• Skip to main content
  • Skip to primary sidebar

JP Cornerstone

Just another Cornerstone Accelerator site

  • JP Cornerstone
  • About
    • About JP Cornerstone
    • Code of Ethics
    • Professional Practice Guidelines
    • External Privacy Notice
  • Offices
    • Stockholm
    • Helsinki
    • Oslo
    • Copenhagen
  • Services
    • Executive Search
    • Board Search
    • Leadership Consulting
    • Interim Management
    • JPC Selection
  • Insights
  • News
  • Contact

Archives for March 2021

Economic Shifts Threaten Family Businesses

March 31, 2021 by Cornerstone International Group Leave a Comment

A majority of the world’s wealth is created by family owned businesses.

Estimates suggest that these businesses — majority owned by a single family — may contribute over 70% of the world’s GDP.  They deliver a superior return on assets in the U.S. (+6.5%), even more in Europe (+8%).

But the current economic stress created by the coronavirus pandemic has exposed fault lines endangering continued prosperity and growth in the sector. 

Nowhere is this of greater concern than In the Middle East, where family business groups contribute 60% of the GDP and, according to a recent PWC survey,  where a whopping one Trillion USD is expected to be transferred to next-generation family members over the next 10 years.

Let’s take a closer look.

THE CHALLENGE

Navigating in times of adversity calls for leadership resilience, organizational creativity, and alignment behind new strategic objectives. Downturns such as we are currently experiencing are times when a company can try new things to stay relevant to a changing world.  

However, some family businesses are missing out on opportunities during these times of colossal consumer behavior shifts, due to few old habits. Here are two.

First Fault line: micromanaging

Regional subject matter experts suggest that governance in some family businesses needs further improvement. A common challenge is when family members or some of the board members are micromanaging the CEO or other C-Suite officers.

This results first in the latter ineffective utilizing their competencies in driving Business Plan execution or defining future strategy. Second, If this reputation becomes attached to the company, it may prevent it from attracting top-caliber CEOs and C-suite members. Third, corporate culture is impacted, and promoting relationships over merit can affect critical decision-making during TUNA (turbulent, uncertain, novel, and ambiguous) times.

That results in a specific breed of leaders that survive in some of these groups, where they execute more often the wishes of others rather than by taking advantage of their valuable experiences and leadership skills to guide the company.

Second Fault Line: Risk Aversion

Some regional family groups tend to embrace a more conservative strategic outlook moving forward. According to Hofstede (a global scholar on national cultures), countries in the Gulf Cooperation Council (GCC) tend to score high in risk-averse ratios. Add to this the fact that many family businesses in the GCC are in traditional sectors such as distribution, retail and real estate and only a small number has explored opportunities in the new economy (e-commerce, cybersecurity, digital payments, digital health, biotech, streaming subscription media, etc) they find today themselves in a difficult spot.

STRATEGIC IMPERATIVE: 

Key strategic objectives for a family business to amplify its state of resilience and achieve sustainable results could include the following:

  1. Sustainable Growth: Achieving healthy finances is a two-way key success factor. In our opinion designing the right strategy forward and having it executed in a robust manner, can affect the outcome of sustainable growth. One core pillar to design and execute a business plan is having the right people on top. An organization can have the best product/solution in the market, the best business model, and the best business plan but without the right leadership to execute it and a vigorous culture; there will not be sustainable growth.

    Investing in top senior talent is a critical component for any type of company to achieve sustainable results. But will top talent work for a family group where pockets of the above two mentioned “derailing” habits still exist? Most probably not. 

    So the first key question here is how to attract the right talents moving forward. The second question is how to nurture, assess, reward, and retain top talent.

  1. Effective Governance: Transitioning to a more corporate-run model for the family business means “Chinese walls” between Board, Family, and Top Management to avoid bad decision-making, micromanagement, and other patterns detrimental to business continuity. 

    The CEO, supported by the C-Suite, designs a sturdy strategic foresight and executes effectively the Business Plan, while the role of the Board is to direct them to become the best they can be. The Board participates in the conversation to enable the CEO & C-suite to design an effective strategy and efficiently execute the strategic objectives and actions.

  1. Business Continuity: It is a more difficult task for some traditional businesses to navigate within a contemporary global economy. The key question is how to digitally transform the traditional business, and foster a culture of innovation in the family business. 

    The challenge is how to engineer that when older generations might not have the capabilities (technical knowledge and right behavior) to drive such a vision and empower the CEO into the new future.

