8 minute read
Leadership
COMMENT
Arash Dara Group CEO, Lootah Holding
Purpose and people
When Covid-19 hit in early 2020, the disruption to businesses was immediate, widespread and significant. For many, after the initial shock and cash related survival considerations, the biggest and most pressing challenge was to use technology that could enable staff to work securely from home.
This was soon followed by the challenge of replicating the real-world interactions – formal and informal, work-related and social – that are fundamental to the successful operation of any organisation.
With the new year fast approaching, it’s time for businesses to reset and develop a strategic business plan for 2022 and beyond.
The pandemic and the pressure to change has taught us many lessons about resilience, adaptability and flexibility. However, now that the pandemic panic has subsided, organisations of all kinds are looking more strategically towards a future that will be very different from the one they were seeing two years ago. A proactive strategic plan for 2022 is paramount now to address key areas for organisational growth.
DOING THINGS DIFFERENTLY In business, CEOs must make bold decisions. Being bold can mean to pick up what works and double down on it. Reframe what winning means and make that bold move early, even if it means that you’ll be the only one, or one of few in the market doing things in a particular way. If you believe it’s the right decision for your business, do it. Fear of making mistakes is what prevents many from going outside of the box. In this dynamic world, it’s better for a CEO to act rather than make no choice at all. Keep trying and be flexible; adaptability is crucial now for both companies and individuals to survive and thrive.
Every leader needs to remember that a bolder approach must be applied within the entire organisation. Ensure you paint the vision clearly, lead from the front and develop a strong product /service to present to the market.
Organisations that lead with purpose and build their strategy around it can achieve continued growth and loyalty from customers and their workforce. Those organisations that understand their purpose and value recognise that 10 per cent of companies create 90 per cent of the total economic profit and that only one in 12 companies move from being an average performer to a top-quintile performer over a 10-year period.
When you know your purpose, you understand where you bring value as a business and move in that direction quickly. Purpose-driven companies experience higher market share gains and are likely to grow three times faster than their competitors, according to research by Deloitte.
PEOPLE MATTER To attract the right talent, mainly look for people with the same values and aspirations – the rest can be taught.
With the right people on board, the ultimate goals can be reached regardless of process maturity. The right people will actually develop and implement those processes for routine success.
Focus on upskilling or reskilling. Crossfunction or adaptability training will also help organisations adapt to new market scenarios fast while using people across departments if needed.
To retain talent, leaders should move away from an authoritative stance and take the mentorship and coaching approach. It’s important to set up performance metrics based on current market specifi cs rather than traditional targets.
ORGANISATIONAL AGILITY The pandemic has also brought renewed focus on resilience: accepting the inevitability of an adverse event and putting in place measures to respond, minimise its impact and recover as rapidly as possible.
Digital technology, of course, was essential to enable the creation of a distributed workforce to be achieved successfully, and it is generally recognised that those organisations with well-established digital transformation strategies were the best placed to make the required changes.
However, the speed at which decisions had to be taken and acted upon required a radically di erent approach, one that focused on producing very specifi c outcomes in the shortest possible time. Companies need to be more agile, break down barriers and make a massive mindset shi t from a big, corporate machine to a dynamic, project-based ecosystem. Transitioning tasks to a project, with cross-functional teams formed within an organisation to best fulfi l that project, will be the secret solution to a better performance. This type of approach is paramount as we move into 2022 and beyond.
REFRESHED STRATEGY Organisations need to both take a longterm and short-term view. They need to plan and prepare to remain viable and successful long-term. They need to be cognisant of short-term issues, such as cash fl ow, supply and demand. And they need to anticipate and build resilience against possible immediate adverse events.
It is incredibly important to be able to forecast for 2-12 weeks, particularly on cash. The winners and losers will be di erentiated in this world based on who is utilising their capital e ectively.
