CEO Industry Insights

This week, Mario Draghi submitted his seminal report on European competitiveness to the EU's political leaders. I hope its findings will shape the agenda of the next European Commission and across European capitals because its core message is one that I believe is essential: Europe needs to boost private and public investment in security and the digital and green transition to ensure future competitiveness. The report confirms that the EU was late to #digitalization and is still not reaping the enormous benefits it offers in terms of #innovation, productivity, and growth. But it also clearly shows that Europe can quickly catch up by adopting proven, state-of-the-art solutions – and that's where Europe should be heading now. Thoroughly adopting cloud solutions in the private and public sector would go a long way already to #modernizing our companies, societies, and governments. We'll get there much faster when we unify fragmented digital markets (across the EU27, as well as inside key countries such as Germany) and by putting digitalization at the top of the political agenda. This will lay an important foundation for our ambitions to catch the next big opportunity for Europe and become a world leader in #AI for industrial applications.   The Draghi Report offers a blueprint for the future – now it’s up to us to take its findings seriously and implement the best recommendations at speed and at scale.  https://lnkd.in/epJaDJQk

Mario Draghi's analysis of the future of European competitiveness highlights the changes that I have long considered necessary and urgent. Draghi points out that the telecom sector is overcrowded: "Today, the EU has dozens of telecom players serving around 450 million consumers, compared with a handful in the US and China, respectively," and adds, "as a result, in Europe both revenues per subscriber and capital expenditure per capita (...) are less than half the US’ and Japan’s levels," reaching the conclusion that "the declining profitability of the telecom sector now may represent a risk for industrial companies in Europe." There couldn’t be a more authoritative confirmation of the perfect storm I also described on stage at the GSMA Mobile World Congress in Barcelona in 2023 (https://lnkd.in/dfi5yQss). That’s where I showed how it was necessary and urgent to change the rules of the game, because #InactionIsNotAnOption. Some may have thought I was being provocative, but step by step, we are all converging on the same positions. First, there was the report "Much More than a Market" by Enrico Letta and Jacques Delors Institute, then the White Paper by the European Commission with Thierry Breton "How to master Europe’s digital infrastructure needs?". Now, Mario Draghi's perspective joins them, recommending to "reform the EU’s regulation and competition stance to complete the digital single market for telecommunications, harmonizing rules and favoring cross-border mergers and operations," and he adds in more detail: • "reduce country-level ex ante regulation and favor rather ex post competition enforcement • facilitate cross-border integration and the creation of EU-wide players • introduce a ‘same rules for same services’ principle across the EU • encourage the definition of commercial contractual agreements for terminating data traffic and infrastructure cost-sharing • incentivize the deployment of new infrastructures by defining cut-off dates for older technologies". Well, let’s continue down this path, united as we are already doing, thanks to the work of organizations such as the Confindustria team led by Emanuele Orsini, GSMA, and Connect Europe, with the indispensable contribution of the Ministero delle Imprese e del Made in Italy by Adolfo Urso, Alessio Butti, Agcom, and AGCM. We are ready to do our part, aware that the game we are playing is one of the most important: without #TLC, there is no digitalization. Report “The future of European Competitiveness”: https://lnkd.in/dhb875VR

