Your career doesn’t have to end at 60 – Why the Metaverse Will Change the Way You Work – The Next Austin? – What Companies will Look for in a Headquarters City – Harnessing the True Value of Corporate Venture Capital – Product Sustainability: Back to the Drawing Board

Your career doesn’t have to end at 60 – Why the Metaverse Will Change the Way You Work – The Next Austin? – What Companies will Look for in a Headquarters City – Harnessing the True Value of Corporate Venture Capital – Product Sustainability: Back to the Drawing Board

Today’s edition of the TextileFuture Newsletter is proposing to you in total four features.

Two short items by the Wall Street Journal that are somewhat related to each other, the first one is entitled “Why the Metaverse will change the Way you work”, and it is geared around work.  The second one bears the title “The Next Austin? – What Companies will Look for in a Headquarters City”, it presents 10 items what organisations are looking for, when moving the headquarters, thus is will have some effect on your workplace.

The third item will take you to “Harnessing the True Value of Coporate Venture Capital”, it îs based upon a report from Bain & Company and various guest authors from that company. We feel that is a core item to read.

The fourth feature is on “Product Sustainability: Back to the Drawing Board”. It gives you an insight and background on how to handle Product Sustainability.

Have one of the greatest Week of your lifespan!

Here starts the first feature:

Typically when employees retire, they walk out of the door with decades of experience. Workplaces are now looking at how to make work work for those who have reached their 60s and still want to carry on working, but without the stress and headache of continuing a high-powered job.

We explore this story in this month’s issue on Work. Find out why the metaverse will change the way you do your job, how off-sites are the new return to the office, and how companies will choose their headquarters city in the years ahead.

We also spoke to Matt Mullenweg, CEO of WordPress owner Automattic, about how his employees are able to work from wherever, and whenever, they want.

The Future of WorkWhat’s Ahead for Work

In the latest issue, the Future of Everything explores what’s ahead for work, from asynchronous schedules to the metaverse on the job

The Future of Everything covers the innovation and technology transforming the way we live, work and play, with monthly issues on transportation, education, well-being and more. This month is Work.

Virtual meetings that feel real, new ways to build and teach, plus jobs you haven’t heard of—soon it won’t be science fiction.

By guest authors Sarah L. Needleman and Kathryn Dill from the Wall Street Journal.

Related Video

In his job as a music-mastering engineer, Chris Longwood spends hours making Zoom calls and exchanging emails with artists around the globe to get a new album ready for release. He looks forward to the day he can meet with them in a virtual sound studio, editing tracks in real time.

“I see a future where my clients can put on a headset or glasses and be able to feel like they are in the studio with me,” said Mr. Longwood, a 35-year-old who lives in Houston. “We could have real back-and-forth conversations and not have to take turns talking, like on Zoom.”

Soon it won’t be science fiction. Tech visionaries expect scenarios much like this in the developing world they call the metaverse. When we need to get together with colleagues or customers to do more than chat, we’ll log into virtual spaces so realistic it will seem as if we’re physically in the same room. We’ll see each other in the form of avatars that, if we choose, look nearly identical to our real selves. And with specialized gloves on our real hands, we’ll be able to touch and manipulate virtual versions of goods like machinery or fabrics.

Many companies that embrace remote work will still turn to in-person meetings from time to time. But some workplace experts expect the new virtual realm to fundamentally change the way many people do their jobs—and also to create new jobs, some unknown today. Though the metaverse is still in early stages, and hardware can be expensive and clunky, these experts see strong potential benefits spurring companies to invest in coming years.

The metaverse is also expected to bring challenges, such as greater competition for jobs and increased turnover as employees’ locations become less important. Employers could more closely monitor workers’ behavior, raising privacy issues. And virtual offices will grapple with the need for new rules—for instance, avatar dress codes.

People aren’t expected to spend entire workdays wearing clunky headsets for virtual meetings. Instead, forecasters see the interactions with the virtual world happening when it’s most useful—either partially or as a full immersion. The hardware will become lighter, cheaper and more advanced.

“The metaverse will be evolutionary, not revolutionary,” says John Egan, chief executive of Paris-based forecasting firm L’Atelier BNP Paribas. “Our productive capacity is going to be significantly enlarged in the same way that computers and mobile phones enabled greater levels of productivity and complexity.”

Here are some of the ways the metaverse is expected to change the workplace.

Meet Me at the Virtual Whiteboard

Get ready to meet with colleagues and others from any location in an instant—no need for travel or even walking across a corporate campus.

“By virtue of teleportation, you can find people much faster,” says Florent Crivello, founder and CEO of Teamflow, a venture-backed startup that creates virtual office spaces.

Such meetings will go far beyond Zoom sessions, for instance enabling workers to collaborate on designing toys, furniture or buildings using 3D tools. During downtime, they could go bowling at a virtual alley to socialise. While an old-school call might do, gathering around a virtual watercooler could make for a more engaging experience, metaverse proponents say.

Working in virtual settings could help streamline what today are lengthy, complex processes. Tolga Kurtoglu, chief technology officer of HP Inc., envisions testing how new vehicles handle crashes before they’re manufactured. Virtual cars would replace real vehicles and dummies, and show how a vehicle performs under any number of weather or traffic conditions.

“The more you bring in next-generation collaboration tools, you will significantly accelerate product-development cycles,” Dr. Kurtoglu says.

A virtual setting could give people whose jobs require handling dangerous or expensive equipment a way to safely practice or experiment with new methods, says Jeremy Bailenson, founding director of Stanford University’s Virtual Human Interaction Lab.

That type of application will be what brings people to the metaverse, he says. “A lot of us think we’re going to put on goggles to come to offices,” he says, but “there’s got to be a reason to go into VR.”

A Job You Haven’t Heard of

When the Web emerged, businesses across sectors created online presences. A similar development will happen in the metaverse, bringing new jobs, forecasters say. New virtual shops, entertainment venues, classrooms and other spaces will need live support—as well as people to build them in the first place.

Some jobs that emerge may not exist today. Before the internet, “would you have ever guessed there would be people called social-media influencers making a living?” Dr. Kurtoglu says. With the metaverse, “It’s likely that new job categories will be created that we don’t have visibility into just yet.”

Other jobs will change. For example, real-estate agents will show customers virtual replicas of properties for sale and tour guides will give virtual previews of real-world vacations, L’Atelier’s Mr. Egan predicts. Eventually, purely virtual homes and vacation destinations could become part of the offerings.

Mr. Egan also foresees jobs that evolve around AI-powered bots designed to imitate the look and behaviors of real people, living or dead. “Someone has to build these experiences,” he says, and others will then come up with ways to earn a living from them. “Imagine,” he says, “your job is to use archive footage to design a lecture by Albert Einstein, a concert by Elvis or a poetry reading by Maya Angelou.”

Hiring and Training Morph

The metaverse could further the trend of workers living far from their employers, giving job seekers and companies more options. “Talent won’t be acquired depending on location,” says Richard Kerris, an executive at Nvidia Corp. who is co-leading a metaverse-infrastructure project called Omniverse.

