Kris Safarova  00:47

Welcome to the strategy skills podcast. I’m your host, Kris Safarova, and our podcast sponsor today is strategy training.com and we have some gifts for you. You can get five reasons why people can know somebody in the meeting at firms consulting.com forward slash on their own, you can access episode one of how to build a consulting practice at firms consulting.com forward slash build. You can also get the overall approach used in well managed strategy studies at firms consulting.com forward slash overall approach and McKinsey and BCG winning resume example, which is a actual resume that led to offers from both of those firms. And you can get it at firms, consulting.com forward slash resume PDF. Take a look and see what you can improve on your resume. And that template works for every level of seniority. And today we have with us a very, very special guest. Adam job is a senior director at the BCG Institute. BCG think Adam job is a senior director at the BCG Institute, and he leads research on strategy. Adam, welcome, yeah.

Adam Job  01:56

Thank you. Thank you, Kris for having me. Great to be here. I would

Kris Safarova  01:59

love to start with your career, I think that it is very helpful for our listeners to get to know you a little bit more, and then we will move into talking about your work. Could you maybe take us back to how it all started and what journey led you to the work you’re doing today?

Adam Job  02:16

Yeah, sure. Happy to so my background is in is in finance. That’s what I studied at university, and I really enjoyed, let’s say, the problem solving aspect of finance, and that is what originally sparked my interest in consulting. So after university, I I came to BCG, and I entered the, you know, normal generalist track, you might say. And for about five or six years, I worked, given my background in the, you know, in finance and university. I worked a lot with banks in consulting. I did a lot of strategy projects, transformation projects. And eventually I discovered, let’s say, the BCG Institute, which is BCGs Think Tank. And I would say even within BCG, it’s it’s not that well known, especially among the more junior people, as I was back then, because it is, of course, a more outward facing, client facing kind of setup. But I saw that this was an opportunity to kind of go deeper on on some of the you know, big questions of the day. And I especially realized that there was actually a dedicated team in that think tank to strategy, which is kind of unique, I think, for a think tank, because think tanks often, you know, maybe they’re focused on geopolitics or macroeconomics or the climate or technology, and the BCG Institute also does all of these things, but it also has a dedicated Strategy Unit, which I found very enticing. And I learned that it is because of BCGs rich history in strategy thinking from our founder, Bruce Anderson, the growth share matrix, which probably everybody knows, the experience curve, and kind of trying to, you know, step into those very big footsteps and keep up the forward thinking about strategy. So that’s how I came to the BCG Institute. And I originally I came here as what is called an ambassador. So this one year rotation that is offered for for consultants at BCG, and I so much enjoyed my time here that I, you know, asked for the possibility to make this a permanent position, which, luckily, was some back and forth was possible. And so now I’ve been at. BCG Institute for over four years, and now I’m leading the team in its research on strategy. So I guess that’s that’s how I got here. That is an

Kris Safarova  05:09

incredible career so far. When you first joined BCG, what surprised you? What did you did not expect?

Adam Job  05:17

Well, I mean, actually a lot surprised me, because I guess even though I studied finance, I was not, you know, as much of an exotic joiner as someone who might have studied biology or maths. I still did not have, you know, I did not have experience. I had not done an internship in consulting, and so it was kind of, it felt very fresh to me, I guess I didn’t have two specific expectations coming in. I think what struck me very early on was the that is all about communication. I guess it’s all about and that still is very true for my work today, it’s all about communicating very clearly and very simply, because so much of the work is aimed at at the executive level, where the attention span is necessarily very, you know, brief. There’s lots of topics to discuss, lots of problems to solve, and so the ability to communicate very clearly and simply, I thought it would be more about analysis and about lots of complexity, but it’s actually a lot about simplification. And one thing that a partner that I worked with early on always said to me is the hardest you know, slide to create is a slide that just has four text bullet points. You just have to make a very brief argument in four times two lines of text, and that can be way harder than, you know, having a very nice graphic or or some kind of chart that shows your analysis results. So that was something that surprised me.

