Category: 3. Business

LAWRENCE — In the U.S. public company audit market, regulators often assume that the absence of competition may lead to lower quality audits. However, a new article reveals competition is often overrated.

“We don’t find any evidence that a lack of competition is problematic. It turns out that auditors who appear to be operating in less competitive markets are more efficient and more effective,” said Will Ciconte, assistant professor of finance at the University of Kansas.

His working paper, titled “Profit persistence in the U.S. audit market,” investigates the relation between audit competition, quality and labor hours. Using proprietary data on auditor realization rates, the findings suggest that lower competition may reflect differentiation and that auditors use market power to deliver high audit quality.

The paper has been accepted to the Journal of Accounting Research.

“More providers should mean more fierce competition, where the provider should then try to differentiate based on their quality, and that should drive quality up and ensure prices stay at a fair price. Unfortunately, that ignores a few things unique about the audit market,” said Ciconte, who co-wrote the article with Andrew Kitto of the University of Massachusetts Amherst.

Their study focuses on profit persistence (i.e., profits are “sticky” over time). They find certain audit offices have abnormal profits and there does not seem to be enough competitive pressure to drive down those profits over time. This provides evidence supporting concerns expressed by the audit regulator that the audit market lacks competition.

“We interpret the evidence as suggesting auditors with persistent profits are just providing better audits,” he said.

For the main analysis, Ciconte and Kitto measure competition using regressions of abnormal profitability in the current year on abnormal profitability in the prior year. (Abnormal profitability refers to the difference between the profitability for a given audit engagement compared to all engagements in the same year.)

Ciconte said, “We use this measure to explore whether higher profit persistence, which we use as a measure for low competition, is related to auditor effort and quality. We test this by regressing auditor hours, financial statement restatements, PCAOB inspection findings and discretionary accruals on our competition measure.”

Most larger companies rely on one of the Big Four firms — Deloitte, PwC (PricewaterhouseCoopers), EY (Ernst & Young) and KPMG — for their accounting and auditing. But that comes with its own set of baggage.

“For many of these companies, they can’t get an auditor that’s outside of the Big Four because there’s a need to invest in technology and knowledge and skills to serve the client,” Ciconte said.

“There’s this concern, ‘We only have these four firms that can serve this pool of clients. They don’t have an incentive to do a good job.’ We say, ‘Let’s see what competition looks like inside these markets. And then if we are detecting that there appears to be less competition, what are the implications for stakeholders?’”

Given that Ciconte found a lack of competition wasn’t problematic, then wouldn’t the audit quality be the same if a company were to switch to any of the other Big Four?

“Because these auditors are able to develop skill and expertise which they can then exploit, this creates a barrier so another firm can’t just come in and say, ‘Hey, you should come with us.’ Because switching off that auditor will be costly to the clients. The clients are willing to stick with them because they figured out a way to develop their processes, to get the right people in place to do good work and to get to a quality answer that is not replicable by a competitor,” he said.

The Delaware native started at KU this fall. He considers his expertise a “weird hybrid” of audit research and tax research.

Ciconte said, “I know from my talks with rank-and-file partners in major firms, they’re always monitoring these concerns. They understand what’s going on in the regulatory environment, and so they’re concerned about potential changes. Our study suggests any changes should be done very cautiously. It’s not good to solve a problem that doesn’t exist.”

Washington, DC: An International Monetary Fund (IMF) team led by Delia Velculescu visited South Africa on December 1-8 to hold meetings with the economic authorities and other counterparts from the public and private sectors for the 2025 Article IV annual consultation. Discussions focused on policies to ensure macroeconomic stability and the structural reforms needed to durably lift potential growth, create jobs, and reduce poverty and inequality.

Context, Macroeconomic Outlook, and Risks

The South African economy has proven resilient to renewed global turbulence this year. Faced with greater protectionism, tariffs, and heightened policy uncertainty, the economy has shown resilience, owing to its abundant mineral wealth, independent institutions, credible inflation-targeting framework, flexible exchange-rate regime, and deep domestic capital markets. Financial-market indicators have improved, in part reflecting important domestic policy developments, such as the shift to a lower inflation target and exit from the FATF grey list, which, together with the recent Medium-Term Budget Statement’s reaffirmation of the government’s commitment to debt stabilization, led to an upgrade of South Africa’s credit rating. Nonetheless, persistent impediments—including product- and labor-market rigidities, spatial disparities, governance weaknesses, inadequate infrastructure, and elevated public debt—constrain the economy’s ability to rebound strongly from shocks, create needed jobs, and achieve its true growth potential.

Activity is expected to improve gradually. Following two quarters of strong activity, growth is projected to reach 1.3 and 1.4 percent in 2025-26, driven by continued robust private consumption. While exports remain hampered by tariffs and continued global trade policy uncertainty, strong commodity prices are supporting export receipts in the near term. Ongoing electricity and logistics reforms are expected to boost investment over the medium run, with growth projected to reach 1.8 percent by the end of the decade. In view of the move to a new lower inflation target, inflation is projected to average 3.3 and 3.6 percent in 2025 and 2026, before settling to 3 percent by end-2027 and beyond.

Risks remain tilted to the downside. Weaker-than-expected global activity—in the context of heightened geopolitical tensions, escalating trade measures, and prolonged global policy uncertainty—could dampen exports and increase commodity-price volatility. An abrupt global financial market correction and tighter financial conditions could lead to exchange-rate and capital-flow volatility and higher sovereign bond yields. On the domestic side, higher costs of disinflation may impact activity in the near term, while a slower pace of structural-reform implementation may exacerbate supply-side constraints and weigh on medium-term growth. On the upside, more ambitious domestic reforms, combined with a de-escalation of tariffs and improved global demand, could help boost confidence and support investment and growth.

Policies in Support of Macroeconomic Stability and Inclusive Growth

Bolstering resilience in a more shock-prone world and pivoting toward higher standards of living for all requires coherent and well-coordinated policies and reforms to safeguard fiscal sustainability, secure low and stable inflation, ensure financial stability, and address entrenched bottlenecks to growth.

Fiscal Policy

The mission welcomes the authorities’ commitment to reduce fiscal deficits and debt. The November 2025 Medium-Term Budget Policy Statement reaffirms the commitment to stabilize and reduce debt over time by achieving a primary surplus of 1.5 percent of GDP in FY26 and 2.3 percent by FY28. The authorities aim to reach these targets through higher revenues and lower spending, while safeguarding public investment and social spending. Under the IMF baseline, however, in the absence of additional well-specified fiscal reforms, revenues are projected to be somewhat less buoyant and public spending to decline more gradually than the authorities forecast. As a result, the primary surplus is expected to increase more slowly and be insufficient to stabilize public debt over the medium run.

A credible, growth-friendly, and politically and socially feasible adjustment is needed to stabilize and reduce public debt, while safeguarding critical spending. With debt high and rising and growth below potential, policymakers face the difficult task of balancing debt-sustainability considerations against the need to safeguard the recovery. Spending needs are also substantial, given high unemployment and poverty rates, weak education and health outcomes, and deteriorating infrastructure. In this context, a well-calibrated fiscal consolidation that accounts for the economic and social realities and needs yet can deliver more credibly on debt-sustainability objectives is critical.

