Lego is perhaps one of the best and popular toys for kids. It is educational, and most of all it develop kids mental and creative ability. That was before, as at one point in time, the toy became boring. It seems everything is just simply putting in blocks together, and deciding what you want to put up while making the best color combination of course.

Problem

The company’s problem began during the late 1990s when they stopped focusing on design.  They wanted to extend the brand by venturing off on wild forays into new product development. A good example if the Galidor, a legendary bomb inside the walls of Lego. The Galidor line was launched in 2002 and was all about action figures. But the action figures where quite different, it didn’t require building skills, the hallmark of the traditional Lego.

Moreover, they branched into a totally new business line in which they have little knowledge about. The company co-produced a kid’s TV show called Galidor: Defenders of the Outer Dimension. It was meant to sell their new toy line. But it sparked little interest and when it went off-air, the sales of the new toy line faded too.

Solution: Design Transformed

Just as design pushed Lego at the brink, it helped bring the company back. Instead of giving designers free rein to conjure up their most brilliant creations, Lego tied their hands. Instead of rubber-stamping nearly every request for a new component, what Lego did was simple. They put each one to a vote, and the highest vote-getters’ design are put into use. Thus, it eliminated rarely used pieces, slashing the total number of components to about 7,000.

Conclusion

Design is Lego’s key competitive advantage. Over the years, there were several players emerged including that of Mega Brands with nearly half the price cheaper.

But then, with the competitive and dynamic management team, if there is a reason they rose back in the market, then there must be a reason to stay.

If you were able to see  raft of new airplane orders at the Farnborough air show in England, what would you think? Well, it only means one thing – a comeback for the world’s aviation business after seeing them dump for several years.

Simply, it was a sign that the aviation industry are recovering from recession with another slew of orders at the biennial Farnborough International Air Show not so long ago.

Flybe, a British no frills carrier topped the list of major buyers as it placed a 1.3 billion dollars order for 35 units of ERJ 175 Aircraft from the Brazilian maker.

But the huge orders doesn’t end there. Boeing said recently that it had agreed its second big order this week to supply Air Lease Corporation with at least 54 next-generation Boeing 737-800s. The first set are due for delivery on 2012, with an option for another six to follow.

Boeing also announced its commitment to deliver planes for the Royal Jordanian Airlines for three 787-8s, which have a list price of at least 500 million dollars per aircraft.

Also, the world’s biggest plane maker, Airbus, said it had reached a 5.7 billion dollar deal to supply Hong Kong Airlines with 25 aircraft – 15 of which will be the A350XWB model that is still under development.

Overall, the show totalled approximately 18 billion dollars in orders on its first day. Definitely, in the days to come it will sell more. And what does this indicate than a resounding and recovering aviation industry.

Truly, the new aircrafts are worth waiting with several new models coming in. But manufacturers need to make sure of its safety in terms of design and overall aspect of the carriers.

San Miguel Corporation Chief Operating Officer, Ramon Ang said recently that Carlyle and the Gokongweis are the top two bidders for their hotdog unit, Purefoods.

The hotdog unit was said to be valued at 1.8 billion dollars, making it one of Philippines biggest food and drinks company. According to And, the decision has been made as they decide to put more focus and accelerate the expansion of faster growing business such as the energy,telecommunications,  mining, and power.

Also the sale is a bid to raise assets to fund expansion into industries. Since 2008, San Miguel has raised about 3 billion dollars from asset sale that has led to triple returns in equity.

Among other bidders are the Aboitiz Group, owner of the Philippines biggest transportation system, and the majority shareholder of Unionbank; and the Campos family, who owns closely held United Laboratories Inc., the largest Philippine drugmaker, and Nutri Asia Group, which bought out San Miguel in Del Monte Pacific Ltd.

However, if offers would not meet eye to eye, the Philippine-based company may opt to publicly sell the shares, as Ang himself once said, he plans to sell a 49 percent stake.

San Miguel’s A shares, which are reserved for Filipinos, declined 0.7 percent to close at 67.50 pesos in Manila. The company’s B shares, which don’t have ownership restrictions, fell 1.5 percent to 67.50 pesos.

Ken Daly, the president of the National Association of Corporate Directors has shared through BusinessWeek, the six things that should alarm directors about a company’s risk governance, which often is an indication that there is a potential problem and issue.

At the top of the list, I’d put unusual financial results, and these can be either positive or negative results that appear unusual. If there’s been a sudden downturn or vast improvement in the financial performance of the company, directors should probe management about the reasons for it and make sure the answers they get are both plausible and acceptable.

Another involves conducting stress tests on the numbers and finding that they don’t hold up. The accounting estimates—loan losses, aspects of fair market value accounting, tax reserves—are all good places for boards to stress-test by looking at the management assumptions underlying these estimates. Let’s use credit cards as an example. Credit-card losses/delinquencies may be tied to unemployment rates. If unemployment has jumped in a region from 7% to 9%, ask how this has impacted the estimates on delinquencies and resources allocated to collections. Really listen to management’s explanations and see if they have adjusted the numbers in a way that makes sense or if it seems that the underlying assumptions to these numbers may be suspect.