On the other hand, many organisations o ten fi nd it challenging to think beyond just the current year. One danger of this mindset is that the current business model will eventually run empty, resulting in declining growth without a solid backup strategy or plan with capital. Another danger is the risk of colliding with a crisis, a technology disruption or a new competitor that can make the current business model obsolete.
Making sure the ‘north star’ is clear and o t reminding the organisation of the destination, while being open to getting there via di erent paths than originally charted, is vital.
COMMENT
The metaverse reality
It’s all too easy to lose in the crypto metaverse, opines Bloomberg columnist Lionel Laurent
Facebook and Microsoft’s stuffy corporate idea of the metaverse – think virtual offices packed with creepy Dorian Gray-like avatars – is nowhere near as dystopian as the cryptocurrency-fuelled metaverse that already exists today.
This latter realm is the real head-spinner. It’s a place that runs on decentralised finance (DeFi), a high-octane $100bn web of largely unregulated platforms that lend and exchange crypto for fees.
It’s a place where parents fret as their kids pocket real money on blockchain games like Axie Infinity; a place where virtual museums display art sold by real auction houses for eight-figure sums; a place rife with inflated prices, insider front-running and myriad frauds and forgeries. It’s a place where, for every interesting financial innovation, there’s a hack, rugpull or wipeout just around the corner – the Squid Game token is only the most recent example.
The question now is how much longer this place, where real and virtual fortunes are made and lost, will stay a Wild West. Probably not very long.
We know from history that speculative frenzies have a habit of eventually fading, while rules and standards are never too far away from fast-growing financial technology. There was a time when peer-topeer lending and instant online payments weren’t as
supervised as they are today, for example. Regulators are already taking a closer look at DeFi.
In supervisors’ sights are crypto assets like stablecoins, which are managed algorithmically to avoid wild fluctuations in price. These serve as the fuel for some of DeFi’s raciest projects, like locking up crypto in trading pools offering ludicrous (and short-lived) 1,000 per cent-plus annual yields, but also some of its most bank-like ones. These might involve an issuer buying real-world loans and bonds, backed by consumer debt or real estate, and securitising them as tokens on the blockchain offering 5-10 per cent yield. (The issuer gets more crypto in return.)
You can glimpse the opportunity for old-school finance here: More automated and transparent processes, with fewer middlemen, might save money and help avoid the kind of shenanigans that led to the collapse of financial services company Greensill Capital.
But the reality today is that even these DeFi projects still come with significant risks. Sift through the fine print and it’s clear that a lot of things could go wrong. The counterparty chain is complex – one offering, for instance, features an India-based entity, connected to a Delaware-based entity, connected to a pool of crypto assets managed by another entity.
There also appears to be limited legal recourse for investors, and little power over issuers, who earmark the proceeds for general funding of “business operations”. If something goes wrong with the algorithmic management of an event like a loan default, there don’t seem to be many answers.
The more bank-like the DeFi project, the more likely it is that bank-like rules, and costs, will follow. On top of regulation, regular banks – so-called “TradFi” – are wading in. French bank Societe Generale is proposing to refinance a tokenised portfolio of covered bonds by borrowing from a DeFi platform. It would be the first such move by a major lender, and a sign the financial sector would rather co-opt than be disrupted by crypto-anarchy. Whether directly or indirectly, sheriffs are moving into town.
Now, to be sure, the cavalry is still playing catchup, and the ingenuity of fraudsters is still very much on display; the philosophy driving today’s dabblers should remain “buyer beware”. This is the Wild West phase of DeFi after all, fintech consultant Peter Lugli says. “I wouldn’t bet the farm; maybe the sickly horse.”
In the meantime, the corporate world’s interest has been piqued. Even Facebook, which is in the regulatory spotlight, is chasing its own stablecoin ambitions with a pilot digital-payments project in the US and Guatemala. Maybe the irony is that, in the future, those stuffy Metaverse offices envisioned by Mark Zuckerberg will end up being backed by metaverse money – half-real, half-virtual, but fully regulated.