The mission supports the authorities’ FY26 primary surplus target and recommends more ambitious medium-term targets to support debt sustainability. To reach a primary surplus of 1.5 percent of GDP next year, as the authorities aim, a fiscal adjustment of around ¾ percent of GDP will be needed relative to staff’s baseline. Locking in savings brought by favorable near-term revenue dynamics, together with additional reforms, can support this effort. In the medium run, the mission considers that a primary surplus target of 3 percent of GDP would be needed to bring debt down to around 70 percent of GDP by 2033, as the authorities plan. This will necessitate an additional fiscal effort of at least ½ percent of GDP per year in FY27-28. Maintaining this primary surplus until debt declines to 60 percent of GDP can help bolster policy buffers against shocks and further reduce debt costs.

The credibility and feasibility of the adjustment hinges on specifying concrete, durable, and growth-friendly reforms, while protecting vulnerable groups.

• Reprioritizing and improving the efficiency and fairness of public spending is essential to support the adjustment and achieve social and political buy in. Building on ongoing efforts supported by spending reviews, the mission recommends reforms focused on: (i) improving the efficiency of procurement practices by finalizing the implementing regulations of the new Procurement Act, along with strengthening internal controls, transparency, and accountability, which are also key to reduce corruption; (ii) rationalizing the wage bill, building on ongoing efforts to incentivize early retirement, strengthen payroll integrity, and link pay with performance; (iii) limiting and linking transfers to state-owned enterprises to reform progress and operational improvements; (iv) streamlining underperforming, duplicate, and low-priority programs and entities; (v) better targeting subsidies; and (vi) further strengthening debt management and the financial management of transfers to provincial and local governments. Such measures would not only contribute to debt-reduction objectives but also create space for additional priority spending on public-infrastructure investment, primary education, and healthcare. Building on ongoing efforts to enhance verification processes and tackle fraud in the social-grants system, further bolstering efficiency and targeting can help ensure that benefits reach those most in need.
• Revenue measures could also be considered, if needed to support the adjustment or finance additional priority spending. Efforts made by the South African Revenue Service (SARS) to raise tax collections and reduce tax debt are commendable and should continue, supported by advancements in digitalization and AI. South Africa’s tax revenue is already high and comparable to peers, with limited scope for significant gains. Potential revenue options include: curtailing tax expenditures that benefit mostly upper-income individuals; raising carbon tax rates, which can also support climate objectives; raising gambling taxes, as currently proposed; and considering additional social contributions if needed to finance the new health system or a redesigned social-relief-of-distress grant linked to job search.
• A fiscal rule anchored in a prudent debt ceiling can help underpin the consolidation and support policy credibility. A numerical debt rule—anchored in prudent debt targets (70 percent of GDP in the medium term and 60 percent in the long term), supported by expenditure and primary-balance rules, well-defined escape clauses, and an independent fiscal body—can help bolster the discipline, credibility, and predictability of fiscal policy, while reducing fiscal risks.

Monetary and Financial-Sector Policies

The adoption of a lower inflation target in the context of a strengthened inflation targeting framework is a major policy achievement. The shift to a lower 3 percent inflation target with a +/-1 percent tolerance band is welcome and expected to support macroeconomic stability and debt sustainability by reducing borrowing costs. In view of subdued inflation and downward-trending inflation expectations, the monetary policy stance remains appropriate. Looking forward, policy should continue to remain data driven and focused on guiding inflation expectations to the new target. Careful communication will be key to maintaining credibility and anchoring inflation expectations, while gradual implementation of the new target remains important to allow for flexibility in case of shocks.

The supervisory authorities have continued to manage financial-sector risks prudently. Systemic risks have increased this year, given higher global uncertainty and sizeable exposure of banks and non-bank financial institutions (NBFIs) to still rising government debt. Nonetheless, the banking system has remained sound and able to expand credit to the economy. It resiliency also reflects important progress made to strengthen crisis-management and prevention tools, such as the new banking-resolution framework, enhanced depositor protection, and stress testing. The phasing-in of a positive cycle-neutral countercyclical capital buffer in 2025 and the planned issuance of loss-absorbing liabilities over the medium term can further help bolster banks’ resilience to shocks.

Looking ahead, monitoring risks carefully and strengthening the supervision of banks and NBFIs remain essential to safeguard financial-sector stability. Risks from the sovereign-bank nexus should primarily be addressed through growth-friendly fiscal consolidation and continued monitoring and risk assessments of banks. Should such risks intensify, consideration could be given to additional prudential measures, while being mindful of potential unintended consequences on financial institutions’ balance sheets and securities markets. In view of sizeable interlinkages between banks and NBFIs, the mission supports the authorities’ efforts to assess system-wide interconnectedness and identify contagion risks and recommends enhancing reporting requirements for NBFIs and ensuring a consistent regulatory and supervisory approach for banks and non-banks.

Ensuring that the financial sector continues to support the economy, including by  providing efficient services, is equally important. A well-functioning financial sector not only depends on but also contributes to a healthy and strong economy through the provision of adequate credit and cost-effective financial services to firms and households. Addressing impediments to SME financing will require revisions of the National Credit Act, reforms of title deeds to unlock collateral, and sustained efforts to foster information sharing across financial institutions. Promoting venture capital and better connecting SMEs to capital markets would help expand SME’s funding options. The mission supports the authorities’ efforts to modernize the payments ecosystem and improve its efficiency by developing a digital payments infrastructure, allowing non-bank participation in the system, improving interoperability, and introducing a digital ID, which can also support tax compliance and prevent financial fraud and social-transfer misuse.  

South Africa’s recent removal from the FATF gray list marks an important milestone. This notable achievement reflects the significant progress made by the authorities to strengthen the AML/CFT framework by improving risk-based supervision of financial and non-financial sectors, establishing beneficial ownership registries for legal persons and legal arrangements, and collaborating across domestic and international agencies to investigate and prosecute complex money-laundering activities. The authorities are encouraged to continue to sustain these efforts.

Structural Reforms

The authorities have advanced structural reforms, albeit at a pace not yet commensurate with the economy’s needs to generate sustainable growth and jobs. Notable progress has been made under Operation Vulindlela to increase electricity generation, including from renewable sources, and allow for private-sector participation in freight rail and ports. New planned reforms aimed at improving local-government service delivery and governance, promoting digital public infrastructure, and addressing spatial disparities are also welcome. However, much remains to be done to fully implement these reforms and permanently lift growth to a level consistent with higher standards of living for all.

With fiscal space and state capacity limited, the private sector will need to drive job creation and growth over the medium run. The current state-led development model appears to have reached its limits in addressing South Africa’s low productivity, high unemployment, and widespread poverty and inequality. Moreover, the strained public finances constrain the ability of the government to support growth through public resources. Thus, unlocking the potential of the private sector through more ambitious structural reforms remains the only viable option to not only boost productivity and employment but also generate the sustained growth needed to achieve South Africa’s social objectives. 

