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The Executive Newsletter of TheOfficialBoard

Transition management

By Dominique Langlois & Frederic Marquette, EIM

26-nov-eim-dream-team1Balancing Excellence and Urgency is a hard, daily challenge for many executives.

In addition to staying top of the daily business life, executives may face unexpected exceptional circumstances such as the long-time absence of a key man, a deep organizational change, the integration of new company, a heavy restructuring because of a lower volume or a sharp cost increase, redefinition of target market or niche, or the launch of a new activity abroad.

When managing all this calls for specialists, that is the everyday business of a few Transition Management Firms.

How does it work? We have built an important pond of highly seasoned executives including all kinds of management roles in all the industries. Those executives can be asked to contribute for a few weeks (experts), a few months (transition) or a few years (recruiting). Most executives can be available for the customers within days.

How are selected the executives? Our executives have been identified because of their solid academic training, of their professional backgrounds and their concrete achievements in the various positions they held. As for any hiring, we only add them in our database after serious reference checkings and in-depth interviews.

How do they work? As soon as they start working for our customers, those managers are permanently assisted by one of our Partners. They all come from top management consulting firms with valuable operational experiences including executive roles. The manager needs to execute fast decisions, to understand key strategic elements, and take the right measure of the environment. This high level assistance is key ingredient for the success of the mission. Even if the challenges are new, the stakes are big and the customers’ expectations are high. A partner will assist the manager with wisdom and seasoned experience.

Dominique Langlois and Frédéric Marquette are Partners at EIM, a leading transition management firm with 15 offices in Europe, Asia and in the US.  EIM has carried out over 6,000 missions in the last 20 years and has over 15,000 high level executives available on demand.

Filed under: Change, The Most Read — @ 9:33 pm on November 26, 2009
 
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Prepare for Climate Change

by Matthew Robinson, Accenture

3-oct-matthew-robinson6Business leaders understand that climate change is a major issue, but many are awaiting clarity about future regulation. Here are six actions to take today to prepare for climate change:

a. Weatherproof your business: A rise in average global temperatures of 1-4°C under current emission paths could result in rising sea levels and greater frequency of freak weather events. Depending on location and industry, this could have severe consequences for a company’s plant, its transport and logistics networks, its supplier base, the welfare and mobility of employees, and critical elements of IT infrastructure. Companies need to understand these stress points and factor them into their long-range business planning.

b. Factor a carbon price into business planning—now: Caps or taxes will mean that CO2 emissions will have a price, something that will drive initiatives that eradicate carbon inefficiencies. Even if a business does not operate in an industry where carbon emissions are directly regulated, many of the firms in its supply chain will, thereby indirectly affecting costs and prices. Companies can audit their carbon footprint and their supply chains to identify carbon “hotspots”. They can explore various options to decarbonize their supply chains such as clean vehicle technologies, optimization of logistics networks, and low-carbon sourcing.

c. Anticipate the trade-related aspects and risks of climate change: Protective measures imposed by economies with high levels of carbon regulation against those with low levels of regulation may mean that companies inadvertently fall foul of border taxes or import restrictions. Companies will need to be highly attuned to this greening of the trade landscape, and act nimbly to manage its attendant risks.

d. Follow the green-brick road: Buildings, transport networks, energy sources, power generation and industry will all need to be upgraded. Advances in information technology will enable the creation of smart cities. Companies should look to harness green incentives provided by governments. They should reorient R&D functions in order to tailor innovations to meet the green growth opportunity. And they should form partnerships to tap into sources of knowledge, expertise and technology.

e. Go and talk to regulators and scientists: Given the complex and multi-faceted nature of climate change, there is a real danger that policy, science and business strategy could each develop in its own vacuum. Businesses should engage with the scientific community, policymakers and regulators to ensure effective, well-designed policies.

f. Harness the greening power of IT: Technological advances such as cloud computing and green data centers are enabling significant reductions in the carbon footprint of information and communication technologies Video conferencing technologies, social networking tools and software can support remote working and reduce the need for travel; smart grids in electricity supply can enable businesses and households to regulate their energy usage and generate power locally that can be sold back to the grid, enabling significant savings.

Matthew Robinson is a Senior Research Fellow at the Accenture Institute for High Performance, where he leads the global trends research program. His current research interests include carbon economy, the re-emergence of a multi-polar world, open business models, scenario planning, and business simulation. He is based in London. Learn more at Accenture.

Filed under: Sustainability, The Most Read — @ 1:16 pm on October 3, 2009
 
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Tax Haven and Tax Heaven

By Hervé Israël, Lovells

Tax lawyers like to think that in any law there are loopholes, and if these loopholes exist, it is because God created them.

22-sept-hisraelIn international taxation, tax havens are a major loophole for sheltering the assets of the wealthy. Tax havens are vilified as the scapegoat of the financial market collapse and the source of an underground economy threatening the world stability.  Most jurisdictions have taken legal steps to fight tax evasion by individuals or companies.

