Professional Documents
Culture Documents
European
and When to Exit
......................................................
Arrogance, Hubris, and Narcissism:
The Over-Confident Leader
......................................................
Business
Cultivating Executive Trust in
the Age of AI Governance
Review
March - April 2024
europeanbusinessreview.com
CRAFTING EFFECTIVE
LOYALTY PROGRAMMES
magnetic
THAT ATTRACT AND
RETAIN CUSTOMERS
4 BRAND LOYALTY
Magnetic Loyalty: Crafting Effective
A Winning Deal: How Biculturals Can Supercharge
Your International Business Negotiations
Priyan Khakhar and Jasmina Najjar
Loyalty Programmes that Attract and
Retain Customers
Klaus Heine and Vanessa Brunner
64 GENDER EQUALITY
Taking a Stand against the Gender Gap
in Workplace Flexibility
12 INNOVATION
Smells Like Patchouli!
Fiona Wylie
68 SUPPLY CHAIN
How to Innovate without Changing Your Product A Practical Guide to Kick-Starting your
Fernanda Arreola and Johann Vitrey Cyber Supply Chain Risk Programme
16
Kamil J. Mizgier
EDITOR'S PICK
A New Business Leadership Paradigm to
74 ARTIFICIAL INTELLIGENCE
Generative AI Update for 2024
Understand Signals and Timing: When to
ENTER a Business and When to EXIT Ray Schroeder and Katherine Kerpan
80
Peter Lorange and Karin Mugnaini
22
Where FICO Gets Its Data for Screening
LEADERSHIP Two-Thirds of All Card Transactions
Eric Siegel
Trust-Me: A Concept and Metric to Embed
in Leaders, Enhancing their Effectiveness
Simon L. Dolan, Kyle Brykman
and Shay S. Tzafrir
86 ENTREPRENEURSHIP
You did not Fail! You are just Rebounding!
34
Olimpia Modorcea and Fernanda Arreola
PSYCHOLOGY
Arrogance, Hubris, and Narcissism: 91 ESG
The Fungibility of Environmental, Social,
The Overconfident Leader
Adrian Furnham and Governance Reporting
Tim Bovy and Ian Hodges
42 AI GOVERNANCE
Cultivating Executive Trust in the
94 SUSTAINABILITY
Partnership and Technology: Solving
Age of AI Governance
Municipal Solid Waste Management in
Luca Collina and Ben Warnes
Developing Economies
50
Sahan J. Fernando and Ambika Zutshi
LEADERSHIP AND MANAGEMENT
Aligning Organisational Ecosystems
to be Fit for Purpose
98 DIGITAL TRANSFORMATION
Change or Transformation
Jonathan Trevor and Kazuhiro Asakawa Nina Mohadjer
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MAGNETIC LOYALTY:
CRAFTING EFFECTIVE LOYALTY
PROGRAMMES THAT ATTRACT
AND RETAIN CUSTOMERS
by Klaus Heine & Vanessa Brunner
A
Most brand managers today see room ccording to a McKinsey study (2020), members of loyalty
for improvement in their repurchase programmes are 30 percent more likely to spend more on the brand
rates, particularly as Generation Z tends after subscribing. Even more, Ourself, a beauty brand recognised
to exhibit lower brand loyalty amidst for its tech-centric products, attributes 40 percent of its sales to its rewards
intensifying competition. As it is more programme (Morris 2023). Research shows that loyalty programmes are
difficult to acquire new customers also a crucial step in enhancing the share-of-wallet (Leenheer et al., 2007).
than to retain existing ones, loyalty Many brand managers have yet to fully realise the great potential of loyalty
programmes stand out as a promising programmes, given the significant number of brands that resort to unorig-
tool. This article outlines a seven- inal, standard loyalty approaches like basic point-collection systems for
step decision process to create loyalty discounts, which may not engage consumers effectively.
programmes that are effective because The cosmetics industry represents a vital area for studying loyalty
they align with consumer psychology programme usage, as it remains ahead of many other industries in digital
and the brand’s overall purpose. marketing innovation. While smaller companies can greatly benefit
www.europeanbusinessreview.com 5
BRAND LOYALTY
design that aligns with how customers expect operate an independent loyalty programme to
and know loyalty programmes. They typically preserve their distinct identity. The primary
offer either status tiers or loyalty points that challenge of coalition programmes is the risk
customers can either climb to achieve a higher that consumers might develop loyalty to the
status or redeem for rewards as a way to incen- programme itself rather than to individual
tivise brand loyalty. These insights underscore brands. As a result, all the beauty brands we
that customers tend to favour a simple design analysed have chosen to run independent
that is easy to understand and works well – programmes. However, the potential of the
which is one of the key success factors for coalition strategy remains largely untapped.
loyalty programmes. The significant advantage lies in cross-
To develop a basic loyalty provgramme promotion opportunities. Instead of competing
design, it is recommended to follow a seven-de- individually, coalition partners can actively
cision process, which is illustrated in Figure 1 promote each other and leverage their
and also outlines the main options available to respective customer bases for the benefit of
brands at each stage. the entire coalition. To avoid collaborating with
direct competitors, there are (1.) affinity groups,
DECISION 1 which unite like-minded entrepreneurs sharing
Involves choosing between a solo or coalition a common interest or affiliation, (2.) sector-
strategy: Will the programme be operated specific programmes, such as those in travel or
independently or in partnership with other hospitality, and (3.) multi-partner programmes
brands? Most luxury beauty brands prefer to spanning different industries.
www.europeanbusinessreview.com 7
BRAND LOYALTY
www.europeanbusinessreview.com 9
BRAND LOYALTY
significant financial, cultural, and social capital. participants can ‘‘engage with the planet’’ and earn
Such sunk costs can be established through one-time 450 points by refilling their perfume bottles instead of
membership fees and, more effectively, through social buying new ones. Secondly, people are most motivated
benefits. Glow Recipe ensures that participants feel when contributing to something larger than them-
part of a community, fostering a sense of belonging and selves that they believe in. Brands have the opportunity
possibly status among peers. Leaving the programme to achieve dual goals: striving for a higher purpose
would mean losing these social benefits. beyond making money while convincing consumers
Gamify Programme Features: When evaluating that their purchases are contributing to a good cause.
a programme design, consider whether it enhances Research shows that resistance to leaving a programme
(1) repeat purchases, (2) upselling and cross-selling is maximised when participants identify with the
opportunities, (3) active member participation, and values and imagery of a brand (Shelper et al. 2023).
(4) alignment with the brand’s values and purpose. Without such emotional commitment, consumers are
The latter two criteria are crucial for evolving a loyalty more likely to switch to competitors when a better
program into a community. Gamification is a key driver product is available.
of active participation, yet currently underutilised,
with only five (8.4%) out of 60 programmes employing
it. NARS, for example, opts for subtle passive gamifica- REFERENCES:
tion elements like game-inspired avatars and a progress 1 Leenheer, J., van Heerde, H. J., Bijmolt, T. H. A. &
Smids, A. (2007). Do Loyalty Programs Really Enhance
tracker, which keeps customers engaged in earning
Behavioral Loyalty? International Journal of Research
and checking points, adding fun to the programme. in Marketing: 42(1): 31-47.
Chanel’s ‘‘La Collection’’ card game is a role model for 2 McKinsey (2020). Coping with the Big Switch: How
interactive gamification elements, originally designed Paid Loyalty Programs Can Help Bring Consumers Back
to Your Brand, https://www.mckinsey.com/capabilities/
for video games. Purchases and different tasks unlock growth-marketing-and-sales/our-insights/coping-
new cards and rewards, creating a sense of anticipation with-the-big-switch-how-paid-loyalty-programs-can-
help-bring-consumers-back-to-your-brand.
and surprise.
3 Morris, M. (2023). Building a Rewards Programme
Provide a Sense of Purpose: Two powerful tech- That Keeps Fickle Customers Coming Back, January
niques to increase emotional commitment are often 8, https://www.businessoffashion.com/articles/
underestimated. Firstly, giving consumers an excuse direct-to-consumer/rewardsprogramme-to-keep-fick-
le-customers-coming-back/.
or justification for consumption can motivate those on
4 Nunes, J. C. & Dréze, X. (2009). Feeling Superior: The
the fence to make a purchase, especially when linked Impact of Loyalty Program Structure on Consumers’
to value-based rewards. For instance, Louis Vuitton Perceptions of Status. Journal of Consumer Research,
35 (6), 890-905.
launched a campaign highlighting their commit-
5 Shelper, P., Lyons, S., Savransky, M., & Harrison, S.
ment to donate a portion of purchase revenues to the (2020). Loyalty Programs: The Complete Guide, Loyalty
Red Cross. In the Mugler Circle loyalty programme, & Reward Co Pty Ltd: London.
Klaus Heine is a marketing professor at Emlyon Business School and has collaborated with
numerous luxury houses in both Europe and Asia. He helps entrepreneurs find out what they
want their brands to stand for – to build high-end brands with a higher purpose.
onefourzerogroup.com
INNOVATION
SMELLS LIKE
PATCHOULI!
HOW TO INNOVATE
WITHOUT CHANGING
YOUR PRODUCT
by Fernanda Arreola
and Johann Vitrey
www.europeanbusinessreview.com 13
INNOVATION
proximity, and other fragrances lost in our reusable, washable). A recyclable example of a
memories, which makes it more likely that they container in perfumes is Bois Imperial3, the bottles
will include aromas that were popular in the are made of glass, without a case, with a sustain-
past. For example, patchouli, a base note, has able approach. Other examples include SEXY by
been used since ancient times. To this date, it is a Honoré des Prés4 with original packaging that
largely used base note that is included in a wide exudes authenticity and the charm of yesterday.
range of fragrances. Some people even simply We can also take the example of Angel by Mugler5,
use patchouli oil. Yes, we often smell patchouli the pioneer of bottle refills.
in our daily lives.