The priority remains to swiftly implement ongoing electricity and logistics reforms allowing for competition through increased private-sector participation. Adequate and cost-effective electricity, railways, and ports are essential to support productive activity in all sectors and boost exports. In the electricity sector, efforts should focus on expediting the operationalization of the wholesale electricity market and ensuring fair competition, fully unbundling Eskom’s generation and transmission functions to ensure the latter’s operational and functional independence, expanding and modernizing the transmission grid, including through accelerating independent power-transmission projects, and developing sustainable operating models for municipalities. Private-sector participation in logistics requires strengthened governing legislation and credible freight-rail access rules, standardized rail and port-concession frameworks, and the establishment of an independent transport regulator. Both Eskom and Transnet should continue to improve their operational and financial performance to reduce dependence on the state.

In addition, an ambitious package of product-market, governance, and labor-market reforms is necessary to help unlock the private sector’s full job and growth potential. Staff analysis suggests that reforms closing half of South Africa’s structural gap with top emerging markets on business environment and governance could boost real output by up to 9 percent, lifting growth to around 3 percent in the medium term.

• Business environment: Burdensome regulations and red tape severely hinder firm—especially SME—productivity. The mission recommends reforms focused on streamlining licensing and permitting, including by establishing a national licensing framework, strengthening local authorities’ licensing capacity, introducing a public inventory of permits/licenses, and simplifying procurement procedures. Reducing regulatory uncertainty, including in the mining sector, can help support investment and growth. Further strengthening the competition-policy framework can also help lower barriers to firm entry and reduce costs.
• Governance and anti-corruption: Sustained efforts remain necessary to address corruption and governance weaknesses. Reforms should focus on establishing an independent Office of Public Integrity and Anti-Corruption, clarifying the mandates of law-enforcement agencies and strengthening accountability, and ensuring the financial and institutional independence of the National Prosecuting Authority. Maintaining an accurate and updated beneficial-ownership database and promoting whistleblower protection are equally important. At the same time, implementing transparent, merit-based selection and appointment of SOE boards and senior public-administration officials and bolstering local governments’ governance and service delivery, including for electricity and water, can help build public trust and support growth.
• Labor market: Complementary labor-market reforms are also needed to support job creation and reduce inequality. On the labor-supply side, addressing spatial inequality requires integrated reforms across housing policies, urban transport, and rural connectivity. Well-targeted mortgage and rental assistance programs and incentives to develop low-cost housing in high economic-activity areas, supported by zoning and building regulation reforms, will be key to support urban employment. Upgrading roads, improving public transit, and formalizing informal transport are also needed to help reduce prohibitively high commuting costs and improve access. Better tailoring active labor-market policies can also support job search and address skills mismatches. On the labor-demand side, shortening dispute-resolution procedures, further streamlining dismissal processes, and allowing for exemptions for SMEs from collective agreements will be key to allow firms to generate much needed jobs.
• Trade: Continuing to engage constructively on trade and enhancing trade diversification and regional integration can further help support resilience and growth. The mission supports the authorities’ efforts to continue exploring export opportunities, including deeper integration under the African Continental Free Trade Area (AfCFTA) through lowering non-tariff barriers and upgrading customs systems. To minimize fiscal risks and avoid market distortions and spillovers, any support measures to sectors affected by ongoing trade disruptions and tariffs should remain targeted and temporary. IMF analysis suggests that macroeconomic gains from industrial policy are generally modest, while broader structural reforms have significantly larger and more durable effects on value added.

The IMF mission team thanks the South African authorities and all other interlocutors for their hospitality and candid exchange of views.

 

 

South Africa: Selected Economic Indicators, 2024-28

 

Social and Demographic Indicators
GDP			Poverty (percent of population)
Nominal GDP (2024, billions of US dollars)	401		Below poverty line (3.65US$/day, 2023)				34
GDP per capita (2024, in US dollars)	6,253		Undernourishment (2022)				8
Population characteristics			Inequality (income shares unless oth. specified)
Total (2024, million)	63		Highest 10 percent of population (2017)				54
Urban population (2023, percent of total)	68		Lowest 40 percent of population (2017)				5
Life expectancy at birth (2023, number of years)	66		Gini coefficient (2017)				67
Economic Indicators
			2024	2025	2026	2027	2028
Title				Proj.
National Income and Prices
Real GDP (annual percentage change)			0.5	1.3	1.4	1.5	1.7
CPI (annual average, annual percentage change)			4.4	3.3	3.6	3.3	3.0
Output gap (percent of potential real GDP)			-0.3	-0.1	-0.1	0.0	0.0
Money and Credit
Broad money (annual percentage change)			6.7	5.3	5.4	4.8	4.7
Credit to the private sector (annual percentage change) 1/			4.4	5.3	5.4	4.8	4.7
Repo rate (percent, end-period) 6/			7.75	6.75	…	…	…
Labor Market
Unemployment rate (percent of labor force, annual average)			32.6	32.6	32.5	32.4	32.3
Savings and Investment (Percent of GDP)
Gross national saving			13.4	12.6	12.7	12.6	12.5
Investment 2/			14.1	13.5	13.8	14.0	14.2
Fiscal Position (Percent of GDP) 3/
Overall balance			-5.8	-5.8	-4.8	-4.4	-4.1
Primary balance			-0.5	-0.5	0.5	0.9	1.1
Gross government debt 4/			76.0	77.0	77.5	78.9	80.1
Balance of Payments (Billions of U.S. dollar Unless Otherwise Indicated)
Current account balance			-2.6	-3.9	-5.3	-7.2	-8.7
Gross reserves			65.5	72.1	72.1	72.1	72.1
in percent of GDP			16.3	16.7	15.2	14.6	14.0
in months of next year’s imports			6.2	6.0	5.7	5.4	5.2
in ARA in percent, excl. CFM			96.0	95.4	91.5	88.5	86.2
in ARA in percent, incl. CFM			107.4	107.3	102.9	99.6	97.1
Total external debt (percent of GDP)			42	45	45	46	48
Exchange Rates
Real effective exchange rate (percent change) 5/			3.9	0.8	…	…	…
Exchange rate (Rand/U.S. dollar, end-period) 6/			18.7	16.9	…	…	…
Memorandum Items
Nominal GDP (billions of U.S. dollar)			401	432	475	494	513
Sources: Haver, National Treasury, SARB, UNU WIDER, World Bank, and IMF staff calculations.
1/ Depository institution’s domestic claims on private sector in all currencies.
2/ Noisy inventories data are excluded from the investment breakdown to highlight fixed capital formation developments.
3/ Consolidated government as defined in the budget unless otherwise indicated.
4/ Covers national government, provincial governments, and social security funds.
5/ As of December 2025. A positive number represents depreciation and vice versa.
6/ Value for 2025 as of December 6, 2025.