Kris Safarova  07:18

Adam, and when you realized how important communication was, do you remember what helped you to get up to standard?

Adam Job  07:26

I think it’s just honestly, a lot of practice and learning from others. I think especially in my early days, the the, you know, life in the team room, as you might say, and observing what the more experienced consultants did, and observing the kind of feedback we would get from the partners, I think that’s really what helped me a lot in those early days as a consultant. It’s a lot of learning on the job, I would say, at least it was for me. I would say, in my current role, which is even more about communication, because the concepts are even more complex. The research is steeper. And still, we may have more than, you know, four bullets on a page, but still, for these kinds of articles, whether we publish them on bcg.com or in Harvard Business Review or MIT Sloan Management Review, there’s very constrained space. So I think reading a lot and also trying to read a lot of non business literature, you know, whether that’s, let’s say, personal interest essays in the Atlantic, or whether that’s, you know, even completely different literature, but really reading a lot and trying to understand, how are they getting the point across? You know, what are they doing? That makes me easily follow them.

Kris Safarova  09:01

I think that helps a lot. That is an amazing advice. Thank you. So you made such a big shift from client facing role. Was it difficult to adjust?

Adam Job  09:12

Oh yes. I mean, I think the Well, as I said, we recruit internally, and I joined internally, but that, of course, means that the skill set is not necessarily one you train for, right? I mean, I came from a client facing role, as you say, and so do the members of my team, but we are not researchers. I mean, most of us have a master’s degree. I have a PhD. Some others do too, but it’s a university research and think tank research is not 100% the same thing. And of course, even if you have strong analytical skills, which most people do, there’s the writing aspect of it, right? So that’s something that you kind of have to teach yourself. Of course, we also have an editorial team and so on, but, but there is a different skill set. And, yeah, I think it took some time to get up to speed. And as I said, it’s not, it’s not a natural progression, in the sense that, you know, a few years with BCG, or even many years with BCG would, would train you for, for a writing, researching kind of job, necessarily.

Kris Safarova  10:32

And after one year of being an ambassador, there you decided to stay. Was it a difficult decision?

Adam Job  10:38

Well, I, I really liked, I really liked my time as an ambassador. And so for me, it was something that I, you know, towards the end of the ambassadorship, when there’s the prospect of going back, I said, you know, I, for me personally, I think it would be nice to stay. I, enjoyed the ability to think more deeply about the topics and in a more, let’s say, forward looking manner that was kind of independent of day to day client demands, while at the same time doing things that are relevant to clients. And I still, I mean, I’m still in a client facing role, in the sense that I, you know, talk to clients about our work, and we do workshops and keynote presentations and see that the table events and all these things, but it’s less, of course, focused on very specific client problems and managing those day to day. So I really enjoyed the mix of, like, the deep thinking, but still having the client relevance. Because on the other end of the spectrum, as I said, I also did a PhD, and in that, I really observe that at least, and maybe it was just my specific research, but let’s say there was not a lot of impact in the real world that I was able to observe from that, and that was something that I that I didn’t like so much, that it was kind of, let’s say, hidden in the ivory tower, as we might say. That’s, of course not true for for all types of research, but it was true for mine, and so I, I thought this is a better way to have it actually have an impact.

Kris Safarova  12:28

What do you think it takes, generally to succeed within a major consulting firm like BCG?

Adam Job  12:34

Well, I think there’s very foundational things like, you know, I think you need to have a certain level of analytical skill set and a certain ability, let’s say, starting out, to communicate. But honestly, I think more than that, it just takes a lot of willingness and ability to learn quickly, on the fly in a somewhat self guided manner. There is, you know, high demands from clients, of course, and there is a lot of support, formally and informally available. But you have to, let’s say you have to be driven and motivated to take advantage of it and try to learn as much as you can. I would say the big thing that Consulting has given me is, you know, an ability to actually learn quickly. I think you know, that also was what helped coming into this new type of role, to to adjust to it quickly. And it helps many of my team, as they come in to adjust to it quickly, because they have the skills to learn it fast, and the motivation to to learn it fast. So I think that is that is above everything else, the number one requirement. And then, of course, there is a lot of, let’s say, Team compatibility, which means, you know, the willingness to work with others, which you know, not all people prefer. Some people prefer to be, you know, on their own, and to, let’s say, think the thought through before you share it with anyone. But that’s not how how consulting works. So I think that’s another important requirement.

