and regulatory challenges must be recognised. But Getir is not alone; other tech startups like Bolt, Klarna, and Robinhood have also made similar moves.
This trend may reflect a maturing tech industry, and the increasing pressure to demonstrate profitability. Nevertheless, the lesson that headcount reduction should be a last resort remains paramount.
The Leaders Digest
What's weighing on the minds of those leading the organisations of today.
Data quality inside global multinationals:
A CEO's Guide to Market Studies And Insight-Backed Decision Making
In our ever-globalising business world, decisions are no longer confined within national boundaries. Operating at an international scale introduces complexities that can confound even the most advanced companies. One of the persistent challenges that looms large is the quality of data and the hurdles it presents when using it to drive strategic decision making. Our experience with a leading global manufacturer catering to the marine industry, seeking to penetrate the Southern Mediterranean and North Africa region, offers an instructive illustration of this challenge.
The Global Data Puzzle: Understanding the Terrain
Data quality issues are no longer confined to isolated incidents but form a labyrinthine challenge for organisations aspiring to go global. The market study began with an ambitious aim, but the conflicting information and inconsistencies across nations posed challenging obstacles. Execs must recognise this terrain, understanding that global scale operations demand more than merely extending domestic strategies.
The Process of Validation: Constructing a Trustworthy Foundation
To navigate the complex data landscape, a robust process of validation was initiated:
Multiplicity of Sources: Drawing from various data sources across different nations, seeking to triangulate information and verify accuracy.
Local Expertise: Leveraging insights from local experts to comprehend regional variations and validate conflicting data.
Industry Collaboration: Working with industry stakeholders to ensure integrity in the analysis.
This validation process wasn't just a procedural necessity; it formed the bedrock of our strategic approach. It's a lesson that resonates with CEOs; the quality of decisions is directly tied to the quality of data
Example of a data validation model
The Strategic Imperative: Aligning Data with Action
The issues surrounding data quality were not just problems to be solved; they were opportunities for strategic alignment. By resolving these challenges, the manufacturer was able to construct a clear and informed roadmap to success. For CEOs, the alignment of data with actionable insights is a strategic imperative. Understanding the nuances of data quality and leveraging them to make informed decisions sets the stage for intentional global expansion.
A Holistic Approach: The Convergence of Data and Strategy
The study culminated in a comprehensive analysis that shaped the client's approach to new regions. This wasn't just about resolving data inconsistencies but constructing a strategic narrative that resonated with global complexities.
Age of Data: Recognising its historical evolution and legacy, much like the organisational maturity.
Size of Data Complexity: Indicating the current scale and intricacy of the global market.
Evolution of Information: Representing natural, progressive development and integration of insights.
Revolution in Decision Making: Marking transformative changes in leveraging data for growth.
Conclusion: An Approach Grounded in Reality
Embarking on this data-driven journey is a navigational endeavour, mirroring the complexities of global innovation initiatives. It offers a roadmap to align organisational capabilities with global dynamics. It's an approach grounded in strategic foresight, resonating with the challenges and opportunities of contemporary business leadership in a global context.
For CEOs venturing into international markets, the lessons gleaned from this market study offer invaluable insights. They reinforce the importance of data quality, the complexities of validation, and the integration of data into strategic decision making. Navigating the data labyrinth often seen at multinationals is now a necessary component of effective global leadership.
The Nadella Effect: Turnaround strategies for laggard leaders. Read here
For deeper industry reads be sure to subscribe to Special Reports below.
Your Questions Answered
Have a burning question? - hit reply or email us here.
"How would an insurance company effectively leverage AI and GPT as an internal tool to enhance employee productivity and decision-making, aligning this transformation with our current strategic goals and ensuring our data integrity?"
Incorporating AI, specifically LLMs and GPT within an insurance company will be a transformational endeavour to say the least. One way to view this would be through the Two Phases model - Two major phases are crucial in any business transformation, each containing two stages. So applying and adapting this framework would be a good place to start. Given the promise and potency of AI, we’ll use this as the trigger for the transformation:
Two Phases of Transformation
Phase 1: Cost Reduction
Stage 1: Trigger
AI and GPT as Catalysts: The decision to employ AI and GPT emerges from the need for enhanced efficiency, productivity, and decision-making capabilities. Recognise this adoption as a catalyst that triggers the transformation, aligning it with industry shifts or performance needs.
Stage 2: Operational Turnaround
Process Optimisation: AI and GPT can be instrumental in process optimisation, reducing operational costs through automation and predictive analytics.
Data Integrity: Ensuring data quality and security will be vital for the success of AI-driven initiatives, integrating data governance within the operational transformation.
Phase 2: Growth and Innovation
Stage 3: New Strategy, Vision, or Business Model
Strategic Alignment: Develop a new vision or strategy that encompasses AI and GPT as central elements, aligning them with your current goals and future growth paths.
Employee Engagement: Foster a culture that supports AI-driven innovation, through training and change management strategies.
Stage 4: Adaptive Innovation
Continuous Improvement: Create an environment that promotes continuous learning and adaptability, ensuring that AI and GPT usage remains agile and responsive to market changes.
Innovation Ecosystem: Establish partnerships or collaboration with technology providers and innovators, nurturing an ecosystem that supports ongoing innovation.
Utilising AI and GPT as the trigger for transformation in your insurance company requires a well-structured approach, aligned with the phases of Cost Reduction and Growth and Innovation. By understanding the stages of Trigger, Operational Turnaround, New Strategy, Vision, or Business Model, and Adaptive Innovation, your company can orchestrate a transformation that not only enhances productivity and decision-making but also aligns with strategic goals and fosters a culture of continuous innovation. This approach ensures that you are not among the 85% of transformation efforts that fail but instead pave the way for sustainable success in a rapidly evolving market landscape.
The Nugget
W.A.L.D.O., an innovative open-source AI base-model designed for the detection of land-based objects through various aerial devices like drones, satellites, helicopters, and planes. Not the only one of its kind, but an interesting demonstration of its application.
Object detection models have the power to transform a number of industries. Some more obvious than others. In mining and energy, it enables real-time surveillance, site exploration and environmental compliance. In keeping with this weeks themes, in logistics and supply chain, it aids in route optimisation and efficient inventory management. Whilst in insurance, it contributes to precise risk assessment, underwriting and disaster response. There is waitlist for W.A.L.D.O. but there are many alternatives.
