Harvard Business Review
Annotated table of contents
Adi Ignatius, the editor in chief of HBR, highlights research on trends in global public opinion in regard to companies’ interventions in controversial social or political issues. “Speak out sparingly”, but “[i]f you have chosen to take a stand, then stand firm”, he says.
Idea watch
2. HBR Team, Don’t let gen AI limit your team’s creativity
An experiment comparing the performance of teams involved in creative problem solving with or without the use of AI found that teams using AI produced fewer bad and outstanding ideas, but more average ideas. To make the most of what AI has to offer, teams need to shape the interactions with it by crafting highly specific statement questions, re-iterating and adjusting queries to allow the algorithm to learn and gain a better sense of context. An interview with Joe Riesberg, chief information officer at EMC Insurance, fleshes out the benefits for one of the participating companies.
3. Amy Meeker, For start-ups seeking talent a lofty purpose can backfire
Murat Tarakci and Timo van Balen analysed responses to job postings from 800 U.S. and Canadian start-ups. Companies that highlighted their social mission received slightly less than half the number of applications compared to the ones that did not. This may be due to perceptions that a strong social purpose implies a longer path to profitability and commercial success. Additional research shows that purpose-driven start-ups could remain attractive when they offer prospects for career growth, recruit through personal channels, and offer salary and equity incentives. The significance of these results will be further tested through studies on selection and retention.
4. Darius Adamczyk, the Chair of Honeywell, on bringing an industrial business into the digital age
Adamczyk explains how Honeywell moved from the 2016 status quo, of more than 150 enterprise planning systems, 2,700 applications and 1,700 websites to an integrated software business within the legacy industrial one. The internal transformation was led directly from the CEO office while the creation of the Honeywell Connected Enterprise, which offers data capabilities to clients, depended on extracting and recombining elements from several businesses. The resulting transparency and real-time availability of performance data has had unexpected benefits, including the ability to weather the Covid pandemic, inflation and geopolitical uncertainty.
Spotlight: Why consistent growth is so challenging
5. Gary P. Pisano, How fast should you company really grow?
According to Pisano’s research, few companies grow consistently over a long period of time: the more common experience is to alternate expansion and contraction. In this analysis, outcomes depend on the ability to balance three features of growth: rate, direction and method. Growing fast or growing slow will lead to success depending on available resources and the ability to control quality at pace. Growth can take place through scaling in a core market, increasing the scope by adding related products and diversification by entering new markets. Moreover, companies can choose to develop their resources for growth organically or through acquisitions. The article is rich in examples of success and failure in the alignment between rate, direction and method.
6. Paul Blase and Paul Leinwand, Create a system to grow consistently
In their study of large publicly traded companies in the USA, Blase and Leinwand find that companies with consistent growth tend to invest in a system, an ‘integrated collection of capabilities’, including five elements: sharp focus on a well-defined customer outcome; detailed specification of how all the company resources and investments contribute to the delivery of this outcome; an operating model that is consistent across the different areas and functions of the business; commitment to renewed reflection and learning from experience; and a willingness to measure effectiveness and allocate investment as needed. Illustrations from the experience of Toast, IKEA, Vertex, Adobe and Roblox support the argument.
7. Dunigan O’Keeffe, Karen Harris, and Austin Kimson, How to succeed in an era of volatility
Adaptability, resilience and prediction have become core aspirations for businesses hoping to weather increased volatility successfully. O’Keefe et al. clarify how established practices need to change in this direction and provide examples of successful shifts at H-E-B, a regional supermarket chain in Texas, Reliance Jio, an Indian telephone services company, Microsoft, and Southwest Airlines. They suggest several steps for companies interested in developing these capabilities: identify concentrations of revenue, costs and suppliers; develop scenarios for extreme but plausible scenarios; allocate capital to reflect these priorities; track signals in the environment; and adjust as necessary.
Features
AI offerings are increasingly expected to perform in alignment with a range of user values such as safety, dignity, harmlessness, fairness and helpfulness. Abernethy et al. draw on their experience with AI in social media, health care, finance and entertainment to identify useful steps to meet these expectations across all the stages of a typical innovation process, from first draft ideas to fully-fledged, market-ready products. Whether the desirable values are derived from existing, generally accepted frameworks or are devised from scratch, they need to be written into the program, reflecting a serious evaluation of trade-offs between time-to-market and the risks of value misalignment, including those that arise from working with partner developers. Human feedback of AI results should reflect value choices and should be carried out regularly, during the development process and after the launch. Surprising behaviours on the part of AI are to be expected and companies should be ready to intervene and contain them.
9. Ken Dychtwald, Robert Morison, and Katy Terveer, Redesigning retirement
In the next decade, the number of workers aged 65 or older is projected to increase by 34% in the USA and other developed economies, the highest rate by far among all age-groups. However, while the employment of older workers is expected and necessary, questions remain about the ability of companies to develop specific strategies to tap into this potential talent pool. They will need to overcome negative stereotypes such as lack of motivation or ability to learn new technologies, recognising that older workers have distinctive advantages, including superior operational skills and emotional intelligence, willingness to engage and openness to flexible patterns of work. Further, the article offers advice on devising and implementing measures to preserve, replenish and share the experience of older workers, and to offer flexibility and embrace age as a valuable dimension of diversity.