Kris Safarova  14:38

So let’s talk about your important work that you guys are doing. And of course, it is an obvious question, but good foundational question, why is growth important?

Adam Job  14:47

Yeah, so, I mean, as you referenced, one of the major topics that we looked at, especially in the last year, is growth, which, of course, they perennial. Strategy topic, but it’s one that is, let’s say, newly relevant. So me, growth is, of course, important, mainly because, empirically, it’s the big driver of value creation. I think if you look at the 10 year time horizon of total shareholder returns. TSR, then about and you decompose it into its constituents. You know how much is driven by growth versus efficiency? So cost reductions or investor expectations, then only the long term, 10 years, 75% comes down to growth, at least this was the case in the last, you know, decades. So you know, it’s important to to value creation. But also, I think on a on a deeper level, growth is important to, let’s say, the the morale at the company and the culture. I think there is, of course, a lot of you know, arguments that I hear in my personal life and and people that I’ve spoken to that and maybe justifiably so, that say, you know, it doesn’t make sense to always chase growth. It’s not sustainable. Literally sustainable. Which, which I think is also, you know, definitely a good argument. But at the at the individual company level, if you don’t grow, you have, you’ll have struggle attracting people to your company because you can’t offer them, you know, easy options to be promoted. You’ll also struggle to be innovative, because, of course, the you know, the willingness to grow and the ability to grow is what will inspire you to go beyond what you’re doing now and come up with new ideas. So I think value creation, attracting talent, innovation, all these things are what growth is essential for.

Kris Safarova  17:12

Of course, it is critically important. What do you think right now makes it much harder than ever to grow for companies, specifically in the United States, and then we can also look at global situation. I think, yeah,

Adam Job  17:27

it’s not only hard in the United States. I think, Well, I would say this. I think companies have enjoyed or, you know, really, depending on where you are in the world, but in many parts of the Western world, they have enjoyed real tailwinds to growth since even World War Two. I mean, there was, of course, increasing globalization, which gave access to new markets, which gave access to cheaper means of production. There was, of course, economic uplifts and demographic, you know, changes in many parts of the world, the rise of the middle class in China, of course, India, that gave rise to billions, literally billions, of new consumers that you could sell your products to in the last let’s say, until 2021, or so, there was also an unprecedented era of cheap capital for probably 10 years or so, where you had near 0% interest rates. Still in the brand scheme of things, capital is relatively cheap, and of course, interest rates are, or have been falling for, you know, the past six, 912, months. So all of those things really benefited companies in their quest for growth. In the last few years, that environment has been changing drastically, almost reversing the globalization premium is disappearing, if not being reversed in some areas, right? There’s tariffs, of course, that that are on everyone’s mind, but also, more broadly, we just had the Greenland situation, for example. There’s a lot of geopolitical instability. There’s, unfortunately, even worse, going on in several parts of the world. So there is no longer this wave of we’re coming closer together, and access to new markets is increasing. There is also alongside that, the a reduction in, let’s say, the primacy of economic growth. I would call it there was, again, in many parts of the world, real emphasis, politically placed on. Growing which, of course, goes hand in hand with a lot of support for business activities, whether that’s international trade or whether that’s subsidies or reducing bureaucratic red tape. And now we are seeing the US being one example. But it’s definitely not the only place in the world where this is the case, that there is a stronger emphasis on national security, a stronger emphasis, maybe, on party politics, which in some cases, means that business interests and the ability to easily grow are being reduced. Then there’s, of course, demographic changes in many parts of the world, especially I’m from Germany. We are a prime example, Japan, China, where we are not growing, the consumer base is aging significantly, so over the medium term, this will not lead to rising consumption. And of course, even then there’s sustainability concerns. I mean, they are not top of mind for many people now in the business community, but still, I think in the consumer space, there is a lot of critical reflection on how much you should consume and what you should consume, and then maybe as a very final thing, I guess the big word, because you were talking about the US, the big word in the US is, of course, affordability, so cost of living, crisis and so on. So this is another thing that leads to scrutiny or struggle with consumption. So all these factors together mean that there, we can certainly say that there’s no tailwinds to growth, and maybe even headwinds in some places and in some some industries,

Kris Safarova  21:49

admin, how do you think the AI impacts possibilities for growth?