Rationalization. What I mean are circumstances where there is a significant discrepancy between what happened and what you thought would happen and there are attempts to try to rationalize this that don’t really make sense. Probably the most obvious one is where results are dramatically different from what the board has been led to believe. Immediately, directors begin to question whether management really has a handle on the business. Surprises should also cause directors to question whether there is something going on that they haven’t been told about.

Another red flag relates to independence. The classic example occurred in the court case of Emerging Communications. A member of the board who served on a special committee formed by the board was an investment banker who was also involved with the proposed buyer.

A lack of knowledge about what others are doing—primarily other companies in the same industry—is also a hallmark of potential problems. A related factor is where the company’s results differ notably from those of others in the industry. Worldcom is a great example. What has caused your company to significantly outpace others in the industry? Is it just brilliant management or better products? Or are there other factors, involving much higher risk/reward trade-offs than competitors are taking? That’s not always a bad thing; but it’s something a board needs to be fully cognizant of.

Finally, where there is an apparent disconnect between strategy and risk, there can be problems. Most of the key risk factors impacting a company relate to the company’s strategy. Yet many directors seem not to fully understand the strategy, nor have they been engaged in strategy development and review in a way that would give them a good understanding of some of the risks that may emanate from that strategy. Notably, in the 2009 NACD public company governance study, strategic planning and oversight was rated the top issue of importance to board governance, yet less than 20% of respondents ranked their boards as highly effective in this area.

The document is over a product of more than ten years of experience in board directorship. A good way to ask all of these approaches is to start by asking a lot of questions, until one is quite satisfied with the answer.

Understanding a person in the business is extremely crucial in the development in the organization. In layman’s term, this is called the relationship between employer and employees. But most importantly, this does not just happen between both of them. As a matter of fact, owners and managers must establish good working relationship too.

As such, board members and shareholders’ relationships is as extremely important than any other business aspects. A board member is elected by the shareholders as a means of entrusting the business to you. So you wouldn’t want to fail them.

But yet, many board members doesn’t know the shareholders. As such, one business executive will provide us a guide on how to maximize the relationship between two parties. What are some of the key questions board members should be asking about the company’s shareholders? Directors should start by routinely asking company management, and specifically the investor relations executive within the company:

1. Who are our Top 10 shareholders?
2. How long have they been our Top 10 shareholders?
3. How frequently do they turn over?
4. What do we understand their investment objectives to be?

The questions will help guide board members to know their shareholders more. Meanwhile other recommendations to help strengthen the relationship would perhaps be taking immediate actions and keeping abreast of shareholder issues. A regular meeting or briefing from the company’s investor relations executive regularly as part of the agenda would be of great help.

Remember, in running a business it’s all about relationships…

Several years had passed by and Britain’s manufacturing industry continued to decline. And today, this downturn has sparked renewed British interest in reviving manufacturing. Yes, China has gained so much attention with their cheap labor and cheap products offerings but don’t look down on Britain as they will probably give a good run by producing a far more better quality products.

Manufacturing has long been the poor relations of the British economy. It is often characterized by inexorable decline, overshadowed by the booming modernity of high finance among many other aspects. But when the recession came such as the collapse in the banking industry, manufacturing is just perhaps one word that is needed to turn the rhetoric into reality.

Although manufacturing output was falling in the past twelve months, which is perhaps the fastest drop since records began in 1948, there is one positive side. The industry still comprises 13.5 percent of the economy compared to the less than ten percent from the much vaunted financial services sector. They carry out 74 percent of business funded research and development and still has the highest employment rate of 2.6 million people. Moreover, it generated 53 percent of the country’s export earnings.

But the problem really is that there is not enough of it in the country. Britain is just 0.5 percent of big UK Manufacturing companies, they are only 1 percent of Europe and only 1.4 percent in the United States. So how is the situation to be solved?

Well, that is to revive to industry putting in more focus on large-scale manufacturing.

Obviously, it is easier said than done, as it is too late to resurrect mass market, world-leading industries of the past such as machine tools, etc. However, to take advantage of the revival is to realize the strong pull of genuine demand nowadays. The energy sector is a case in point. People now consume more and more gas and electricity.

Good business treat designs as a holistic process that pulls in savvy marketing and research, as well as smart ideas. Although, it may not always be equal to good business, the point is the companies which create new sources of value in the world are most often achieved through a well structured design process that is more holistic and inclusive that the notion of good design.

In our world today, when one speaks of design, it would seem to be always a noun or even an adjective. They would always follow it with a question about what color? Etc. But more than ever, good design has come to stand for something similar with style. It comes in a largely relativistic judgment of aesthetics and semiotics informed by a constantly shifting zeitgeist.