  1. Effective Succession and Control of Business: Develop well-fit G2 or G3 members by reinforcing their capabilities (both technical, leadership, and behavioral in the new norm) to succeed G1 and assume ownership responsibility for the legacy business. In summary, some key objectives for the G2 and G3 family members could be exemplified as follows:
    1. Growth: maximizing financial value,
    2. Liquidity: better cash flow,
    3. Control: keep with ownership and avoid outside equity or debt

THE WAY FORWARD: 

Inability to tackle decisively the previously mentioned “fault lines” could have a detrimental effect on the continuation of any regional family business; especially after the recent gigantic changes in consumer behaviors, that were augmented by the global pandemic. 

We strongly believe that securing top senior talent, forgoing the micromanaging tactics, and fostering a more innovative culture by the board and/or family members, could safeguard a better future for the family business.

A critical fix here is to design a robust succession planning blueprint for the family. Informed/educated owners should hire board members and non-executive directors based on merit, not on family relationships, and then a stalwart board will hire a good-fit CEO to lead the firm to the next level. In summary, the board’s fiduciary duty should be to elevate top management to the next level rather than to micromanage it.

In Cornerstone International Group (Middle East Practice) we have a solid senior team with more than 100 years of leadership experience in the region, to effectively design a dedicated succession planning model. Our certified master coaches (ICF) can augment the capabilities of the G2/G3 members: we are highly competent to assess and identify their potential and conduct a training needs analysis.

Second, we have excellent project management skills in executing one- or two-year succession planning programs and effectively mentor and navigate family members during these turbulent times.

Finally, understanding shifts in consumer behaviors and realigning leadership doctrines with new behaviors is a critical tacit knowledge that we have developed in Cornerstone Middle East, so to be able to recruit the right-fit senior talent for the family groups.

Filed Under: Cornerstone Blog

Get Ready for Covid Passports

March 17, 2021 by Cornerstone International Group Leave a Comment

Last week our Life Sciences & Health practice hosted a global webinar on the current status of the coronavirus pandemic. Medical scientist Dimitri Lavillette explained the incredible advances of immunization in using your own  body as a bio-lab in the development of a vaccine – within a single year.

Dr. Richard Jones looked at a different challenge: where do we go next?

Dr. Jones is the South-East Asia Regional Director of International SOS, the world’s leading medical services and security provider employing about 5,200 medical professionals.  His clients are corporates who are flooding him with calls asking how they vaccinate an entire workforce and where they go after that?

There is no easy answer, no one size fits all.  Last Thursday, the global roll-out of Covid vaccinations looked like this:

  • 6 vaccines approved for full use
  • 21 candidate vaccines in final stages
  • 75 vaccines in clinical evaluation
  • 78 vaccines in preclinical evaluation.

This shatters previous records of response in a medical field accustomed to producing at most half a dozen different vaccines for a given disease. But getting these candidates across the finish line is just the first part of the challenge. The extent of current vaccination programs, as measured by doses  administered,  varies hugely across the world from total coverage (100%) in Israel, 60% in UAE and 10 other regions squeezed in between 2% and 35%.

Big picture? 1.1% of the global population has been fully vaccinated. 6% of the global population, 120 million, has been infected.

Globally, the recovery is all over the place. Developed nations have the jump on vaccine production and distribution.  Even within one socio-economic stratum – think USA – we have huge imbalances between the infection-free population and those spreading infection.

Which is why there is a heated debate going on right now in terms of when and how to identify the “infectiousness” of each group with some form of vaccine passport

The freedoms available to each group are radically different.  If you are an infection threat you must be socially isolated to protect others.  If you are not,  should you  still have to be under the same restrictions?  One, it is not fair.  But more important, you are needed in society to help the economy and social normalcy to recover.

International SOS, the organization Dr. Jones belongs to, is primarily a provider of health insurance. A major client is the airline business and international companies with interests all over the world whose success depends on mobility. International SOS has developed Covid passports which are issued to travelers as proof of vaccination they are no longer an infection threat.

Denmark will roll out a digital passport soon and IATA has also developed one to help its airline members.  IBM has developed its own Digital Health Pass that would allow access to a public location such as a sports arena, university or workplace.

With the uncertainty of mutant strains and variants threatening the duration of the pandemic,  some form of status verification or passport would seem inevitable.

There is pushback from the guardians of personal freedom who fear yet another separation of the haves and have-nots,  but the concept of vaccine passports will be hard to work around.  The pandemic may not be the worst/widest in history but it is massive. Only 10 countries on the planet have not reported Covid cases and eight of them are islands in the South Pacific.

Which of course begs the final question on  passports,  on whose authority can we count? Who will produce a digital document unanimously acceptable and accessible?

As they say, good luck with that.

Filed Under: Cornerstone Blog

WEBINAR: Can Medical Science Turn the Covid-19 Corner?