Adam Job  21:53

Well, I think AI, well, it should Well, I think there was a very famous graph in the Financial Times last year that essentially said, you know, if you ask all the experts how AI will affect productivity, you will get everything from 10x to nothing. So I’m I, I’m not sure I’m best positioned to say where in that spectrum we will fall. I will say, AI should be positioned to help us be more innovative. We’ve you know, I think in many, many different ways. One of them, of course, that is maybe very visible. Are these things in the medical space and in the biological space with alpha fold and so on. You know, these are ways in which AI can supercharge innovation. Let’s say, sounds a bit like consulting speak. But you know, that’s that’s one area, I think, beyond that, and this is something that we’ve written about, is on a much more, you know, smaller scale within companies. AI can help innovation efforts, right? It can help us, every individual employee. It can help us come up with ideas, right? It can help us, say, be a sparring partner. It can help us, especially, to communicate our ideas to others, right? That is, I think, probably the thing where AI is still excels most Gen AI, right? It’s in helping us communicate ideas. And with many of the tools that are now available in the like low code vibe coding space, and there are many companies out there, Chevron, for example, that have trained non technical staff in the use of these tools and allowed them to build their own solutions with with Gen AI that help them come up with, come up with new, let’s say whether it’s internally used or externally available products. So in all those senses, AI can definitely help us innovate, and should be able to help us grow. I that’s, that’s what I would say as a pure strategy angle. I would say AI alone is definitely not enough to do that. I mean, if you, if you make an analogy to evolution, then AI would be what helps us get a lot of new ideas, a lot of variation, let’s say. But of course, variation is not enough. You also need to select what works, and you need to amplify that across the across the species or the population. So there’s also a need for, you know, looking at what solutions are actually. Good new testing mechanisms. If everybody in the firm comes up with new ideas, how do you decide which ones are actually good? How do you ramp the best ones up to the scale of the whole firm, at the scale of a new offering? So I guess my two things are, AI should help in innovation, but it won’t do so by itself. And then I think there is a much bigger question, which I’m not positioned to answer, of which is more at the macro economic level, which is, if we are pouring all of our efforts and investment resources into AI, as is currently the case, at least a lot is being invested into it. Are we neglecting or overlooking some other is there an opportunity cost to that? So I think I’m not positioned to answer that part

Kris Safarova  25:53

that is a very, very important point, and there’s definitely a huge opportunity cost. What if you look also on the other side. Do you feel that you observe, based on your research, that executives experience so much uncertainty because of AI, that they are struggling to grow and struggling to figure out what is the right path to follow for the company?