At least part of the job-interview process will take place in the metaverse. That means, among other things, candidates will need to acquire appropriate avatar attire, says Jared Spataro, corporate vice president of modern work at Microsoft Corp. “How you represent yourself in the virtual world will be just as important as how you represent yourself in the real world,” he says.

Related Video

Training for new hires will evolve. Virtual-reality and augmented-reality technology—already used for military, law-enforcement and healthcare job training—will become more sophisticated, tech visionaries say. New hires at manufacturing plants will learn how to operate complex machinery; at warehouses they’ll get trained on how to pack boxes; and at retail stores they’ll get to know every product and where each belongs–all in virtual replicas of those places.

“The biggest difference when it comes to training is that the feedback loops will be 10 times shorter,” says Teamflow’s Mr. Crivello.

Accenture PLC created its own virtual-reality environments for training courses. Eventually workers will be able to enter VR to practice giving managerial feedback to an AI bot or visit an oil rig for simulated training.

“It’s scratching the surface with respect to what we think immersive learning unlocks for us—you can just keep doing it until you get better at it,” said Jason Warnke, who leads Global Digital Experience at Accenture PLC.

New Privacy Questions

Along with advances in work and training, the metaverse could provide organizations with an exponentially more powerful tool for oversight and surveillance. Your boss might miss seeing you roll your eyes at an in-person or video meeting—in the metaverse, if eye-tracking is enabled on your headset, that expression can be recorded and logged. If coupled with data about body temperature or heart rate from a smart watch, the information could be used to try to infer a worker’s emotional state, says Kurt Opsahl, general counsel of privacy-watchdog group Electronic Frontier Foundation.

The nudges that people have become accustomed to as online consumers—like product suggestions or refill reminders—could become part of their metaverse work lives, says Brian Kropp, chief of human-resources research at research firm Gartner. You could get a notification that someone in another meeting mentioned something relevant to your own projects, or a mid-meeting prompt that a participant is drifting off.

“As the manager [you would] have a real-time dashboard of who’s paying attention, who’s not paying attention,” says Mr. Kropp. “You’ll get a nudge as a manager saying, ‘I noticed Bob seems to have a confused look on his face, now might be a good time to ask what he’s thinking,’ or ‘Jill hasn’t talked in the last 30 minutes, you should invite her to get involved.’”

A savvy manager might make these observations in a video meeting now, but in the metaverse the technology would do the observing and inform the boss, he says.

While that could be useful in finding ways to motivate workers, such technology could also be used to predict who might be a troublemaker and sideline them, Mr. Opsahl says. Or someone could be misread. “This is a concerning thing, whether it’s right or wrong,” he says. “If it’s able to understand and react to your emotional state, there’s the potential for manipulation or invasive misuse of that data.”

www.wsj.com

 

The Next Austin? What Companies Will Look for in a Headquarters City

Urban resorts, clean energy, disaster protection: Real-estate and workplace experts predict 10 key factors that will attract employers in coming years.

By guest author Konrad Putzier from the Wall Street Journal.

The Covid-19 pandemic has caused corporate America to rethink what it wants in a headquarters. Millions of people are productively working from home and may never again spend five days a week in the office. Some have moved from places like New York to cheaper, smaller cities. The first corporate offices are joining the newest migration wave, and more will likely follow. But as they pick the site of their future headquarters, companies aren’t just thinking about what their employees want today. “They think about something that might be 30 years from now,” says Robert Hess, vice chairman at real-estate services firm Newmark.

Some things are unlikely to change. Companies will probably always want low taxes, an educated workforce and a big airport. But other factors are likely to become far more important in the future. As global warming worsens storms, wildfires and heat waves, more companies will likely look for cities that are prepared for natural disasters and offer green energy, site-selection consultants say. The rise of e-bikes, e-scooters and self-driving cars means cities looking to appeal to companies will need a new transportation infrastructure. Cheap housing, nightlife and access to nature are also bound to become more important.

Here are 10 key factors for cities looking to attract corporate headquarters in coming years.

Urban Resorts

As more people work remotely, some companies are bringing employees together once a quarter from their far-flung home offices. The goal: developing the kind of company culture and personal relationships that are hard to maintain over video calls. That means companies need space for employees to stay and socialize. Urban resorts could help fill that need, some property developers say. Unlike today’s conference hotels, which usually offer little beyond meeting space and catering, these resorts may include outdoor pools, nightclubs, water parks, casinos and other amenities where workers can have fun during off-hours.

A look at how innovation and technology are transforming the way we live, work and play.

Company Apartments

In the future, it may not be enough for cities to offer companies land and tax breaks to build an office. They may also need to offer apartments. Surging housing costs are contributing to rising wages, making it more expensive for companies to hire. They are also making it harder to retain employees, as people leave jobs to move to cheaper cities. Cities will either need to build plenty of affordable housing, or offer tax breaks and lands to companies to do it themselves. “If there’s something you can do to make the cost of living cheaper, you’re going to have a leg up on every single competitor,” says Colin Behring, CEO of real-estate developer Behring Co.

Tunnels

In booming cities like Nashville and Austin, traffic jams cause countless lost work hours for companies. Part of the solution may lie underground. Subways as well as below-ground shopping and eating venues have long been part of the success of cities like New York and London. In the future, tunnels could also help more people commute to work in their car without having to sit in traffic. “You physically can tunnel deeper than buildings are tall, meaning five to six overlapping or stacked tunnels can create a pretty dynamic navigation map,” Mr. Behring says. Underground roads wouldn’t just shorten commute times—they could also free up space above ground for parks and pedestrians, he says.

Ultrafast Internet

Access to cheap, reliable and ultrafast internet is crucial to most companies. The spread of remote work means companies need to think not just about internet connections in their offices, but also in their employees’ apartments, on streets and in local coffee shops. In cities where a single company controls the supply of ultrafast internet and overcharges for service, costs can become a problem. “That can become a drain on the local economy. It’s basically a tax that people will have to pay,” says Rohit Aggarwala, senior urban tech fellow at Cornell Tech. To ensure access to cheap, fast internet, major cities like New York should create public corporations to build out fiber networks, for example by issuing debt to pay for the cables and raising revenue from users, he says.

Nightlife

In a tight labour market, companies are fighting harder than ever to keep their employees from leaving and to attract new recruits. That means they are increasingly keen to be in cities where their workers enjoy living, site-selection consultants say. Austin is attracting more big companies than some other Sunbelt cities in part because of its restaurant and music scene. “People want more than just a place to work,” says Chris Lloyd, chairman of the trade association Site Selectors Guild and senior vice president at McGuireWoods Consulting. Cities that promote nightlife and culture, for example by cutting red tape or offering subsidies, can get a leg up on the competition.

Clean Energy

One company after another is pledging to eventually reduce net carbon emissions to zero. That makes access to green energy at cheap prices increasingly important. Big tech firms, which are among the most sought-after office users, are particularly eager for carbon-neutral sources of electricity. Cities that can’t offer nearby wind farms or hydroelectric power face a disadvantage when they compete for big corporate offices, site-selection consultants say. “ESG is not a fad anymore,” says Mr. Hess of Newmark, referring to the acronym for environmental, social and governance. “Some of these larger cities would be smart to have offshore wind.”