CONCEPT:
The concept proposed by the product can be
altered by simply changing its colour and how it
IF IT IS NOT THE PRODUCT, addresses a community (gay pride, cancer survi-
THEN WHAT? vors, nationality, etc.). An example
is Blood Concept6, a brand where
Gaining inspiration from what is
done in the perfume industry can
A product’s positioning can you choose the blood type you
want to wear.
help you look at your product’s be based on the messaging
commercialisation and commu- around it, the discourse a COMMUNICATION:
nication efforts differently. Most This consists of changing the
importantly, it can give you hints on
vendor uses to present it, messaging. For instance, if you
how to innovate in sectors where or even the concept that can’t make people smell your
competitors propose very similar the buyer is searching for. product, how do you make them
products and where product inno- buy it? You can for example evoke
vation is unlikely to provide an edge other things that can give a sense
for differentiation. of the sensorial emotions that will be expe-
rienced once used. For example, the candle
CONTAINER: company Promenade à Auvers7 bases scents on
If you cannot change the product then you can the original scenery that Vincent Van Gogh used
change its packaging. Furthermore, this pack- to inspire his paintings. As for storytelling, we
aging can change in nature (box, bottle) but even can also find the incredible job of Eight & Bob8
in terms of the raw material it uses (recyclable, which comes packaged as a book.
adjustable according to your desires thanks Fernanda Arreola is a Professor of Strategy, Innovation,
and Entrepreneurship at ESSCA and a researcher
to interchangeable cartridges.
focusing on service innovation, governance, and
social entrepreneurship. Fernanda has held numerous
NETWORK: managerial posts and possesses a range of international
People rely more and more on where they academic and professional experience.
find the product as a basis for their deci-
Johann VITREY-TARDIF is a lecturer at ISC Paris, IESEG
sion to purchase or not. It is not only about Paris, Paris Perfume School and Thelma Business
selling online but also about who the distrib- School in Dakar (Senegal), teaching Luxury Marketing,
utor is. Perfumist11 is the first collaborative International Trade and Cross Cultural Communication.
He is the founder and CEO of SESAME, an expert in
perfume advisory application, created by
olfactive marketing and olfactive identity. He also owns
perfume enthusiasts, to help you discover two niche perfumeries in France. Late deafened, he is
fragrances that best suit you. the President of the French OHNS Ethics Committee.
www.europeanbusinessreview.com 15
EDITOR'S PICK
WHEN TO ENTER
A BUSINESS AND
WHEN TO EXIT
In business, as in a host of other contexts, timing is everything. While sensing the
optimum moment for a given course of action may require more art than science,
we can at least be aware of the indicators that we should be looking out for.
seem to have had a central concern for lead indi- that person or entity, ideally before others see
cators, i.e., how to perceive indicators and better similar or comparable indicators. Our aim, with
forecast various types of decisions. Accordingly, our book, has been to contribute towards this.
leaders might be inspired by our book to establish
their own tailored factors. To explore how to find such “weak” signals
for guiding in/out decisions, we thus surveyed
So, how can leaders come 70 books, written by a wide
up with better ways of doing array of practitioners totalling
this? Are there factors that To know when to accelerate some 15,000 pages. Further,
leaders might follow which we interviewed some 21 senior
might signal that there is time
one’s engagement in a leaders from business and poli-
for action? And such signals business, as well as when tics. The result is summarised
may have value only if they can to decelerate seems key. It in The Future Ready Leader. In
be considered to be exclusive
for a given decision-maker. If
seems to be a matter of skill the following, we shall discuss
how these learnings could
the signal-reading is available regarding “ins and outs” help leaders to improve timing
to all, in contrast, there could decisions. We shall offer a
be relatively little to gain. In conceptual scheme for coming
such cases, it can be unrealistic to come up with up with lead indicators, based on inputs from our
better timing decisions, at least those that others book. Further, we will aim to illustrate how our
in the market would not have picked up on. The approach might work when applying this to three
trick will be to identify factors that are unique to specific businesses.
www.europeanbusinessreview.com 17
EDITOR'S PICK
www.europeanbusinessreview.com 19
EDITOR'S PICK
One important assertion should be made at this stage, a pool of ships designated to the transportation of
namely that it is important that a firm’s top leadership be chemicals. There seemed to be signals that it was a
in a position to actually act when an opportunity comes up. good time to enter, with the price of the ship being
The counterpoint might be more fundamental disagreement relatively low, a somewhat low new-building order
among leading stakeholders, such as between various share- book, as well as an apparent global uptake for the
holder groupings, top management, the board, and so on. transportation of chemicals.
Again, it is important that there is someone at the helm with
clear decision-making authority. The reviews and interviews in Part 5 could shed
important light on the issues affecting the attrac-
tiveness of chemical shipping. Several of the book
reviews in Part 3 are also relevant, perhaps above
EXAMPLE: A LAND-OWNING FIRM all that of Siilasmaa’s book.
While there are many inputs from our book that might
shed light on this issue, several of the books reviewed in
Part 1 may be particularly relevant. Andrew McAfee’s book
appears to be particularly so. Also, the book by Sam Zell
(Part 8) is also helpful.
EXAMPLE: PURCHASE OF A
CHEMICAL TANKER
business interruptions that can arise from a variety In summary, in-out decisions can yield success if made
of reasons, including environment, process, with the highest degree of observation of patterns, capture
people, and so on. Some breakpoints are expected, of signals, analysis, and solid doses of clear decision-making.
others not. For those not anticipated, being in tune We must not only ask our teachers and guides to help us to
with or alert to the not-so-easy-to-see data points or acquire these skills, but we ourselves must shift our leader-
the weak signals can help leaders to catch them. ship mindsets to that of a “signal sensitivity” mindset.
www.europeanbusinessreview.com 21
LEADERSHIP
Every leader needs to inspire trust in their Trust is an essential concept in many of the arti-
followers, employees, and stakeholders. Trust is cles, books, and research focus of the coauthors
one concept that binds all efforts at relationship- of this article. Dolan (2011 and 2020), for example,
building together, leading to business success. refers to TRUST as the “Super-Value”, the “Value
In this article, three experts in business of Values” or the “Mother of all Values”.1 Garti and
management discuss how leaders can build trust. Tzafrir (2022), in a recent book, suggests trust to be
a powerful concept for synchronising work-family
relationships.2 As researchers, consultants, and
INTRODUCTION change agents, we argue that a leader who wishes
to be effective in his/her role needs to embed the
Trust is the foundation of any successful rela- triple anchors in his/her toolbox: 1) A clear defini-
tionship, whether it be personal or professional. tion of what trust means (and what trust is not), 2) a
Building trust requires effort and time, but the bene- clear methodology to assess trust, and 3) evidence-
fits of a trustworthy relationship are immeasurable. based tool (or tools) to assess the genuine level of
Trust can lead to increased communication, better trust that he/she experiences. We therefore believe
collaboration, and a stronger sense of community. that the time is ripe to explore these three compo-
In this article, we will explore the strategies and nents, which we have been researching for over 20
techniques available to leaders that can be used to years. This is needed because managers, leaders,
establish trust in their relationships. and employees across organisations frequently
www.europeanbusinessreview.com 23
LEADERSHIP
Mind you, trustfulness refers to the willingness quality that underpins all healthy relationships.
to trust others and to believe in their intentions and Without trustworthiness, trust cannot be built or
actions without questioning them. It is a positive maintained. Trustworthiness requires individuals
trait that allows individuals to build strong rela- to be honest, reliable, and consistent in their behav-
tionships and foster collaboration. Trustfulness is iour, even when it is difficult or inconvenient.
often associated with openness and vulnerability, All in all, research shows that leaders who display
as it requires individuals to let their guard down trust, create a positive culture which makes a huge
and rely on others. On the other hand, trustworthi- difference in terms of the commitment and produc-
ness refers to the ability to be trusted, and to act in tivity of members of the organisation (See Exhibit 1).
a reliable and honest way that inspires confidence
in others. It is a character trait that is built over
Some tangible consequences connected
time through consistent behaviour and actions. Exhibit 1: to leaders who generate trust
Trustworthiness is often associated with integrity
and responsibility, as it requires individuals to be
Experience Enhance Report Report
accountable for their actions and to follow through
on their commitments. It also involves compas- Over 40% Productivity 74% 106%
sion and benevolence, as one needs to believe that
Less waste by about less more
others will act with kindness and with their best
interest in mind. and enhance 40% Stress energetic
While trustfulness and trustworthiness are Resource Savings at work
both important, they are not interchangeable.