Adam Job  26:15

Yeah, I think it’s a good, good question. I would say, certainly we are, well, we should never say we are in times of unprecedented uncertainty. I mean, I was not around in, you know, the Cuban Missile Crisis. I don’t know. I’m sure times has been uncertain before, but the amount of volatility, especially political, geopolitical volatility, we have now, is quite high. And as you say, on the other hand, there is AI, which is the technology that currently is has so much potential that it’s kind of unclear, even in the next five years, what it will do and what the world what impact it might have or might not have on the world. So I think this is actually one of the major questions that that executives struggle with now, I think, you know, if I had to break it down, I would say two perspectives on this. One is kind of the, how do you deal with this? What is the strategic response to uncertainty? That’s one perspective. So we’ve thought about that a lot, especially inspired about one year ago now by the incoming administration in the US and the tariffs and the uncertainty associated with that in the, let’s say, February, March timeframe, or a year ago. And we thought a lot about how this uncertainty is different from other kinds of uncertainty. It’s the politically driven one, and I think some of the ways it’s different are and what’s making it hard for executives is it’s a uncertainty that is reactive in a way. Let’s say you have, you know, if there is a natural disaster happening, or, you know something, some other source of risk and uncertainty, that’s something that you cannot really influence, but also, your reaction to the tsunami will not make the tsunami worse, right? But your reaction to a political risk could make it worse. It could make it worse, because then there is, let’s say, additional threats or escalations from political leaders. But I would say that’s, that’s maybe at most half the risk, because just as big a risk is that there is public backlash if you react or if you don’t react, right? So I think this reactiveness of political risk is one big thing the other, on the other hand, the idea that inherent in that you can influence it to some extent right companies have lobbied for political favor or opportunities for many decades. So that’s another thing that is different from other types of uncertainty. And and so I think you really need to understand what specific type of risk you’re facing on the let’s say, political dimension in order to make a strategic decision in order. And we kind of broke it down into four kinds of responses. Is it a place where you should be making a bet? Is it a which should be the case if you think that you have a if you are uniquely positioned to influence the landscape in some way, that you have some information that others don’t have, if you have access that others don’t have, should you be. Be in defense mode, which is, should you do you sound somehow have to react to shield your core, because it’s really an existential threat that you’re facing. And this should only also be done when you you assume that the or you have good reason to believe that this threat is there to stay for a longer term, right? It’s not very temporary. And the third strategic response, which, again, I think ties to that, is when it’s a very short term thing, or when you can expect the uncertainty to abate, then there should be like a wait and see strategy, right? You disengage, you try not to make any commitments, but also try to, let’s say, activate contingency plans for if this happens, then this is how I will react, right? It’s not complete disengagement. It’s not going into hibernation, but it’s disengaging temporarily, or if the uncertainty is there to stay for the longer term, then I think there is really a an imperative to build almost a strategic portfolio of options right, rather than going into one specific thing. The second part, I would say, and maybe also to bring it back to the AI point there is, you know, in the uncertain times that we’re in now and in volatile times, I think most companies, and we’ve done research on this, feel like they should hold back on making big bets. Let’s say, you know, big bets, which could be pivoting to a new industry, or making a big acquisition, or something like that. And there’s a few very common, let’s say, myths, we would call them, that are holding companies back in that regard, which are things like, well, you should only make such a bet in a time of uncertainty, if you have a cushion to fall back on, or if you are coming into it with strong momentum, or if you have a lot of experience in risk taking. So we actually looked at we actually looked at this empirically over the last 20 years. We looked at 10 high uncertainty events in different industries. We looked at the Affordable Care Act rollout, how that affected healthcare. We looked at covid and how that affected hospitality. And we specifically didn’t look only at Kris like a clear crisis, which would mean go into defense mode, right? But we looked at times of uncertainty. This could be good for us or it could be bad, we’re not sure. And we looked at companies that made a big bet, for example, a big acquisition, versus companies that pulled back. And we found, as I said, of course, the big lion’s share of companies, they pull back in these times of uncertainty and and it is in line with the myths I said, Right it’s companies that come into the uncertain times with low momentum. They’re more likely to pull back if they don’t have a cushion to fall back on. If they’re not, for example, diversified firms that that are naturally a bit more resilient, you pull back. If you are not an experienced risk taker, if you don’t regularly make big bets, you pull back. But interestingly, we found that all these types of companies that I just mentioned, if they do decide to make a bet, they actually have a great performance. So the kind of conclusion that we got to is there should be almost more, let’s say agency given to companies and leaders to make big bets in uncertain times, because it seems that there is a clear pattern that they make fewer big bets than they should. So I think you know, does that mean that specifically in the age of AI, as you know, one of the big, uncertain times you should make a big bet? I mean that, of course, depends on the specific case. And it also, I’m not saying that the bet necessarily has to do with AI, right, but I think it’s, it’s a really interesting finding to think about, that often we are being overly fearful. Let’s say in these times,

Kris Safarova  34:39

what do you think somebody listening to us right now can do where they currently feel fearful and not sure what to do, so they’re not making big bets, what some of the questions they can ask or some of the ways they can change the mindset and consider a big bet? Yeah.