Yet, recently, countries that appear to be tax shelters have joined the European Union.  Ireland, Malta and Luxembourg are among the best locations in Europe for carrying out a business activity in a low tax environment.

Freedom of establishment is embedded in the founding principle of the European Union, making it hard to limit tax shelters. States have to allow their citizens and companies to carry out business in any other EU member state. And furthermore, most of the recent court decisions have ruled in favour of the tax payers, rather than the tax administrations.

The recent financial turmoil is changing the game. Banking secrecy has been challenged, and some states have been forced to sign exchange of information agreements or face sanctions. Most have complied. Whether blessed or excommunicated by the international community, tax shelters in places like Switzerland, the Channel Islands or Lichtenstein have been listed in different categories of white, gray, etc.

In the US, the paranoia is even more forceful, as shown by the number of laws challenging the use of tax shelters. A draft law called “Stop Tax Haven Abuse Act” was introduced before the Senate by President Obama before his election. This act calls for the establishment of a blacklist of offshore secrecy jurisdictions. An alternative proposal by Senator Baucus would establish a compulsory report of offshore accounts.

Is the use of tax shelters still recommended? Our politicians should keep in mind that there will always be people and companies who try to avoid paying high taxes. Ultimately, the simplest solution for a taxpayer may be to transfer their tax residency to a tax haven rather than transferring their wealth there. For the country of origin all tax opportunities would be lost. We are witnessing an increasing number of wealthy people considering this option.

The alternative for the governments of the civilized high tax countries would therefore be to become more tax friendly. One day they might even ask themselves, should we become a tax haven?

Hervé Israël is Partner at Lovells, in Direct Tax, Indirect Tax, Tax, Tax Disputes. Lovells is one of the largest international legal practices with offices in Europe, Asia and the United States.

Filed under: Conflict Resolution, The Most Read — @ 3:50 pm on September 22, 2009
 
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Think and Act as an Owner

By Michael Creamer, Vice President Human Resources, Cott

29-aout-michael

Is it a new concept? Not really. Over the years many companies have wanted their employees to think and act as owners. Some are much more successful than others.

What strategies have been tried? Granting options, Restricted Stocks and Long Term Incentives. In many cases, these strategies seemed to work. But was it because of the ownership feeling or was it due to the general economy and growth of the stock market?

There’s a difference between an owner and an investor. Investors generally have a short- or medium-term time horizon, and they’re thinking strictly in dollar terms. By contrast, owners are in for the long haul, and they have an emotional attachment to the company that goes beyond dollars. Equity type incentive plans can be a good idea, but the only way to get people to think like owners is to elicit real ownership behaviors.

At Cott we started focusing on this by setting objectives for employees that directly related back to business objectives. At the time we did this, it seemed like the right thing to do.

As we implemented and developed scorecards to measure the objectives, we realized we had created a monster. We assumed that everyone could attach a dollar amount that could be measured as their contribution.

We decided that simple is better and began to focus on 4 things all employees can wrap their hands around as owners. The vision we set out was “The 4c’s” : Cash, Capex, Customers, Cost

By focusing on these, it is easier to emphasize thinking and acting like owners. It is easier to talk about all 4 C’s when your anchor is Cash. If you have a lot of cash your focus is investing it wisely. If you don’t have a lot of cash you’ll need to watch what you spend, affecting costs. Having cash allows you to invest in Capex while having low levels of cash makes you think very hard about Capex and how quickly will you get your money back.

How do our people do this in their daily tasks?

  • For our line operators and mechanics, line efficiency is key. The more production without waste means higher levels of efficiency and the very clear goal of being nominated as the plant of the year.
  • Our accountants now provide concrete suggestions on how to better focus expenses without affecting worker productivity.
  • Salespeople now focus on long term solutions, partnering with our retailers to bring quality products and efficiencies for Cott.
  • The procurement team’s everyday focus is looking at ways to efficiently partner with suppliers to creatively reduce costs.

We have had good success with our 4c’s. People talk about them and embrace them. Of course not everyone agrees all the time, but people have a theme to latch onto as they begin to think like owners. It is like the owner of a new car; you wash it, wax it and look for scratches.

Michael Creamer is Head of Human Resources at Cott. Cott is one of the world’s larger beverage companies supplying over 200 retailers in the United States, Canada, the United Kingdom and Mexico through 20 manufacturing facilities.

Filed under: Team Motivation, The Most Read — @ 4:00 am on August 30, 2009
 
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Work with Passion

With Jean-Michel Lorain

Jean-Michel Lorain is the chef of La Côte Saint-Jacques, a prestigious family hotel-restaurant, which won three stars again this year in the famous Michelin guide.

5-juillet-jm-lorin1Part of a chef’s secret mystery is in the ingredients he chooses. What are your favorite ones?

I love mushrooms for their subtle flavours, their tastes of woodland and their wild side. When I go collecting mushrooms with my team, we never know how many ceps, chanterelles, coulemelles, or coprins we will find.