Want to know what's dominating CEO conversations? Here is the most recent data for Q1 2025 by Philipp Wegner with IoT Analytics - Hot off the Press as of March 25th! 𝐊𝐞𝐲 𝐅𝐢𝐧𝐝𝐢𝐧𝐠𝐬: • 𝐓𝐚𝐫𝐢𝐟𝐟𝐬 𝐓𝐚𝐤𝐞 𝐂𝐞𝐧𝐭𝐞𝐫 𝐒𝐭𝐚𝐠𝐞: CEO mentions of tariffs surged by 190%, surpassing previous peaks as companies grapple with new global trade tensions and policies. CEOs are actively exploring strategies to mitigate or even leverage these tariff impacts. • 𝐔𝐧𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐭𝐲 𝐒𝐩𝐢𝐤𝐞𝐬: Mentions of uncertainty climbed 49% as geopolitical shifts and trade wars cloud strategic decisions, notably affecting the EMEA region and industrial sector most significantly. • 𝐀𝐈 𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐞𝐬 𝐑𝐢𝐬𝐢𝐧𝐠 – 𝐄𝐬𝐩𝐞𝐜𝐢𝐚𝐥𝐥𝐲 𝐀𝐠𝐞𝐧𝐭𝐢𝐜 𝐀𝐈: AI remains a priority, with an impressive 275% spike in discussions about Agentic AI—highlighting a strategic shift towards autonomous decision-making technologies designed to boost efficiency and innovation. • 𝐑𝐞𝐜𝐫𝐮𝐢𝐭𝐢𝐧𝐠 𝐇𝐢𝐭𝐬 𝐚 𝐅𝐫𝐞𝐞𝐳𝐞: Amid economic turbulence, CEOs scaled back conversations on hiring by 8% while hiring freeze mentions soared by 286%, signaling cautious approaches towards workforce expansion. 𝐌𝐲 𝐓𝐚𝐤𝐞: CEOs today face complex, interconnected challenges. They’re shifting from optimistic hiring and growth toward defensive positions amidst economic uncertainty and tariff complexities. At the same time, investments in innovative AI, particularly agentic AI, are viewed as strategic ways to navigate these turbulent waters. 𝟑 𝐏𝐢𝐞𝐜𝐞𝐬 𝐨𝐟 𝐀𝐝𝐯𝐢𝐜𝐞: 𝟏. 𝐑𝐞𝐚𝐬𝐬𝐞𝐬𝐬 𝐒𝐮𝐩𝐩𝐥𝐲 𝐂𝐡𝐚𝐢𝐧 𝐑𝐢𝐬𝐤𝐬: Evaluate your exposure to tariffs immediately. Move swiftly to adjust sourcing and production to maintain competitiveness. 𝟐. 𝐒𝐜𝐞𝐧𝐚𝐫𝐢𝐨 𝐏𝐥𝐚𝐧𝐧𝐢𝐧𝐠 𝐢𝐬 𝐂𝐫𝐮𝐜𝐢𝐚𝐥: Strengthen your organization's ability to rapidly respond to geopolitical shifts. Having robust contingency plans can provide stability in uncertain times. 𝟑. 𝐀𝐜𝐜𝐞𝐥𝐞𝐫𝐚𝐭𝐞 𝐀𝐈 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭: Quickly identify and prioritize strategic AI investments—especially autonomous, agentic AI solutions—to drive productivity, agility, and market advantage despite hiring freezes. 𝐅𝐨𝐫 𝐦𝐨𝐫𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐨𝐧 𝐭𝐡𝐢𝐬 𝐫𝐞𝐩𝐨𝐫𝐭: https://lnkd.in/eWWMt47K ******************************************* • Visit www.jeffwinterinsights.com for access to all my content and to stay current on Industry 4.0 and other cool tech trends • Ring the 🔔 for notifications!

