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Las Vegas and the Ugly Truth about Diversification

Las Vegas and the Ugly Truth about Diversification The next big theme I want to talk about is: “Las Vegas and the Ugly Truth about Diversification.” I used to live in Las Vegas, and I love it there. It's wonderful, beautiful—an amazing city. It’s one of the few places in the world where you can find the most amazing restaurants open at 6 a.m. Vegas is a boom and bust town. It does amazingly well when the world is happy and wants to travel and spend money. It does terribly when the world is not happy, cannot travel and does not want to spend money. I was in Vegas just before the financial crisis of 2007, running all the way into 2008 and 2009. I was there at the launch of some major brand, and everyone was so excited and telling me about how Celine Dion had just bought a house in Vegas. I don't know if that was true—real estate agents will tell you anything to sell property. Then the financial crisis came and everything collapsed. Vegas said they would diversify—whether they actually meant it is another thing. They didn't really diversify much, or at least the fruits of…

Las Vegas and the Ugly Truth about Diversification The next big theme I want to talk about is: “Las Vegas and the Ugly Truth about Diversification.” I used to live in Las Vegas, and I love it there. It's wonderful, beautiful—an amazing city. It’s one of the few places in the world where you can find the most amazing restaurants open at 6 a.m. Vegas is a boom and bust town. It does amazingly well when the world is happy and wants to travel and spend money. It does terribly when the world is not happy, cannot travel and does…

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Zack Snyder’s Justice League Movie Recut Is a Brilliant Strategy

Zack Snyder's Justice League Movie Recut Is a Brilliant Strategy The next big theme—and a very exciting and entertaining theme—is the fact that Zack Snyder's Justice League has just hit HBO Max. I'm as excited as anyone to see four hours of this monumental epic. But if you've been following what has happened, you know that Justice League was released many years ago, and it was regarded as a failure, a flop in the market. Many people are surprised that HBO Max, or WarnerMedia, the holding company, spent something like $70 million, giving Zack Snyder permission to come back and re-edit his movie. The history is quite interesting because he was brought in to do the initial Justice League, but the WarnerMedia executives didn’t like the direction the movie was going in, so they asked another director—who had worked on the Avengers and Buffy the Vampire Slayer—to come in because they liked his style of having these very comical storylines, and humor, which is what Marvel movies are famous for. Think about this for a second. You spent tens of millions of dollars building a storyline and a theme and a mood in the Zack Snyder style, which is gritty…

Zack Snyder's Justice League Movie Recut Is a Brilliant Strategy The next big theme—and a very exciting and entertaining theme—is the fact that Zack Snyder's Justice League has just hit HBO Max. I'm as excited as anyone to see four hours of this monumental epic. But if you've been following what has happened, you know that Justice League was released many years ago, and it was regarded as a failure, a flop in the market. Many people are surprised that HBO Max, or WarnerMedia, the holding company, spent something like $70 million, giving Zack Snyder permission to come back and…

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AT&T, Verizon, T-Mobile and the Unspoken Truth about Strategy

AT&T, Verizon, T-Mobile and the Unspoken Truth about Strategy The first big theme is called, “AT&T, Verizon, T-Mobile and the Unspoken Truth about Strategy.” As you may know, the United States has auctioned off many licenses for wireless spectrum to be able to use the 5G standard. This means that the US is preparing to roll out 5G. Buying licenses that allow telecoms companies to compete in 5G is a prerequisite. It’s almost like they’re buying a distribution channel so they can move data. It's a costly endeavor—billions and billions of dollars are spent on this. I'm going to talk…

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What is the value of an automotive brand?

