For mergers, there is a window of opportunity for capturing the most benefits. A synergy curve defines this window and, ultimately, the success or failure of a merger. The result of months of preparation, planning, and implementation, the curve shows the accumulation of synergies over time. In successful mergers synergy curves are defined in the early stages and used as a driving force for the integration. A merger with a sense of urgency is far more likely to reach its full potential and by plotting a synergy curve during the planning of the merger senior executives can see the speed at which synergies could be delivered and track the planned accumulation of synergies over time. Plotting a curve also helps clarify the deal's strategic rationale, fundamental to maximizing synergy delivery. As the deal progresses through announcement and toward close, the curve's accuracy can be refined as more data is made available. A final curve takes shape as the synergies are tested through the development and sign-off, and once completed, can be used throughout the integration to benchmark, plan, and track the synergy delivery rate. In this paper, we bring together our experience and data from many mergers to describe the types of synergy curves for various integration strategies, and highlight the typical time frames for delivering synergies at an overall level and at the level of individual functional work streams. Used correctly, the synergy curve is the fundamental tool for successful synergy delivery and, to the CEO, the cornerstone of a successful merger.

Standards are the rules, guidelines, and definitions that describe repeatable ways of doing things. Standards are a crucial element in the EU's industrial strategy as Europe seeks to remain a shaper of global standards rather than a follower.

The European Round Table of Industrialists worked with A.T. Kearney to study the issue of developing and implementing standards. We found six recommendations for establishing standards in European industry:

• Establish performance targets to foster innovation. Standards spread collective knowledge, bringing together industry players in a working environment of sharing and collaboration. The use of standardized parts and business processes can reduce early investment costs and risks, and provide a platform from which industries can innovate.
• Consult with experts. Involving technical and industrial experts, even when standards are initiated by governments, can help build standards on solid foundations.
• Coordinate industry players. European standardization bodies can play a larger role in facilitating standard-setting along the value chain and across industries.
• Balance speed and consensus. Standards must be put in place quickly in the face of accelerating technological change and market competition, and they must be built on a foundation of consensus to broadly address the requirements of all players.
• Encourage a global approach. European companies that adopt and participate in setting global standards increase their market access to other countries.
• Encourage SME participation. Despite their importance to the European economy, few small and medium-sized enterprises (SMEs) are actively involved in setting standards.

There has never been an age when people did not marvel at the pace of change in their lives. If the acceleration of change in our era is not unprecedented, there has certainly been nothing like it for at least a generation. A.T. Kearney’s Global Business Policy Council has developed a measure of volatility that quantifies just how volatile our age has become.

Our Turbulence Index portrays an interwoven world economy in which the volatility of external conditions doubled from 1999 to 2011. For strategic planners, operating environments became twice as difficult to predict, even in the near term. We call this “the 200 percent effect.” 

This picture of extraordinary volatility quantifies what we all know intuitively about the growing influence of externalities on senior executives and the companies they manage. A decade ago, variables such as currency fluctuations and input costs had half the impact on corporate earnings that they do today.

The Index illustrates the macroeconomic uncertainty, financial instability, and unprecedented thirst for resources in an age of unpredictable energy and commodity prices. But bear in mind that the Index does not measure prices. It measures the degree of price movements—their volatility. It offers a foundation for analytics that, if approached systematically, can guide choices about resourcing, investment ideas, and talent management.

On the Richter scale, the quake is 9.0, the most powerful ever to strike Japan. Even as the aftershocks rumble, none of us imagines the approaching tsunami traveling behind the quake, across the Pacific, toward Japan's eastern coast. When the waves break, the news is immediately horrifying, and only grows more so. More than 20,000 people are dead or missing.

The catastrophe is not over. Three reactors at the Fukushima Daiichi nuclear plant flood and suffer core meltdowns. Radiation levels rise. An estimated 150,000 people move out or are evacuated while municipal officials impose a 20-kilometer exclusion zone around the power station. Around the world Fukushima becomes a household name for the worst possible reasons.

When "thought leaders" are asked about growth, they instinctively cite the same four or five companies. They love Apple, Amazon, Starbucks, and General Electric: mega-global behemoths with near-infinite power to attract talent, capital, and political goodwill. Listening to the conventional wisdom, you might think the only way to grow is to have billion-dollar investment programs pursuing multiple strategies under a celebrity CEO. Yet growth is not limited to the superstars. In fact, many of the largest companies in Australia and around the world are a fraction of the size of companies commonly profiled as case studies in growth. These are what we like to call "real companies"—versus the almost mythical status of the giants with their vast resources—and they are engaging in real growth based on real strategies.

Social media has become an integral part of our daily lives. We use Facebook, LinkedIn, Twitter, YouTube, Blogspot, and other social networking services to converse with friends and colleagues and to share family photos, videos, and important moments in our lives. It is a conversation over the (digital) backyard fence where your side of the fence is in Melbourne and your neighbor's is in Paris.

Yet people who skillfully blog and tweet with friends and family have not brought these same skills to the workplace. Although social media has distinct, valuable implications for corporations, most executives still see it as ... well, a mystery. The openness of Web interactions still baffles many companies as they try to squeeze the concept of social media—the square peg—into the traditional silos—the round holes—of marketing, sales, and operations.

We think it is time to change this. Rather than treat social media as a distinct element of a larger marketing strategy, companies should make it the core component of every customer-engagement strategy.