Nature Parks

Companies looking to keep their employees happy, healthy and productive could increasingly look for cities with access to greenery and natural outdoor spaces. Visits to national parks surged during the Covid-19 pandemic. Being able to take a lunch-break hike in the mountains is already a big reason why cities like Boulder are attracting big companies. And some companies are even looking to include hiking trails in their office campuses. Amazon, for example, is building a 350-foot office tower in Arlington, Va., that will feature two spiraling outdoor walkways with local plants and trees twisting to the building’s top. Trees also help absorb carbon emissions and clean the air—another priority for companies looking to be more environmentally friendly.

Disaster Protections

Worsening storms, wildfires and heatwaves pose a challenge to companies looking to keep their offices open and employees safe. That means firms will increasingly look to be in cities with strong protections against natural disasters, says Mahesh Ramanujam, the former head of the U.S. Green Building Council. Disaster-proofing the electricity grid is the first task, he said. Widespread power outages such as in Manhattan after superstorm Sandy in 2012 can cripple corporations for days. Protecting offices from flooding and employees’ suburban homes from fires is also important. And in places like Arizona, cities need to make sure buildings and infrastructure can withstand extreme heat as climate change heats up the globe.

Self-Driving Cars Welcome

Self-driving, electric cars are set to become a key mode of transportation for people and goods. They could also help boost corporate productivity, allowing more people to work while they commute. Mr. Lloyd says some of his corporate clients are increasingly interested in cities that are looking to create a friendly environment for self-driving cars. Offering plenty of charging stations is just the start. In the future, cities should create networks of sensors and systems that can feed these cars information on traffic lights, road closures and traffic jams, he said, leading to shorter commute times.

E-Bike and E-Scooter Lanes

The pandemic has changed the way many urban residents get to work. A growing number are switching from buses and subways to electric bikes and scooters, which are proliferating across the U.S. as a fast, easy and cheap way to bridge short distances. Offering a network of protected bike lanes could make cities more appealing to big companies, Mr. Aggarwala says. “If you’re keeping people out of automobiles, you’re making the streets safer and more pleasant,” he said. As food delivery becomes a bigger part of office life, these lanes could also offer space for smaller self-driving vehicles transporting food from restaurants.

And…What’s No Longer Important

When industrialist Francis Cabot Lowell and his partners founded the Boston Manufacturing Company in 1813, they picked Waltham, Mass., as its headquarters. The reason: The Charles River ran through the town with enough speed to power a textile mill. Over the following two centuries, the things companies look for in cities changed dramatically. Many of the factors that once led firms to pick some cities over others for their headquarters no longer matter.

The rise of coal-powered steam engines in the 19th century meant towns on downward-rushing rivers like Waltham soon lost much of their appeal, according to Douglas W. Rae’s book “City.” Coal was easier to transport to port towns with calmer waters like Chicago, New York and Philadelphia, meaning they became more attractive to America’s big industrial firms. Some companies settled near railway hubs, leading to the growth of cities like Atlanta.

By the middle of the 20th century, the spread of cars and trucks meant firms no longer had to be close to ports and railway lines to move their employees and goods. The spread of telephone lines was just as important. In the past, firms had to be close to ports, railways or telegraph lines if they wanted the latest market information. Thanks to cheap long-distance calls, “all of a sudden you don’t actually have to be in New York in order to get the most up-to-date information about, say, how the London Stock Market is doing,” Mr. Aggarwala says. Untethered from ports and rail, many companies began moving where their executives and employees wanted to live: the suburbs and sunny, low-tax Sunbelt cities.

Now, corporate preferences are once again changing. Some firms are seeking out cities with vibrant nightlife or beautiful natural settings, as keeping young employees happy becomes more important. Housing costs and internet availability are a growing concern. Even rushing water, which once drew companies to towns like Waltham, is making a comeback: Big corporations like Microsoft increasingly seek out hydropower as a green-energy source.

www.wsj.com

 

Harnessing the True Value of Corporate Venture Capital

Companies miss out by treating corporate venture capital like traditional M&A.

By guest authors Joost Spits, Thomas Wendt, and Dustin Rohrer from Bain & Company.

Letter from the M&A Team: Beneath the M&A Headlines

The world is changing for those in the trenches getting deals done.

Dear friends,

Welcome to the fourth annual edition of our Global M&A Report. Our mission remains constant: Use our unique position in the M&A world to connect what we see in our clients’ executive suites with the larger trends happening across the globe. The result, we hope, is to make all of us a little better at the craft of M&A.

On the surface, the 2021 headline has to be “M&A is back.” And so it was, with the highest total deal value in history. Strategic M&A, including corporate acquisitions and portfolio company add-ons,saw its second-highest year on record in 2021, fueled by all-time high deal multiples. Meanwhile, financial investors, special purpose acquisition companies, and venture capital accounts saw evenhigher growth. Strategic buyers are seeing a growing diversity of deal types, with alternative deal models such as partnerships increasing. And 2021 brought a renewed focus on scale deals as the disruption from Covid-19 presented opportunities for strong competitors to retrench around market leadership.

All of this made M&A more demanding for executives and deal professionals. Strategic buyersneed an expanded set of skills to compete. Clarifying these broadened demands is why we write this report.

This year’s report leads off with a quick year in review. We do start with the horse race statistics that many of our competitors focus on, but from there, we highlight exactly how the world is changing for those in the trenches trying to get deals done. The report discusses in greater detail several hot topics that might help you think about your job just a little bit differently.

The report contains 26 articles by Bain partners from around the world, commenting on specific industries and geographies where we think interesting things are happening. Please pick andchoose as you see fit!

Finally, we have updated some of our core research underlying our belief in the concept of repeatable M&A. In a nutshell, frequent and material acquirers create greater total shareholder returns than those who don’t have as robust an M&A strategy. This pattern has held up over the pasttwo decades, despite the M&A market’s evolution since.

At a Glance

  • Corporate venture capital (CVC) deal value has increased more than tenfold over the past decade.
  • Despite its popularity, most companies are not getting the full potential value they would reap if they made early-stage CVC investments.
  • By not engaging in early-stage deals, CVC investors miss out on the insights they can gain from exposure to trends several years ahead of the competition—and early-stage

This article is part of Bain’s 2022 M&A Report.investment can help companies further de-risk future M&A.

Explore the Report

As an alternative to traditional acquisitions, companies are making more minority investments, especially in the form of corporate venture capital (CVC), hedging their bets and de-risking later M&A. They’re picking winning players, getting early access to companies they might want to buy, and learning more about the cutting edge of their industry.

Annual CVC volume has grown at about 7 % between 2017 and 2020, with value increasing more than tenfold over the past decade as companies invest in innovations and new business models that will lead them into the future. CVC now accounts for nearly a quarter of all venture capital (VC) investing; 10 years ago, it represented only 11 % (see Figure 1).

CVC ideally is deployed as a market-sensing mechanism, and at times, it can open the door for future M&A. But most companies focus on late-stage investments, treating CVC more like traditional M&A. They look for companies that they can bring into the core business right now and feel more comfortable performing diligence on those with an existing product or market fit.

