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How to Lead
In the second feature of our new weekly series — for readers who are interested in what makes good leadership — is Rupert Soames, the Serco CEO, on how to manage a company in crisis.
Andrew Hill's challenge
The FT's management editor sets a weekly test of your business, strategy and management skills.
No matter that Toys R Us filed for bankruptcy protection in the US in September, toys ARE still us — and some toy stores continue to thrive. I picked what was once my local Manhattan toy store, West Side Kids, in my column this week as an example of how a combination of community ties, adaptability and good fortune helped it survive, while bigger names were falling around it.
That said, as the owner told me, "we can't be complacent". Amazon remains a potent force in toy retail, for example. So my challenge this week is to write a short strategy — three points, if that — for independent toy shops to survive, and thrive, for the next 10 years. Send your thoughts to firstname.lastname@example.org, as always.
Last week, I asked for a three-point charter that could govern the relationship between Kind Snacks and its new investor, Mars. Sandra Pickering, who describes herself as "a former Mars associate", points to the confectionery group's five existing principles — Mutuality, Responsibility, Quality, Efficiency, Freedom — as a good starting point. For example, she says, "Freedom is Mars’s way of expressing a long-term outlook not controlled by stock market short-term needs. I’d guess that Daniel Lubetzky, the founder of Kind, will appreciate the importance of that".
In further reading this week, Eric Berger of Ars Technica describes the consequences of the catastrophic fire that killed three astronauts in Apollo 1 on the launch pad in 1967. It's a long read, but his compelling argument is that by denting the Nasa team's feeling of invincibility, and triggering urgent changes to the whole mission to the moon, the tragedy actually guaranteed later success. Most notably, Austrian refugee George Low, who took over as Apollo program office manager, "changed people, thinking, and culture in a short period of time, and... rescued a spacecraft that was seriously flawed". The management trick, of course, is to find a way of achieving such motivation before disaster strikes.
Every week a business school professor or academic recommends useful FT articles.
UK to hold more offshore wind and green energy auctions in 2019 The article illustrates the divergent paths in energy infrastructure. On one hand, is the investment and construction of nuclear power installations, which nearly always suffer from large cost and time overruns. Despite hundreds of power stations built around the world, lessons are not learnt.
The alternative is renewable technologies, which due to their modular design can be scaled quickly, so construction times and costs are less, with immediate returns on investment.
Whilst renewables are still subsidised, the cost of producing these is falling. The cost of renewables is now lower than conventional sources. This is placing more pressure on big energy projects such as Hinckley Point Nuclear Power Station.
French-backed Finnish nuclear plant delayed again The long running saga of the Olkiluoto-3 plant is a classic example of the inherent risks within megaprojects. Currently, Olkiluoto-3 is nearly 10 years late and costs are running at three times the original €3.2bn budget.
Nuclear power is subject to what economists call “negative learning curves,” which designate the situation that the more we learn about nuclear power, the more costly it gets to build nuclear power plants (mainly due to high and increasing safety standards over the past many decades). This is a case study of how not to run a megaproject.
Jonathan Moules' business school news
Bitcoin is not just a hot topic of conversation these days, given the digital currency’s meteoric rise in value this week. It can also get you into business school. Bulgaria’s Varna University of Management is offering a €1,000 bitcoin scholarship for applicants to its computer sciences degree.
Business education is in the midst of trying to evolve to a changing corporate landscape, brought on by digitisation. In an age where the cost of doing things is dramatically reduced by putting these online, the human skills of communication, critical thinking and the ability to work in teams only increase. It also creates demand for new technical competencies such as data analysis.How you pay for this learning will also be up for review. However, for most schools, moving to bitcoin might be a step too far.
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Edited by Wai Kwen Chan — firstname.lastname@example.org