Due Diligence
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Decreased uncertainty, improved decisions
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.
Our latest
Thoughts
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/
Strategy Tools
Strategy Tools: Growth, Profit or Returns?
By Stuart Graham and Marc Wilson
Stuart is a manager and Marc is a partner at Global Advisors.
Both are based in Johannesburg, South Africa.
Growth, profit or returns? It’s all three, however we find that the relationship between these and shareholder value creation is poorly understood – if at all.
All three measures become critical to the way forward as companies navigate the Covid-19 crisis.
After ensuring business survival, navigating through the Covid-19 crisis requires returns on invested capital AND growth to deliver shareholder returns. S&P 500 companies averaged 13% RONA and 5% revenue growth (CAGR) through the financial crisis (2008-2012) .
Monolithic survival approaches may starve compensating growth opportunities – a portfolio approach is required.
Key insights
Returns are not enough – companies must also grow to create value.
Profits and cash flows cannot increase indefinitely through cost-reduction, efficiency, business mix, etc – top-line growth is critical.
Returns must be above costs of capital to be value accretive.
S&P 500 companies averaged 13% ROIC and 5% revenue growth (CAGR) through the financial crisis (2008-2012).
Margins and revenue growth, or even profit growth in themselves don’t answer that question of whether shareholder value was created or destroyed. There are many examples of where growth and high margins actually destroy value.
Company valuations reflect an aggregate of their business portfolio – rebalancing segments based on their growth and return profiles can lift company value.
Growth requires investment – at the very least in the working capital required to support revenue growth.
Measuring RONA or ROIC and Revenue growth shows whether business activity is value accretive or destructive.
You can use the Global Advisors Market Cap (valuation) framework to map your business – and agree action to deliver improved shareholder returns.
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
- 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
Selected News
Quote: Alexander Osterwalder – Author
“Companies should focus on one of three value disciplines: operational excellence, product leadership, or customer intimacy.”
– Alexander Osterwalder, Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers
The quote, “Companies should focus on one of three value disciplines: operational excellence, product leadership, or customer intimacy,” comes from Alexander Osterwalder’s influential work, Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. This book, co-authored with Yves Pigneur and supported by hundreds of business practitioners worldwide, fundamentally reshaped how organizations approach designing, innovating, and understanding their business models.
Backstory and Context of the Quote
Osterwalder draws on the concept of value disciplines to guide organizations in carving out a distinct market position. The three value disciplines—operational excellence, product leadership, and customer intimacy—were popularized in strategic management as core focuses that companies should excel in to achieve competitive advantage. In Business Model Generation, Osterwalder emphasizes that sustainable success often requires unwavering commitment to one of these disciplines, rather than trying to excel in all three simultaneously. This focus enables an organization to align internal processes, culture, and strategy, thereby delivering superior value to customers in a way that competitors find difficult to replicate.
When Osterwalder speaks about value disciplines, he situates them within the broader context of the Business Model Canvas—a visual framework he developed to help organizations systematically map out how they create, deliver, and capture value. By identifying a primary value discipline, companies can design their business model to deliver on what matters most to their chosen customer segments—whether that’s unbeatable efficiency and low cost (operational excellence), cutting-edge and innovative products (product leadership), or deep, personalized relationships (customer intimacy).
This principle has resonated with business leaders, startups, and innovators globally, highlighting the importance of clear strategic focus as a foundation for building compelling customer value propositions and robust business models.
About Alexander Osterwalder
Alexander Osterwalder is a Swiss business theorist, author, and entrepreneur best known for developing the Business Model Canvas, a strategic tool used by millions of organizations worldwide. With a background in management information systems and a PhD from the University of Lausanne, Osterwalder has dedicated his career to making strategy and innovation tangible, practical, and accessible.
He co-authored Business Model Generation with Professor Yves Pigneur, a book that has been translated into over 30 languages and used as a standard reference in business schools and boardrooms alike. Osterwalder’s follow-up frameworks—such as the Value Proposition Canvas—further help organizations deeply align their offerings with customer needs, focusing on “jobs, pains, and gains” to design products and services that truly resonate.
Osterwalder’s work is characterized by its clarity, practicality, and visual approach to strategy. His tools bridge the gap between theoretical insight and hands-on application, enabling leaders to navigate business innovation with confidence and precision. Through his contributions, Osterwalder has empowered a new generation of visionaries and changemakers to reinvent how value is created in the modern economy
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