Harvard Business Review
January/February 2021
Annotated table of contents
1. Adi Ignatius, Rivals and friends
Adi Ignatius, the editor in chief of HBR, recommends the co-opetition article in this issue and marks the departure of two long-time editors at the magazine.
Idea watch
2. HBR Staff, Why rookie CEOs outperform
According to new research, rookie CEOs can compensate for their relative lack of experience at this level and even turn it into an advantage. Unencumbered by an established rulebook or dedication to cutting costs, first-time CEOs tend to focus on top-line growth. Being generally younger, they also tend to stay longer in the role and to show mindsets more inclined towards curiosity, adaptability, and flexibility. David Cote, who became the CEO of Honeywell in 2002, suggests that ‘hunger is worth more than experience’, at least for companies that can afford to focus on the long-term.
3. Dagny Dukach and Andy Wu, Stand-up meetings inhibit innovation
Dukach interviews Professor Andy Wu of HBS about his research on stand-up meetings, a staple of agile working practices. The findings paint a nuanced picture of how different types of meetings are suitable for achieving certain objectives. Thus, stand-up agile meetings encourage focus on rapid integration of work among team members and accountability. They are effective especially for the implementation of projects in software. However, stand-up meetings are less suitable when the objective is wide exploration or the generation of deep innovative ideas, for instance in sectors such as hardware or the creative arts. In the current virtual environment, meetings can create a bridge between independent, potentially more innovative work and collective accountability and control.
4. Deanna Mulligan, former CEO of Guardian, on using values to drive strategic planning
The Manhattan headquarters of Guardian were flooded when Hurricane Sandy hit in October 2012 and had to close for months, creating continuity of business pressures. This event was the impetus for a concerted effort to future-proof the business by strengthening the IT infrastructure and the digital skills of the workforce, consistent with the company core values of doing the right thing, making people count and setting high standards. The post-Sandy investment has also helped Guardian measure and improve its diversity and inclusion performance and offer insurance services to gig economy workers. The current pandemic has validated and accelerated these efforts, as Guardian has been able to continue to serve its customers, pivoting for instance to an entirely digital sales process.
Spotlight: Does business need a new model?
5. Roger L. Martin, It’s time to replace the public corporation
The public corporation has been the dominant form in advanced, complex market economies for a century, but such corporations are surrounded by a variety of other types of companies: privately owned, owned by private equity firms, owned by employees, family firms and so on. This article sheds light on changing patterns of ownership, as more public corporations are taken private. It suggests that the long-term corporation, co-owned by pension funds or other long-term investors and knowledge workers, might provide a better distribution of incentives for these primary stakeholders.
6. Lucian A. Babchuk, Don’t let the short-termism bogeyman scare you
In this analysis, the short-term orientation of some investors need not represent an insurmountable obstacle for superior performance. To a certain extent, markets do respond to perceptions of sound investment strategies and allow for low returns in the short-term if the long-term prospects are credible. Moreover, investors, even activist ones, provide much-needed oversight and can drive performance, while different kinds of investors, long-term or short-term might be allies in the right circumstances. It is worth recognising as well that at times companies themselves drive short-termism to benefit executives and this can be addressed through more robust compensation packages that focus on the long term.
Features
7. Adam Brandenburger and Barry Nalebuff, The rules of co-opetition
Even though competition is hard-wired in the marketplace, companies can and do cooperate, creating various forms of co-opetition. In this article, Brandenburger and Nalebuff draw on examples from a variety of industries, such as car making, airlines and tech, to show how and when it can make sense to cooperate with rivals, without triggering anti-trust regulatory responses. To begin with, companies need to consider whether they could lose more by not cooperating and to decide how to cooperate while protecting their competitive advantage. When the case for cooperation is strong, moreover, it is critical to structure agreements with careful regard for defining scope and control, for dividing the benefits, and finding people with the right mindset to carry out collaborative work.
8. Paul Ingram, The forgotten dimension of diversity
Social class is a factor with greater impact on career attainment and progression than race or gender, and yet it is largely left out of the diversity, inclusion, and equity programmes of most companies, to their detriment and that of the individuals concerned. In this article, Ingram argues that organizations need to get past the social stigma associated with lower social origins and to develop transparent measurement and reporting. To remedy the bias toward exclusion of workers coming from modest social backgrounds, companies need to make this issue explicit; to avoid degree inflation in job advertisements; recruit management candidates from all departments; focus on social class and race exclusion simultaneously; and build an organizational culture based on solidarity with all workers, irrespective of their origins. Examples of good practice from PwC, Uber, Airbnb, Televerde, JP Morgan Chase and Walmart among others show the way forward.