10. Frédéric Dalsace and Goutam Challagalla, How to market sustainable products
Dalsace and Challagall discuss the interaction between the sustainability and effectiveness attributes of products, identifying three types: independence (sustainability and effectiveness are not related), dissonance (sustainability attributes may diminish effectiveness) and resonance (sustainability attributes enhance effectiveness). Equally, consumers may fall in one of three categories: greens are true believers who do not question the price; blues are agnostics who may spend a limited amount for additional, sustainability features; and greys or disbelievers do not care or are sceptical about sustainability. The article then explains how marketers need to highlight the features of their products to appeal to the different consumer groups.
11. Anne-Laure Fayard, Jess Majekodunmi, Martina Mendola, and Rachel Kenny, Nurturing innovation
Fayard et al. describe patterns and factors that go into creating a sustaining environment for innovation. For instance, connecting and building business relationships are more likely to succeed when participants are carefully selected and their experience is well curated, with a suitable mix of in-person interaction and periods of reflection. Equally, to sustain collaboration, it is useful to structure follow-up and to provide mentoring for the long term, across all relevant areas, to provide checkpoints and to sustain the broader ecosystem. The article draws on experience at Unreasonable Impact program and other intermediaries who nurture innovation well, such as the Innovation Ecosystem at Nova School of Business and Economics, Impact Hub London and OpenIDEO, showcasing entrepreneurs and businesses that were able to resolve critical issues with their help.
12. Vijay Govindarajan and Venkat Venkatraman, Heavy machinery meets AI
In a variety of sectors, from car manufacturing to machinery for agriculture to airplanes, first-mover companies have demonstrated the advantages of integrating AI, in a few different patterns. Specifically, Govindarajan and Venkatraman distinguish between fusion products, fusion services, fusion systems, and fusion solutions, each with an ever-deeper integration of digital, intelligent capability. Any significant integration of AI will lead to non-linear growth, in a competitive landscape populated by digital players who leverage information and data assets. Expansion is enabled by virtual integrations and partnerships, using real-time observations and customer outcomes, generating self-updating insights.
Bersoff et al. draw on a survey of more than 75,000 people in 28 countries regarding views on priorities and appropriate behaviours for business. Perhaps surprisingly, social responsibility is widely viewed as a core responsibility, second to providing safe and useful products and services. Businesses are expected to tackle challenges such as healthcare, climate change or inequality, but there is also a significant, perceived performance gap. While the interests of owners and shareholders are well-served, companies are seen as falling short in relation to other stakeholders, such as customers and employees. For each company it is vital to consider carefully the variety of viewpoints among its stakeholders and craft nuanced, but firm, well-communicated engagement strategies. Examples of successful, and unsuccessful handling of controversies include Walmart (on the sale of guns), Anheuser-Busch/Bud Light (on support for a hired trans influencer), Target (promotions of Pride-themed products), Michelin (on sustainable development), Cracker Barrel restaurant chain (plant based offerings), Apple (on privacy) and others.
Huckman et al. describe four areas in which retailers and health systems in the USA have begun to cooperate more closely involving retailers in the provision of comprehensive care. One is the delivery of complex food prescriptions for patients suffering from diabetes, hypertension or kidney dysfunction. Technology retailers could help install advanced devices in the homes of patients to help them manage complex chronic conditions. Consumption data owned by retailers could become part of the patients’ electronic health record and could be used to predict waves of infectious diseases and to test the effectiveness of drugs. Finally, retailers could contribute to the development of workers able to provide health care services. The article provides advice on how retailers and health care systems can explore and devise partnerships, from clarifying strategy and specific contributions, to pricing and value sharing.
Agrawal et al. offer an alternative model for integrating data into supply chain management through machine learning, the development of digital twins and connectivity across all the participants in the chain. The result is efficient real-time inventory allocation decisions which will improve the availability of products at lower cost. They discuss the implications of this model through two detailed examples of Fortune 500 companies, a producer and seller of equipment for manufacturing semi-conductors and a consumer electronics firm selling to thousands of retail stores.
Experience
16. Scott Walker, Negotiate like a pro
Walker distils insights from his decades of work as a negotiator in high stakes situations, such as kidnappings and extortions, as well as advisory roles for day-to-day corporate deals. He defines the requirements for deep, level five listening, which entails empathetic curiosity about the other’s position, trying to discern the logic of their position, feelings, self-perception and perspective. Focus can be trained by employing consistently tools and techniques such as minimal encouragers, open questions, reflecting back, emotional labelling, sticking to ‘I’ statements. Once rapport is established, it becomes easier to put forward requests and to reach a mutually agreeable solution.
17. Jorge Tamayo, Case study: Navigating labour unrest
The manager of a Japanese car factory based in Brasil ponders the best way to address poor performance: additional investment and expansion or downsizing and transformation into a distribution centre? Labour activism requiring control over sensitive areas, such as hiring and technological development, complicate the issue.
18. Scott LaPierre, Does capitalism need reform – or revolution?
LaPierre reviews arguments in support of improving capitalism, by putting moral action and accountability at its centre, by balancing self-interest with public concerns in a form of progressive capitalism and by prioritising shared, long-term interest in business relationships. For others, these are unsatisfactory, partial measures and full revolution is needed before business and governments could address the challenges of our times, including climate change and inequality.
19. Alison Beard, Life’s work interview with Renée Fleming
Renée Fleming, the reigning American soprano, answers questions about her values and the development of her career, overcoming shyness and stage frights. Success conflict proved an especially difficult hurdle, but she has been able to continue to learn from and give back to others, not least in a new book she has curated, Music and Mind, facilitating collaborations and exploring how art can be harnessed for health and wellness.
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