Adam Job  34:56

I mean, I think at the at the company level. Or at the, you know, if you’re the leader of a firm or a team, I think there’s three things to think about. One is kind of to have, you know, a risk taking mindset. There’s a great book that I read recently from the Harvard professor ranjay Gulati, where he talks about the, you know, the culture of fear that is often in companies, which is kind of the outcome of, you know, you kind of have to be risk averse if you want to keep your job, let’s say, right it, you know, it may, there might be an outsized benefit from taking a risk versus just keeping up the status quo for like, individual careers. So I think, like having a more risk, take taking mindset. And I think this is something that leaders can actively signal, right? They can go ahead and they can say, Okay, I’m making this I’m taking this step. I’m acting as an example. There is, of course, also more, let’s say mechanical things. I mean, stock based compensation is, for example, something we found in our in our research that the successful risk takers in the sample of the study that I just discussed were much more likely to pay significant stock based compensation to incentivize their people to take risks. Right? That’s a very mechanical way to do it, but there are also many, let’s say cultural nudges that you can give where you could set up specific programs to get people to take a risk, right? I mean, some companies are famous for their very entrepreneurial spirit. Amazon is, of course, famous with the day one culture. But also, for example, at Tata, they have the dare to try award at IKEA. This was something we read about as we did the research. The CEO apparently gives out cards to go bananas, which we found very fun, but it’s kind of a a card that he gives out to the leadership team in advance, co signed by him to say, if you take a risk and you show me this card, then I’ve already given you permission in advance, right? So I think these are some, let’s say, cultural things. I would say a second thing, which is maybe more mechanical and actionable, is preparedness, right? I mean the maintaining the ability to act quickly when the opportunity presents itself. So that means, for example, if it’s acquisition related, to have a an overview of potential targets ready. What decisions do I make under which situations kind of, you know, it’s a type of scenario planning, developing, playbooks and so on. And then I think maybe the, the biggest, and to me, most interesting part of being fostering this risk taking mindset is that, as I said, risk taking is not the natural response to uncertainty. The natural response is to is to pull back. And so there is a lot, a lot of progress can be made by resisting this bird behavior. When we wrote this article, we were, of course, inspired by the example of Warren Buffett, who famously said, be fearful when others are greedy, but greedy when others are fearful. And that serves him very well. And we’ve also written an article in the past about Warren Buffett’s, let’s say a longtime partner, the late Charlie Munger, who, of course, is very famous for his, let’s say little book of psychological and cognitive biases that you have to go through when you make it an investment decision. But one of his big principles was, resist bird behavior, right? You have to be able to think independently from the crowd. And I think there, that is easy to say, but there are some actionable things that companies can do to to, let’s say, make this a habit, right? There’s, there are, for example, setting up red teams, which are essentially charged with negating or discussing the consensus agreement. We found some hedge funds or venture capital firms that set up anti portfolios when they decide not to make an investment. They. They they track the non investments, and they see, okay, you know, after a year, five years, 10 years, here’s where we went wrong, and why did we make that decision, and how can we improve our decision making process? And then there’s a lot to do in actually varying decision making processes themselves, right? They are usually relatively fixed, but we can think about varying who makes the decision. What heuristics or hurdle rates do we use to qualify whether a decision is good or bad or how? How far away from where we usually look? Do we look this time exactly again in acquisition targets? Should we maybe start our search in a different industry and see if it leads us somewhere else? So that’s always to make sure that you’re not stuck in this mental trap or hurt behavior that companies can think about.

Kris Safarova  40:59

Thank you, Adam, and how companies can think about value creation without growth.