While beneficial, this approach misses a critical part of the value that comes from exposure to early-stage companies.

CVC ideally is deployed as a market-sensing mechanism, and at times, it can open the door for future M&A. But most companies focus on late-stage investments, treating CVC more like traditional M&A.

Consider that the best venture capital firms engage in hundreds of discussions with start-ups each year. They are exposed to hundreds of business plans, and, as a result, they start to see emerging disruptive trends four or five years earlier than the general public. While a venture capital fund’s team may invest only in 2 out of 100 companies they meet with, a critical part of the value lies in the insights gleaned from the other 98.

Indeed, these conversations expose companies to trends several years ahead of competitors. Venture activity often precedes market disruption, giving in-the-know investors an opportunity to actively course correct. The learnings often are about the ideas and trends that companies did not know to expect—the “unknown unknowns” (see Figure 2).

Another big benefit of early-stage investing is that it can further de-risk future M&A. With small check sizes in the early stages, investors can buy themselves a seat at the table and watch a company or technology grow over time. If the company becomes an acquisition target, the parent company has two to four years of diligence from exposure through the early-stage investment. This brings in valuable information to diligence that can significantly de-risk the investment and integration. Compare that with the typical three- to four-week diligence.

In terms of investment required, some companies initially balk at the idea of setting up a USD 100 million to USD 200 million venture fund. While this is a large sum to commit, a VC fund’s dynamics are laid out over a 10-year life cycle, making the annual investment closer to USD 10 million to USD 20 million. And if executed well, there is potential for significant rewards. Even if a fund only returns the initial investment, the company basically has a window into the future—and a way to extend and ensure its strategy.

Five Big Things to Know about M&A in 2022

Our survey of 281 M&A executives finds that retaining talent, capturing revenue synergies, boosting ESG, and making the most of alternative deal models are top of mind for buyers.

Reimagining Talent in M&A

With survival and growth riding on a company’s ability to hire the best talent, more executives are finding creative ways to solve the people equation.

By guest authors Sinead Mullen, Tim Leonard, and Marc Berman from Bain Company

At a Glance

  • Executives see talent retention as the second-biggest contributor to deal success. And with record numbers of employees actively job searching, the challenge is getting even more critical as many industries face a talent shortage.
  • The best companies take critical steps in both the diligence and integration stages to ensure that talent stays put. For example, they invest to understand a target’s centres of influence and perform extensive diligence pre-close to assess attrition risks and employee engagement.
  • Executives who successfully retain key talent through integration say that establishing a strong and compelling vision for the future is the most important element contributing to that success.

Even in the best of times, mergers and acquisitions cause employees to worry about uncertainty and change, often leading them to consider other options. But these are not the best of times. Virtually no company has been unaffected by the Great Resignation as record numbers of employees explore new opportunities.

A March 2021 Gallup poll found that 48 % of the US working population was actively job searching or watching for opportunities. It was a survey that included workers in every job category, from hourly consumer-facing roles to highly paid professionals. According to the US Department of Labor, more than 4.5 million workers quit their jobs voluntarily in November, the most in the two decades in which the government has been keeping track.

Some companies are doing a better job than others of proactively addressing people issues throughout the diligence and integration processes.

These are stats that haunt any proposed talent-focused deal: People were already thinking of leaving, and a pending acquisition or merger can make that decision even easier. Our survey of executives found that talent retention is the second-biggest contributor to deal success (see Figure 1). When talent is a major factor in a potential deal, acquirers need to proactively address people issues throughout the diligence and integration processes. Some companies are doing a better job of this than others.

 

Implications for practitioners

But getting it right isn’t easy. To harness the value of early-stage investments, companies need to adjust their mindset and operating models.

CVC requires a higher risk tolerance, faster decision making, and a longer investment horizon than most corporate acquirers are accustomed to. For these and other reasons, the most successful companies set up separate VC entities that can operate independently from corporate bureaucracy and deploy a decidedly non-corporatemindset.

This mindset shift and the intelligence value from exposure to early-stage companies has several implications for the CVC operating model.

While most executives acknowledge that people issues are critical in an integration, they often examine only a few areas during the diligence process. They tend to focus primarily on the executive leadership team; they also typically explore a limited set of solutions, such as compensation packages for senior leaders. Acquirers that are surfacing as winners, however, take a robust and creative approach to people diligence when exploring a target. This approach gives them visibility into the team and culture that has propelled the target’s success and can inform decisions about whether to pursue the deal and how to shape an eventual integration.

A dedicated investment team with critical expertise is the first key component for companies pursuing CVC. Bringing in individuals with deep venture capital experience will help to more quickly build the CVC muscle, and it will have a positive impact on the company’s reputation in the VC world.

Venture capital is all about your network and reputation as a trusted investor. While later-stage companies look for VC investments to scale their business, early-stage companies put a premium on reputation, reliability, and long-term focus. Corporates usually have a hard time seeing the good early-stage deals because often they are not seen as a reliable investor—for instance, they come and go, they want strings attached, or something else—so they need to earn their seat at the table. That takes time and is often easier with a fund set up outside of corporate and other well-known practitioners running it.

It starts by understanding a target company’s centres of influence. That means quickly identifying key players across three categories:

  • Who is mission critical today? Who drives the day-to-day success as a result of their expertise, and who is critical in the near-term to ensuring continued performance and supporting the integration?
  • Who is mission critical tomorrow? Who can deliver the capability spikes needed to achieve full potential?
  • Who are the true people influencers? Who do people listen to, and who will likely take others with them if they leave?

Acquirers need to ask pointed questions to build an initial list of critical talent, outlining their roles and responsibilities and specifics on how they are critical to the success of the company. Leaders should quickly craft a strawman of the combined company’s future operating model, working to answer two basic questions:

  • How different is it from the way they work today?
  • What level of change and disruption do they anticipate for the key players?
  • Acquirers need to ask pointed questions to build an initial list of critical talent, outlining their roles and responsibilities and specifics on how they are critical to the success of the company.

It’s important to keep a close eye on impacted populations that are both critical to future success and that are likely to undergo a significant change. Invest heavily in these individuals. As soon as possible, cultivate direct relationships with them to understand their aspirations, motivations, and career goals. Financial incentives keep people in the short term, but nonfinancial considerations around purpose, growth and development, and cultural connectivity keep them for the long term. Actively build a point of view on their likelihood to stay and potential drivers for retention, and build it into your plans from day one. It’s essential to ensure that acquisitions are aligned with longer-term talent strategies—including building the new capabilities that can drive growth; unlock new adjacencies; and support diversity, equity, and inclusion efforts.

Video: Bain Partner Sinead Mullen discusses ways for M&A executives to manage the widening talent gap and address people issues throughout the entire deal process.

