I hope you came through winter unscathed and that you’re welcoming spring as enthusiastically as is everyone at Atticus. Now that most companies are well into the business year, our April newsletter offers you a range of important management issues to consider.

Steve Ryan writes about “Disruptive Innovation,” a phrase coined by a Harvard business professor to describe how new technologies can overthrow the competitive advantage of even industry powerhouses. But while it can signal new opportunities, it also brings new challenges that management must understand and address.

Managing human capital is as critical today as managing financial resources. Carmine Domanico cites a recent survey that indicates how superior human capital management and superior shareholder returns go hand-in-hand. Carmine goes on to explain the implications of that linkage as you manage on a daily basis.

And Jim Bliwas warns us that there’s a big difference between a catchy slogan on your website and having a genuine brand. Too many companies confuse the two. As Jim points out, a brand is a clear, concise statement of the “unique essence” of the company. He then explains a proven process used to create a meaningful brand statement, and how doing that translates to better customer service, loyalty – and profits.

We also report on the surprising results of our March survey about document retention policies and I hope you’ll take a moment to complete our April survey, which is about China. According to a March 2006 StatsCan study, Canadian companies are failing to cash in on China’s huge need to build infrastructure. Moreover, even the natural resources sector, long the bulwark of Canada-China trade, is falling behind similar trade between China and other parts of the world. We’ll be interested to learn what you think, and will report the study’s findings in May.

Again, welcome to spring!

Greg Petkovich
President
Atticus Interim Management

Disruptive Innovation – Battle Cry of Emerging Enterprise?
By Steve Ryan

In recent years a favourite phrase has emerged among new business ventures in their efforts to build investor enthusiasm. Introduced by Clayton Christensen in his best-selling book “The Innovator’s Dilemma” (Harvard Business School Press, 1997), the concept of “Disruptive Innovation” describes how new technologies can overthrow the competitive advantage of even industry powerhouses. The phrase is now used to insinuate opportunities that are beyond the reach of established competitors. But that is not a complete interpretation.

Read the full article.

The Impact of Effective Human Capital Management
By Carmine Domanico

Global consulting firm Watson Wyatt recently completed a study that analyzed how human capital is a lead indicator of shareholder value. This was a follow up to a study conducted two years ago. The essential question they sought to answer then was: Can the way a company manages its human capital significantly affect its financial performance?

Read the full article.

The Atticus Survey: Few Ontario Businesses Have A Document Retention Policy.
Less than half say they have such a policy even though 80% say they’ve been involved in a lawsuit. Of those with a policy, only a few have enforcement procedures in place to make sure it is followed.

In February, the Atticus newsletter covered the need for companies to have a document retention policy. In a survey included with the article, nearly 2,500 businesses were asked if they have such a policy in place.

Only slightly more than one-third – 37 per cent – say that they do. And while about 5 per cent of businesses state that they are developing one, an overwhelming 56 per cent of those surveyed say they do not have a policy for retaining documents. The vast majority of businesses – 80 per cent – with a policy have had it in place for at least four years. As well, the survey shows that document retention is more likely in larger businesses than in smaller companies.

Given the widespread use of e-mail in business, it is surprising that 71 percent of companies with a retention policy do not include e-mails as part of what must be kept.

According to the study, which was conducted on-line from February 1 to 15, 2006, 80 per cent of all Ontario companies have been involved in a lawsuit or other legal dispute at some point.

Nearly six-in-10 companies say they expect employees to follow the policy, but do not have any procedure in place to ensure that they do. Of the companies that actively enforce the policy, 28 per cent leave the job to the CEO while 14 per cent ask their lawyers to do the policing.

The need for a policy was generally spotted by the CEO, according to the survey, with 21 per cent saying they initiated the programme. Ten per cent note that the idea came from an outside advisor other than a lawyer, and only five per cent say that their lawyers suggested developing a document retention policy.

Of the companies in the study, 43 per cent are located in the Greater Toronto Area while the remaining 57 per cent are elsewhere in Ontario.