 

Barry Morris and Deirdre Toner join Couchbase to advance product innovation and customer-focused execution

SAN JOSE, Calif., Dec. 9, 2025 /PRNewswire/ — Couchbase, Inc., the developer database platform for critical applications in our AI world, today announced two senior leadership appointments that strengthen the company’s focus on accelerating its enterprise customer growth trajectory. Barry Morris has joined as Chief Product and Strategy Officer and Deirdre Toner has joined as President and Chief Commercial Officer.

Morris is a proven tech executive and data infrastructure industry veteran, with more than 30 years experience leading U.S. and European software businesses. He has scaled organizations to more than $1 billion in ARR, has built multiple data management companies, and brings extensive experience building category leaders. A customer-focused executive with a deep technology background, he most recently held leadership positions at Google and Amazon Web Services (AWS).

Toner brings more than 30 years of experience driving high-growth sales teams and business development across companies of all sizes. Her background spans applications, data and infrastructure, with deep expertise in machine learning and generative AI. A customer-centric leader with a strong focus on scalable results, she joins Couchbase from AWS where she most recently served as General Manager of U.S. Specialty Sales. Toner has also held senior roles at DataStax and SAP.

“Barry and Deirdre bring incredible experience that aligns with where we are headed as a company, building on the strong foundation our team has created,” said BJ Schaknowski, CEO at Couchbase. “Their leadership will help strengthen our focus on product innovation, go-to-market excellence, world-class culture, delighting customers and operational discipline.”

“Data sits at the center of competitive advantage in an AI-driven world and strengthening data strategies for AI is now essential for every organization,” said Morris. “I joined Couchbase because of its long-standing commitment to innovation and its proven success across major enterprises. The company is uniquely positioned to support data and AI modernization at any scale, and I look forward to contributing to that mission.”

“Customers tell us they are under tremendous pressure to ready their data for AI in a manner that delivers real outcomes,” said Toner. “They want technology partners who understand their challenges and can help them move forward with confidence. Couchbase has built the scalable foundation required in this new AI-first era and proven its value across some of the most demanding environments. I’m excited to join because I believe in Couchbase’s mission and in the opportunity to support customers as they navigate the demands of today’s AI-driven landscape.”

About Couchbase
As industries race to embrace AI, traditional database solutions fall short of rising demands for versatility, performance and affordability. Couchbase is seizing the opportunity to lead with Capella, the developer database platform architected for critical applications in our AI world. By uniting transactional, analytical, mobile and AI workloads into a seamless, fully managed solution, Couchbase empowers developers and enterprises to build and scale applications and AI agents with confidence – delivering exceptional performance, scalability and cost-efficiency from cloud to edge and everything in between. Couchbase enables organizations to unlock innovation, accelerate AI transformation and redefine customer experiences wherever they happen. Discover why Couchbase is the foundation of critical everyday applications by visiting www.couchbase.com and following us on LinkedIn and X.

Couchbase^®, the Couchbase logo and the names and marks associated with Couchbase’s products are trademarks of Couchbase, Inc. All other trademarks are the property of their respective owners.

SOURCE Couchbase, Inc.

WASHINGTON, Dec. 09, 2025 (GLOBE NEWSWIRE) — FTI Consulting, Inc. (NYSE: FCN) today announced that the Company’s Board of Directors has elected Rike Rabl as Chief Human Resources Officer, effective Jan. 1, 2026.

Ms. Rabl, who joined FTI Consulting in 2020 and is based in Washington, D.C., will lead FTI Consulting’s global human capital strategy, including talent acquisition and development, workforce planning, and total rewards. In her role, she will work with segment and regional leaders to attract and grow top talent worldwide and will serve as a member of the firm’s Executive Committee.

Ms. Rabl will succeed Holly Paul, who joined FTI Consulting as its first Chief Human Resources Officer in 2014. During her tenure, Ms. Paul transformed FTI Consulting’s human resources function, including building out the firm’s recruiting and talent development teams, enhancing benefits and introducing new employee engagement initiatives, among many other changes. Ms. Paul will remain with the Company in a senior advisory role.

“I would like to thank Holly for her leadership and her many contributions over the past 11 years,” said Steven H. Gunby, CEO and Chairman of FTI Consulting. “Holly has helped us attract, develop and retain great people — people with the drive and energy to do great work for our clients, which in turn allows us to build our brand and attract more great talent.”

Mr. Gunby added, “To continue to drive this Company’s powerful organic growth trajectory, we must compete and win in the two markets that matter most: the market for clients and the market for talent. Holly and Rike have partnered to make this transition smooth, and I am confident that Rike’s global perspective and track record in driving transformational change will help us build on the strong foundation Holly created.”

Commenting on the transition, Ms. Paul said, “The heart of FTI Consulting is our people. It has truly been an honor to help lead our Company through the shift to organic growth that we started in 2014. After more than a decade, this is the right time for a transition. Rike’s experience leading strategy at people-driven companies will help us continue to elevate our HR strategy and practices for the next chapter of FTI Consulting’s growth.”

Ms. Rabl most recently served as Deputy Chief Human Resources Officer, partnering with Ms. Paul to oversee HR operations globally and drive HR strategy and transformation efforts to improve service delivery.

Commenting on her appointment, Ms. Rabl said, “As a leading expert firm, our success depends on empowering our people to deliver exceptional results for clients and on our ability to attract, develop and retain the best professionals in the market. Holly’s leadership and commitment to the firm’s values have made a lasting impact. I’m honored to build on that legacy and excited to partner with our business leaders to drive innovation in our talent strategy.”

From 2014 to 2020, Ms. Rabl led large-scale transformation at Fannie Mae as Head of the Transformation Office, partnering with senior leadership to design and execute strategies that resulted in lasting improvements of the operational effectiveness of the business. Earlier in her career, she spent nearly a decade at Boston Consulting Group (“BCG”), advising global clients on strategy, organizational design and large-scale transformation initiatives from conception through implementation.

Ms. Rabl earned a master’s in psychology with a focus on organizational psychology from the Johann Wolfgang Goethe University in Frankfurt, Germany, and received her MBA from London Business School.

About FTI Consulting
FTI Consulting, Inc. is a leading global expert firm for organizations facing crisis and transformation, with more than 8,100 employees located in 32 countries and territories as of September 30, 2025. In certain jurisdictions, FTI Consulting’s services are provided through distinct legal entities that are separately capitalized and independently managed. The Company generated $3.70 billion in revenues during fiscal year 2024. More information can be found at www.fticonsulting.com.

FTI Consulting, Inc. 
555 12^th Street NW
Washington, DC 20004
+1.202.312.9100

Investor Contact: Mollie Hawkes+1.617.747.1791
mollie.hawkes@fticonsulting.com

Media Contact: Matthew Bashalany+1.617.897.1545
matthew.bashalany@fticonsulting.com

Source: FTI Consulting, Inc.

Blockchains are public databases. That’s an immediate roadblock for large institutions like banks, whose clients largely don’t want their balances and payments history open to prying eyes. Now, the crypto giant Circle has partnered with the blockchain Aleo to launch a “private” version of its stablecoin called USDCx, which will obscure transaction histories, Howard Wu, cofounder of Aleo, told Fortune.