Trustfulness can be a positive quality, but it can also
Source: https://esp.6seconds.org/2017/08/24/
be risky if it is not accompanied by discernment la-neurociencia-de-la-sala-al-directorio/
and caution. Blindly trusting others, unconditional
trust, can lead to disappointment and even harm
if the other person proves to be untrustworthy. On
the other hand, trustworthiness is a foundational THE SPIRITUAL DIMENSION
OF TRUST
www.europeanbusinessreview.com 25
LEADERSHIP
communication, a lack of collaboration, and ulti- performance. When employees are unhappy in
mately, a loss of productivity. their jobs, it can also lead to increased absenteeism
In the workplace, mistrust can be equally and presenteeism, which can further impact the
damaging. It can create a toxic environment where organisation's bottom line.
employees feel suspicious of one another, and where
collaboration is difficult to achieve. Mistrust can lead
to a lack of innovation and creativity, as employees
are hesitant to share their ideas and opinions for fear THE PARADOX OF EMPLOYING
of being judged or criticised. It is difficult to recover “INWARD-TRUST¨ BUT
from mistrust, as research shows that it takes approx- “OUTWARD- ZERO TRUST”
imately six trust-building actions to compensate for
one act that breached trust.6 So far, we have argued that trust is a valuable
Mistrust in the workplace can have serious conse- commodity. It is especially important to nourish it
quences for both employees and the organisation. within the people that work in the same team or organ-
Firstly, mistrust can lead to a toxic work environ- isation. We call it “inward trust”. But, with the rise
ment. When employees don't trust their leader, it of cyber-attacks and political turmoil, it is becoming
creates a culture of suspicion and paranoia. This increasingly difficult to rely on others. That's where
leads employees to feel isolated and unsupported, the concept of “Zero Trust” comes in. This approach
which can have a negative impact on their mental to security is gaining popularity in both international
health and well-being. A toxic leader politics and the digital security sector.
can also lead to high turnover rates, The idea behind Zero Trust is simple:
Mistrust can lead to a
as employees may feel compelled to trust no one. This means that every
escape the negative atmosphere. lack of innovation and user, device, and application must
Secondly, mistrust in the leader- creativity, as employees be verified and authenticated before
ship of an organisation can decrease being granted access to a network
are hesitant to share
productivity. When employees don't or system. It also means that access
trust each other, they do not collaborate their ideas and opinions is granted on a need-to-know basis,
or communicate effectively leading to for fear of being judged rather than blanket permission.
avoidable mistakes. When employees While the concept of Zero Trust
don't feel comfortable working with
or criticised. may seem extreme, it is becoming
their leaders, they may also be less likely to ask for necessary in today's world. Cyber-attacks and polit-
help, which can further decrease productivity. ical turmoil are on the rise, and trust is becoming
Thirdly, when employees lack trust in their harder to come by. Zero Trust provides a solution to
leader, they feel unsupported and undervalued. these problems by ensuring that every user, device,
This leads to a lack of motivation and enthusiasm and application is verified and authenticated before
for their work, which ultimately impacts their being granted access. This is a small price to pay
www.europeanbusinessreview.com 27
LEADERSHIP
Exhibit 3: Entrusting You: A Scale for measuring the level of trust I have in my Leader/Manager/Boss
Here are 21 statements that demonstrate dimensions of trust that you have in your manager/leader/boss (select a
focal person). The scale is based on the works of Tzafrir and Dolan, 2004).8
Indicate the degree to which you agree with each statement by using the following scale.
1
Disagree strongly
2
Disagree
3
Neither agree nor disagree
4
Agree
5
Strongly Agree
Think about yourself and the person in your organisation that you wish to assess. This can be a direct manager, a colleague
at work, a leader or the so-called Boss. For each statement, write the number that best describes how much you agree or
disagree with each statement.
Score
Item # Statement (1-5) Card Label
1 My needs and desires are very important to both of us. Shares needs & desires
2 I can count on my manager/leader to help me if I experience difficulties. Lends a hand at difficulties
3 My manager/leader is sensitive and quite open-minded when he /she has to deal with me. Open up
4 People around me succeed because my manager/leader does not let conflicts arise (he/ Resolves conflicts
she does not let people step on each other).
9 If I make a mistake, my manager/leader will “forgive and forget” in order to not upset me. Forgives unintentional
mistakes
10 My manager/leader´s actions and behaviours are supportive and harmonious. Harmonious action
11 My manager/leader´s actions are consistent with their words (he/she “walks the talk”). Walks the talk
12 My manager/leader is known to generate comfort and thus I feel unthreatened in sharing Generates comfort
personal or intimate information with him/her.
13 There is a lot of warmth and caring in the relationships between my manager/leader Warmth & Caring relationships
and myself.
14 My manager/leader makes personal sacrifices for me to maintain the relationship. Engages in personal Sacrifices
15 My manager/leader expresses his/her true feelings about important issues that Manifest true feelings
concerns us.
16 My manager/leader brings the best of his /her humanistic traits in order to Brings the best human
sustain our good relationships. character
17 My manager/leader shows genuine concern for my needs and qualities. Shows concern
18 All in all, my manager/leader is a reliable person. Exhibits reliability
19 My manager/leader focuses on the message, (not on his messenger status), Consistent actions
to ensure that he/she is aligned with his/her promises.
Harmony
Concern The Trust Mate
R
#2 #5 #7
Lands a hand at Keeps promises Is knowledgeable
difficulties and competent
• Now, mark your final score on each of the
corresponding dimensions in the three-
dimensional ENTRUST template. Once marked,
connect the dots with a straight line. Please #8 #11 #18 #19
shade the area. This is your perceived TRUST Has a success Walks the talk Exhibits Shows consistent
track reliability actions
zone with the person that you are assessing.
C
zone of Trust #1 #3 #6
Shares needs & Is open minded Ensures equity
Reliability Concern desires
10
9 10
9
8
7
6 7
8 #9 #13 #15 #17
5 6 Forgives Display warmth Manifest Show concern
4 5
3 4 unintentional & caring true feelings
2 3 mistakes
1 2
0 1
0
0 1 2 3 4 5 6 7 8 9 10
#4 #10 #12
Resolves
conflicts
Promotes
harmonious
actions
Generates
comfort
H
#14 #16 #20 #21
Demonstrate Demonstrate Great Maintain
personal humanistic Collaborator harmony
sacrifices character
Harmony
www.europeanbusinessreview.com 29
LEADERSHIP
H-zone
7
My Trust zone with my leader
www.europeanbusinessreview.com 31
LEADERSHIP
ARROGANCE, HUBRIS,
AND NARCISSISM: THE
OVERCONFIDENT
LEADER by Adrian Furnham
www.europeanbusinessreview.com 35
PSYCHOLOGY
They are also paradoxically envious of others They may try to “buy” themselves into exclusive
and begrudge them their success. They are well circles. They often require excessive admiration
known for their arrogance and their disdainful, and respect from people at work for everything
patronising attitude. As managers, their difficult- they do. This is their most abiding characteristic.
to-fulfil needs can lead them to have problematic They usually have a sense of entitlement, that is,
social relationships and make poor decisions. unreasonable expectations of especially favour-
Many are exceptionally sensitive to setbacks, able treatment or automatic compliance with
feeling both degraded and humiliated. They their manifest needs. They are unsupportive but
mask this with defiant counterattacks demand support for themselves. All
and rage. They may withdraw from are unwilling to recognise or identify
situations that led to failure or try to
Narcissists overall are with the feelings and needs of others
mask their grandiosity with an appear- boastful, pretentious, in and out of work. They have desper-
ance of humility. and self-aggrandising. ately low emotional intelligence.
At work, narcissistic individuals Essentially, narcissism is a
have a grandiose sense of self-impor-
They overestimate disorder of self-esteem; it is essen-
tance (for example, they exaggerate their own abilities tially a cover-up. People with NPD
their achievements and talents, and and accomplishments self-destruct because their self-ag-
expect to be recognised as superior grandisement blinds their personal
without commensurate achievements).
while simultaneously and business judgement and mana-
Inevitably they believe that they rightly deflating others. gerial behaviour. At work, they
deserve all sorts of markers of their exploit others to get ahead, yet
specialness: bigger offices and salary, inflated job they demand special treatment. Worse, their
titles, a bigger budget dedicated to their needs, reaction to any sort of criticism is extreme,
more support staff, and greater liberty to do as including shame, rage, and tantrums. They aim
they wish. to destroy that criticism, however well-inten-
Most individuals with NPD are preoccupied tioned and useful. They can be consumed with
with fantasies of unlimited success, power, envy of, and disdain for, others, and are prone to
brilliance, and money. They believe that depression as well as manipulative, demanding,
they are “special” and unique and can and self-centred behaviours. Even therapists
therefore only be properly under- don’t like them.
stood by, or should associate with, Many researchers have tried to “unpick” the
other special or high-status essence of the paradoxical, fragile self-esteem
people (or institutions). of the narcissist. The narcissist’s self-esteem is
at once unstable and defensive. It seems that
their self-esteem is utterly contingent on others’
feedback. Further, it is dissociated between
explicit (overt) and implicit (covert) views.
What is most distinctive about narcissists
is their self-assurance, which often gives them
charisma. They are the first to speak in a group
and they hold forth with great confidence, even
when they are wrong. They so completely expect
to succeed, and take more credit for success
than is warranted or fair, that they refuse to
acknowledge failure, errors, or mistakes. When
things go right, it is because of their efforts; when
things go wrong, it is someone else’s fault. This is
Oldham and Morris note four tips for working with narcissists:
www.europeanbusinessreview.com 37
PSYCHOLOGY
THERE ARE MANY MARKERS OF manipulate, ply, shape, beguile, machinate, or manoeuvre
NARCISSISM. HERE IS A CHECKLIST FOR the feelings or opinions of others.
SOMEONE YOU MIGHT SUSPECT OF NPD:
1 REACTIVE ANGER
Concerning anger and rage in response to perceived
11 EXPLOITATIVENESS
Assessing a tendency to exploit, take advantage
of, and use others for their own gain.
slights, criticism, failure, or rebuke.
2 SHAME
Concerning shame or humiliation in response to
12 ENTITLEMENT
Involving feelings and actions of entitlement,
presumptuousness, not being satisfied until they get what
perceived slights, criticism, failure, or rebuke. is perceived to be deserved, or expectation of favourable
treatment.
3 INDIFFERENCE
In response to perceived slights, criticism, failure,
or rebuke. 13 ARROGANCE
Assessing haughty, snobbish, imperious,
pretentious, conceited, pompous, and disdainful beliefs
5 EXHIBITIONISM
A seeking of constant admiration, showing off when
in the presence of others, and attention-seeking, without
others, displaying attitudes that are generally uncaring
and unsympathetic.
6 THRILL-SEEKING
Assessing a tendency to engage in high-risk behaviour
for the sake of thrills and excitement.
acclaim, and an excessive driving ambition to achieve.
7 AUTHORITATIVENESS
Assessing a tendency to take charge of situations, to
authoritatively take responsibility for making decisions,
THE NARCISSISTIC LEADER
8 GRANDIOSE FANTASIES
Assessing fantasies of grandeur and success,
preoccupation with fantasies of future glory, and a
tendency to distort reality to achieve an overly positive
view of past, current, or future accomplishments.
