Secret to CEO success: pay higher wages

Masaru Tange says the strategy that turned his company into one of Japan’s best-performing stocks may be surprising: he buys smaller firms and boosts their workers’ pay. Mr Tange’s Shift, a software tester, acquires other businesses near the bottom of the industry supply chain and raises their engineers’ salaries. He says he’s able to do this and still charge competitive prices by cutting out layers of companies that serve as middlemen in the outsourcing process. And having more workers leads to higher sales. Shift’s shares have risen more than 5,300pc since it went public in 2014, the second-best performance on Tokyo’s benchmark stock index. The company’s market capitalisation has surged to about $2.3bn, pushing the value of Tange’s 33pc stake to about $745m. Tange, 46, says his business model is an attempt to remove inefficiencies in Japan’s software industry, where layers of subcontractors take cuts on orders before passing the work to another company below. It’s also, he says, a break from the merger & acquisition strategy of buying a business and looking to reduce costs.

(Adapted from “CEO Behind 5,300% Stock Gain Says Secret Is Raising Salaries,” by Min Jeong Lee and Toshiro Hasegawa, published on May 16, 2021, by Bloomberg Businessweek)

Support working mothers before it’s too late

Gallup found that women’s wellbeing during the pandemic slipped further than men’s as their levels of stress and worry rose. “This year has been a roller coaster blur of exhaustion, treading water, self-doubt, and loss of identity,” one working mom said. “No matter what I did, I couldn’t get ahead. I’m behind on emails, behind on work, behind on dishes, laundry, the list goes on. I still find it hard to comprehend that a whole year has gone by. Sometimes I am sad I didn’t appreciate it enough, and sometimes I am thankful it is over.” That feeling explains the rationale behind the departure of so many women from the workforce: They left because they couldn’t keep carrying what felt like the weight of the world on their shoulders. These emotional setbacks hit women in the prime of their working lives the hardest: middle- to high-income women under age 50. To retain working women, leaders need to be flexible. Think about how you can support workers so they can accomplish great outcomes.

(Adapted from “7 Ways to Save Your Working Moms Before It’s Too Late,” by Jane Miller and Jennifer Robison, published on March 5, 2021, by Gallup)

The global dynamics of shoes

Footwear companies have been diversifying their sourcing for a decade now, and the quantities of footwear flowing in from China is already at an all-time low. In 2009, about 88pc of US footwear was manufactured in Chinese factories. Ten years later, that number had fallen to 67pc. Tariffs aren’t the only element causing brands to head for new sources. Other variables like rising labour, energy, and raw material costs are also prompting companies to reevaluate their partnerships with Chinese suppliers. Footwear brands are trying to figure out new ways to stay relevant, driven not just by tariffs and duties but also by a desire to be sustainable and fashionable. As low-tech and labour-intensive industries such as the footwear industry are not complicated to set up, and workers are easily trained, many Chinese factories are also transferring their assemblies to Bangladesh for apparel and footwear.

(Adapted from “Enhancing the Competitiveness of Pakistan’s Footwear Industry” by Samir S Amir and Ramsha Hameed, published in January 2021, by The Pakistan Business Council)

How to say no to your boss

“No.” It may just be the most powerful word in any language. Still, using it can be equally tricky — especially at work. It is even harder when you’re in the early stages of your career or passionate about your job. Unlike what most people think, saying no doesn’t make you a bad employee. On the contrary, it helps you reclaim your time and can help you maintain your work-life balance. Here are three strategies to help you learn the art of turning people down: 1) Change your mindset. It’s hard to say no when you feel like work is the most important thing in your life. Think about what else is meaningful to you. Unless you know how else you could spend your time, saying no with conviction will be tough. 2) Identify the opportunity cost of saying no. If you say yes to a new project, what are you necessarily giving up? 3) Get comfortable saying no. Look yourself in the mirror and loudly say no multiple times and start by practising in low-risk situations.

(Adapted from “How (and When) to Say No to the Boss,” by Dina Smith, published in May 2021, by Harvard Business Review Ascend)

Published in Dawn, The Business and Finance Weekly, May 24th, 2021