ADI IGNATIUS: I’m Adi Ignatius.

ALISON BEARD: I’m Alison Beard, and this is the HBR IdeaCast.

ADI IGNATIUS: Alison, there has been a lot of talk about whether our institutions are up to today’s challenges. So I’m talking about schools, I’m talking about companies, I’m talking about other organizations that really continue to be run essentially as they were 100 years ago when our economic and social needs were very, very different. I’m particularly interested in how companies are structured and whether they’re set up to succeed in today’s really fast moving business environment.

ALISON BEARD: Yeah. And I think this is a problem that we’ve been trying to solve for years, right? Reorganizing to be more agile, more experimental and more digital.

ADI IGNATIUS: That’s definitely happened. Our guest today, Jana Werner, argues that most companies still retain an organizational structure that yeah, may have evolved, but is still too rigid to make it in this world. And the authors use a metaphor that the ideal modern organization should be like an octopus with tentacles that work separately, but also together with distributed intelligence, sensory awareness and adaptability.

ALISON BEARD: I like that. Octopuses, I’ve been told it’s not octopi, seem to be having a moment in film and TV and books. They do have big heads, but I guess the legs are the real engines powering them through the ocean. So is this about finally finding a way for companies to reduce hierarchy once and for all and create autonomous but still connected teams like those legs?

ADI IGNATIUS: So it might be. It’s definitely about breaking down bureaucracy and it’s about an obsessive focus on what really matters, which is customer needs. So that’s the advice of Jana Werner, executive and residents of enterprise strategy at Amazon Web Services and co-author with Phil Le-Brun of the new HBR article, Become An Octopus Organization, as well as the new book, The Octopus Organization: A Guide to Thriving in a World of Continuous Transformation. So here’s my conversation with Jana.

I’d like your analysis of what’s wrong with corporations today, so let’s start with that, what is wrong with our organizations?

JANA WERNER: My co-author, Phil Le-Brun, and I found working in large organizations, helping to advance and transform them, and now working with a lot of large companies in our day jobs currently, that they essentially still are factories. They’re based on the models of Frederick Taylor and co, a bit of a rusting construct built on standardization, specialization, control, individual performance focus, compliance, essentially predictable outcomes. This used to work, the idea of creating efficiency was a way to operate. But these models no longer work, they’re built on a foundation of permission, permission to innovate, to speak up, and they’re designed to de-risk and be efficient.

Yes, we are trying to evolve. There’s a lot of great new practice and practical examples out there, Silicon Valley, for example, and some organizations have evolved like this, the Apples, of course, of the world and Amazons of the world. But many of the larger traditional organizations I work with, the majority, actually, are finding it hard, and they do it in pockets, but not to the point that we would like to inspire organizations to do.

ADI IGNATIUS: It sounds like companies think they have made progress, think they have… We’re adopting the Silicon Valley style. But your point is it’s just tacked on to these traditional structures that need a pretty dramatic change. So your idea is to inspire companies to pursue a new approach, which you call octopus, to become an octopus organization. Talk about what is an octopus organization.

JANA WERNER: We start from the point of view that how we operate and how we engage and what companies and customers need today has changed so much. Today’s success depends much more on building genuine trust with customers, with the employees you work with, with a broader set of stakeholders as well. Work is so much less transactional, it’s cross-disciplined, new technology comes up.

So the idea for us is to say you need to move a bit away from command and control, because you can’t command and control your way to exceptional outcomes through learning new ways of operating and new technology. So it’s about creating connection, about creating agency, more than this permission-setting culture we currently have, and then designing companies that can thrive in the current complexity. So a bit from the metal tin man suit to a living organism, and the octopus was one that came to mind for many reasons.

ADI IGNATIUS: I recently interviewed the global managing partner at McKinsey, who said in his conversations with CEOs all over the world, I’m paraphrasing, but basically, no one is happy with their organizational structure. They feel that it’s too complicated, it’s too matrixed, people can’t figure out how to get anything done.

Now, you’re sort of talking about a reorganization, which is daunting for companies that are already feeling they don’t have a grip on the organization now. But in what way will this simplify or lubricate the business of innovation within companies to adopt a structure like what you’re talking about?

JANA WERNER: I would probably not so much call it a structure, I would call it a mindset, a way of thinking and a way of operating, of living differently. We’ve seen a lot of restructures, and most of them cause more challenge or often scarring than they cause an actual improvement of productivity and comfort for people to work in it.

The idea is more about how can you push decisions into the organization to people who are close to the customer, who are close to the problem. It’s about all these amazing people that we hire, and then actually tell them what to do instead of tapping into their knowledge and their experience. How can you switch them all on so they all come every day to work to say, “What are the problems we’re solving? How can I solve them in ever-better ways? And how can I help advance and adapt my organization so it stays lean, we fight against this natural buildup of bureaucracy of layers of extra things, and we keep focusing on the customers, not on inward things, and we keep thinking about how to innovate for those customers.

ADI IGNATIUS: I think there are probably a lot of companies that think, yes, we are customer-centric, because we say that, because we say it every day. So how do you get from mouthing the words, we’re customer-centric, to actually being that?

JANA WERNER: I love that question, because I work with organizations that say, “We put the customer at the heart of everything we do,” but then they, for example, you look at their budget, and 80% of their budget is actually spent on what we call keeping the lights on, on infrastructure, on internal change. So their money doesn’t talk the way that they think they are working and a lot of them are inward-focused.

So the switch is quite challenging, and the organizations that do that well have their leaders engage with customers. So instead of thinking, they have use proxies, they use proxy metrics, like net promoter scores, instead of using opinions of, I’ve done this job for 30 years, I know what my customers want, they still go out and speak to customers.

We’ve spoken to Indra Nooyi, she was the former CEO of PepsiCo and is now an Amazon board member, she used to ride Pepsi delivery trucks and go in restaurants to see what was going on. So leaders stay close, they do call listening. They understand they need to dive deeper into the data they get from customers and not believe the abstract proxy metrics, like net promoter scores. They hear anecdotes and they follow those anecdotes to figure out what is not quite right and how do we serve customers better. And they push decisions of how to serve customers and solve problems to those people in their orgs that are close to them.

ADI IGNATIUS: But is that the key? I mean, the key to this can’t be to ride a delivery truck once in a while if you’re the CEO. But is it what you just said, about empowering the frontline people to listen and to respond to customer needs?

JANA WERNER: Exactly. And that means giving them the opportunity to think about how they solve problems for their customers and not pushing those decisions up the chain, and enabling them, giving them the technology, we talk a lot about AI now, instead of clamping down on it, giving them the technology to solve problems in new and different ways for their customers, giving them the innovation freedom.

I just worked, last week, I visited the transformation team of a car manufacturer, a struggling one, and they’re under so much pressure that all innovation ideas need big business cases, big proposals, massive behind-the-scenes arguing and negotiating that people get buy-in. And then, these big innovation proposals get so big and to the board that they have to be signed off, and when the board has signed off, of course, everyone has to jump at it because the board has given attention.