9 CYNICISM / MISTRUST
Assessing a sense of cynicism and mistrust concerning
the motives, intentions, and reliability of others.
10 MANIPULATIVENESS
Assessing a tendency to skilfully and characteristically
www.europeanbusinessreview.com 39
PSYCHOLOGY
6 Uses the royal “we” in conversations Conceiving narcissism as a self-esteem trait disorder
does imply, as many personality psychologists have
7 Shows excessive self-confidence argued, that there is a clear continuum between healthy
and unhealthy. However, the issue remains where to
8 Manifestly has contempt for others draw the line.
www.europeanbusinessreview.com 41
AI GOVERNANCE
AI has still to earn its spurs as a reliable tool in the locker of business.
So what guidelines are available to executives to aid in determining the
appropriate level of trust to apply towards AI systems? To date, different
jurisdictions' regulatory frameworks vary in their approach.
CULTIVATING
EXECUTIVE TRUST
IN THE AGE OF
AI GOVERNANCE
by Luca Collina & Ben Warnes
while enabling innovation. However, complex EU: The EU Act promotes accountability and
and fragmented regulatory approaches could transparency in AI. This can help executives
undermine trust in AI among key decision-mak- trust AI more through audits to check processes.
ers. This analysis compares emerging AI gov- Managers have duties around monitoring
ernance laws and regulations in the EU, US, systems to ensure progress and compliance.
and UK, specifically examining their potential Restrictions on problematic AI protect workers
impact on trust for executives, managers, and while allowing innovation, although some uses
workers adopting AI systems. could still undermine rights.
The EU’s AI Act categorises risks and sets US: Over 90 per cent of AI executives say that AI
rules to protect rights while enabling innova- improves their decision-making confidence, but
tion. The US has an AI Bill of Rights and order others lag. Academic research shows that ethics
for safe AI, but no comprehensive laws yet. The shape trust in AI. Companies would use AI more
UK takes a pro-innovation approach with guide- with guidelines for fairness, explainability,
lines for responsible AI use overseen by existing and privacy. However, common values across
regulators. industries do not yet exist.
FIGURE 1
EU US UK
+ - + - + -
Rules to check AI Limits on new ideas Flexibility allows Uncertainty around Rules for careful AI Regulatory complexity
responsibly used more innovation future laws increase make a way for leaders is confusing on
bring anger over
make AI's governance opportunities reluctance to adopt and use it compliance
missed chances
more trustable
Rights protections Working together Pro-innovation
Compliance work- With little oversight,
Rules on risky AI ease address public scep- takes too much approach aligns with
load is seen as leaders bear the trust
leader worries ticism about freeng leader time and companies' enthusiasm
excessive issues alone
adoption focus for AI
Rules match leader Stopping some AI Safety guidelines Internal trust gaps Confidence building Economic impact pres-
values for trustworthy blocks hopes for answer calls to ease undermine execu- supports executive sures make workforce
AI moving ahead concerns tives' confidence moves to AI planning challenging
www.europeanbusinessreview.com 43
AI GOVERNANCE
executives must weigh their context amidst (National Artificial Intelligence Research
competing aims. Steps upholding ethical stand- Resource) to make AI tools and resources more
ards, welfare, and technological advancement available, secure, compatible, and accessible for
stand the best chance of motivating cross-re- everyone to learn.1 This can be seen as an addi-
gional public investment and leadership buy-in. tional support for management.
Regulations through elements related Why are further actions expected from US
to trust and further actions expected by managers?
executives. Top executives already trust AI to improve
decisions. The problem is with the employees’
FIGURE 2
trust. Most staff lack confidence in the technol-
EU
ogy’s fairness and transparency. Without shared
Regulations – • Accountability and transparency provisions
elements ethical guardrails in place across sectors, uncer-
related to trust • Restrictions on problematic AI to protect rights
tainty persists.
Additional • Set clear guidelines for ethical AI practices aligned with EU values
executive • Foster a culture embracing responsible innovation through training
Managers must translate high-level AI princi-
actions ples into understandable workplace policies and
• Proactively assess risks of systems to workers and mitigate concerns
training. Openly addressing concerns about bias
and job loss rather than ignoring them expands
Why are further actions expected from the trust in AI. Cross-industry collaboration to
EU’s managers? align core values, cementing transparency and
EU executives must take additional actions accountability, can give employees confidence
to build trust in AI beyond regulations due to that AI will be applied ethically.
two considerations:
FIGURE 3
The EU AI Act establishes accountability and UK
restrictions to manage risks. However, achieving Regulations –
• Guidelines promote responsible AI development
genuine adoption and confidence from exec- elements
related to trust • Rules aim to build public trust and confidence
utives requires further cultural leadership and
• Advocate for straightforward AI regulations in your industry
commitment to ethical AI. Additional
executive • Assess and be transparent about potential workforce impacts
While regulations provide an oversight frame- actions • Lead in developing solutions to distribute the gains from AI
broadly
work, progress depends on executives driving
change through active capability building, risk
management, and internal governance. Going The UK’s rules aim to make companies confident
beyond rules to instil ethical AI across operations in using AI by promoting transparency, accounta-
builds authentic trust and acceleration. bility, and other trust-building principles. However,
regulatory complexity across sectors could reduce
FIGURE 4
this confidence. There are also concerns about
US
economic impacts. On the other hand, the gener-
Regulations –
• The AI Bill of Rights outlines critical protections
elements ative AI framework for HM Government,2 even if
related to trust • An executive order establishes standards for safe, trustworthy AI
directed to the public sector, supplies an additional
Additional
• Champion building trust in AI through strong ethics policies point of reference for supporting businesses in
executive • Increase openness and staff education on AI to bridge internal
actions trust gaps topics related to the adoption and implementation
• Collaborate with others to develop fundamental trust principles from make or buy, to ethics, data and privacy.
www.europeanbusinessreview.com 45
AI GOVERNANCE
Leaders put visible effort into the steps above specific regulations emerge, view compliance
to show that they walk the walk. Rules that are as a floor rather than a ceiling for responsible
shown to be genuine build trust. Staff knowing innovation.
that leaders invest to avoid AI harm means a lot, When leaders show care for impacts on
too. Evaluating work changes with heart gains people rather than uncaring profits, staff and
loyalty when profits still matter, too. And fair rules society reward the care by trusting leaders’
forged together end suspicion. These concrete judgement on using AI moving forward. So
moves towards responsi- responsible foundations laid
bility make the public and Regulations alone do not ensure with care then open doors to
employees cheer executives confident progress. Leaders
forward on using AI to aid lives. executive trust; organisational get trust once trust is earned,
EU policymakers could culture and policies matter. boosting their confidence in
further compel internal audits AI systems.
on existing models while requiring accounta-
bility for automated decisions. US leaders might “Earn trust, earn trust, earn trust. Then you
demand rapid course-correction abilities if can worry about the rest.” 3
systems display unfair performance deviations Responsible AI relies on earning trust through
post-deployment. UK governance could authorise ethical practices and inclusive governance.
external ethical inspectors to halt dubious Organisational adoption hinges on leadership
projects based on mounting evidence. approaches within companies as well.
Collaborate across sectors to align on AI How executives steer emerging technologies
best practices guided by shared values. Where proves critical for stakeholder confidence. The
LEADING ETHICALLY
“A leader knows the way, goes the way, and shows
the way.” 6
Admit limitations in AI literacy and seek multi-dis-
ciplinary input to enable debate. Proactively
surface potential biases, risks, or inequities in
AI systems. Assess sociotechnical challenges;
conduct impact redress when necessary, slowing
rapid deployment. Prioritise ethics and people
over trends or quick wins. Build connections to
gather community perspectives on appropriate
AI uses – accountability spans boundaries.
www.europeanbusinessreview.com 47
AI GOVERNANCE
Leadership “essentials”
then responsibility. Provide team authority to Leaders’ actions
Regulations
halt questionable deployments via accessible
feedback systems enabling agile responses.
Sustained, transparent communication and Policies
and Share Training
Learning and
inclusive decisions distribute capabilities across culture compelling
culture guidance
ethic vision
an empowered workforce to uphold ethics. based
AI
TRUST
Enable
Workforce Leading Work with
Staff for
CONCLUSIONS impacts &
address
Ethically Governance
regulators
& stake-
concerns holders
HyperSense Platform is a brainchild of Subex, a pioneer in enabling Digital Trust for businesses across the
globe. Subex helps businesses embrace disruptive changes and succeed with conƬdence in the digital world.
