Welcome to 3 Key Charts, a weekly department in which we explain the graphs, maps, tables and diagrams that you must understand to guard and grow your business. The diagrams and graphics displayed below could help you discover a new opportunity, alert you to an impending risk, or teach you how to be a better manager.
In this instalment, we look at the biggest challenges for new-installed executives, Canada’s services trade with India, and R&D spending in Newfoundland and Labrador.
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Where it’s from: “Ascending to the C-suite” by McKinsey & Company.
What it shows: Transition activities rated “somewhat difficult” or “very difficult” to carry out by internal and external hires moving into C-suite roles. Culture factors were the toughest to navigate, with attempts to change ingrained corporate culture ranking highest of all transition activities (79% for external hires, 69% for internal hires). Next most-challenging was creating a shared vision around strategic direction (70% for external hires, 68% for internal hires). The results are based on a survey of 1,195 C-level executives across all industries, regions, company sizes and functional specialties, weighted according to the contribution of the respondent’s nation to global GDP.
Why it matters: The activities on this list will determine the success or failure of your personnel changes, whether you’re promoting a worker into a management role or parachuting someone in from outside the company. People-related factors dominate the list, and while team-mobilization ranked below some business and cultural activities (63% for external hires, 65% for internal hires), many of the most difficult decisions and changes that a new manager will seek to make require the backing of the unit or company’s staff. The emphasis on managing the workforce suggests that getting employees on board should be a new executive’s first task. Internal hires cannot assume their experience within the company will smooth the transition into the C-suite: while such executives displayed a better understanding of their firm’s organizational culture (53% difficulty rating versus 65% for external hires), they were just as likely to have difficulty changing that culture and motivating their team to action. Failed appointments carry a high cost, especially in executive roles. So if you’re in the process of filling an executive position, make sure you have a firm transition plan in place and that your employees are ready and willing to follow a new leader, wherever he or she may go.
MORE EXECUTIVE APPOINTMENTS: The First Thing Every New Boss Needs to Do »
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Where it’s from: “The Contemporary Canada-India Relationship” by the Asia-Pacific Foundation of Canada.
What it shows: Canadian trade in services with India in 2012. Canada imported $816 million in Indian services that year, with 73% of those made up of commercial services, 16% government and transportation services, and 11% travel services. India imported $640 million in Canadian services, with 47% being travel services, 30% commercial services and 23% government and transportation services.
Why it matters: Interest in India’s growth potential has skyrocketed since the election of a new government last year, and the visit of Indian Prime Minister Narendra Modi to Canada has boosted the profile of the country in the eyes of many Canadians. A growing middle class and anticipated mass-urbanization could fuel an even-greater demand for services, which already make up 22% of bilateral trade between India and Canada. If yours is a service offering, India is the market you should be exporting to. But that doesn’t mean there’s no opportunity in India for product-based businesses; as the Conference Board of Canada’s Danielle Goldfarb points out, selling services related to your primary product offering is an easy way to boost revenue from an overseas market. Entering India isn’t as easy as opening up a shopfront, however. Finding the right local partner to represent your business is key to success in the subcontinent.
MORE MARKET STRATEGIES: Why You Can’t Do It On Your Own in India »
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No new ideas in Newfoundland (& Labrador)
Where it’s from: “Achieving Sustainable Prosperity: Benchmarking the Competitiveness of Newfoundland and Labrador” by the Conference Board of Canada.
What it shows: Spending on research and development (R&D) by businesses in Newfoundland and Labrador and competing jurisdictions as a percentage of GDP. Comparator jurisdictions included Norway, the United Kingdom, Texas, North Dakota, Alberta, Saskatchewan, Quebec, Nova Scotia and New Brunswick. Companies from Newfoundland and Labrador spent a smaller portion of jurisdictional GDP on R&D than the unweighted competitor average in each year from 20012011.
Why it matters: The report indicates that Newfoundland and Labrador is overly reliant on the natural resources sector, and that labour productivity and GDP growth have been declining since the high point of oil production in 2007. The province needs to find new products and processes to diversify its economy and boost business productivity to compete with other jurisdictions. But the graph suggests that the province’s companies have not been making the investments necessary to spur that kind of innovation. The province ranked last among patent applications per million people in it’s competitive set from 20062010, suggesting that relatively few groundbreaking new ideas are emerging from the Rock or the Big Land. But businesses don’t need to invent whole new product categories or technologies to make effective use of R&D spending. The report notes that it’s equally important for companies to “add to or sustain the value of products and services, or to enhance the efficiency and effectiveness of existing business processes.” Entrepreneurs who hope to build sustainable businesses in Newfoundland and Labrador would do well to put more of their money into R&D.
MORE R&D SPENDING TRENDS: The Real Reason Companies Don’t Innovate »
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What conclusions do you draw from these charts? Let us know using the comments section below.