So there’s no more room to innovate small and do things. And they said, “We used to go down to the basement, the engineers, and work on new cars. None of this exists anymore.” And that’s the opposite of what’s needed.

ADI IGNATIUS: So let’s talk about the octopus metaphor. So the idea of distributed intelligence, sensory awareness, adaptability. What was the moment, the aha moment maybe, that convinced you that the octopus is the right metaphor, the right model, for a modern business?

JANA WERNER: I saw an amazing movie called My Octopus Teacher, most people probably know it, and it got me curious about the creature. And I studied more about it and I learned how absurdly sophisticated their ability is to adapt through things like shape-shifting, they can change the texture of their skin, they have an unbelievable capacity to learn. They can even alter their RNA, so they can create new molecules depending if they’re in hot or cold water, and they do that within a day so they can adapt to their environment.

And the whole idea was, can we give people a word, a simple way of looking at it to say, “This is what we’re looking to do”? And most importantly, they have distributed intelligence. My 10-year-old daughter told me they have neural clusters in each of their arms, so they don’t just have a central brain, but they have decentralized intelligence. So the idea is, how can we give people an imagery, a metaphor, to think differently about their organization, and this creature is just that.

ADI IGNATIUS: So to stick with that, then you have the tentacles, I hope I have the right word, that are working separately, but obviously are also working together. All right, so let’s talk about that within companies. I’ve heard professors say, “Yes, yes, yes, we hate silos,” but silos are actually useful for getting things done. How do you balance the fact that we need things to work independently, while also contributing to the fuller whole organization?

JANA WERNER: I think this is an ever-questioned problem, the idea of how do you balance autonomy with alignment, and sometimes you go over the top one side and you go backwards and have less alignment and a bit more autonomy. The idea is to think about leaders providing the clarity, the context of what the challenges are, what are the problems worth solving, what are the few things that are important to enable people to then go and solve for those things, and that creates a mix of having context, having clarity of what a few priorities are, and giving people the freedom and the space to experiment in that space.

And in the companies that do this well, they actually accept that there will be a bit of duplication and there will be a bit of messiness, but we’d rather accept this for the advanced gain of more innovation and more speed and more customer centricity, but it is always a trade-off.

The silo problem for me is much more pronounced in large and traditional organizations, where leaders sit in an executive team and they’re not a leadership team, they’re just a team of leaders who come together. And they, for example, decide in an executive team something like, we want to become more customer-centric, and then the CFO goes away and says, “Okay, we need to get more efficient so we can cut prices.” The CMO goes away and says, “We need a new customer experience.” The CIO goes away and says, “We have to change our technology like this and that.” So the people who sit together in the executive team are more connected to their silos and try and solve problems in their silos than trying to connect an outcome as a leadership team and then horizontally connect and develop these outcomes.

ADI IGNATIUS: So at this stage, would you describe Amazon as a successful example of an octopus company? I think of them as, since Jeff Bezos creation – we are customer obsessed. I think under Andy Jassy they’re trying to cut out a lot of the bureaucracy, a lot of the stuff that slows them down in the middle. Have they become what you’re talking about? Are they on the path to becoming that? Can anybody ever become the ideal that you’re talking about?

JANA WERNER: I think it’s good to have an ideal. Many companies have mixed some tentacles and still some old tin men rusty armor. Some have more of an octopus, some have less, and I think the more successful companies have more of these traits. And I think Amazon has many of the qualities, and in many parts of the organization, acts in this way, in this metaphor.

So we have principles that we follow that layout values. We try to push independent product teams, we call them two pizza teams, who are as broadly autonomous as possible and can be close to their customers, can make their own decisions, like little startups. Of course, in every organization, there’s a risk that the company calcifies and goes into the antipatterns, like pushing decisions up the hierarchy, making decisions too slowly, starting to become involved in their internal proxy processes rather than thinking about customers, that risk exists. We call this a shift from day one culture, being like a startup, to a day two culture, which is this more rigid, slower organization that’s not an octopus. And we keep consciously fighting against this day two culture, because it’s not something you change once, you have to continuously make sure you go back to this octopus-like way of being.

ADI IGNATIUS: On the question of innovation, a lot of companies pursue dual transformation approach. That’s been true at Harvard Business Publishing as well. We’ve published a book by Scott Anthony on this, where your next generation innovation, inventing the future is separated from innovation at the core. It sounds like you’re suggesting a different approach to innovation. Is that right?

JANA WERNER: Yeah. We see a lot of organizations that do innovation labs because they feel they’re struggling to truly drive innovation through the DNA of the organization, but that puts innovation to the side. It gives the ability and the resources to a few people, and those few people are often not the broad organization that is actually close to the customers and to the problems to solve. And that’s risky because a lot of this innovation then doesn’t reach the customer, it stays proof of concepts, and it’s hard to bring these abstract ivory tower and removed innovations into the organization to stick and scale.

So the recommendation we have is actually giving broad access to innovation mechanisms, ways of working, and enabling organizations across the piece to innovate. For example, Amazon Prime, the idea was created by someone who was filling spreadsheets about delivery and about how to start thinking about connecting and bundling offerings. The idea is push this to anyone in the organization rather than just a few who think they understand how to innovate, because innovation comes from experimenting, from being close to the problems, from trying things and from having ideas.

ADI IGNATIUS: What are the structural, cultural signals that leadership can try to create that tells employees that innovation is genuinely that sort of daily obsessive behavior, and not, as you say, a isolated or special event or isolated department?

JANA WERNER: It’s first of all giving them the mechanisms. So for example, at Amazon, we have a method called working backwards, and the broader organization gets the tools to do this and gets the opportunity to create and write ideas for innovation and share them. We expect this in our annual performance reviews, we look at what have you done to look to innovate, to simplify. We share what we mean by innovation. You don’t have to invent the X-ray and you don’t have to invent a new tool for agentic AI. Innovation can be small i innovation, so little things, creating some efficiency, fixing small problems, so that people get out of this fear, paralyzing idea, they have to do something big.

And we also provide the freedom to say, “When you come up with something, write your idea down, take it through the organization. You don’t just have to go up to your boss and ask for permission.” So the idea is give principles where people can realize, this is part of my daily job, put it into the performance reviews, give them the tools, and then celebrate when people come up with innovations, tell the stories, share what they have created so that others realize this is real. We’re not just pretending to say this, we’re actually wanting you to do this.

ADI IGNATIUS: You also write about how there are these antipatterns that need to be done away with or improved. Talk about one or two of them, these antipatterns that are blocking this transformation that you’re describing.

JANA WERNER: In a lot of companies, we start to do a piece of work and we don’t really think about what is the problem we’re trying to solve. We get all this money, we create a big project, and then we go and we start and we try to show progress in this project. The tendency is then to keep developing, keep working on it, because we want to first of all have a bit of immediate gratification that we’re making progress on the project, we want to showcase to our leaders that we’re making progress.