ALIGNING
ORGANISATIONAL
ECOSYSTEMS TO BE
FIT FOR PURPOSE
by Jonathan Trevor and
Kazuhiro Asakawa
M
organisational ecosystems to be fit for purpose
anaging organisations to be highly and high performing. Strategic alignment, in
aligned and capable of implementing this context, refers to the careful arrangement
their chosen strategy is an age-old challenge. It of the different components of an organisational
has only become harder now that many firms and ecosystem — from its purpose (its raison d’etre) to
public sector organisations embrace ecosystem its strategy and structure — required to leverage
principles in their organisational design. external resources for strategic value successfully.3
Because they are more open, flexible, and Each component represents a strategic choice.
integrated than the industrial-age hierarchy, ecosys- Ecosystem leaders must select from various options
tem-based organisations can leverage external the one that suits their circumstances best. All
resources (think partners) to offer customers components should be highly aligned, ideally.
enhanced value upstream (think novel product Whether to create or participate in ecosystems,
and service development) and downstream (think our study helps managers work through these crit-
flexible delivery) than they ever could be if relying ical strategic choices and improve their chances
upon internal resources alone.1 However, published of success. First, we organise ecosystem purpose,
research indicates that up to 75% of ecosystems strategy, and structure into first, second, and
are considered failures.2 The leaders we spoke third-order strategic choices. Second, we present
to acknowledge the considerable potential of a practical framework to help ecosystem leaders
ecosystem thinking for their businesses but also choose between their various options at each stage.
expressed concern over the complexity of organ- The first and second-order choices are the focus
ising along such lines. of this article, Part A. Third-order choices and the
We studied a sample of leading international unique implementation challenges presented by
and Japanese firms with a stated ecosystem strategy organisational ecosystems are the focus of a second
to understand how they strategically align their linked article, Part B.
www.europeanbusinessreview.com 51
LEADERSHIP AND MANAGEMENT
www.europeanbusinessreview.com 53
LEADERSHIP AND MANAGEMENT
and manufacturing, which was designed to isolate which coordinates, exchanges, and encodes locally
itself from other rival firms to avoid technology acquired new knowledge in its product innovation
leakage.7 Regardless of physical footprint, this type and then pushes new products out to sales and
of “closed” ecosystem is well established, and part- marketing functions in those same geographically
nerships are often long-lived and highly stable. dispersed end markets.8
One of the interesting challenges with closed
Closed And Horizontally Integrated Ecosystems horizontal ecosystems is that they may involve
focus closely on membership of their ecosystem partnering between companies that might previ-
but encourage many more horizontal connections ously have been — and still can be — competitors.
between the focal organisation and Such ‘‘Frenemy’’ (i.e., friends who
network members and between One of the interesting are also enemies) arrangements
network members directly. The role
of the focal organisation is less super-
challenges with closed are common in ARM (described
later) and its close and long-term
visory, and the nature of partnering horizontal ecosystems manufacturing relationship with its
is less transactional. It is more about is that they may biggest competitor, Intel.
nourishing connections between IBM’s key strategic partners
ecosystem partners for upstream and
involve partnering include deep commercial collabora-
downstream innovation purposes. between companies tions with hyperscalers (think Amazon
An early example of this type that might previously Web Services), infrastructure partners,
of ecosystem strategy is the fast- and global consultancies such as Ernst
moving consumer goods company,
have been — and still & Young. All strategic partnerships
Nestle. Nestle has pursued a strategy can be — competitors. operate under a single internal organi-
of acquiring complementary firms sational structure, the IBM Ecosystem,
as well as setting up research and development and one leader, Woolley. To reduce competi-
centres worldwide to act as dispersed “antennas” tive conflicts and greater freedom for ecosystem
to sense and source local market knowledge and engagement, IBM divested itself of its managed
creativity. Acting as a focal point for this distrib- infrastructure business, Kindryl, as mentioned
uted network is Nestle’s R&D coordination unit, previously. A second challenge is to find the right
www.europeanbusinessreview.com 55
LEADERSHIP AND MANAGEMENT
(Toyota) purpose-built innovation Each form of ecosystem must and vertically integrated is
community located in the city the best option. Or, if it is to
of Susono near Mt Fuji, Japan.
be structured appropriately create an innovation commu-
Analogous to Silicon Valley in the if it is to perform its strategic nity highly aligned with your
US or Silicon ‘‘Fen’’ in the UK, of function capably as intended. product development cycle,
which ARM is a product, Woven a select group of highly inte-
City is, by design, an open ecosystem integrating the grated strategic partnerships might be best.
delegated efforts of many thousands of partnering Whichever ecosystem strategy is chosen, each also
companies. They operate side by side, physically presents managers with unique implementation chal-
and virtually, to further Toyota’s goal of realising lenges. Each form of ecosystem must be structured
radical new mobility technologies. appropriately if it is to perform its strategic function
Sosei Group Corporation is a holding company capably as intended. Designing an ecosystem struc-
of biopharmaceutical companies specialising in ture to be fit for purpose is an additional — and critical
drug development. Sosei Group enters into license — alignment consideration and the focus of Part B
agreements primarily with US, EU, and Japanese of this series: Designing Organisational Ecosystems &
companies to market the licensed drugs in Japan Overcoming Barriers to Implementation.
and find alternative usage for such drugs. Sosei, in
its foundation era, chose to locate itself in the UK REFERENCES
to engage in R&D collaboration with local univer- 1. Williamson, P. J., & De Meyer, A. (2012). Ecosystem Advantage: How to
Successfully Harness the Power of Partners. California Management Review, 55(1),
sities and venture firms to tap into the innovation 24-46.
ecosystem in the UK.12 Similarly, Takeda, a leading 2. Reeves, M., Lotan, H., Legrand, J., & Jacobides, M. G. (2019). How Business
Ecosystems Rise (and often fall). MIT Sloan Management Review, 60(4), 1-6.,
Japanese pharma, adopted this type of ecosystem
3. Trevor, J. & Varcoe, B., (2017). How Aligned is Your Organization? Harvard Business
by deciding to engage in drug discovery through Review. 7 February. Harvard Business School Publishing.
open partnerships worldwide.13 4. https://www.ibm.com/blog/qa_kate_woolley/
IBM’s “Collaboratory” strategy also falls into 5. Asakawa, K, & Doz, Y. (2002) Shiseido France 1998. INSEAD Case #4934.
this type of ecosystem strategy, for the company 6. https://www.allthingssupplychain.com/the-amazing-supply-chain-of-mcdonalds/
7. Murtha, T., Lenway, S. & Hart, J. (2001) Managing New Industry Creation: Global
engaged in open innovation even without setting Knowledge Formation and Entrepreneurship in High Technology. Stanford
up its own R&D labs through active collaboration Business Books.
with universities, government, and commercial 8. DeMeyer, A. (1003) Nestle S.A., INSEAD Case, #2692.
9. https://www.businessofapps.com/data/app-stores/
partners within host country ecosystems. Open
10. https://www.oecd.org/industry/global-value-chains/
and horizontal ecosystems represent the most
11. Trevor, J. (2022). Re: Align: A Leadership Blueprint for Overcoming Disruption
recent and the most complex type to emerge in and Improving Performance. Bloomsbury Publishing.
theory and practice. 12. Asakawa, K. & Osada, E. (2003) Sosei (A) & (B), Keio Business School Case,
#20030712J.
13. Korine, H. & Asakawa, K. (2019) Takeda: The Governance of Strategic
Transformation (A) & (B), London Business School Case. #LBD
Ref: CS-18-24/25; HBP: LBS222/223.
SUMMARY
Ridiculously Extraordinary
DigitalCX
Digital CX AI Services Trust and Safety Consulting
A WINNING DEAL:
How Biculturals Can Supercharge Your
International Business Negotiations
by Priyan Khakhar
and Jasmina Najjar
www.europeanbusinessreview.com 59
NEGOTIATIONS
www.europeanbusinessreview.com 61
NEGOTIATIONS
www.europeanbusinessreview.com 63
GENDER EQUALITY
Workplace flexibility has become a central pillar in the modern employment landscape,
reflecting a growing recognition of its importance for work-life balance, mental health,
and overall employee satisfaction. At the heart of this movement lies a persistent and
troubling disparity: the gender gap in workplace flexibility. Despite strides toward gender
equality, women continue to bear the brunt of caregiving responsibilities, a reality that
significantly impacts their professional lives and well-being.
Founded on the principles of equality and inclusion, Brand Champions emerged from
Fiona Wylie's personal experiences with the challenges of re-entering the workforce
after maternity leave. This journey inspired her to advocate for more flexible work
arrangements and address the broader issues of gender bias and inequality in the
workplace. A company’s mission should be about promoting flexibility and fostering an
environment where all employees, regardless of gender, can thrive.
BEYOND GENDER:
WORKPLACE FLEXIBILITY At the root of the flexibility gap lies a deep-
seated gender bias that assigns women
While women are at the epicentre of the
flexibility gap, the conversation extends a disproportionate share of caregiving
beyond gender. Mental health issues, responsibilities. This bias affects women's,
generational expectations, and societal and the primary caregivers', availability
norms all play critical roles in shaping
the landscape of workplace flexibility. and commitment to work and influences
We need to recognise these complexi- employers' perceptions and decisions
ties and champion a holistic approach to
regarding flexibility and accommodations.
addressing them, advocating for policies
and practices that accommodate the work-
force's diverse needs. This means moving beyond mere awareness to
promoting and practising inclusivity actively. For
instance, training programmes can be designed
to help employees and management understand
THE IMPACT OF GENDER BIAS AND unconscious biases and their impact on decision-
CAREGIVING RESPONSIBILITIES making. Organisations can create a more equitable
workspace by fostering an environment where
At the root of the flexibility gap lies a deep-seated employees feel comfortable calling out biases and
gender bias that assigns women a disproportionate suggesting improvements. Such efforts could lead
share of caregiving responsibilities. This bias affects to a significant decrease in gender-based discrim-
women’s, and the primary caregivers’, availability ination and increase the representation of women
and commitment to work and influences employers’ in leadership roles, thereby changing the narrative
www.europeanbusinessreview.com 65
GENDER EQUALITY
Fiona Wylie recognised the need for flexibility in the workplace after her journey returning
to work after maternity leave and founded Brand Champions. Renowned for her "SOS"
support, Fiona offers flexible marketing assistance with a quick turnaround, precisely
tailored to the evolving needs of their clients. She's heavily involved in charity work.
References
1. LinkedIn Research on Workplace Flexibility (2023).
2. Brand Champions Survey on Women's Health
Issues and Workplace Support (2023).
www.europeanbusinessreview.com 67
SUPPLY CHAIN
A PRACTICAL GUIDE TO
KICK-STARTING YOUR CYBER
SUPPLY CHAIN RISK PROGRAMME
by Kamil J. Mizgier
www.europeanbusinessreview.com 69
SUPPLY CHAIN
Select a comprehensive risk Choose a robust framework, such as NIST, to structure your C-SCRM programme.
1 management framework Tailor it to the specific nuances of your supply chain.
