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Global Advisors is a leader in defining quantified strategies, decreasing uncertainty, improving decisions and achieving measureable results.

We specialise in providing highly-analytical data-driven recommendations in the face of significant uncertainty.

We utilise advanced predictive analytics to build robust strategies and enable our clients to make calculated decisions.

We support implementation of adaptive capability and capacity.

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Thoughts

Global Advisors’ Thoughts: Getting the Balance Right

Global Advisors’ Thoughts: Getting the Balance Right

By Kate Barnes

I am a working mother, as are many of my friends and past colleagues. Naturally we often debate the challenges of getting the balance between work and family right.

Personal circumstances vary widely and have a big impact on the choices one has, but my solution has been to work on a part-time basis. I have been lucky enough to do so for the past seven years and to me it seems like an excellent compromise. Yet there are many times when it feels like balance is the last thing I am achieving – in fact, I have the distinct feeling that I am failing on every front – my kids, my husband, and my boss, colleagues or direct reports, all want more of me.

Perhaps the truth is that I want too much. I want to be stimulated, challenged and to feel like I am adding value in the work place, but I also want to see my children more than the average, full-time working mother.

Many working mothers have made decisions involving changes to their working day in order to manage the work-family balance better. Unfortunately, I have found that one of the biggest issues is that one cannot simply decide on an approach, agree it with your employer, and then settle into whatever routine that entails. You might agree an arrangement to work 5, or 6 or 7 hours a day, or 30 hours a week, or to arrive at work early and leave by 3 or 4pm. But in most jobs, you will have to consider the balance equation on a daily basis, sometimes multiple times a day. Is today the day I give more to work because there is a demanding deadline and everyone else is working late, or is it the day I give more to my child, because he is receiving an award at school or swimming in a gala?

And often the call has to be made taking into consideration not only what is happening today, but also looking at where the pendulum fell yesterday, or last week, or over the past couple of weeks.

As with any decision there are consequences, even if at first they are unforeseen. In the early stages of my career, I like many, was an idealistic youngster with dreams of holding a very senior, leadership position. I was ambitious, and some might say that I had much of what it takes to achieve my goal. Some years down the track I was being interviewed for a prospective job and the potential employer noted from my CV that the achievements in my career (or lack thereof) were not in line with my academic record, and he wondered why this was. I can’t remember what my response was, but I know I knew the answer. I even knew at exactly which point in my career the upward trajectory slowed. It was the day I was working at a large corporate, and I asked for flexitime. I negotiated that on two afternoons a week, I would be allowed to leave at 2pm and I would make up the time in the evening, after my young children were asleep.

Shortly thereafter, when a potential internal move to a new position was being discussed I was informed that I could not be considered for the role as I was “part-time”.

This was a wake-up call.

Read more at http://www.globaladvisors.biz/thoughts/20170719/getting-the-balance-right/

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Strategy Tools

Strategy Tools: ‘Price-Volume-Profit’ Part 1 – A strategic take on cost-volume-profit analysis

Strategy Tools: ‘Price-Volume-Profit’ Part 1 – A strategic take on cost-volume-profit analysis

By Eric van Heeswijk and Marc Wilson
Eric is an analyst and Marc is a partner at Global Advisors. Both are based in Johannesburg, South Africa.

Almost every person who has studied financial or management accounting at school or university is probably familiar with cost-volume-profit (CVP) analysis. It should be the basis of financial planning in most companies. However, in our experience, most managers do not apply the analysis and get it wrong in its most basic form (e.g. planning for similar / increased volumes together with price increases). The outcome? At best: results that fail to meet budgets. At worst: firms trigger the “margin-price-volume death spiral”. Whether you are a production manager or a CEO, you should understand how CVP analysis applies to your firm. Your business’s survival may be at stake.

Read more at:
https://globaladvisors.biz/blog/2019/11/28/strategy-tools-price-volume-profit-part-1-a-strategic-take-on-cost-volume-profit-analysis/

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Fast Facts

The use of full absorption or average costing in asset-intensive industries with under-utilisation can lead to self-defeating pricing strategies

The use of full absorption or average costing in asset-intensive industries with under-utilisation can lead to self-defeating pricing strategies

Non-conformance costs can distort pricing decisions The use of full absorption or average costing in asset-intensive industries with under-utilisation can lead to self-defeating pricing strategies

  • The use of full absorption or average costing in a manufacturing environment with under-utilisation can lead to self-defeating pricing strategies
  • The increase in price to cover costs results in volume decreases – lowering factory utilisation and increasing unit production costs. This is the start of the utilisation-pricing “death spiral”
  • Costing according to factory utilisation – partial absorption costing – offers the opportunity to be more strategic about costing and utilisation
  • “Unabsorbed” costs can be targeted through OEE and volume improvements. At the same time, the “disadvantage” of having a large factory is normalised and pricing can compete with more fully-utilised factories
  • A recent manufacturing client saw 60% of unit costs arise from factory under-utilisation – sub-optimal OEE levels (non-conformance), low volumes and work-centre bottlenecks contributed to the utilisation gap
  • These principles can apply to any asset-intensive business – for example banking
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Selected News

PODCAST: Strategy Tools: Growth, Profit or Returns?

PODCAST: Strategy Tools: Growth, Profit or Returns?

Our Spotify podcast explores the relationship between Return on Net Assets (RONA) and growth, arguing that both are essential for shareholder value creation. The hosts contend that focusing solely on one metric can be detrimental, and propose a framework for evaluating business portfolios based on their RONA and growth profiles. This approach involves plotting business units on a “market-cap curve” to identify value-accretive and value-destructive segments.

The podcast also addresses the impact of economic downturns on portfolio management, suggesting strategies for both offensive and defensive approaches. The core argument is that companies should aim to achieve a balance between RONA and growth, acknowledging that both are essential for long-term shareholder value creation.

Read more from the original article – https://globaladvisors.biz/2020/08/04/strategy-tools-growth-profit-or-returns/

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