But actually, when we spoke in our interview for the book to Astro Teller, who’s the CEO of Alphabet X’s Moonshot Labs, he gave us the metaphor of the monkey on the pedestal, and he said, “If you want to teach a monkey on a pedestal how to recite Shakespeare, where do you start?” And his view was that most organizations start building the pedestal, so you start, try and make progress, it keeps the team in the comfort zone, you can show off things.

But actually, there’s absolutely no point building the pedestal if you can’t get the monkey to recite Shakespeare. What’s his point? His point is get to know quickly, tackle the most difficult and challenging problems first, and then you get to know quickly. And when you get to know, you celebrate those teams, because they have now freed up resources and time and energy from something they should no longer be working on instead of just keeping going.

ADI IGNATIUS: These are human behavioral issues. You’re not going to do away with every manager, and managers have their areas of control, they have their egos, and that’s the reason for some of what you talked about, you can’t just wish that away. You need committed managers who are doing something productive, so how do you balance this… Okay, everyone is empowered to innovate and to take steps and to make the experiment, how do you balance that with the fact that organizations do tend to create structures and that’s how things get done? I don’t know. I love the idea of it, but how do you do it and how do you make it stick?

JANA WERNER: It requires discipline. Our organizations grow, I think it was Parkinson’s law who came up with this idea that our organizations and bureaucracies grow in our sleep by 5% to 7% every year, because he was a Naval historian, and he found as the British Navy’s fleet became smaller, the number of generals and people working in the British Navy became more. So Parkinson’s law tells us the organizational bureaucracy grows and grows even in our sleep. And organizations that do this well, they take a commitment to say, “We have to constantly groom.”

We know companies like Google, there are leaders who put positive friction into processes that become too big. For example, Google’s hiring process became so big that more and more people were involved in hiring someone, and at some point, a senior leader put positive friction in to say, “You now need sign off from me personally if you want to have more than five people involved in the hiring process.”

It’s like mowing the lawn, you can’t stop. You have to continuously add positive friction where you can and continuously take out this growth of bureaucracy and leadership. We have a beautiful term that my colleague, Phil, came across called, it’s like the body mass index, but it’s actually the bureaucracy mass index. So you can try and measure your wait time, your time of useless activities, and try and work on your body mass index.

ADI IGNATIUS: Okay. So if your bureaucracy mass index shows that you’re too bureaucratic, what do you do? Do you just take out middle managers? What do you do if you identify, or self-identify, we are too bureaucratic, then what’s the first step?

JANA WERNER: We know that leaders rarely understand how work gets done. So it’s often not about leaders trying to drive change from the top, but empowering people to say, and having principles that you also get measured on and rewarded on to say, “Have I invented? Have I simplified?” We call this invent and simplify at Amazon. We have a principle, “Have I consistently looked at how I can do things leaner, how I can take out this bureaucracy?”

It’s even things like, if I want to start a new project, have the mindset of making it smaller, because people tend to take up the time and the resource with bigger spaces. You make a project longer, it will take more time, it will require more resources. So having a mindset of giving people less time, less resource, is a way to reduce bureaucracy growing. Frugality is a way of bureaucracy growing less, and giving people the opportunity to cut that down themselves. And sometimes, it’s little things, like learning how to give tools. For example, a leader not expecting a full PowerPoint presentation about a first draft implementation of a solution, but saying, “I don’t need you to do that. I need you to come and show me the scrappy, terrible, difficult stuff you’re working on, because it creates honesty, it creates less bureaucracy, and it shows us in more real life what’s going on and how far you’re getting with your work.”

ADI IGNATIUS: How are we going to build the world’s best pedestal?

JANA WERNER: You don’t.

ADI IGNATIUS: So what a lot of companies do is experiment at the bottom with the customer, and then if it works, there’s this instinct to scale it, and you started to talk about this before. What’s wrong with that, or what’s the right versus wrong approach to scaling experiments that seem to be working?

JANA WERNER: We talk about risks of scaling. We like the word spreading. We believe that things that work well that are developed in a certain part of the organization, if they’re really that good, they naturally spread. It means that you don’t create a push top-down, but people adopt and spread through the organization what works, and that is a much more natural way of change to stick with people, and for people to then also advance because they feel they own it.

Scaling is a risky concept because it runs the risk of robbing people of local ownership. We believe scaling is something you do to offer people something that creates efficiency and speed, everything else is better organized and changed in a natural pull culture.

ADI IGNATIUS: As we’ve been saying, organizations, they have their silos, they have their structures, myself included, we have meeting cultures, nobody wants to take ownership of risky ideas. How do you make this really happen within organizations that have all of these embedded problems?

JANA WERNER: Yeah. We talk a lot about ownership culture and the challenge that a gatekeeper culture tends to create, and we tell the joke of the pig and the chicken. So the pig and the chicken walk down the road, and the chicken says to the pig, “Shall we open a restaurant together?” And the pig goes, “Yeah, sure. What shall we serve?” And the chicken says, “Well, ham and eggs, of course.” And suddenly, the pig stops in its tracks and goes, “You realize I have to be much more committed to that than you.” And sometimes it takes the audience a minute of why that is. But basically, the point we’re trying to make, there’s a difference between those that contribute and those who are really committed and accountable. And often in organizations, we have lots of chickens who lay their eggs, they come to meetings, they have opinions, they want to be involved, they give part sign-offs of something. But it’s really, really difficult to find someone who truly owns something end-to-end and delivering an actual outcome, something meaningful, and making the necessary decisions to achieve it.

And we say, “You need more pigs in your organizations.” Maybe don’t call them pigs. At Amazon, we call them single-threaded leaders. I think at Apple, they’re called directly responsible individuals. But the idea is someone who really gets up and injects energy and urgency into initiatives, is passionate about something, can dive deep into issues, move forward, presses on progress every day. And when companies tell me they struggle to assign single-threaded leaders, then I tell them either this isn’t important enough or you have a prioritization issue.

So surface your chicken behavior, create non-confrontational ways to challenge this passive participation. You can ask politely for the decision, “Do we really need you? Are you here to commit resources? Why are you here?” And of course, then do things like give a chicken tax, so if someone shouldn’t be there as a chicken, make them pay a chicken tax. So there’s lots of ways of making this playful, but it overcomes a massive problem that stagnates organizations.

ADI IGNATIUS: In many ways, you describe what I would say for years we’ve been writing about, this is good leadership, that good leadership isn’t just talking down, but it is empowering others, it’s empowering others to be leaders and to develop leadership capabilities. But there must be something more than just that for this really to succeed. At the end of the day, is it about the CEO or the leader of the company truly understanding the value that you can create by unlocking some of these opportunities? Is it ultimately top-down, you need a CEO who says, “Yes, we’re going to empower. I’m going to let go, people below me are going to let go. We’re going to let go of authority and let people more on the front lines innovate and talk openly.” What is the ideal leadership function here to making this happen?