Perform a detailed risk analysis to identify and understand cyber risks associated
Conduct in-depth supplier
2 risk assessment
with each supplier in the supply chain. Consider factors such as their cybersecurity
posture, data handling practices, and overall risk exposure.
Clearly articulate your organisation’s risk appetite levels, ensuring alignment with
Define your supply chain risk
3 appetite
the diverse risks posed by different suppliers in the supply chain. Embrace economic
supply chain risk capital as your compass to guide strategic decisions.
Develop strategic mitigation Collaborate with suppliers to develop strategic risk mitigation plans, focusing on
4 plans with key suppliers proactive measures to minimise potential impacts on the supply chain.
Institute minimum Prioritise basic cybersecurity practices throughout the supply chain. Establish
5 cybersecurity standards monitoring mechanisms, baseline behaviours, and multi-layered defence systems to
across the supply chain mitigate risks collectively.
Ensure supplier-driven Collaborate with suppliers to establish robust backup procedures that are regularly
6 backup and recovery tested and encrypted. Ensure that backup media are stored securely, avoiding
protocols proximity to operational systems.
Strategically integrate cyber Leverage cyber insurance in collaboration with suppliers. Align it with risk
7 insurance for supply chain management frameworks and use it as a supplementary tool for financial protection,
resilience risk assessment, and contractual leverage within the supply chain.
www.europeanbusinessreview.com 71
SUPPLY CHAIN
Dr. Kamil J. Mizgier is the former Global Supplier Relationship and Risk Management Leader
at Dow with 15 years of experience in implementing risk management strategies across
industry sectors. Before this role, he led enterprise risk modelling projects and teams,
among others, at BNY Mellon and UBS. He has published more than twenty academic
and practitioner journal articles on risk management and is a frequent public speaker. He
obtained his master’s degree in applied physics at the Warsaw University of Technology and
a PhD in supply chain management at ETH Zurich.
GENERATIVE
AI UPDATE FOR
2024
by Ray Schroeder and Katherine Kerpan
While the first full year of operation of ChatGPT, 2023, gave a In one of the earliest academic studies of the
foretaste of the enormous impact that AI is going to have on implementation of GenAI, Harvard University,
us all, 2024 shows every sign of boggling the mind even more. the University of Pennsylvania Wharton School,
Here are some things to look out for. and MIT collaborated to analyse the impact
of making the ChatGPT tool available to 758
G
consultants at the prestigious Boston Consulting
enAI has taken a leading role in supporting Group. Given 18 realistic consulting tasks, the
and enhancing activities, drawing on GenAI-equipped consultants, who used GPT-4,
cognitive functions in many facets of our society. completed on average 12.2 per cent more tasks,
Unlike the robotic revolution that impacted mostly 25.1 per cent more rapidly. Additionally, 40
blue-collar workers in the manufacturing and per cent of the trial group were judged to have
assembly industries of the end of the 20th century, produced higher-quality results.19
GenAI has most directly impacted white-collar and Based on more than 4,700 interviews of busi-
creative workers over the past year. ness executives at the World Economic Forum
OpenAI’s ChatGPT was the first major GenAI held in Davos, Switzerland earlier this year, 46
out of the gate in late 2022. It started an avalanche per cent of the leaders believed that GenAI would
of entries in the field from start-ups to the leading boost profits in 2024. Also, 25 per cent of the chief
large tech corporations of Microsoft, Google, Meta, executives expected GenAI to lead to headcount
IBM, and more. Now, with more than 100 million reductions of at least 5 per cent this year.7
weekly users, as well as more than 92 per cent of Clearly, GenAI has the potential to be a game-
the Fortune 500 companies,9 OpenAI remains in changer in the coming year. In this article, we
the lead of this massive movement to integrate will examine a number of the key changes, chal-
artificial intelligence in nearly all aspects of busi- lenges, and opportunities that can be expected
ness, industry, and commerce. by the end of the year.
www.europeanbusinessreview.com 75
ARTIFICIAL INTELLIGENCE
WHAT TO EXPECT FROM NEW Business and industry thrive on maintaining an agile,
GRADUATES AS REGARDS AI responsive culture that is highly sensitive to the changing
needs and wants of their market; higher education is notori-
Beginning in 2024, we should anticipate a new genera- ously known as the “ivory tower” that is insular and slow to
tion of graduates equipped with AI skills, reshaping the change. Each of the two has a different ecosystem.
workforce.6,12 Immersed in nascent AI applications, these Business is dominated by serving the client or customer
graduates exhibit baseline fluency through daily use. Most while generating a profit; higher education is ruled by
considered AI’s trajectory in selecting their majors, with serving students and, up until now, to a far lesser extent on
over 75 per cent factoring labour market implications into serving employers of graduates.
their decision-making.6 However, doubts persist regarding The worldwide environment has changed across the
workforce automation. Many desire integrated curricula two fields. With fewer students entering college, enrol-
that blend technical and humanities disciplines to prepare ments in Europe have declined by nearly 5 per cent over the
them for AI collaboration and a hybrid new world.21 past decade,14 and enrolments in the US have declined by
Reassuringly, this cohort remains hopeful about 10 per cent over the same period.24 Amid rising expenses
AI’s possibilities. Unlike previous technological shifts, for college attendance, students have looked to alternative
these digital natives see AI as a tool to boost critical credentials and directly entering careers in lieu of the tradi-
thinking, creativity, and productivity, not a replacement tional baccalaureate degree. In order to maintain tuition
for human roles.23 As Handshake12 notes, Gen Z seeks to and fee revenue to cover operating expenses, the colleges
drive AI initiatives within organisations, suggesting robust and universities on both sides of the Atlantic must cultivate
greater enrolments.
Meanwhile, the advent of GenAI and associated tech-
nologies has shifted the needs of employers. The new
technologies can accomplish tasks historically handled by
middle managers, accountants, human resources special-
ists, supervisors, marketers, computer programmers, legal
department workers, and many more office positions. Yet,
GenAI has opened whole new areas of workers in prompt
engineering, AI trainers, sentiment analysers, AI integra-
tion specialists, AI ethicists, AI art directors, AI security
specialists, and many more.8
It is in the nexus of education and employment that these
two ecosystems merge. The interests of both universities
www.europeanbusinessreview.com 77
ARTIFICIAL INTELLIGENCE
and corporations are best served by successful careers for knowledge exchange fuels innovation and propels the AI
the students as they become new employees. The Boston ecosystem forward.
Consulting Group has advocated for partnerships between The pace of AI development is relentless. As LinkedIn
higher education and busi- contributors1 advise, staying
ness: “Partnerships between The pace of AI development informed can be daunting.
higher education institutions and is relentless. As LinkedIn Cultivate a culture of continuous
employers can be invaluable for learning within your organisa-
helping businesses respond to contributors advise, staying tion. Voracious learning in diverse
growing talent needs. They can informed can be daunting. formats – from online courses and
offer employers a reliable way to Cultivate a culture of conferences to hands-on experi-
cultivate an educated and trained mentation – expands competency
workforce.”18 Serving their mutual continuous learning within and comfort with evolving tools.1
interests, such partnerships will your organisation. Invest in employee training
advance both ecosystems in the programmes that equip your
years ahead. workforce with AI knowledge and skills. Encourage experi-
mentation and support internal or external “hackathons” or
innovation labs to explore emerging AI applications.
Finally, the AI Readiness Quotient, a diagnostic tool from
STRATEGIES TO STAY ON TOP Wharton, is an invaluable resource for businesses. It helps
OF THE CHANGES organisations assess their readiness for AI integration, iden-
tifying areas of strength and opportunities for improvement.
Forget the zero-sum-game mentality. Hamood11 advo- By understanding their current position in the AI landscape,
cates “extreme information-sharing”, particularly around companies can develop targeted strategies to enhance their
failures and challenges. Nothing is a “mistake”, as long AI capabilities, ensuring that they can effectively leverage
as learning is acquired. Fostering a culture of openness AI technologies.22
encourages cross-company collaboration, accelerates
learning, and minimises redundant efforts. Share your AI
journeys, successes, and setbacks with industry peers and
participate in open-source communities. The collective THE WORLD OF BUSINESS – MORE
THAN EVER BEFORE – BELONGS TO THE
INFORMED, AGILE, AND FEARLESS
www.europeanbusinessreview.com 79
ARTIFICIAL INTELLIGENCE
www.europeanbusinessreview.com 81
ARTIFICIAL INTELLIGENCE
www.europeanbusinessreview.com 83
ARTIFICIAL INTELLIGENCE
REFERENCES
1
http://www.bizml.com/
2
https://nilsonreport.com/newsletters/1209/
3
https://sloanreview.mit.edu/article/
what-leaders-should-know-about-measuring-ai-project-value/
4
https://www.marketplace.org/2021/05/04/
the-human-labor-behind-artificial-intelligence/
5
https://sloanreview.mit.edu/article/
what-leaders-should-know-about-measuring-ai-project-value/
6
https://predictionimpact.com/documents/notes-for-The-AI-
Playbook/The AI Playbook - notes for chapter 4.pdf
7
https://predictionimpact.com/documents/notes-for-The-AI-
Playbook/The AI Playbook - notes for chapter 4.pdf
8
https://www.machinelearningweek.com/
9
https://generativeaiworld.events/
10
http://machinelearning.courses/
11
http://machinelearningtimes.com/
12
http://www.machinelearningspeaker.com/
13
https://www.machinelearningkeynote.com/predictive-analytics
14
http://www.civilrightsdata.com/
Eric Siegel, PhD, is a leading consultant and former Columbia University professor who helps
companies deploy machine learning. He is the founder of the long-running Machine Learning
Week8 conference series and its new sister, Generative AI Applications Summit,9 the instructor of
the acclaimed online course “Machine Learning Leadership and Practice – End-to-End Mastery”,10
executive editor of The Machine Learning Times,11 and a frequent keynote speaker.12 He wrote the
bestselling Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die,13 which has
been used in courses at hundreds of universities, as well as The AI Playbook: Mastering the Rare
Art of Machine Learning Deployment. Eric’s interdisciplinary work bridges the stubborn tech-
nology / business gap. At Columbia, he won the Distinguished Faculty award when teaching the
graduate computer science courses in ML and AI. Later, he served as a business school professor
at UVA Darden. Eric also publishes op-eds on analytics and social justice.14
www.europeanbusinessreview.com 85
ENTREPRENEURSHIP
T
he hidden side of such achievement is In our research, we gathered insights from successful
also common to all entrepreneurs: failure. entrepreneurs who navigated through business failures
According to the Bureau of Labor Statistics1, and comebacks. The first example that comes to mind is
in the US, at least 20% of businesses will fail in their Elon Musk. The visionary behind Tesla and SpaceX faced
first two years, and up to almost 50% will do so by age significant challenges in Tesla's early days. Financial
five. Therefore, we question what is there to be said strains, production delays, and scepticism from critics
(and known) about failure, and most importantly, led Musk to stop production temporarily. His pivotal
what do we know about eventually coming back? lesson from this experience was the importance of
planning strategically and adapting to unpredictable
circumstances. Musk emphasises the prerequisite of
a resilient mindset, urging entrepreneurs to perceive
FAILURE IS MORE COMMON THAN obstacles as opportunities for growth.
