5 must reads for your weekend

We keep an ear to the ground for the interesting stats, insights and discussion points you need to feel in the know.

1. Would you drive by or drive through?

This was the week that the price of even the humble hamburger wasn’t safe from rising inflation. It’s amazing that the cost hasn’t changed for the last 14 years in the UK. Perhaps the ability to keep the cost the same for so long has had something to do with the turnaround the fast-food chain has undergone since 2015. Back in 2018 we spoke to Kevin Ozan, CFO of McDonalds, about how when sales first stalled, then slumped, in the early part of the 2010s he brought back the brand excitement (as well as operating growth and financial discipline). Part of the strategy in 2015 involved a goal to refranchise 4,000 restaurants by the end of 2018. Today, more than 90% of McDonald’s restaurants are operated by franchisees.

How fresh thinking paid off at a fast food giant

2. Don’t take no for an answer

“Adriana Brownlee, high-altitude mountaineer, doesn’t stop her climbs despite the risk of mountaineering being both mental and physical,” Ryan Burke, Global EY Private Leader, shares his outtakes from this year’s EY World Entrepreneur Of The Year event. “Even when in the death zone,” she said, “on the mountain, you just focus on your goal. Everything else just brushes away.” As Gaston Taratuta, Founder and CEO of Aleph Group, Inc., who took home the EY World Entrepreneur Of The Year 2022 Award, put it immediately after his win: “Entrepreneurs get told ‘no’ a lot, but you have to push through and be relentless. You need to keep forging ahead and surrounding yourself with people who lift you up and push you to continue. If you fail 100 times, that doesn’t mean you won’t succeed the next time.”

How entrepreneurs are the answer to the world’s problems right now

3. Embrace and encourage opinions

“Strong emotions are part of the transformation process.” Errol Gardner, EY Global Vice Chair – Consulting, writes on LinkedIn. “So, the onus is on leaders to anticipate, acknowledge and work with people’s emotions to create the conditions for transformation success. High-performing transformation leaders create a workplace environment where team members feel they can safely speak up without exposing themselves to the risk of criticism, discrimination or reprimand. In my experience, one of the critical barriers to success is a culture that encourages upward management of good news reporting and suppressing bad news. When people see their role as not sharing when they have challenges e.g., missing milestones, this creates a bow wave of potential issues later in the project cycle where it is much harder and more costly to address.”

What are the six drivers of successful business transformation?

4. Consider all options

Inflation had already been rising as pandemic-induced supply chain disruptions met a rise in consumption but the war in Ukraine has sent the price of energy, food and other commodities soaring. The US Consumer Price Index (CPI) increase reached a 40-year high of 8.5% in March 2022. In the Euro area, inflation is forecast to peak at 6.9% in the second quarter, while the Bank of England expects UK inflation to hit 10% later in 2022. Although inflation could help governments reduce the burden of their pandemic-induced debt, price hikes hit the poorest hardest, deepening inequalities and potentially fueling populism. This presents a difficult policy trade-off: the need to curb inflation without triggering recession.

So, what are the options for governments?

• Minimum corporate income taxes
• Windfall taxes on energy companies
• ?Digital services taxation
• Environmental, social and governance (ESG) behavioral taxes, such as carbon taxes or plastic bag tax
• Higher taxation of wealthy individuals

How CEOs can partner with governments facing policy dilemmas

5. Can we break the cycle?

The UN estimates that agricultural production will need to increase by about 50% by 2050 to keep pace with rising demand for food. But food systems cause as much as a third of greenhouse gas emissions, up to 80% of biodiversity loss and use around 70% of freshwater reserves. The scale of action required cannot be underestimated. It requires a fundamental transformation of all sectors, including energy, manufacturing, transport, infrastructure, agriculture, forestry and land use. Humans must also radically rethink how we produce and consume food and fuel and manage waste.

Six ways that governments can drive the green transition

If you do one thing:

Stay agile and consider new opportunities which you may have dismissed previously.

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