  • Get creative about how to read the landscape
  • Too many executives underinvest in people diligence simply because they don’t believe they can access meaningful information until after close. Yet the best talent acquirers find ways to be proactive pre-close to determine the potential risks and accelerate the integration journey from day one. These are the steps that matter.
  • Get the conversation started. Don’t shy away from engaging key talent. Ask to speak with a broader group of people, not just the executive team. In addition to those conversations, reach out to alumni—they may be willing to speak more openly than current employees. Remember that different sources are biased in different ways, so you need a balance of perspectives. These conversations can give you significant insights into talent, existing strengths and weaknesses, perceptions of your company, level of attrition risk, and hidden assets within the organization.
  • Leverage publicly available data. Digital tools can help bring visibility into a target’s historical attrition rates or engagement metrics during diligence. Together, they can paint an accurate picture of the employee dynamics within the company. Glassdoor offers preliminary insights into employee sentiment, allowing you to anticipate attrition risk, change fatigue, or burnout in the target company. LinkedIn provides visibility into the organization, helping you understand the current operating model and depth of capabilities. Fishbowl includes open conversations from employees, providing insight into how the community interacts.

Infographic

Five Big Things to Know about M&A in 2022

Fig 2 b Bain

Retaining talent, capturing revenue synergies, boosting ESG, and making the most of alternative deal models are top of mind for buyers.

Use people insights to guide the integration

The people diligence should inform whether you do the deal. If that diligence raises too many red flags, don’t hesitate to walk away. But if the people and culture issues seem manageable, the diligence should dictate how you approach integration. As soon as you mobilize for integration, translate people diligence learnings into implications for the integration. Two best practices ensure that you are engaging on people issues right from the start.

Cocreate a clear, compelling vision for the combined company. Executives who successfully retain key talent through the integration say that establishing a strong and compelling vision for the future is the No. 1 most important element (see Figure 2). Immediately after closing a deal, bring leaders and influencers together to craft that vision for the future organization. This narrative should include a case for change, a view of the future state, measures of success, and guiding principles—the guardrails for making key decisions. The simple act of imagining and defining a shared future so soon after close helps to align leaders, build excitement, and foster energy for the change ahead.

Figure 2 b

The top two factors for talent retention, compelling vision and clearly defined roles, are nonfinancial

In the merger that created UKG, leaders from Kronos and Ultimate Software came together to shape the story of their future, clarifying their shared purpose and highlighting the opportunity to make even more impact as a combined entity. This process aligned leaders around a shared aspiration to truly put people at the center of their business. The process also alleviated concerns around cultural differences and distinctive ways of working.

Build energy from the middle. Tons of great talent sits below the executive level. Reach out to those key leaders and critical influencers, and directly engage them in the process, enlisting them as integration ambassadors. This team can provide feedback on the integration journey, identify and help solve emerging issues, and build cultural understanding and connectivity across legacy organizations. This group can help protect the blind spots of the executive team and integration leaders. They see, hear, and experience the integration (and the business) differently, and they can pinpoint risks, opportunity areas, and emerging challenges.

Such a team played a key role in accelerating the cultural integration of Caliber and Abra, supporting the rollout of store conversion and other key changes. By inviting these individuals into the process, the leadership team empowered key influencers to proactively support and shape the change journey while building advocacy within the organization.

Understand the organisations’ capacity for change. The ability to navigate change through an integration is a key determinant of value in most deals. Many leaders pay limited attention, however, to change readiness—that is, an organization’s capacity to effectively navigate change. Bain’s Change Power Index® tool helps companies anticipate the change archetype of both their own company and that of the target. It serves as a starting point for planning for remedies and solutions. Clearly understanding each organization’s ability to change can help determine how to structure an integration in a way to support your talent strategy and accelerate value capture while mitigating risk.

The popularity of using M&A to obtain and retain scarce talent has introduced a new term into the business lexicon: the “acqui-hire.” As the talent gap threatens growth and profits across industries, more companies will devote more energy to performing creative people diligence and enabling people insights to guide integration. How to predict the winners in the raging war for skills? They’re the companies with an unwavering focus on talent before, during, and after the deal—deal after deal.

Delivering Results in Joint Ventures and Alliances Requires a New Playbook

Alternative deals are different from typical acquisitions, and they need to be viewed with a fresh set of eyes.

By guest authors By Joost Spits, Arnaud Leroi, and Dustin Rohrer

At a Glance

  • In this time of accelerating disruption, many companies look beyond traditional M&A and participate in a broad range of joint ventures and alliances to access assets and capabilities.
  • Frequent acquirers achieve higher total shareholder returns than their counterparts, and they are more likely to use partnerships, according to Bain research.
  • Doing partnerships well requires some notable differences from M&A in approach and capability.
  • Companies need to tailor the exploration and diligence to emphasize partner fit and trust between parties, and overinvest in creating the right governance structure and operating model.

As they grapple with the double whammy of industry turbulence and skyrocketing valuations, more companies are looking beyond traditional M&A to alternative deals, making joint ventures (JVs), alliances, and minority investments an integral part of their growth strategy.

Partnerships are a critical extension of the M&A and growth strategy. Over the past 10 years, the total shareholder return of frequent acquirers was nearly double that of infrequent acquirers, according to Bain research (see Figure 1). A vast majority of frequent acquirers rely on partnerships, and they use them more frequently than infrequent acquirers.

Venture capital is all about your network and reputation as a trusted investor. While later-stage companies look for VC investments to scale their business, early-stage companies put a premium on reputation, reliability, and long-term focus. Corporates usually have a hard time seeing the good early-stage deals because often they are not seen as a reliable investor—for instance, they come and go, they want strings attached, or something else—so they need to earn their seat at the table. That takes time and is often easier with a fund set up outside of corporate and other well-known practitioners running it.

In the hope of having access to the hot early-stage deals, some companies chose to engage in VC through a fund-in-fund model, essentially investing in a financial-driven VC fund as a limited partner. This approach might have its merits over building out a company’s own VC operations, but consider it carefully since it has a lot of limitations, including high cost (management fee and carry), lack of control over where to invest, and limited visibility into new companies after year four when the fund has deployed its initial capital. Though building reputation takes time, companies that do it right see the benefits of earning their seat at the table.

The second key component of the operating model is building an operating or platform team between the investment team and the corporate parent. While recognizing the value of intelligence gleaned from early-stage exposure is easy, bringing that intelligence back to the corporate parent is not.

Companies need to capture insights in a structured way and play them back to corporate so that they are valuable and actionable. Again, some VC experience is important. This team needs to know how to work with start-ups. Its members also need to speak the language of the business as they will be the critical link that brings new insights back into the business.

Read the Next Chapter

Bain’s Bedrock Beliefs on How to Create Value from M&A

A repeatable model helps to generate higher total shareholder returns.

By guest authors David Harding and Joerg Ohmstedt from Bains Company

This report necessarily spends most of its time on what is new and different in the world of M&A. For example, we have argued that executive teams need to modify their playbooks to retain critical talent; account for new business needs, such as environmental, social, and corporate governance; and capture revenue synergies.

All of that said, there are some fundamental truths about M&A that have withstood the test of time. The analyses discussed below have been replicated multiple times over the past 20 years. The answer remains the same across all the different cohorts we have studied.

Headline: If you want to be successful at M&A, develop a repeatable model. Do it often, learn from your mistakes, and make it a material part of your business. Done right, it will generate higher total shareholder returns (TSRs).

Fast fact: About 84 % of publicly listed companies have participated in M&A over the past decade.