9. Hannah Riley Bowles and Bobbi Thomason, Negotiating your next job
Bowles and Thomason have researched thousands of stories of young and seasoned professionals across the globe, arriving at four important insights about critical factors that shape career transitions. First, they argue that long-term career goals ought to guide any career negotiation. Second, it is important to recognise the type of career advancement sought and the expectations associated with it: a negotiation might represent a logical, expected next step (an ask); it might create an unusual, bending scenario that needs additional justification; and it might shape the course of organizational development, requiring specific strategies. Third, the quantity and quality of information about the overall situation is extremely important. Finally, complicated transitions contain developmental opportunities of their own, in terms of relationships at work and at home, and being open to this is likely to lead to better outcomes that focusing on early, rigid objectives.
Machine learning technologies are increasingly deployed to perform tasks in real world situations, raising numerous questions about their accuracy and safety. This article outlines the risks that accompany machine learning, including inaccurate predictions, agency risks, moral risks, and risks stemming from locked versus continuous learning. Once they have recognised these risks clearly, managers and companies can take several steps to contain them. These include carrying out randomized controlled trials for performance in new environments; creating certification systems; monitoring continually, asking questions about performance across all risk areas; and developing working principles and guidelines to manage these new risks.
11. Tensie Whelan and Elyse Douglas, How to talk to your CFO about sustainability
Many companies have already implemented sustainability strategies, but their financial implications, or, as this article suggests, the Return on Sustainability Investment (ROSI) are not clearly defined, failing to secure the support they deserve. Whelan and Douglas present a methodology for calculating ROSI taking account of 9 mediating factors: innovation, operational efficiency, sales and marketing, customer loyalty, risk management, employee relations, supplier relations and stakeholder engagement. Applying the methodology involves a close review of existing sustainability strategies and the related changes in operational or management practices, a determination of resulting benefits, and their quantitative and overall monetary value. This stock taking exercise can be used to quantify benefits retrospectively or to evaluate new initiatives offering a clearer basis for making investment decisions.
12. Jessica Rodell, Volunteer programs that employees can get excited about
The success of volunteer programs is a matter of avoiding common pitfalls in the first instance. For example, when volunteer programs simply copy what appears to have worked at other companies, when they are the pet projects of leaders or become compulsory, they are unlikely to generate genuine support. These shortcuts undermine the sense of authentic purpose that should be the guiding principle in designing volunteer programs. In some cases, productive design choices and features emerge from the frontlines and the company can offer resources to scale them up; in others cooperation with a variety of stakeholders, including customers, could help bridge the meaningfulness gap.
This article draws on large scale surveys of compensation practices across the globe and in-depth qualitative interviews with company directors. It identifies empirical patterns for executive pay across global regions and industries and it explains in detail the four trade-offs that structure compensation packages: fixed-term versus variable; short- versus long-term; cash versus equity; and individual versus group. Finally, the article captures the dynamic aspects of compensation design, showing how certain trade-offs are more likely to achieve strategic objectives.
14. Josh Baron and Rob Lachenauer, Build a family business that lasts
According to Baron and Lachenauer, family-owned businesses are the most popular company form, representing 85% of businesses across the world and employing 62% of the USA labour-force. In this article, they look at five areas that are critical for the resilience of family businesses: the ownership type (sole owner, partnership, distributed ownership of concentrated ownership); the governance structure (looking at the roles and relationships between owners, management, board of directors and family members); the definition of success, balancing liquidity, growth, and control; communication and trusted relationships; and succession.
Experience
15. Colin M. Fisher, Teresa M. Amabile, and Julianna Pillemer, How to help (without micromanaging)
Giving and receiving help can reflect a certain power imbalance, creating resentment. Nonetheless, it is an important part of the give-and-take of productive collegial relationships and collaborations. This article helps us hone the arts of giving and accepting help from colleagues by focusing on timing, clarity about intentions and rhythm alignment. Examples from research with 124 groups, using daily diaries and weekly in-depth interviews illustrate the analysis.
16. Thomas J. DeLong, When your star player asks to go part-time
This case-study sets out the dilemmas of a female director whose number 2 is about to go on maternity leave and plans to return only part-time. Ethnic and cultural differences may also play a part as the two women seek to develop an understanding of their mutual interests and work out a solution to balance work-like choices.
17. Ramsey Khabbaz, Sports and social justice
In this review essay Khabbaz reflects on the differences in response to racial discrimination within American football and basketball. There are large differences between the NFL and the NBA, in terms of structure, culture, power and profit, which explain why the NFL has been able to ignore calls for greater equality while the NBA has been comparatively supportive of its black players.
18. Alison Beard, Life’s work interview with Tina Turner
A truly inspiring survivor, Tina Turner shares here her learning on how to cope with the highs and lows of life by building ‘indestructible happiness within.’ She says: ‘I choose to honour each experience in my life, negative and positive, as a chance to increase my wisdom, courage and compassion.’
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