Adam Job  41:06

Yeah, so this is, this is maybe, I guess, a question that is

Adam Job  41:14

kind of obvious, if not, maybe on the forefront of most, most companies, which is, if it’s so hard to grow, then maybe, could we create value without growing? And so we wanted to look into this because we found it an intriguing question, especially because, as I said, with all the headwinds to growth that companies are experiencing, there is the the risk of destroying value if you try to grow at all costs. So for example, and I’ll get back to this, but we found that when we looked at 1000s of companies that had, you know, successfully reignited growth after long periods of stagnation, almost none of them did it with unrelated acquisitions. So by looking far away from their current business and making big acquisitions, almost none of those led to me. They might have led to short term growth, but not long term value or creative growth. So that just indicates that sometimes you’re just in a position where trying to grow at all costs might end up destroying value. So we looked at, you know, the alternative, and we looked at a sample of companies that over a 20 year period had not grown in real terms, so so more than inflation adjusted, but that at the same time, we’re able to create more value than than their industry peers on average. And then we evaluated how they do it. And if you think about it again, I have a finance background, although this is probably also obvious. If you don’t have a finance background, if you want to generate returns without growing it’s kind of there’s a limited number of ways to do it, right? I mean, you could essentially have the two obvious paths. Or you should could be more profitable on the revenues you’re already generating. So that means increasing margins or reducing costs. Or you could reduce the asset base on which you are, reducing those smart those those revenues. Again, it’s another way of saying increasing margins, but, but I still point it out because it’s, it’s a different lever, right, whether you try to increase, let’s say, top line margins versus reducing the asset base. And so in those three, uh, ways we found strategies that these companies that we identified, and was about 50 or 60 companies that successfully did this over a 20 year timeframe, some of them went for an what we call an asset light play, which is, you know, they were, they already had strong customer relationships. But instead of trying to sell these existing customers more of their existing product, they went to a more asset light offering. And often, because this was in the 2000 to 2020 or 2005 to 25, timeframe, this involves moving to a software as a service kind of offering. And there’s lots of players, especially in the industrial goods space, that went to offering additional asset, light based services in addition or as a replace. And for their classic products. And so that kind of was one way to do it. Another way to do it was to move ups, to move to a higher quality slash luxury offering. So again, not about selling more, but about increasing prices by upping the quality of your offering. And the third one was kind of a vertical integration based strategy where you would just try to capture more of the total profit pool of the value chain you’re in by acquiring people upstream or downstream in the value chain. And then it’s not really bigger profit, because it’s all internal. So it’s not really bigger revenue, because it’s all happening internally, but then you can maybe extract more profits from it. And so those were kind of three of the four strategies. And the fourth, which is kind of the most interesting one, because it’s less obvious, is, well, you what are some other ways you could increase your returns. If you’re not, as I said, increasing revenues, you’re not increasing margins, you’re not reducing the asset base. The only final way we found was you can reduce the volatility of your returns. And this is kind of the final group of companies we found that kind of almost created a bond like stock, where they had such constant dividend payment. Sometimes, some of these companies have had them for, you know, many decades that this was rewarded by investors, especially in more volatile times with with greater returns. I think, I guess the The final thing I’ll say about this is it was interesting to us that this value creation with our growth is possible. But again, it was a small number of companies, maybe, I think, 5% or so of the total sample of non growing companies actually managed it, and it’s also not a long term strategy. I mean, they did it for 20 years, but it’s at least not a for every strategy, because, of course, you cannot, you cannot increase margins to more than 100% and that’s already impossible. You cannot reduce your volatility of your dividends to less than 0% so so in the end, you will, at some point, have to find new growth opportunities again. And of course, as I also said in the beginning, these companies, despite perhaps not struggling on returns. Even though they had a lack of growth, they did often face challenges on attracting talent, on keeping up innovation and so on which, which will just always be inherently linked to a lack of growth.

Kris Safarova  47:57

Adam, and is there anything else that you wish I asked you and they didn’t, that you want to share about your research and important work you guys are doing.