What is the value of an automotive brand? The third big strategy topic comes from the automotive sector, titled, “Big Value Chain Profit Pool Shifts Are Painful.” It's like going to a dentist to have a root canal without any anesthesia. I'm going to pin this entire conversation around a sub-question: What is the value of an automotive brand? What is the Porsche brand worth? What is the Kia brand worth? What is the General Motors brand worth? What is the Volkswagen brand worth? What is the Volvo brand worth? Automotive brands are worth billions of dollars. They are anchors of national pride. I'm sure that Italians are proud that Ferrari comes from Italy. I'm sure Germans are proud to say that Porsche is manufactured in Germany. Brands are valuable, and they are powerful symbols of national prestige. The good news—and bad news—for many automotive companies is that we’ll soon find out what a brand is worth because Apple has raised the stakes. By having conversations with different automotive companies about whether they will manufacture an Apple Car and brand it an Apple Car and give up their brands, Apple is basically saying this: This is the choice you need…

What is the value of an automotive brand? The third big strategy topic comes from the automotive sector, titled, “Big Value Chain Profit Pool Shifts Are Painful.” It's like going to a dentist to have a root canal without any anesthesia. I'm going to pin this entire conversation around a sub-question: What is the value of an automotive brand? What is the Porsche brand worth? What is the Kia brand worth? What is the General Motors brand worth? What is the Volkswagen brand worth? What is the Volvo brand worth? Automotive brands are worth billions of dollars. They are anchors…

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Allowing the best technology to bubble up

Allowing the best technology to bubble up The next big topic is the massive interest in electric vehicles. Kudos to Elon Musk—he wasn't the only one, but he was a big part of making electric cars mainstream, not just in the media and in consumer sentiment but as part of policy-making circles around the world. The theme I want to talk about is titled, “Does Science Need an Industrial Policy AKA Protection?” It's almost as if the world has decided that we're going to go all-in on electric as the predominant technology to become carbon neutral and protect the environment. There are many alternative technologies to electric cars, like hydrogen. I'm sure there are technologies I haven’t even heard of that are being incubated in a lab somewhere at Stanford. Policymakers are making implicit decisions to subsidize one technology and erect barriers to protect that technology. By doing so, they make it more expensive and raise the entry costs for alternative technologies. If one technology is better than another technology, why do we need to increase barriers to protect it? Isn’t the better model to fund as many technologies as you can? That way, the one that is best at…

Allowing the best technology to bubble up The next big topic is the massive interest in electric vehicles. Kudos to Elon Musk—he wasn't the only one, but he was a big part of making electric cars mainstream, not just in the media and in consumer sentiment but as part of policy-making circles around the world. The theme I want to talk about is titled, “Does Science Need an Industrial Policy AKA Protection?” It's almost as if the world has decided that we're going to go all-in on electric as the predominant technology to become carbon neutral and protect the environment.…

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Why Is the Only Labor Cost Strategy is Elimination of Labor Costs?

Why Is the Only Labor Cost Strategy is Elimination of Labor Costs? The next big topic, and it's probably one of the biggest topics we’re seeing, is a question: Why is the only labor cost strategy is elimination of labor costs? In my entire career—from my time as a business analyst to manager, partner, senior partner—every executive I spoke to talked about eliminating labor costs. It is always the same four-step process: 1) Of the employees we are forced to have, we're going to find out how to increase their productivity and get more from them. 2) To optimize as much as we can, and we can't optimize any more, we're going to outsource to a lower cost country. 3) Once we’ve outsourced to a lower cost country, we're going to try to automate as much as we can—first in the high-cost country, and then the low-cost country. 4) Once we've automated, we're going to digitize as much as we can. Automation and digitization are different things, but they're used interchangeably. COVID has obviously made this a bigger topic because companies have realized that maybe they don't need as many employees as they thought. I've never heard an executive say,…

Why Is the Only Labor Cost Strategy is Elimination of Labor Costs? The next big topic, and it's probably one of the biggest topics we’re seeing, is a question: Why is the only labor cost strategy is elimination of labor costs? In my entire career—from my time as a business analyst to manager, partner, senior partner—every executive I spoke to talked about eliminating labor costs. It is always the same four-step process: 1) Of the employees we are forced to have, we're going to find out how to increase their productivity and get more from them. 2) To optimize as…

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The Necessity of Changing the Strategy Conversation