As anyone following EU affairs could not avoid notice, Mario Draghi unveiled his long-awaited report today. He touched upon various issues, but digital technologies in general and AI in particular stand out as a make-it-or-break-it matter. Here is what you need to know. The report's focus is on Europe's competitiveness. For Draghi, the origin of the productivity gap between the EU and the US that started to widen in the mid-1990s is explained mainly by Europe's failure to capitalize on the first digital revolution driven by the internet. Several structural problems are pointed out, particularly those related to access to capital and fragmentation of the single market. However, the most daunting criticism for Brussels is "inconsistent and restrictive regulations" that burden SMEs and innovators. Draghi notes that "while the ambitions of the EU's GDPR and AI Act are commendable, their complexity and risk of overlaps and inconsistencies can undermine developments in the field of AI by EU industry actors." A slap in the face for EU policymakers who boast the 'Brussels effect.' Very harsh words at the press conference as well. "With this legislation, we are killing our companies," Draghi said, pointing out that regulation favors large players since SMEs have fewer resources for compliance. To mitigate this regulatory burden, Draghi suggests harmonizing national AI sandbox regimes, simplifying the implementation of the GDPR, and avoiding contradictions between the two landmark laws. Potential regulatory hindrances should also be regularly assessed. The report recommends the adoption of an EU Cloud and AI Development Act to enhance computing infrastructure and AI capabilities and launch plans to integrate AI models in strategic sectors vertically. Draghi details how he thinks these verticals should be developed, as he sees them as vital for Europe's industrial players to stay competitive. The overall coordination is assigned to a 'CERN-like' AI incubator, an idea that emerged from the EU chief scientific advisors. The report goes one step further and proposes the launch of 'quasi-pilot lines' to bring together the relevant market actors to develop sector-specific AI models. Grand challenges are also envisaged to fast-track translating scientific findings into industrial applications. To sum up, for Draghi, Europe needs to get back into the tech race with the US and China, and the 'AI revolution' is a key opportunity that should not be missed. "A window has opened for Europe to redress its failings in innovation and productivity and to restore its manufacturing potential."

Layoffs cost 10X to 100X more than they save, but HR’s data only covers compensation, so business leaders only see savings. I use data to talk at least one CEO out of layoffs every month. Here’s how to protect your team from the chopping block. Quantify the Loss: The most common mistake is making the case with the value the team has created and the projects it has delivered. CEOs think about future value, not past gains, when making layoff decisions. What projects won’t deliver and how much revenue will be lost? CEOs need growth now more than ever. Build the case with data that quantifies the forward-looking value on the team’s product roadmap. Emphasize This Year’s Losses: Your CEO is being told that after an initial cost in the next 1-2 quarters, the business will see higher margins. Quantify this year’s lost revenue in big, bold terms. Showcase how internal efficiency initiatives will save the company more than the team costs. What external teams will miss their goals? Everyone advocates for themselves, so you’ll stand out by getting other leaders to add their voices. Use external teams’ KPIs and connect them to top-level strategic goals. Reduce Costs Without Reducing Headcount: Take high-cost, low or uncertain returning projects off the roadmap. Optimize hardware and cloud utilization. Push out tool and infrastructure purchases. Consolidate and put pressure on vendors to offer discounts. I frame this as, “I can’t reduce the staffing budget, but here are other areas where I can provide similar savings this year.” Instead of saying “No,” give your CEO alternatives and new options. Focus on informing vs. convincing. Every company’s CEO and CFO are taking a hard look at the technology budget, and layoffs are being discussed quarterly. Be proactive. Assume it’s coming and prepare the case now. Your team and career will be better off if you do.

As we await the launch of the EU's Clean Industrial Deal, I (on behalf of Schneider Electric) have joined fellow industry leaders to call for action by proposing four policy recommendations that can reignite Europe’s competitiveness:    1️⃣ Promote energy-efficiency through ready-to-implement solutions – Europe must adopt cost-effective energy efficiency measures. Manufacturing industries could nearly double the gross value added per unit of energy by 2040 (International Energy Agency (IEA)).   2️⃣ Accelerate electrification – The Electrification Action Plan should focus on measures to boost electrification across all end-use sectors, with a target of 35% electrification by 2030. This is the key to making the energy transition affordable.    3️⃣ Take an integrated approach to our energy system to enhance the flexibility – E.g. We could leverage resources such as the 2,860 TWh of waste heat available annually in the EU.    4️⃣ Establish financing measures and other incentives - Predictable and accessible financing measures are crucial to enable industries to adopt cost-effective solutions and foster partnerships for funding, regulatory support, and shared resources.    This is a pivotal moment, but our goals are within reach. With collaboration and focus, I believe Europe will see a sustainable and competitive future.   Read the full article in Euronews: https://lnkd.in/e7rhiXUm    What do you hope to see in the Clean Industrial Deal?    Jürgen Fischer Jose La Loggia Karin Lepasoon (was Avasalu) Kathleen (Katie) McGinty Lars Petersson Judith Wiese    #CleanIndustrialDeal #EU #EUPolicy #Electrification #LifeisOn #ImpactCompany 