We have assessed the returns to shareholders of the different M&A strategies employed by a universe of 2897 publicly traded companies from around the world.

It turns out that two axes define a lot of what differentiates M&A performance—frequency (how many deals you do) and materiality (how much of it you do). We have outlined the 10-year compound annual growth rates for the TSRs of four groups of acquirers by deal frequency and materiality. The 16% of companies that did no deals reported an annual TSR of 5.4%.

It does not take a lot of deals to become a frequent acquirer, about one per year. To be a material acquirer does require heft—namely, 70% or more of your market cap from acquired companies over a decade. Still, 18% of all the companies in our sample were considered material acquirers.

So what do these trends tell us?

First, consistent M&A activity over economic cycles contributes to higher TSR. This finding holds up year after year, across industries. Deal success and deal failure is more a matter of cumulative experience and capability in making a deal and less a function of standalone deal circumstances.

Second, similar to most things in life, you get better at what you do when you do it repeatedly. Companies that acquire frequently (serial bolt-ons) tend to outperform the average company on TSR (10.1 % annual).

Third, companies that not only acquire frequently but that also develop the capabilities to undertake larger deals do even better. We call these companies mountain climbers, and their 11.0% annual TSR leads the class. Investors have come to recognise this.

Consistent M&A activity over economic cycles contributes to higher total shareholder returns. This finding holds up year after year, across industries.

We spend a lot of time studying mountain climbers to understand their distinguishing capabilities. Two mountain climbers, Thermo Fisher Scientific and Hitachi, are highlighted in the following section. More broadly, we have identified and track 334 mountain climbers. Many are well-known success stories, including Ahold Delhaize, Alimentation Couche-Tard, Assa Abloy, Bristol-Myers Squibb, Broadcom, Charter Communications, Cigna, Melrose Industries, Qualcomm, Salesforce, Schneider Electric, Siemens, Sony, Stanley Black & Decker, Symrise, Toyota, Tyson Foods, UnitedHealth Group, and so on.

Mountain climbers follow an integrated approach to managing M&A from strategy to integration, which strengthens and reinforces their repeatable M&A capability with each deal.

An effective partnership playbook can go a long way toward avoiding the fate of sinking into the bottom third of value-destructive partnerships.

Digging deeper, we see that the difference between the winners and losers rests on execution. Clear value creation/economics and strategy are the top (and nearly equal) contributors to success, according to our survey of 281 practitioners, and a lack of these dimensions contributes to failure. Yet the top reasons for failure are execution related: poor cultural fit and a lack of strong senior management commitment (see Figure 2). Execution is an ongoing process that requires up-front diligence and strong commitment over the life of the partnership. Having an effective partnership playbook can go a long way toward delivering effective execution and avoiding the fate of sinking into the bottom third of value-destructive partnerships.

Building the partnership playbook

When companies fail to achieve the full potential of a partnership or strategic alliance, it’s often because they underestimate how the playbook for these alternative deals differs from the playbook required for traditional M&A.

In these M&A alternatives, there are three critical things to get right.

Tailor the exploration and diligence process to emphasise partner fit and trust between parties. Picking the right partner involves not only estimating economic value for both sides but also finding a cultural and strategic fit (in which companies can be synergistic) and working to build trust early. Specific areas of fit that can be examined during diligence include risk appetite, market perspective, and accountability preferences.

Companies with mismatched risk appetites and misaligned market perspectives on issues such as the most important segments to focus on and how to win are likely to run into conflict when new opportunities arise for the partnership.

Accountability preferences, such as the level of oversight and sign-off needed for partnership activities, are another area in which it’s important to reach alignment early in diligence. Finally, trust is an elusive but key component of the partnership exploration and building process.

Companies with mismatched risk appetites and misaligned market perspectives on issues such as the most important segments to focus on and how to win are likely to run into conflict when new opportunities arise for the partnership.

Overinvest in creating the right governance structure and operating model. Getting a partnership’s operating model and governance right up front (before signing) matters. In an acquisition, the initial operating model can be adjusted as needed post-integration. The parent company does not need to ask permission to make governance changes. In partnerships (and JVs in particular), however, making changes to the operating model after signing often turns into a complex negotiation between partners.

The operating model considerations in a partnership are different than in M&A. There are two considerations in a partnership: the operating model of the partnership entity, such as a JV, and the operating model between the parents and partnership entity. For the parent-partnership model, companies should consider control across three dimensions: equity (share in profits/losses), investment, and management control.

There are critical questions to answer based on these dimensions. Will each parent be a portfolio manager, strategic architect, or a combination of both? Will one parent play a more dominant role in operations, or should there be an even balance between partners? What capabilities and assets will each parent contribute? What decisions need to be approved by one or both parents?

There are myriad other considerations that add complexity to the operating model. Many companies get weighed down trying to anticipate all decisions that the partnership will make so that they can build them into the operating model. Often the best path is to aim for simplicity and enable agility in the partnership.

Giving a partnership independence to make decisions while defining a few targeted areas of capability access (from one or both parents) allows the entity to grow and change with the market. Trusting a JV or alliance to learn from mistakes and grow can be the ticket to a healthy and independent value creating partnership.

Show commitment to lifetime management. Similar to any business, it’s important to recognize that the future will usually be different than planned. A partnership is likely to perform well on some dimensions and underperform on others as the market evolves. To keep the partnership relevant, a periodic strategic refresh can help. This allows companies to revisit the strategic intent and align on what to stop, start, and continue based on the evolution of the partnership and market dynamics.

This is often most effective when done outside of the quarterly review process. One example of this is a partnership-focused offsite every two years, which includes both partnership leaders and some outside leaders to keep the thinking fresh. Another critical component of most partnerships is planning for the end. Initial negotiations should recognize the potential for a partnership’s evolution as market dynamics shift. Should the partnership have an off-ramp after a certain period of time or when market dynamics shift? Should one or both partners have the option to acquire? What are the most likely exit rationales and trigger points? Having a clear exit plan can save both parties lots of frustration down the road.

Needed: A partnership capability

Doing this right requires being thoughtful about how to set up the internal partnership capability. Companies that maintain an active portfolio of partnerships often have a level of centralized partnership capability. This can vary from partnership knowledge management—in which guidelines, processes, and lessons learned are captured in a center of excellence—to an exclusive JV/alliance team that oversees partnership screening, setup, and management.

Companies should also be thoughtful about the overlap among the partnership team, M&A team, and business unit leadership. Several areas of the partnership process, such as screening and parts of due diligence, can build off the M&A team and playbook. But as we’ve mentioned, there are areas in which the JV process should be distinct.

It’s also critical to be thoughtful about where business unit leadership plugs into the partnership process. If business unit leaders own the partnership once it’s set up, it is important to loop them in early in the process to get input during diligence, partnership setup, and other stages.