Although at times, many people would tend to go for things that are aesthetically pleasing, sometimes it reach through a point that design is actually a class of shallow of luxury goods aimed at a specific set of buyers. And this doesn’t represent any lasting value at all.

And to provide remedy, it would always be better to treat design as a verb, a process, and a way of approaching challenges to learn to use, to create positive change in the business arena. At first, it might be hard due to the notion instilled to us on what design is. But with dedication, you would eventually realize the enormous value of design to humanity.

The relationship of design and market success is always parallel to each other. Success in the marketplace is always a result of understanding complex endeavor that allowed one to create a good process design. More than good design actually.

Take the case of Apple, Google, Microsoft, these are all companies who prides themselves with good design. And the result? A very successful presence in the industry.

Brandings seems to be one of the biggest challenges in many companies in the United States. If you’ve got brand, it is important that one creates a good image out of it as well as good public relations.

Today, increased access to personal data has enabled brands to communicate more effectively with their audiences. It even motivates them to change lifestyles. Personal data nowadays are easily accessed. For one, the social networking sites have contributed a vast majority of this, while the world wide web (technology) has also made its share of contributions. From just a mere person you knew, today, with the help of social networking and technology, it enables each one of us to know common friends as well.

Gone are the days when brands only broadcast one-way messages to an audience with no expectation at all. The most trusted brands today engaged in conversations with people that even reach at a personal level.

And so marketers are using your data in order to achieve the following:

• Create simple tracking tools that help customers gain insights about themselves and even change behaviors.
• To create better relationship between customer and brand changes, that would lead to building trust.
• Allow customers to invest in monitoring their constant progress by using a specified brand.

In their raw form, often, this data often look like Excel spreadsheets intended for statisticians. But more than that, it is integrated within a simple, intuitive interface; the numbers can come to life through gorgeous visualization and robust functionality. However, recently, one of the main limitations of traditional data visualization was it focus on aesthetics over usefulness.

As data continue to become the motivational force for social good, we need to put in mind that the most important thing perhaps, is how we can translate them into business strategy.

The current business pace in the world is obviously dizzying. It has been always a tough decade for many business leaders, where we saw many U.S. companies struggle just to keep up with the economic clout of competitors in China, Mexico, India as well as other potential players in the world.

And all of these shall strike fear to the hearts of business leaders most especially with the downturns in economy and troubled housing, labor, and credit and banking industry.  If you are the leader, what are there to do? This is obviously not a great time to rejoice, but neither a time for glum acceptance. For out of today’s grave problems sprout the seeds of great opportunities – that the smartest businesspeople among us will win.

Innovative Growth Strategies

Times change that where there is nothing new about management theory, there’s so much that is new and exciting in business. And much of what’s new concerns the strategy needed for growth have become the goal of many successful companies.

Today’s approach bears no resemblance to the past, when privileged men joined hands with hired consultants to design a company’s strategy. In the present, it is all about the collective wisdom that arises from within the business itself.

New Management Thinking

The new management thinking is obviously defining it as “the art of getting things done through people.” That is why management guru Mary Parker Follett put on a human face on his management book to signify its definition.

After 30 years, this proved to be effective because the best ideas in business come not from academics or consultants, but by its people doing the work inside the companies. The one’s that meet challenges each and every day.

New Rules for the Game

Therefore, the new rules of the game are not going after big investors. But simply, the new rules has something to do with the company’s ability to spot an unmet customer need, backed by an enthusiastic resolve and a thoughtful plan to put the idea to work.

We live in a time of innovation. And the only means to outsmart your competition is to think innovatively.

It is not surprising to see that workers income have remained bleak even as the Great Recession has started to recover. The pressure to many organizations is on where wages are typically clamed down when economy slows. This time, the previous year’s was actually one of the worst since the 1930s. Most workers understand that employers aren’t exactly going to hand out huge wage hikes. More so, the official unemployment rate has remained high at 9.7% as government statistics would tell.

This is not a surprising scene, where pay rewards seem to be severely lacking for a majority of workers over the past three decades. Whether the measure is in wages, earnings, or total compensation, the inflation-adjusted pay remains the same. Employees have seen there pay go up only a little during the past four business cycle expansions.

As such, one of the biggest questions is – How financially vulnerable workers are with the jobs and incomes less secure than ever? Whatever the answer is, it obviously isn’t a healthy economy. There is a broad sense that it’s a precarious labor market.

Wage increases are obviously slow and low. The average hourly earnings for all private sector workers are only up by 2% over the last 12 months while large employers only expects to raise employees base salaries by a mere 2.5% this year. As statistics would show, the rate is on of the lowest wage increase of all time. More than the low wage increase, companies are embracing variable pay plans, annual lump sum bonus payments so it won’t be added to the base pay.

This is deeply troubling news. The traditional relationship between relationship and productivity for higher wages has been severed. Productivity growth is the fundamental building block of better living standards. But the disconnect has really become a big deal. I guess workers just need to continue to strive and when economy goes on a full recovery, that might be the time employers gives the value to it.