18 Posts found for Author: Ulrich Pidun

While post-completion audits for large projects are common in many companies, the feedback into decision making typically happens only sporadically. Advanced companies review not only projects but also past decisions. The head of corporate strategy at a large industrial conglomerate puts it this way: “We made our biggest losses from moves not made. So we also explicitly review opportunity cost mistakes.”

Content: Quotation | Authors: Sebastian Stange, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Management, Project Management

In most firms, incentives are tied to company or business unit performance. The consequences of large investment decisions typically take too long to materialize to have an impact on an executive’s bonus or promotion. This can lead to moral hazard, especially when managers expect to move on after a couple of years in a position.

We recommend tying personal targets and incentives to the success of … [ Read more ]

Content: Quotation | Authors: Sebastian Stange, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Accountability, Compensation, Human Resources, Organizational Behavior

Understanding the underlying risks should be a particular focus in project selection. Research has shown time and again that human beings are weak at risk assessment, but some techniques can help. A good starting point can be to frame the discussion in terms of a base question: What do we need to believe in to make this an attractive investment? This framing can help uncover … [ Read more ]

Content: Quotation | Authors: Sebastian Stange, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Management, Project Management, Risk Management

A business ecosystem is a dynamic group of largely independent economic players that create products or services that together constitute a coherent solution.

This definition implies that each ecosystem can be characterized by a specific value proposition (the desired solution) and by a clearly defined, albeit changing, group of actors with different roles (such as producer, supplier, orchestrator, complementor). The definition excludes some of the more … [ Read more ]

Content: Quotation | Authors: Martin Reeves, Maximilian Schüssler, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Business Model, General, Management, Organizational Behavior, Strategy

Drawing on the insights gleaned from three years of ecosystem research, BCG offers a step-by-step framework for developing an incumbent company’s ecosystem strategy.

Content: Article | Authors: Balázs Zoletnik, Martin Reeves, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subject: Strategy

We worry that in their headlong embrace of formal systems of risk management, many companies are pursuing a highly technical approach to risk management—characterized by complex financial models and elaborate, formal risk-management systems—in isolation from the day-to-day activities of the broader organization. The result is that risk management may exist as a formal function, but it is not really embedded in the “mindset” of the … [ Read more ]

Content: Article | Authors: Alexander Roos, James Tucker, Marc Rodt, Sebastian Stange, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subject: Risk Management

Business ecosystems are on the rise. In 2000, just three among the S&P top 100 global companies relied predominantly on ecosystem business models. In 2020 this number had grown to 22 companies, which together accounted for 40% of total market capitalization.

It is no wonder that many leaders of established companies are afraid of missing out on this trend and feel compelled to come up with … [ Read more ]

Content: Article | Authors: Balázs Zoletnik, Martin Reeves, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Business Model, Strategy

It is widely acknowledged that business ecosystems offer great potential. Compared to more traditionally organized businesses, such as vertically integrated companies or hierarchical supply chains, business ecosystems are praised for their ability to foster innovation, scale quickly, and adapt to changing environments.

However, many companies that try to build their own ecosystems struggle to realize this potential. Our research has shown that less than 15% of … [ Read more ]

Content: Article | Authors: Martin Reeves, Niklas Knust, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Business Model, Strategy

If designing a traditional business model is like planning and building a house, designing an ecosystem is more like developing a whole residential district: more complex, more players to coordinate, more layers of interaction and unintended emergent outcomes.

What makes ecosystem design distinctive is that it requires a true system perspective. It is not sufficient to design the value creation and delivery model; the design must … [ Read more ]

Content: Article | Authors: Martin Reeves, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Business Model, Strategy

The term “business ecosystem” has firmly established itself in the dictionary of management buzzwords. Many managers, fearful of missing out on this trend, feel compelled to come up with their own business ecosystems—or at least to become part of some large emerging ecosystems. But they struggle with the broad scope of the concept, unclear definitions, and the lack of practical advice. This article should help. … [ Read more ]

Content: Article | Authors: Martin Reeves, Maximilian Schüssler, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subject: Strategy

As business grows ever more digital—as virtual relationships increasingly become the norm in the post-COVID reality, stakeholder trust becomes as crucial as product or service quality. Nowhere is this truer than in business ecosystems, those dynamic alliances of largely independent economic entities that create products or services that constitute a coherent solution. Ecosystems depend on well-functioning networks of buyers, sellers, and various other parties in … [ Read more ]

Content: Article | Authors: François Candelon, Marcos Aguiar, Matthew Williams, Niklas Knust, Santino Lacanna, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subject: Management

Trust, we instinctively realize, is a precious quality that binds relationships, and nowhere more so than in business ecosystems. It’s foundational, but also fragile because all the participants in an ecosystem must learn to work with, and rely on, each other, knowing that no external force compels them to do so. Mutual trust, as much as mutual interest, binds business ecosystems.

Yet few business leaders focus … [ Read more ]

Content: Article | Authors: François Candelon, Marcos Aguiar, Niklas Knust, Santino Lacanna, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Business Model, Strategy

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Recent research by BCG and Technical University Bergakademie Freiberg investigated the motivations and success factors for business portfolio restructurings. By analyzing the characteristics and patterns of the underlying transformation processes, we developed practical insights on issues relating to the magnitude, speed, and sequencing of restructurings.

Editor’s Note: I was really intrigued by this research.

Content: Article | Authors: Michael Nippa, Sebastian Schönhaar, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Management, Miscellaneous, Strategy

Complex global corporations are under unrelenting pressure to create value. But no corporate center can add value without an effective parenting strategy, and no strategy can succeed without an organizational design that translates strategy into operational reality. Learn how to turn your corporate center into a value-creation engine.

Content: Article | Authors: Fabrice Roghé, Matthias Krühler, Sebastian Stange, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Corporate Governance, Management, Organizational Behavior

Risk management isn’t just a matter of complex financial models and formal risk-management systems. It is an essential value-creating activity that should inform the strategic debate at every level of the organization. Here are ten basic principles that should govern “the art of risk management.”

Content: Article | Authors: Fabian Günther, Frank Plaschke, Marc Rodt, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subject: Risk Management

Ever since Bruce Henderson introduced the growth-share matrix, corporate portfolio management has been a big part of the CEO agenda. But a recent BCG survey, conducted with Freiberg University in Germany, reveals a major gap between the effort companies put into portfolio management and its impact on corporate decision-making.

Editor’s Note: includes and excellent overview of CPM including history and common criticisms.

Content: Article | Authors: Harald Rubner, Matthias Krühler, Michael Nippa, Robert Untiedt, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Finance, Strategy

Inflation has a corrosive effect on business performance, but like any economic threat, it tends to separate the wheat from the chaff. Those companies able to protect themselves from inflation’s negative effects can exploit an inflationary period to improve their competitive advantage. With prospects for inflation on the rise over the midterm, companies need to start now to make sure their organizations are “inflation ready.” … [ Read more ]

Content: Article | Authors: Daniel Stelter, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subject: Finance