The Lead: ATT-Time Warner Merger, Tesla Cutting Jobs, Interest Rate Hike

The Lead, AchieveForum’s weekly brief of leadership news and insights, provides quick clarity into relevant headlines and straight-forward analysis for applying effective leadership tools and techniques.

AT&T-Time Warner Merger Approved by Federal Judge

Last year, the Justice Department sued to block the AT&T-Time Warner deal, but a federal judge just approved it last week. Concerns were that the merger would make prices go up for consumers and hurt competition, but the companies argued that their industries are different and that the deal will allow them to better compete against companies like Google and Netflix.

Our View: While several merger horror stories capture headlines, many companies get the daunting process right. A successful merger encompasses operating and financial performance, business and technical capabilities, solid stakeholder relationships, and strategy improvements with short-term wins and long-term benefits. A successful merger hinges on its narrative, so ensure that merger communications are set in the context of the broader corporate story, including its past, present, and anticipated future. Further Reading

Tesla to Cut Several Thousand Jobs

Electric car maker Tesla Inc. is working to reduce costs while maintaining its production ramp-up for its Model 3 sedan. The steps of simplifying its management structure and cutting several thousand jobs at Tesla are part of CEO Elon Musk’s plan to increase free cash flow, a key metric of financial health. Investments will continue to pour into projects like the Model Y crossover and its Gigafactory.

Our View: Proper resource allocation is a dilemma CEOs and other leaders face every day. Resources, especially financial ones, should be aligned with strategy. When leaders understand their company’s priorities and long-term strategy, they become well positioned to support its growth. Nimble resource allocation is key, as research by McKinsey found that “companies that reallocated more resources earned, on average, 30 percent higher total returns to shareholders annually.” Further Reading

Federal Reserve Interest Rate Hike

Reflecting a stronger economy, the Federal Reserve made its second hike this year by raising its benchmark interest rate by a quarter of a percentage point. A majority of policy makers said they anticipate a total of four interest rate increases in 2018. Unemployment is at its lowest since 2000, and a record for employers adding jobs every month has been set as it has been occurring now for 7.5 consecutive years.

Our View: Policy, regulation, and interest rate changes guide businesses whether it’s directly or indirectly. Business leaders need to be agile in their response to changes that occur at the local, national, and international level. Responding to change over following a strict plan helps companies compete in the rapidly changing marketplace. Further Reading

India’s Waste Management Challenge

India can learn from South Korea’s waste management policies to help tackle their daily 150,000 tons of municipal solid waste, which according to the World Bank will reach 377,000 tons per day in India. With urbanization and industrialization, the waste generation is troubling. South Korea currently has over 60% of new and renewable energy produced from waste, in part due to a landfill-powered hydrogen plant and a complementary policy focus to harness energy from waste-to-energy facilities.

Our View: Sometimes finding the right solution to a problem means finding the right expert to address it. An excellent way to go about finding an elite expert is a pyramid search, which was pioneered and studied by Eric von Hippel and other researchers at MIT. During a pyramid search, you attempt to reach the peak of the pyramid by seeking out individuals with the highest levels of expertise by identifying people who might have some knowledge in a given topic area and asking them who else might know even more than they do. Then you contact those people and repeat the process until you reach the top of the pyramid. Further Reading

New Research on Rewards and Motivation

According to new Cornell research published in the Journal of Personality and Social Psychology titled “It’s About Time: Earlier Rewards Increase Intrinsic Motivation,” adding immediate rewards to your tasks is one way to increase your interest in your work at hand. Kaitlin Woolley, assistant professor of marketing at Cornell University, explains “the idea that immediate rewards could increase intrinsic motivation sounds counterintuitive, as people often think about rewards as undermining interest in a task. But for activities like work, where people are already getting paid, immediate rewards can actually increase intrinsic motivation, compared with delayed or no rewards.”

Our View: A rewards system is an excellent way to keep your team engaged, loyal, motivated, and happy, and employee rewards don’t always need to be cash based. Tickets to a conference of their choice, tech accessories, a front parking space, or even a thoughtful thank you card can be great options to boost morale and rewards for short-term wins. Further Reading

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