China recently pulled off a dazzling display with more than 10,000 drones lighting up the night sky - an impressive feat on its own. Now, consider the potential if these flying formations were equipped with computer vision - a branch of AI enabling machines to understand images or video in real time. For drones, that means recognizing objects, interpreting surroundings, and making instant decisions without waiting for human input. Where could this lead? - Public Safety: Large events or bustling city centers could be monitored more efficiently, with drones helping to spot emerging risks or coordinate emergency responses. - Environmental Stewardship: Drones might track wildlife movements, gauge pollution levels, or map deforestation, providing insights to support conservation efforts. - Urban Planning: From traffic flow analysis to infrastructure checks, drones could handle time-consuming tasks more precisely and safely than human crews. While these ideas are exciting, they also raise questions about privacy, safety, and regulatory frameworks. Balancing innovation with responsible deployment will be crucial as we move toward a future where AI-powered drones become an integral part of our daily lives. What do you think is the most significant benefit - or challenge - of harnessing computer vision to guide drone technology? #innovation #technology #future #management #startups

🔍 Three Key Aspects of the Draghi Report on European Competitiveness Professor Mario Draghi's recent report on European competitiveness has sparked significant debate within the EU, especially in Germany. Here are the three aspects of the report that stand out: Germany's Role in the EU's Industrial Future A pressing point in the report concerns the challenges facing Germany, Europe's industrial powerhouse. With stagnating productivity, an aging population, and lagging digital innovation, Germany is at a crossroads. Draghi urges the country to rethink its growth model and actively engage in a coherent EU-wide industrial policy. Many in Germany fear that an EU industrial strategy would be a burden. However, the report argues that this concern is unfounded. Countries like Germany can benefit significantly from such a strategy by investing in digitalization, infrastructure, and sustainable energy. By realigning its economic strategy, Germany can secure its own competitiveness and act as a catalyst for a more resilient European economy. Competition as a Catalyst for Innovation A compelling aspect of the report is its emphasis on the relationship between competition and innovation. While some argue that strict competition policy could stifle innovation, the report demonstrates that competition actually acts as a catalyst for innovation. One proposal is to allow merging firms that are not dominant to justify their merger by proving it will enhance innovation. This approach strengthens the role of innovation in competition assessments while preventing potential abuse. Finding this balance between fostering innovation and ensuring fair competition is crucial for the future of the European economy. Strategic Use of Resilience and State Aid The report also advocates for integrating resilience into competition policy more strategically. In sectors like medicine and semiconductors, where supply shortages pose a risk, resilience must be a key consideration. The proposal to establish a separate agency to assist competition authorities in matters of security and defense is an innovative way to manage these complexities. Equally significant is the push for European-level subsidies instead of national state aid. This approach aims to minimize market distortions and strengthen the single market by using EU funds to support research and development and tackle coordination problems. By adopting a more strategic use of state aid, Europe can enhance its competitiveness while avoiding market distortions. 🚀 Conclusion: The Draghi report is both a wake-up call and a roadmap. For Germany and other member states, it is time to view current challenges as opportunities and work together toward a competitive and future-ready EU. Fiona Scott Morton Giorgio Monti Jacques Cremer Rupprecht Podszun Daniela Schwarzer Lucas Guttenberg Sander Tordoir Nils Redeker Tom Nuttall Hans von der Burchard