Adam Job  48:06

Well, I think the final thing you could ask me is, how this fits into the rest, I guess, of the of the portfolio, because we just picked out, let’s say, one specific topic. Let’s answer this question. Yeah. I mean, I I think, as I said at the beginning, the the BCG Institute has my team, which is strategy research, which, again, I think, is kind of unique. And we, as I said, are kind of in these footsteps of Bruce Henderson. But of course, the thing I shared now is much more specific than something like the growth share matrix, which is such a generally applicable framework. So I kind of think of our work as falling into three buckets, the first, first one being kind of these textbook strategy topics, which are things like, what’s the role of the corporate center versus the business units? How should the strategy process be structured? And topics, as I just shared, like growth, like capital allocation, that that are, you know, perennial challenges that are constantly having to evolve, because strategy itself is a living discipline, right? And so that’s an example of that, as I just shared. The second topic we do a lot of work on, is what I would call the strategic perspective on mega trends. And it’s something we also touched on, if there is a mega trend, like AI, like political uncertainty, like climate change, we try to find meaning in it for the CEO or the. Strategy Officer, how? How should you respond to that? What is, what is the implication of it for competitive advantage? Let’s say. And then the third bucket is going back to Bruce Henderson, the big strategy frameworks often inspired even by, by insights from outside the realm of business. You know, the oldest I mentioned evolution before. I’m not a biologist, but Martin Reeves, my former boss, who you’ve had on this show, he’s a biologist. So he sought a lot of inspiration in evolution, which is, of course, the oldest competitive arena, and so it is a lot of trying to come up with general strategy frameworks, which may be one example, are the four strategies that I shared of how to respond to political risk, right? That’s kind of a framework perspective.

Kris Safarova  50:53

Adam, thank you so much. I want to wrap up with one or two, probably one day don’t have much time left questions that I like to ask at the end if there’s time, if you feel comfortable sharing some so to say, success habits in your life that you feel really help you be as effective as you can be, that you do throughout the day the week, that you feel really helpful.

Adam Job  51:15

Okay, I haven’t reflected too much about this, but I think, well, and not sure i have i will reinvent the wheel too much here. I think one thing that is really important to me is given that I am in a job now where deep thinking is really important, protecting some time to do that right. I’m trying to not constantly be in meetings. And luckily, since I have a very global team there will, I’m able to carve out, let’s say, thinking time between, you know, when this person comes online and so on. So, so that’s one thing that I think is really important. I know that that’s really difficult to do given also my consulting experience, but, but that’s one thing that helps me a lot. And then, as I said, I think, I think, especially when it comes to consulting, we are, if I may speak for the general profession, we are really efficient, really hard working, getting fast to from zero to 100 and that’s, that’s, of course, important, I think, especially in the early years in the job. But I think being deliberate as you become more senior, or as you enter into a different role, or, in general, as you want to evolve being deliberate without taking off the blinders, right if you if you think of a horse. And as I said, for me, that means, for example, reading a lot of non business related research, because many ideas and inspirations come from outside, because otherwise we would just be always thinking about the problems that we already and the clients are already asking us, but then we would always be, you know, we would not be able to write about maybe the next thing, and I think in all the striving for efficiency that should not be forgotten, kind of to look around and seek for inspiration.

Kris Safarova  53:35

Adam, thank you so much. Where can our listeners learn more about you? Read your work, anything you want to share?

Adam Job  53:42

Yeah, sure. They can follow me on LinkedIn, Adam job. They can go to the BCG Henderson Institute website, and they can just Google, and that’s where they’ll find find my articles and so on

Kris Safarova  53:58

Adam, thank you again, so much for being here. I really enjoyed our discussion.

Adam Job  54:02

Yeah, me too. Thank you for having me. Kris was very fun.

Kris Safarova  54:05

Our guest today was Adam job. Was a senior director at the BCG Institute, and he leads research on strategy. And our podcast sponsor today is strategytraining.com you can get some gifts from us. Five reasons why people ignore you or anybody in a meeting, very helpful. You can get it at firms, consulting.com forward slash on the room. You can get access to Episode One of how to build a consulting practice at firms, consulting.com forward slash build. You can get access to the overall approach used in well managed strategy studies at firms, consulting.com forward slash overall approach, and McKinsey BCG winning resume example, which is an actual resume that led to office from both of those firms. It works for any seniority level, and you can get it at firms, consulting.com forward slash resume. PDF. Thank you so much for tuning it, and I’m looking forward to. Connect with you all next time.