I also appreciate many vegetables from the past which have often been somewhat forgotten, like many varieties of cabbage, winter squash or Jerusalem artichoke. They deserve a special place on our menus.  I buy my vegetables on the market at Joigny, Burgundy near our restaurant or from two truck farmers with whom we have worked for dozens of years.

What is your favorite recipe?

My favourite recipe is the one I will create tomorrow. I enjoy always striving for a challenge: creating a new dish, building a new menu, and always trying to do better. My latest creation is a piece of beef cooked half fried, half Tartare.

On our menu, we always try to be as descriptive as possible and call it “Hereford Beef filet in chaud-froid (hot-cold) with creamed corn, Chanterelle, and green beans with truffle”.

What advice do you have for somebody willing to become a chef?

Before you start, define your goals, the guest-house, the region, the style of your cuisine, but also the life you want… My personal choice was to take over the family business founded by my grandmother in 1945. I could have chosen a very different style.

Starting with your mission is essential because you need to be passionate to stay at the top. It requires a lot of daily hard work and a strong discipline to create a unique experience for each of your customers.

Who has helped you the most in becoming one of the most-renowned chefs?

First, my parents gave me a passion for this profession and discipline. I had to make a name for myself which has not been easy because the environment is so selective and because each chef has a strong personality.

Two great chefs, Jean and Pierre Troisgros, have been my professors and have shared their talents with me.

Today, my 75 employee team helps me bring daily pleasure to our clients. 15 of them been working with me for the last 10 to 20 years. I owe a lot to all of them.

Jean-Michel Lorain is the Chefs’ European Coordinator at Relais & Châteaux, a family of 480 prestigious hotels and restaurants in 56 countries. He is also the owner of the Relais & Châteaux La Côte Saint-Jacques in Burgundy, France.

Filed under: Chef's Words, The Most Read — @ 11:55 pm on July 7, 2009
 
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Dawn Raids in Europe

By Peter Citron, Lovells

One of the key tools that the European Commission uses in its fight against cartels and other anticompetitive behaviour is a dawn raid, an unannounced on-the-spot investigation. There are some hard facts emerging from recent dawn raid practices which businesses should be aware of.

8-juin-dawnraid2

Wider use of dawn raids

In 2008, the Commission opened a sector inquiry into competition in the pharmaceuticals sector and dawn raided a number of pharmaceutical companies. This is the first time that the Commission has launched a sector inquiry by means of a dawn raid. The case illustrates the Commission’s determination to use its dawn raid powers increasingly widely.

IT Searches

Inspectors have the right to examine and copy documents stored on a computer system. The inspectors bring IT experts who can use forensic search techniques and can retrieve deleted documents. The documents do not have to be on the computer system on the premises. The Commission takes the line that they are entitled to review and copy all documents which are accessible from the premises, and this can include documents which are stored on a server outside the EU.

Privilege

The recent Akzo judgment has confirmed that communications with in-house lawyers can be reviewed and copied by inspectors in an EC investigation. Only communications with independent, external, European Economic Area-qualified lawyers are protected by legal professional privilege. So, for example, advice from a US qualified lawyer, which may be privileged under US rules, can be inspected and copied by Commission officials for use in their investigation.

Sealing

If a dawn raid lasts more than one day, it is standard practice for the Commission inspectors to seal rooms and filing cabinets. It is absolutely essential for companies to ensure that these seals are not broken or tampered with. In 2008, the Commission imposed a fine of Euro 38 million on E.ON Energie AG for breaking a seal fixed by the Commission during a dawn raid.

Obstruction

The Commission has a clear policy of punishing companies severely for obstructing investigations. In its first application of its new 2006 fining guidelines, the Commission imposed an increase of 30% to Sony’s fine for obstruction of the dawn raid. This was on the grounds that a Sony employee had refused to answer oral questions asked by the Commission’s inspectors and another employee was found to have shredded documents during the inspection.

Waiting for the company legal advisors

The presence of a legal advisor is not a legal condition for the validity of the inspection, and the inspection must not be unduly delayed or impeded by awaiting the arrival of legal advisors. Inspectors may be willing to wait a maximum of 15 minutes for legal advisors to arrive.

Home searches

The Commission has the power to raid private homes in addition to business premises. In May 2007 inspectors raided the home of a director in the marine hose cartel investigation, and another inspection at private premises took place in 2008.

Further guidance?

We have developed an e-learning course on how to deal with dawn raids for you and your teams in Europe. This is an interactive screen-based course which employs a series of role plays to deliver training to a number of staff within any organisation.

Peter Citron is Head of Practice Development and Knowhow for the Competition and EU law practice area of Lovells. Lovells is one of the largest international business legal practices with offices in Europe, Asia and the United States.

Filed under: Conflict Resolution, The Most Read — @ 11:38 pm on June 8, 2009
 
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