2024 has seen MATCHESFASHION LIMITED collapse, FARFETCH rescued and YOOX NET-A-PORTER sitting in a financial purgatory, waiting for a buyer. Yet amid this multi-brand gloom, Mytheresa have delivered at stellar year of sales and growth. It wasn’t meant to happen this way, after all the acquisitions of YNAP, Matches and Farfetch made a lot of people very rich and they became the darlings of both investors and trade press alike. In comparison, Mytheresa barely got a mention; but now look at the 2024 numbers. ➡ Net sales increase to €840.9m, a 9.8% growth from €766.0m in 2023 ➡ GMV growth of 7.1% to €913.6m, compared to €853.2m in 2023 ➡ Gross Profit margin of 45.7%. ➡ Positive profitability of €7.7m. CEO Michael Kliger, said "Mytheresa builds a community for luxury enthusiasts. We create desirability through digital and physical experiences.” In a year where luxury sales have struggled, Mytheresa have been smart to double down on their top customers offering “money-can´t buy” experiences in partnership with luxury brands, including a two day Italian experience with Brunello Cucinelli at Lago d´Orta, a two day Italian summer experience with DOLCE&GABBANA in Capri and a yacht cruise experience with Valentino in Nice. These events are hosted by the site’s personal shoppers who subtly maximise the spending opportunity for their guests. And as the luxury houses looks for partners to leverage to maintain their own growth, Mytheresa have cemented themselves as their digital platform of choice. Their customer is hyper-discerning; they don’t come to the site looking for hip, emerging designers. Instead, they go to Mytheresa for the strongest mix of the world best designers – and the curation they get is spot on. They have also achieved genuine emotional engagement with their consumer, the hardest trick for a digital business to achieve. The edit of collections is their secret sauce. US President, Heather Kaminetsky summed this up succinctly: “Nobody has a lot of time. They don’t want 400 options when searching for a white button-down shirt. They want to see just the best 10 or 20 items so they can move on with their life. We do that and they come back time and time again.” Mytheresa expects sales to grow as much as 13 percent in 2025 and growth in the US is top of the agenda now. The business has a far lower share of the market there but is growing fast. In fact, expect them to break the €1bn mark in 2026. DHR Global #fashionretail #luxuryretail

Why I believe in Burberry’s new strategy Last week Burberry's CEO Joshua Schulman outlined the company’s new strategy “Burberry Forward.” Whilst I believe that a turnaround will take time, given the weak luxury environment, here’s why I think the new strategy makes complete sense 1.    Timeless British Luxury Under the past two executive management teams, Burberry was arguably too fashion-forward and strayed from its position as a timeless British luxury brand. It is not Gucci and has never succeeded through high fashion, so juxtaposing heritage and innovation makes sense. Burberry is already cleverly playing on British wit through its “Wrapped in Burberry” campaign, with Rivals’ actors David Tennant and Alex Hassell shot in Bloomsbury. This is great storytelling. 2.    Lead with authority in outerwear and earn authority in other categories It is a relief to know that Burberry is planning to focus on its core DNA, outerwear. This is a huge opportunity given Burberry’s unique position as a British outerwear brand. Burberry’s 2024 outerwear campaign “It’s always Burberry weather” celebrates the company’s commitment to this category. Using models of all ages, Burberry also manifested its multigenerational appeal. 3.    Align distribution with product and customer strategy Stores: Burberry’s store productivity should improve as Burberry focuses again on core categories and related products. For example, the focus on scarves is a natural extension to Outerwear. This is a great way to bring in aspirational customers who may be looking to spend £400+. E-commerce: Historically Burberry was a front runner in e-commerce (together with Tiffany & Co.). Today this is no longer the case, so it is reassuring to know that Burberry is focused on improving the e-commerce experience. Outlets: While there has been much focus on Burberry’s dependence on outlets and I don’t believe the number will shrink significantly, this is not the company’s primary problem. Even in Burberry’s heyday it had a lot of outlets. The key issue has been not having the right full price product to start with. 4.    Reignite high performance culture and capabilities We all know the power of a motivated team. One of the great things about Burberry under the leadership of Angela Ahrendts was the energy in the room and involving the entire workforce by communicating clearly with everyone.  As an industry veteran, Josh Schulman is bringing in executives he knows well – such as Paul Price - having worked together in their previous roles. In addition, combining the use of data to make decisions with creativity and intuition. So, what creates a powerful luxury brand is the ability to capture the brand’s original DNA and infuse it with creativity and innovation, and then draw in customers through powerful storytelling. This is exactly what Joshua Schulman is doing. I’d love to know what you think. #British #luxury #storytelling #management Smith Square Partners