WE THINK Steve Jobs, the co-founder of Apple, endured a
turbulent period when he was expelled from his
Embarking on an entrepreneurial journey is a roll- company in the mid-1980s. After his departure, Apple
ercoaster ride filled with trials and triumphs. Some faced stagnation, and its future seemed uncertain. In
entrepreneurs face unexpected roadblocks that 1997, Apple acquired NeXT, a company Jobs founded
force them to pause or close their businesses for an during his time away, leading to Jobs' return. He
extended period. Despite the setbacks, many individ- introduced ground breaking products like the iPod,
uals force themselves through a process of time and iPhone, and iPad during his second tenure at Apple.
resilience that helps them reactivate themselves and Jobs' takeaway is about the power of reinvention and
recreate ventures and careers. the ability to turn adversity into innovation.
www.europeanbusinessreview.com 87
ENTREPRENEURSHIP
to listen to their bodies and prioritise their health. embracing personal well-being and addressing life's
Oprah Winfrey, media mogul and founder of the challenges head-on can lead to renewed success in the
OWN Network faced a challenging period in 2011 professional realm.
when she decided to end her iconic talk show, "The The stories of these accomplished entrepreneurs
Oprah Winfrey Show". This significant personal and underline the inevitability of hardships and strains
professional transition allowed her to focus on other in the entrepreneurial world. Pausing a business for
aspects of her life and career. Winfrey's experience an extended period may seem like a setback, but the
highlights the power of making tough decisions for pivotal perspective is to see it as a strategic pause for
personal well-being and the potential for new oppor- recalibration. Learning from industry giants like Elon
tunities to emerge from those choices. Musk, Steve Jobs, Howard Schultz, and Reed Hastings,
Mark Zuckerberg from Meta took a two-month entrepreneurs can adopt resilience, strategic plan-
paternity leave in 2015 after the birth of his first ning, reinvention, and adaptability as essential
child. During this period, Zuckerberg prioritised his elements in their track to success. Remember, the
family, experiencing the profound impact of a work- pause is not the end, just like the theatre’s intermis-
life balance. His journey underscores the significance sion is not the play's culmination. Instead, it's a time
of celebrating personal milestones. It emphasises the for recalibration, upgrading, and rearranging the
need for entrepreneurs to prioritise their well-being stage to prepare for the next act.
and family commitments, even amid the demands of
managing a thriving business.
This insight accentuates the holistic approach to
success that recognises the close connection between IS THIS A FAILURE?
personal and professional aspects of life.
Personal hardships can be powerful catalysts for These examples make us question if these situations
positive change. can be classified as failure or if we should reassess
Pausing a business due to health, family, or personal how we refer to unsuccessful business ventures and
issues requires a unique strength and recalibrations of businesses. For
self-introspection. Entrepreneurs instance, research2 has found
Personal hardships can
like Mark Zuckerberg, Arianna that 65% of novice entrepreneurs
Huffington, Richard Branson, be powerful catalysts for will make a comeback and try
and Oprah Winfrey showcase that positive change. their chances again at launching
another business. Interestingly,
only those who do not acknowl-
edge having failed will have limited
chances of ever trying it again.
Furthermore, when the decision
to close or pause a business arises,
what is necessary is taking time to
complete what we will define as a
rebounding cycle. From our research
and observations, for entrepreneurs
to fully reinvest themselves, they
must allow themselves to undergo the
following process.
First, they must acknowledge
the need to pause or stop. Second,
they must seek support to make such
a decision. Third, they must take
REBOUNDING CYCLE
www.europeanbusinessreview.com 89
ENTREPRENEURSHIP
REFERENCES
1 Top 6 Reasons New Businesses Fail. 30
December 2022. Investopedia. https://www.
investopedia.com/financial-edge/1010/top-6-
reasons-new-businesses-fail.aspx
2 Do You Plead Guilty? Exploring
Entrepreneurs’ Sensemaking-Behavior
Link after Business Failure. 5 June 2016.
Science Direct. https://www.science-
direct.com/science/article/abs/pii/
S2352673415300093?via%3Dihub
3 The Five Stages of Grief. 07 June 2022.
Psycom. https://www.psycom.net/
stages-of-grief
4 Do You Plead Guilty? Exploring
Entrepreneurs’ Sensemaking-Behavior
Link after Business Failure. 5 June 2016.
Science Direct. https://www.science-
direct.com/science/article/abs/pii/
S2352673415300093?via%3Dihub
5 Re-creation after Business Failure: A
Conceptual Model of the Mediating Role
of Psychological Capital. 02 March 2022.
Frontiers. https://www.frontiersin.org/
articles/10.3389/fpsyg.2022.842590/full
• Look after yourself. Maintaining good mental health is
6 Psychological Capital: What It Is and Why
fundamental to developing resilience and overcoming change. Employers Need It Now. 21 August 2023.
According to a recent study10 of almost 300 entrepreneurs, American Psychological Association. https://
www.apa.org/topics/healthy-workplaces/
70% acknowledged mental health concerns. The findings of psychological-capital
this study are significant because they suggest an underlying 7 60,000 rebounds. https://60000rebonds.com/
relationship between entrepreneurship and many of the 8 Second Souffle. https://secondsouffle.org/
affective, cognitive, and mental health conditions that a qui-sommes-nous/
stressful situation may trigger. Entrepreneurs must note this 9 Fuckup Nights. https://en.fuckupnights.com/
trend and act accordingly, seeking medical help if necessary 10 Are Entrepreneurs “Touched with Fire”? 17
April 2015. Michael A. Freeman, M.D. https://
when overcoming this moment. michaelafreemanmd.com/Research_files/
Are%20Entrepreneurs%20Touched%20
• Take time. If you need time, take it! Time will allow you to with%20Fire-summary.pdf
11 Coping with Entrepreneurial Failure.
recover psychologically and physically. It will also give you the November 2007. Research Gate. https://www.
space necessary to complete a full cycle of rebounding, for researchgate.net/publication/305889287_
which learning and gaining perspective11 are required. Coping_with_entrepreneurial_failure
Olimpia Modorcea is a certified coach, therapist, and published author who brings over
25 years of international experience in corporate technology to her passion for personal
development. Dedicated to empowering professionals and business owners, she helps
them navigate and accelerate their careers with purpose, ease, and emotional stability.
THE FUNGIBILITY OF
ENVIRONMENTAL, SOCIAL, AND
GOVERNANCE REPORTING
by Tim Bovy and Ian Hodges
I
n October 2023, the member states. This will
EU defeated an attempt by some of its be the case with the new ESG reporting
Members of the European Parliament (MEPs) to standards. ESRS, for example, will apply to all non–
water down the requirements regarding its European EU companies that were previously in the scope of
Sustainability Reporting Standards (ESRS), thereby the Non-Financial Reporting Directive (NFRD), which
ensuring that, through the incorporation of double was the predecessor to the CSRD. As the London Stock
materiality, it would achieve its ultimate goal of giving Exchange has noted, this includes Companies with
non-financial and financial reporting total parity. securities, such as stocks or bonds, listed on a regulated
Following this news, the Global Reporting Initiative (GRI) market in the EU; Companies with annual EU revenues
claimed that “a high level of interoperability between the exceeding €150 million and an EU branch with net
new ESRS and the GRI Standards – already widely used revenue of more than €40 million; and Companies with
by thousands of organizations in Europe and around the annual EU revenues exceeding €150 million and an EU
world – [had] been achieved.”1 Although the GRI acknowl- subsidiary that is a large company, defined as meeting at
edged that ESRS is mandatory and the GRI voluntary, least two of the following three criteria: more than 250
their claim nevertheless called attention to the issue of EU-based employees, a balance sheet above €20 million
fungibility, implying that the GRI stood alone in providing or local revenue of more than €40 million.2
organisations with a truly global reporting standard. Our Even within member states of the EU, there is
view is that the issue of fungibility is more complex and cultural and legal diversity. Across the world there
nuanced than that, while appreciating the value that the could be orders of magnitude more difference and
GRI brings to the table. complexity. How large organisations address these
Increasingly, standards set by the largest trade and differences in their supply chains and international
political blocks such as the EU have a degree of extra-ter- subsidiaries will have significant implications for
ritoriality. In the case of the EU, this means some laws their own reporting and for the success of ESRS
apply in specific contexts beyond the jurisdiction of itself. We should not expect comparable reporting
www.europeanbusinessreview.com 91
ESG
7. Anadón L D, Nemet G and Verdolini E (2023). The Future Costs of Nuclear Ian Hodges has worked in
Power using Multiple Expert Elicitations: Effects of RD&D and Elicitation
Design. Environmental Research Letters. 28 April 2023.
a variety of information
management roles over
a twenty-year career.