March 7, 2021 by Cornerstone International Group Leave a Comment

The first case of infection from the Covid-19 virus was recorded in China in mid-November 2019.

Since that time this tiny virus has been responsible for infecting 115 million people in 219 countries and taken the lives of 2.6 million. Six weeks ago, infections reached a peak with 1,723,209 new cases in one day.

Covid has disrupted settled human existence in virtually every corner of the planet. One week ago, the total number of students closed out of schools worldwide was 1.38 billion.

The bad news: it’s not over. The good news: it could have been a lot worse.

This Thursday, Cornerstone’s Life Sciences & Health practice will host a webinar discussing the most remarkable aspect of the Covid-19 pandemic: the speed with which is it being brought under control.

Only two things stop a pandemic. It loses steam when the target population becomes so heavily infected there is nowhere left for the virus to continue growing. In the old days, a pandemic was over when there were no people left to infect.

The second weapon is a vaccine.

Vaccines as a disease fighter date back two hundred years but with dubious efficacy. Milestones have been few and far apart because vaccines are incredibly difficult to develop. It took 28 years to find a vaccine for chickenpox.

Within 15 months, according to the WHO, several vaccines are in use, 50 candidate vaccines are in clinical trials, six vaccines in China and Russia have been given limited approval and three have been given Emergency Use Authorization by the US Federal Drug Administration and are already in distribution to 1.5 million people per day.

According to historians, the Covid-19 pandemic is the most destructive in a century. If, in fact, we are finally turning the corner, it will no doubt go down in history as one of the most amazing victories of modern medical science.

Don’t miss the webinar

Thursday, March 11 at 0900 EST.

 You can register here

 

Filed Under: Cornerstone Blog

Primary Sidebar

Recent Posts

  • Attracting Leadership Talent in a Private Company
  • It’s early in 2025 – what has changed?
  • Thriving in an Era of Continual Business Reinvention
  • Managing Multigenerational Workplaces Across Cultures – Part 2
  • Managing Multigenerational Workplaces Across Cultures

Recent Comments

    Archives

    • March 2025
    • February 2025
    • December 2024
    • September 2024
    • August 2024
    • July 2024
    • June 2024
    • May 2024
    • April 2024
    • January 2024
    • November 2023
    • October 2023
    • May 2023
    • March 2023
    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • August 2022
    • July 2022
    • June 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • March 2020
    • February 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • February 2018
    • February 2017
    • January 2017
    • July 2016
    • April 2016
    • March 2016
    • February 2016
    • October 2015
    • April 2015
    • March 2015
    • October 2014
    • June 2014
    • April 2014
    • March 2014
    • February 2014
    • December 2013
    • August 2013
    • May 2013
    • April 2013
    • October 2012
    • September 2012
    • August 2012
    • May 2012
    • March 2012
    • January 2012
    • December 2011
    • November 2011
    • October 2011
    • September 2011
    • July 2011
    • May 2011
    • March 2011
    • January 2011
    • December 2010
    • August 2010
    • June 2010
    • May 2010
    • April 2010
    • March 2010
    • February 2010
    • January 2010
    • December 2009
    • November 2009
    • October 2009
    • September 2009
    • August 2009
    • July 2009
    • June 2009
    • May 2009
    • April 2009
    • March 2009
    • February 2009
    • January 2009
    • December 2008
    • November 2008
    • October 2008
    • September 2008
    • August 2008
    • July 2008
    • June 2008
    • April 2008
    • March 2008
    • February 2008
    • January 2008
    • December 2007
    • September 2007
    • August 2007
    • June 2007
    • April 2007
    • December 2006
    • November 2006
    • September 2006
    • August 2006
    • July 2006
    • June 2006
    • March 2006
    • February 2006
    • January 2006
    • November 2005
    • October 2005
    • September 2005
    • August 2005
    • July 2005
    • June 2005
    • May 2005
    • April 2005
    • March 2005
    • February 2005
    • January 2005
    • December 2004
    • November 2004
    • October 2004
    • September 2004
    • August 2004
    • July 2004
    • June 2004
    • May 2004
    • April 2004
    • March 2004
    • February 2004
    • January 2004
    • December 2003
    • November 2003
    • October 2003
    • September 2003
    • August 2003
    • July 2003
    • June 2003
    • May 2003
    • April 2003
    • March 2003
    • February 2003
    • January 2003
    • December 2002
    • November 2002

    Categories

    • Cornerstone Blog
    • Uncategorized

    Meta

    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org

    Copyright © 2025 · JP Cornerstone · Sitemap

    Website Development by LimeCuda