As more companies opt for partnerships to help them deal with industry disruption and the high multiples for traditional M&A, they will discover just how different alternative deals are from typical acquisitions—and how critical it is to approach them with a fresh set of eyes.

www.bains.com

 

Product Sustainability: Back to the Drawing Board

By guest authors Stephan Fuchs, Stephan Mohr, Malin Orebäck, and Jan Rys from McKinsey, Stephan Fuchs is a senior expert in McKinsey’s Munich office, where Stephan Mohr is a partner; Malin Orebäck is a senior expert in the Stockholm office; and Jan Rys is a consultant in the Zurich office.

Up to four-fifths of a product’s lifetime emissions are determined by decisions made at the design stage. By building on proven cost-optimization techniques, companies can get those choices right.

Across industries, the great cleanup is underway. Driven by tightening regulations, pressure from investors, and shifting customer preferences, companies are striving to reduce the burden of their activities on the planet. This quest for sustainability requires action on many fronts, with changes to supply networks, manufacturing processes, and business models. Companies are also rethinking how their products are designed, engineered, and used, looking for ways to meet performance and quality requirements while using fewer resources across the full life cycle of everything they make.

Two factors are pushing design up the sustainability agenda. The first is technological: an ongoing shift of lifetime emissions from product operation to product production. The shift is partly thanks to user demand for extra features and capabilities that require additional materials to deliver. But it’s also because technical changes designed to promote efficient operation tend to involve additional product complexity. For example, domestic heat pumps require more materials than the gas or oil boilers they replace. Compared with their energy-hungry predecessors, high-efficiency electric motors may contain additional carbon-intensive materials, including extra copper and rare-earth magnets. The variable-frequency drives that are used to optimize the control of these advanced motors need their own circuitry and semiconductor components.

Perhaps the highest-profile example of this shift is the transition from internal combustion engines to electric propulsion, which is reshaping the life-cycle emissions profile of passenger vehicles. One study found that about 20 % of the carbon generated by a diesel vehicle comes from its production, with most of the remaining 80 % emitted at the tailpipe. An equivalent electric car, by contrast, produced fewer emissions in the use phase but required additional carbon-intensive materials in the battery. If electricity for the vehicle came from fossil fuels, production’s share of lifetime emissions would rise to 45 %. If the vehicle were charged using only renewable energy, production emissions would account for 85 % of the total (Exhibit 1).

The second reason for increased scrutiny on design sustainability is the recognition that the design phase is typically the most powerful and cost-effective point to address the resource footprint of future products and services. Companies have long known that design decisions determine most of a product’s manufacturing, operating, and maintenance costs. The same logic applies to sustainability. Our analysis suggests that while R&D accounts for 5 percent or less of the total cost of a product, it influences up to 80 percent of that product’s resource footprint.

Design affects sustainability in multiple ways. Products with greenfield design for sustainability may use less material or replace high-footprint virgin materials with lower-impact recycled or biologically based alternatives. Swiss sports-shoe company On, for example, has developed a fully recyclable shoe made from bio-based synthetic materials. Instead of simply selling the product, the company offers a subscription model for consumers. Worn-out shoes will be sent back to the manufacturer for disassembly, with the consumer receiving a new pair in return.

Companies have long known that design decisions determine most of a product’s manufacturing, operating, and maintenance costs. The same logic applies to sustainability.

Design decisions can also determine how easily a product can be repaired, upgraded, remanufactured, or recycled at end of life. Consumer-electronics company Fairphone uses a modular design for its devices, with the aim of eliminating planned obsolescence by allowing components to be replaced by the user if they fail or become outdated.

Building a sustainable R&D function

Leading organizations are already achieving impressive results by focusing the effort and ingenuity of their R&D teams on the sustainability imperative. For many R&D functions, however, a key challenge is finding ways to meet new demands for enhanced sustainability alongside the ongoing need to control costs, meet new customer needs, and differentiate their products from those of their competitors.

Executives tell us that the ability to manage this additional complexity represents the next frontier in the development of high-maturity R&D organizations. Of course, some companies have already made step-changes in their capabilities in recent years. For example, traditional design-to-cost methodologies have evolved into today’s design-to-value (DtV) approach, with its focus on the cost-efficient delivery of the features that matter most to customers. And more and more businesses have also made great strides in digitization, using new tools and data sources to accelerate the product-development process and improve its outcomes.

Design for Sustainability (DfS) extends and expands these approaches, requiring organizations to adapt their existing tools, adopt new ones, and upgrade both the infrastructure and capabilities of the R&D function (Exhibit 2).

To achieve DfS at scale, companies can address three interrelated elements in the R&D function. First, how will they rethink the way their products use resources, adapting them to changing regulations, adopting circularity principles, and making use of customer insights? Second, how will they understand and track the emissions and cost impact of design decisions to achieve their sustainability ambitions? Third, how will they foster the right mindsets and capabilities to integrate sustainability into every product and every design decision? Let’s look at each of these elements in more detail.

Customer and design insights

The biggest opportunities to improve sustainability often come from changes in the wider value chain that surrounds a product. Leading companies take a holistic perspective on sustainability, examining the way products are transported, packaged, handled, and used—and what happens to them at end of life. They talk to and observe customers, suppliers, and other stakeholders in the value chain, then they use the resulting insights to generate creative improvement ideas.

One quick-service-restaurant company, for example, wanted to reduce the amount of packaging waste generated by its stores. When the design team looked at the complete value chain, it found that a significant fraction of that waste was generated by the intermediate packaging that protected products in transit from factory to store.

That inspired a complete redesign of the packaging value chain. The company developed an aesthetically pleasing, resource-efficient, and recyclable package that could protect products all the way from production to the customer’s hands. Individual products were then consolidated in lightweight, reusable, and returnable containers to protect them in transit. Those changes helped the company reduce total packaging waste by 18 percent, with less of that waste going to landfills. The company also cut overall supply-chain greenhouse-gas emissions by a third.

Emissions cost transparency

Sustainable design is fraught with complexity and trade-offs. Substituting recycled material for virgin material might at first appear to reduce the carbon footprint of a product—but transportation emissions might outweigh any gains if recycling plants are concentrated in far-off locations. To make decisions such as these, design teams need good data on the environmental footprint, costs, and risks associated with different materials and manufacturing options. And they need effective tools that allow them to analyze different options quickly and accurately.

Such tools are now becoming available. Resource cleansheets, for example, extend the cleansheet cost-modeling methods that mature organizations already use to support the design and procurement process (Exhibit 3). By including greenhouse-gas emissions into their bottom-up models of products and processes, companies can compare different design, manufacturing, and supply-chain options. Or they can benchmark their current approaches against the best available to identify the biggest improvement opportunities.

Because resource cleansheets also include cost data for materials and manufacturing steps, companies can use them to find win–win opportunities that simultaneously reduce costs and associated emissions—or at least to compare the relative value of options that improve the product’s environmental footprint but cost more.

Combining rigorous, granular analysis with creative thinking can unlock solutions that deliver the combination of better environmental performance, lower costs, and greater customer value. One major footwear company, for example, used this approach to redesign the packaging for its entire product range. Optimising the box design, switching to recycled cardboard, and reducing the print area and number of colors helped it cut the carbon footprint of the boxes by almost half. Those changes also delivered a cost reduction of almost 20 %. Choosing to reinvest some of those savings into a switch from oil-based printing inks to a bio-based alternative would generate a further 9 % carbon-footprint reduction (Exhibit 4).