He has designed and
implemented records
and information management systems at
a national scale, developing parts of the
digital archive at The National Archives
(UK). At a corporate level he’s undertaken
information management projects with
The Royal Household and Her Majesty’s
Treasury. Ian also has information
rights expertise developing policies and
procedures for Freedom of Information and
Data Protection compliance and working
as a Data Protection Officer. In addition
to CISM, CIPP/E and CIPM certifications,
Ian holds a BA degree from the University
of Southern Queensland, a postgraduate
diploma from Deakin University, Melbourne
and an MA from Birkbeck, University of
London.
www.europeanbusinessreview.com 93
SUSTAINABILITY
PARTNERSHIP AND
TECHNOLOGY:
Solving Municipal
Solid Waste
Management
in Developing
Economies
by Sahan J. Fernando and Ambika Zutshi The collectivist national culture of most
developing economies holds the key to estab-
Can waste management be improved in developing lishing sustainable MSWM. Looking after
economies to establish sustainability and a cleaner one another, being collective, thoughtful, and
environment? This article discusses seven key striving for win-win solutions for all involved
should be incorporated as part of the strate-
strategies involving all stakeholders and their
gies for all stages of MSWM from collection to
respective responsibilities.
processing. Examples of these strategies which
can be adopted by government and private busi-
nesses involved in MSWM include:
A
common comparison on walking the streets of devel-
oped versus developing economies is witnessing
garbage in the streets. This is observed in the South
Asian and African regions due to weak and inadequate munic- PARTICIPATORY MANAGEMENT
ipal solid waste management (MSWM) practices (Munyai & Having a participatory approach in all stages
Nunu, 2020). The global MSW generation is expected to reach of MSWM is essential as it will encourage key
3.4 billion tons per year by 2050 (a 50% increase from the stakeholders like national and local govern-
current levels) and 53% of this growth is likely to come from ments, waste service providers, waste or
developing economies (Tiseo, 2022). sanitation workers, waste pickers, households,
www.europeanbusinessreview.com 95
SUSTAINABILITY
www.europeanbusinessreview.com 97
DIGITAL TRANSFORMATION
TRANSFORMATION?
by Dr. Nina Mohadjer LL.M.
It may be said that to implement change in an look for the difference between change and transforma-
organisation takes a real leader. But, as Nina tion, you come across the following definitions. Change
Mohadjer contends, to carry out a transformation is the exchange of one thing for another of similar
calls not only for a leader but also the wholehearted type. Transformation, on the other hand, is a complete
commitment of all those involved – and that, while change in the appearance or character of something or
more challenging, can only be positive. someone in a way that the thing or person is improved
(Cambridge Dictionary, n.d.). In the business environ-
ment, a change is automatically a top-down request and
A
I is everywhere and almost everyone is fright- an external factor, regardless of the agreement of the
ened by ChatGPT. Sure, some are excited, people involved. A transformation, however, requires
believing that AI will eliminate boring tasks the internal agreement of the involved, making the
and write their emails, articles, and books. This point of transition from one stage to the next seem seamless
view does not consider that a system, in this case AI, aka (Behrend, n.d).
ChatGPT, is only as successful as we, the humans, make Just like many words in the business world, these
it. So the question comes up of whether it will lead to two words are used interchangeably, and unfortu-
change or transformation in our business world. If you nately not always in the right context.
Often, when the word “change” is used in business, Transformation needs the change, but goes one level
people connect it with discomfort. While it is supposed deeper into the cultural system of an organisation. It
to bring positive aspects to an already-existing situation, completely replaces one thing with another by not only
service or product, it creates an unknown, combined changing the external perception, but by reinventing
with unease. This does not consider the fact that change all the aspects.
in business should have two important components: (a) Additionally the time component is not definite.
system change and (b) personal change. One is for the Instead, a transformation aims at a continuous rein-
introduction and implementation of the system, and vention to adapt to the present state, as well as the
the second is the human individual aspect to ensure the needs of the future. As transformation aims to reinvent
acceptance and the use of the application. a complete situation, service, or product, it involves
The dynamic Lewin model of change indicates the different business units and, thus, it becomes more
following three steps in order to have a successful imple- challenging and more unpredictable to involve all
mentation of change: (1) unfreezing the present stage; the parties (Golden-Biddle, 2007). The transforma-
(2) implementing the new behaviour; and (3) re-freezing tion phase requires that employees step outside their
the stage (Levasseur, 2001). Within comfort zone, but this is only
the entire process, however, the Transformation needs the possible if the leaders are trans-
key success factor is timely lead-
ership communication. Thus, it
change, but goes one level parent and show them where their
journey will lead. The employees
becomes the leadership's chal- deeper into the cultural have to understand that different
lenge to select which parts to system of an organisation. phases with the associated time
keep, and which to eliminate. period are a necessity and will lead
However, the second aspect has
It completely replaces to a prosperous future.
to be considered and becomes the one thing with another It becomes automatically the
main success factor for the change by not only changing the leader's job to motivate, engage,
management. While employees communicate, and demonstrate
used to obey a leader’s request for
external perception, but by the urgency of the transformational
change and the leader's decision reinventing all the aspects. steps (Kotter, 1996; Kotter, 2007;
of what needs to be unfrozen,
implemented, and refrozen, today,
employees want to be part of it. As 70 per
cent of change requests fail due to employee
resistance (Ewenstein et al., 2015), manage-
ment needs to respond to the employees'
question: “Why?” (Hiatt, 2006).
As Prosci (2012) indicates, change
management can only be successful if
the individuals who are obliged to use the
changed product or system or face the
changed situation understand the reason
for the change. Simultaneously the organ-
isation has to accept that an application
will never be successful if the individuals
do not have that comprehension of the
changed vision of the desired outcome
(Ewenstein et al., 2015).
www.europeanbusinessreview.com 99
DIGITAL TRANSFORMATION
Golden-Biddle, 2013). At this point, it also The success of a from the top, employees as
becomes the leader's task to understand individuals were able to see
frustrations and subsequent criticism transformation requires the the future and, thus, started
and use the feedback to re-evaluate the collective commitment of relying on their own strength
direction. Furthermore, the leader has users, the understanding of in dealing with the crisis.
the opportunity to demonstrate the
urgency by indicating that the business the why and when, and the
will not be able to remain in the present right vision for the future.
state, but that the transformation into CONCLUSION
the next stage is an absolute necessity.
Lastly, transformation management is a repetitive In conclusion, transformation focuses on the future. Thus,
procedure and a never-ending circle of feedback, when we speak about digital transformation, we indicate
comment, adjustment, and re-evaluation (Golden- that the individuals using the digital devices, system, and
Biddle, 2013). products are involved. It will be a top and bottom rela-
Why do we refer to digital transformation and not tionship. A digital “change” would indicate a top-down
digital change? After analysing the different aspects approach, but a digital device, system, or product without
of each, it becomes clear that a digital change would the involvement of the end users would be redundant in
not have room for survival. A system implementation the shortest time period.
would not work without the involvement of the people To quote Tanmay Vora: “Change fixes the past and
who are supposed to use it. The success of a transfor- transformation focuses on the future.” (Behrend, n.d.).
mation requires the collective commitment of users,
the understanding of the why and when, and the right
REFERENCES
vision for the future.
1. Behrend, F. (n.d.). "The difference between change and transformation",
While senior executives have the power to request retrieved 11 April 2021, from https://transformation.work/blog-en/insights/
a change in almost any aspect of an organisation, a the-difference-between-change-and- transformation/
successful transformation requires a step-by-step 2. Bruch, H., & Sattelberger, T. (2001). "Lufthansa’s Transformation Marathon:
Process of Liberating and Focusing Change Energy", Human Resource
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The best example is Lufthansa. In 1991 the airline, close 3. Cambridge Dictionary. (n.d.) "Change" and "transformation", in Dictionary
Cambridge.com, retrieved 10 April 2021, from https://dictionary.cambridge.org/
to bankruptcy, had to reinvent the business and create dictionary/english/transformation.
a global aerospace partner by creating a mental change 4. Ewenstein, B., Smith, W., & Sologar, A. (2015). "Changing change management",
McKinsey Digital
in the employees. While employees were excluded
5. Golden-Biddle, K. (2013). "How to Change an Organization Without Blowing It
from the cost management and cost reduction, the Up", MIT Sloan Management Review, 54(2), 35-41.
remainder had to be involved in a trusting relationship 6. Hiatt, J. M. (2006). ADKAR:A model for change in business, government and our
with the airline from strategic and rental arrogance to community: How to implement successful change in our personal lives and
professional careers. Loveland, CO: Prosci Research
devolution and simplification and finally reintegration 7. Kotter, J. P. (1996). Leading change, Cambridge, MA: Harvard Business Press.
(Bruch, 2001). The airline was able to engage everyone 8. Kotter, J. P. (2007). "Leading Change: Why Transformation Efforts Fail", Harvard
not only by changing the mental state regarding the Business Review, 85(1), 96–103.
transformation, but had a simultaneous top-down, 9. Levasseur, R. E. (2001). "People Skills: Change Management Tools – Lewin’s
Change Model", Interfaces, 31(4), 71, https://doi.org/10.1287/inte.31.5.71.9674
bottom-up approach within four weeks. By putting
10. Prosci, X. Y. (2012). Best Practices in Change Management, Loveland, Colorado:
leadership into action and not just requesting a change Prosci Learning Centre Publications.
Dr. Nina Mohadjer, LL.M. has worked in various jurisdictions where her cross-border
experience as well as her multilingual capabilities have helped her with managing reviews.
She is a member of the Global Advisory Board of the 2030 UN Agenda as an Honorary Advisor
and Thematic Expert for Sustainable Development Goal 5 (Gender Equality), and a co-founder
of Women in eDiscovery Germany.
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