Getting corporate culture right is important, which is why organizations invest heavily in shaping their cultures and influencing the behaviors of their workforces. Determining how much value is derived from the investment is another matter. Does the money spent on developing and communicating mission statements and corporate values really change employee behavior, or are there hidden, more powerful forces at work that make this investment ineffective? And if the investment in shaping culture does bring about change, is it promoting behaviors that support performance, or inadvertently encouraging poor behaviors?

The key to developing corporate culture, particularly one that becomes a source of competitive advantage, requires gaining insight into how culture is formed; this includes the important role that employees' attitudes and perceptions play in the process. Organizations that take time to understand the process and develop a highly engaged workforce can expect to see significant performance improvements. For those that create a culture aligned with their business strategy, the rewards are greater still: a workforce acting in unison as a dedicated powerhouse, moving the organization toward meeting its strategic goals.

For the past four decades, we have seen a staggering number of strategic schools of thought and frameworks. The A.T. Kearney Strategy Chessboard helps sift through them to pick the right one for the right situation.

The 1980s were dominated by Michael Porter's thinking, the 1990s had multiple contributors (Prahalad and Hamel stand out in Competing for the Future,) and the early 2000s saw noteworthy contributions from Kim and Mauborgne in Blue Ocean Strategy and Deans, Kroger and Zeisel in Winning the Merger Endgame. At the same time, the Santa Fe Institute has contributed valuable insights on the economy as a "complex adaptive system" and its associated strategy implications.

Dozens of schools and frameworks claim to be the most widely applicable and useful for strategy development. The question is, are these strategy schools universally applicable or can they complement one another?

Based on our extensive work in strategy development we have concluded the latter. With this in mind, the A.T. Kearney Strategy Chessboard was designed to help corporate leaders select the right starting point for strategy development and formulation.

This paper does the following:

• Challenges two common but often flawed assumptions: that industries are predictable and that a company's primary focus is adapting its positioning
• Lays out the Strategy Chessboard and its use of industry predictability, while discussing companies' willingness to adapt to or shape an industry
• Outlines how to use the Strategy Chessboard in strategy development

In 1996, two-time champion Michael Schumacher, one of the best Formula 1 drivers in the world, signed with Ferrari, a team considered a joke by most in the racing industry. Ferrari, having not won a championship in 17 years, was in chaos. But signing Schumacher was part of long-term strategy by Ferrari CEO Luca Cordero di Montezemolo to restructure every aspect of the company—car design to engineering and reliability to sponsorship and staff.

In the short term, it didn't work out very well. After Schumacher's engine blew up at the 1996 French Grand Prix, wasting his $1 million-per-race salary, team principal Jean Todt offered his resignation. But Montezemolo was not swayed by such short-term setbacks, even as they continued over the next four years. Within nine years, Schumacher had won more races and championships than any driver in history, making Ferrari the world's undisputed Formula 1 leader.

How many business strategists follow Ferrari's lead, developing and sticking to long-term strategies? Lately, not very many. Obsessed with the ever-increasing pace of change and its impact on soaring rates of "hypercompetition," many executives we've talked to believe it pointless to invest in strategic thinking beyond one to three years; indeed, a five-year strategy is considered long term.

We have a problem with that.

Family businesses account for three-fourths of the private-sector economy in the GCC.¹ Most of these businesses are young—60 percent were formed since the 1970s—and highly diversified, with more than half involved in trading, financial services, real estate and construction. Most have naturally evolved to highly decentralized management and legal structures, a trend amplified by a new generation of family members who are demanding significant roles within the business.

The rapid growth of GCC family businesses is being helped along by strong political and business networks in the region, and historical ties with high-growth African and South Asian markets (see sidebar: Family-Owned Companies: Decades of Success). Family businesses have gained size, strength and competitive advantage compared with foreign competitors. However, the recent economic downturn has exposed strategic and operational weaknesses in many family businesses. Some have already responded with a renewed focus on improving governance, managing the business portfolio, cutting costs and increasing operational efficiencies. Others have not.

This paper offers a strategy, specifically designed for family businesses. We outline three principles oforganizational effectiveness: establishing governance and succession planning, refocusing the business portfolio, and becoming a leaner, nimbler and more competitive organization.

Since the 1970s, we've witnessed a bewilder­ing array of strategic schools of thought and frameworks. The 1980s were dominated by Michael Porter's positioning for competitive advantage. The 1990s had multiple contribu­tors, with Prahalad and Hamel's Competing for the Future standing out. Kim and Mauborgne's Blue Ocean Strategy and Deans, Kroger and Zeisel's Winning the Merger Endgame were noteworthy contributions in the early 2000s. Throughout these decades, the Santa Fe Institute has painted the economy as an Evolving Complex System, which has significant strategic implica­tions as the institute suggests that managers often assume certainty where there is none.

Dozens of schools of thought claim to have the most widely applicable and useful framework for strategy development, yet most strategists are biased toward the theories and frameworks with which they are most comfortable. At A.T. Kearney, we believe that a single strategy school is not universally applicable; strategies and their frameworks are complementary. Based on our research and work in this area, we've developed a Strategy Chessboard that enables us to articulate clear choices in strategic approaches and pick the right starting point for developing and applying a particular strategy.

This approach is critical for dealing with two assumptions that are often flawed but accepted: (1) that an industry is predictable and (2) that a company's strategic focus is always concerned with adapting its positioning within this presumably predictable industry.

Capital expenditures are never far from a CFO's agenda, but the issue has received more attention than usual these days, as global capex spending has risen to $10 trillion per year. Using a comprehensive long-term approach, CFOs can "pull the capex lever" to determine how much to spend, where it should be spent and how that spending translates to real returns.