The work also revealed that the organization’s policies had a real impact on packaging-related emissions. The special tooling used to manufacture some packaging types was responsible for a significant fraction of their carbon footprint, and frequent changes to packaging design meant that these tools were often discarded long before the end of their useful life. Simply retaining the same designs for longer generated a big cut in both costs and carbon emissions.

Capabilities and execution

The third piece of the puzzle involves developing organisational structures, resources, and capabilities to support DfS efforts across the whole R&D function (Exhibit 5). One common concern expressed by R&D leaders is that they struggle to execute the potential sustainability improvements that they identify. Engineers typically lack the tools to assess and prioritize different ideas or the knowledge to incorporate them into a product.

To overcome these stumbling blocks, many companies find it useful to establish a focal point for their efforts—either a center of excellence that supports the sustainability program across the function or dedicated sustainability champions working within business units. The center of excellence takes responsibility for the introduction of new tools, such as resource clean sheets, and for acquiring and maintaining the data needed to support effective decision making on sustainability topics. It will also work with leaders in the wider R&D function to build sustainability into the organization’s formal R&D processes.

To help R&D staff use the new tools and processes effectively, companies will likely need to invest in capability building, from introductions to sustainability topics for senior managers to in-depth training on life-cycle analysis and resource clean sheeting for design and engineering personnel.

Finally, organisations need to track the progress of the sustainability efforts and embed them into their R&D performance-management systems. That calls for changes to metrics, targets, and incentive systems, all aligned with the sustainability goals of the wider business.

The transition to a sustainable economy requires products that are designed differently, made differently, and used differently. The teams designing those products will need to be set up differently too. Leading organizations are already beginning that transformation, raising the maturity level of their R&D functions with new skills, processes, tools, and mindsets.

www.mckinsey.com

Newsletter of last Week

A brutal wake-up call for the ECB  https://textile-future.com/archives/84091

The highlights of last week’s NEWS, for your convenience, just click on the feature to read.

Acquisition

BASF Venture Capital and Orbia Ventures Invest in Israeli Biotech Company FortePhest https://textile-future.com/archives/84293

Apparel

Apparel Brands’ Rally Hangs by a Thread https://textile-future.com/archives/84219

Awards

HYPETEX® and adidas Selected as JEC Innovation Awards 2022 Finalists for Kromaskin™ Field Hockey Stick https://textile-future.com/archives/84075

The “Cellulose Fibre Innovation of the Year 2022 Award” goes to DITF Denkendorf https://textile-future.com/archives/84263

Building

Swiss Empa: Insulation with aerogel -Building lean pays off https://textile-future.com/archives/84151

Carrier Billing

Forecast: Carrier billing spend at USD 74 billion by 2024 https://textile-future.com/archives/84207

Companies

Vans launches in-house VR3 accreditation https://textile-future.com/archives/83973

lululemon releases Second Annual Global Wellbeing Report https://textile-future.com/archives/84189

UBS Investor Sentiment Survey: Investors remain optimistic though wary amidst inflation anxiety and looming rate hikes https://textile-future.com/archives/84193

Nestlé strengthens agricultural science expertise with new research institute https://textile-future.com/archives/84204

Cotton

Gallant International launches world’s largest regenerative organic cotton project https://textile-future.com/archives/83960

Data

The McKinsey Week in Charts https://textile-future.com/archives/84027

Inflation in the OECD area hits 30-year high in December 2021, reaching 6.6 % https://textile-future.com/archives/84037

Household income rises slightly in OECD area in Q3 2021 as US decline offsets increases in other countries https://textile-future.com/archives/84052

OECD leading indicators continue to point to moderating growth in several major economies https://textile-future.com/archives/84235

Unemployment in OECD area drops further to 5.4 % in December 2021 https://textile-future.com/archives/84243

EU’s energy import dependency decreased in 2020 https://textile-future.com/archives/84256

The McKinsey Week in Charts https://textile-future.com/archives/84543

Digital Advertising

Forecast: Digital advertising spend at USD 753 billion in 2026 https://textile-future.com/archives/84157

Education

NEW in fall: English-language tourism studies at MCI https://textile-future.com/archives/83989

EU

EU Commission presents new study monitoring data flows in Europe https://textile-future.com/archives/83942

Meeting of the Joint Swiss–EU Committee for Research and Innovation https://textile-future.com/archives/83946

EU Industry Days: Putting EU industrial ecosystems on the path to the green and digital transitions https://textile-future.com/archives/84125

Events

Kelheim Fibres again on the podium at the Cellulose Fibre Innovation of the Year Award https://textile-future.com/archives/83977

Finland

FIVE FROM FINLAND: Winter gear https://textile-future.com/archives/83900

Footwear

Nike sues StockX over NFTs https://textile-future.com/archives/84084

Intellectual Property

Investment

Kimberly-Clark to invest USD 30 million in Columbian plants https://textile-future.com/archives/84003

ITC

19 % of EU enterprises employ ICT specialists https://textile-future.com/archives/84269

Lace

New perspectives through precise lace symmetry https://textile-future.com/archives/84089

Artificial Leather

Synthetic Leather (Artificial Leather) Market worth USD 78.5 billion by 2025 https://textile-future.com/archives/84072

Seminar

Seminar in February: Structuring of needle punched https://textile-future.com/archives/84298

Online Shopping

EU Online shopping ever more popular https://textile-future.com/archives/83932

Success Story

Turkish upholstery leader opts for the Montex®Coat https://textile-future.com/archives/84275

Partnering

Tailorlux announce strategic collaboration with Aware https://textile-future.com/archives/83983

Personalities

Bayer appoints Christine Roth as new Head of Oncology Strategic Business Unit at Pharmaceuticals Division https://textile-future.com/archives/84014

Bayer Consumer Health names Dr. Ricardo Salazar Hernández Chief Medical Officer https://textile-future.com/archives/84019

Pets at Home hires former Morrisons director as new CEO https://textile-future.com/archives/84065

Millichip leaves content role at Sky Studios https://textile-future.com/archives/84199

The European Commission appoints three Directors for its departments for competition, economic and financial affairs and its Secretariat-General https://textile-future.com/archives/84163

Scientists

Five from Finland – Women scientists https://textile-future.com/archives/84317

Sustainability

BASF expands portfolio of climate friendly products introducing the first isocyanate not carrying a CO2 backpack https://textile-future.com/archives/84123

Switzerland

Switzerland and the United Kingdom to cooperate more closely in Science, Research and Innovation https://textile-future.com/archives/84184

Wallpaper

Newbie and Boråstapeter launch new wallpapers for children’s interiors https://textile-future.com/archives/84172

Wearables

Top 5 Wearable Technologies to Watch in 2022 https://textile-future.com/archives/84080

Webinars

10 E-Commerce Tech Trends reshaping Retail in 2022 and beyond https://textile-future.com/archives/83966

OECD Webinar on Climate and Health (February 17, 2022) https://textile-future.com/archives/84283

WTO

WTO DDG Ellard: Multilateralism is the solution to challenges of global commons, unilateralism https://textile-future.com/archives/84215