JANA WERNER: Yeah. One, it’s the courage to do so, and it’s very hard as a leader. Both Phil and I, who wrote about this, have been leaders, and we still find ourselves struggling sometimes to give up ownership because things aren’t done the way exactly how we want them. So it is hard to do that, and that is one part. But the other part that’s really important is creating the clarity so that people can have the context of making the right decisions, of being able to understand which problems are the important problems to solve, and how to go about solving them, and having the freedom and the comfort to do so. And creating that clarity is a really, really difficult task and it’s an ongoing task for leaders. We spoke to the CEO of the London Stock Exchange, named Julia Hoggett, and she says a third of her role is to continuously create that clarity into her team and to keep recreating it.

The other thing then is to push decisions into the organizations and stepping away and becoming more an architect of the system, so not so much working in the system, but trying to let people, when they have this clarity and context, take decisions and do experiments. And I love this, Reed Hastings, he said he prides himself of trying not to take any decisions in an entire quarter. And the last thing that, particularly in our role, Phil and I see, is leaders having to get more curious about technology, and not just saying, “I don’t understand,” they are curious about people, they’re curious about finance, but often not so curious about technology. And the leaders we see that do all of this well, they become curious, they invite us for training sessions, they speak to tech experts and they understand in their ecosystem what’s possible.

ADI IGNATIUS: Leaders in our complex organizations have so many priorities, how do they focus then on what really can make a difference in terms of the kind of transformation you’re describing?

JANA WERNER: It’s all about creating focus. Did you know, by the way, the term priorities only existed in singular until the 19th century, and only then have we started to add a lot and a lot of priorities and went away from a singular priority? If you give people time, they will fill 100% of that time.

So the idea is, how can you go back to focusing, to getting brave and doing and having less priorities? The most impressive example was one of the first interviews my colleague, Phil and I did for a book with Benedict Burn. He’s the CEO of a sportswear company and also an extreme mountaineer. He climbed death zone mountain, so there, above 8,000 meters where there’s not enough oxygen to sustain life. And he told us, as he was driving into Taliban territory to climb his next mountain, he told us a story that most death zone climbers take about five days to climb such 8,000-meter mountains, they take about 50 to 55 kilos of equipment. It’s a lot of equipment to carry.

So he takes a completely different approach. Together, with all his equipment, the clothes he wears and the skis he uses to get down the mountain fast, he only carries 7.4 kilos. So he cuts absolutely everything that isn’t a priority, his shoe laces, he even shaves his eyebrows, cuts his hair. He has absolute focus so that he can take only two days instead of five, go up the mountain and ski back down. And he told us, “This is the relentless focus I also bring to my business.”

So the idea of letting things go, what do we really need, what are the absolute priorities, and getting rid of this tyranny of end. Do smaller things, do a not yet, get rid of the zombie projects that linger around that people fell in love with. And go with something we learned from the CEO of the Johannesburg Stock Exchange, a hell yes test. If people don’t say, “Hell yes, we should be doing this,” then it’s probably not something you should do, or maybe not yet.

ADI IGNATIUS: So if listeners are inspired by this, if they say, “Yeah, yeah, yeah, I would like my company to be more like everything you described,” what’s a small, maybe low-risk action that a leader can take immediately to get there, to increase ownership at a team level or whatever it is? What are some things they could do right now?

JANA WERNER: What they can do is start listening and asking more questions than they may be used to, and that’s a bit uncomfortable. And then, again, it’s not about leaders driving change, but pick some of the antipatterns we write about. Look at where people feel uncomfortable, where their shoulders go heavy, where they look away, where they laugh, and follow the compass of where things are uncomfortable or difficult.

Ask about these things, and then give people the opportunity to start fixing these with your support. “What resources do you need? What’s a small thing we can try?” When we’ve tried it, “What interesting assumptions or beliefs that we didn’t even realize we had have we actually uncovered that are holding us back?” So it’s giving the opportunity, this idea of lighting a thousand fires as a leader, to people in their organization, not doing the change yourself, and yourself as a leader becoming more curious and helping create this clarity.

ADI IGNATIUS: Jana, that is great. Thank you very much for being on IdeaCast.

JANA WERNER: Thank you so much for having me.

ADI IGNATIUS: That was Jana Werner, executive and residence of enterprise strategy at Amazon Web Services, and coauthor of the HBR article, Become an Octopus Organization, and of the book, The Octopus Organization: A Guide to Thriving in a World of Continuous Transformation. If you found this episode helpful, share it with a colleague and be sure to subscribe and rate IdeaCast in Apple Podcasts, Spotify, or wherever you listen.

If you want to help leaders move the world forward, please consider subscribing to Harvard Business Review. You’ll get access to the HBR mobile app, the weekly exclusive insider newsletter, and unlimited access to HBR online. Just head to hbr.org/subscribe. And thanks to our team, senior producer Mary Dooe, audio product manager, Ian Fox, and senior production specialist, Rob Eckhardt. And thanks to you for listening to the HBR IdeaCast. We’ll be back with a new episode on Tuesday. I’m Adi Ignatius.

The boss of Ford has said western carmakers are “in a fight for our lives” against Chinese competition as the US manufacturer agreed a new partnership with France’s Renault.

The two companies said on Tuesday that they would work together on two smaller electric cars, with the first to go on sale as soon as early 2028. They will also look at producing vans together.

“We know we’re in a fight for our lives in our industry,” Jim Farley told journalists in Paris. “There is no better example than here in Europe.”

The rapid rise of Chinese electric carmakers has put enormous pressure on European and US rivals, who have been slower to develop battery-powered vehicles. Manufacturers such as BYD and Chery have gained market share by producing well-reviewed electric cars at much lower costs than western manufacturers.

Producing smaller electric vehicles cheaply has been particularly tricky for European carmakers, who have tended to focus their efforts on larger cars that have space for a bigger battery.

The two cars announced on Tuesday will be based on Renault’s Ampere electric car blueprint but will be designed by Ford and carry the US brand. Renault had previously planned to sell shares of its Ampere unit as a separate company dedicated to electric car technology, but it abandoned that plan last year as investor interest waned.

The companies said Renault’s plant at Douai in northern France would produce the vehicles. The plant makes the Renault 5, an electric car that has won plaudits for its design and relatively low cost.

Ford has struggled in Europe in recent years. Farley announced 4,000 job cuts last year, including 800 in the UK, and cut back planned production of the new electric Explorer and Capri models, citing the “weak economic situation and lower-than-expected demand for electric cars”.

Farley also criticised European electric car sales targets this week, writing in the Financial Times that the continent’s carmakers faced “the world’s most aggressive carbon mandates” at the same time as “a flood of state-subsidised EV imports from China”.

Renault’s chief executive, François Provost, said: “In the long term, combining our strengths with Ford will make us more innovative and more responsive in a fast-changing European automotive market.”

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In a separate development, BMW announced the retirement of Oliver Zipse as the chair of the company’s management board on Tuesday. He will be replaced in May by Milan Nedeljković, who joined the company as a trainee in 1993 and has risen to oversee the company’s production.

The Munich-based carmaker had extended Zipse’s contract in 2023 to 2026, beyond the usual retirement age of 60. As BMW’s boss since 2019, he also had to contend with the rise of Chinese competition, although the manufacturer has performed better than some of its German counterparts.