The Necessity of Changing the Strategy Conversation Streaming is probably one of the biggest digital shifts we’re seeing. Around the world, conversations are taking place with companies about how to build successful business models around streaming—whether it’s books, audio, video or podcasts. These companies range from giants like Netflix to small indie podcast producers. I have a client who is an executive in strategy at a fairly large streaming organization in the United States, and I'm going to paraphrase some of the discussions we've had to underpin this overarching theme about the economics of streaming. Her business and many others are facing an underlying issue: Artists who supply content for streaming platforms are complaining because they’re not being paid enough. Whether it’s artists streaming on Spotify or podcasters streaming on other platforms, they feel that the percentage of revenue they make is not big enough. In the old model of the music industry, large record labels would listen to many potential stars, pick a few, pay them an advance, assign them a big budget and massive promotion, share around 30% of the profits or less, and only after the advance was paid off would the artists continue to get 30%…

The Necessity of Changing the Strategy Conversation Streaming is probably one of the biggest digital shifts we’re seeing. Around the world, conversations are taking place with companies about how to build successful business models around streaming—whether it’s books, audio, video or podcasts. These companies range from giants like Netflix to small indie podcast producers. I have a client who is an executive in strategy at a fairly large streaming organization in the United States, and I'm going to paraphrase some of the discussions we've had to underpin this overarching theme about the economics of streaming. Her business and many others…

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Reviving a Troubled Division and a Troubled Career

Reviving a Troubled Division and a Troubled Career Finally, I want to talk about reviving a troubled division and troubled career. I want to celebrate some of our executive coaching clients. I have a client who works for a major tech company. He's around 36, he has kids and he thought he was in the twilight of his career. We had a discussion and he told me, “My career is going nowhere. I work for a part of a tech company that maybe 15 or 20 years ago was seen as an important part of the business, and a lot of attention was given to it. It was mentioned in press releases. The CEO spoke about it. But today, I have 120 people reporting to me. I have a budget, but I don't sit anywhere near the corporate campus. I don't go to the main campus. I don't rub shoulders with the most important executive vice president. I haven’t seen the CEO in two or three years. Nobody worries about us. Nobody calls us into meetings. Nobody asks for our time. Basically, it's like people have forgotten about us. Morale is low, and everything is fading and failing.” I made…

Reviving a Troubled Division and a Troubled Career Finally, I want to talk about reviving a troubled division and troubled career. I want to celebrate some of our executive coaching clients. I have a client who works for a major tech company. He's around 36, he has kids and he thought he was in the twilight of his career. We had a discussion and he told me, “My career is going nowhere. I work for a part of a tech company that maybe 15 or 20 years ago was seen as an important part of the business, and a lot…

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The Single Biggest Strategy Shift for the Next Few Decades

The Single Biggest Strategy Shift for the Next Few Decades This is by far the biggest story of the week, and I’m very surprised that it hasn’t received more attention because it has incredible importance for the world. I would say this is the most important story that every CEO in the world needs to worry about. If you are the president of a country, as you're making decisions about where to focus your industries, which to incentivize and which to disincentivize, this is an important story. The biggest story that many people missed is the fact that the number of registered newborns in China dropped by 15% from 2019. As a corporate strategist, this is a phenomenal statistic. As I meet executives in our coaching program, I make sure that their companies are thinking about how this impacts them. A lot of them don't understand how this impacts them, so I'm going to unpack it here. This statistic means that the number of Chinese newborns is dropping. Why does this matter? At a certain point—predicted to be in 2027—the Chinese population will begin to shrink. This has profound implications for the world. Let's explain this in numbers. Let's assume…

The Single Biggest Strategy Shift for the Next Few Decades This is by far the biggest story of the week, and I’m very surprised that it hasn’t received more attention because it has incredible importance for the world. I would say this is the most important story that every CEO in the world needs to worry about. If you are the president of a country, as you're making decisions about where to focus your industries, which to incentivize and which to disincentivize, this is an important story. The biggest story that many people missed is the fact that the number…

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