Annotated table of contents
Adi Ignatius, the editor in chief of Harvard Business Review, writes about the virtues of doing less and prioritising right, highlighting the article on leadership in this issue. He draws attention to the new logo, a ‘bold, modern twist on the traditional shield’ where the name of the magazine fills the frame.
Idea watch
2. HBR Team, Learning emerging skills doesn’t always pay off
New research shows that investment in learning is most effective when employees focus on mastering business critical skills they already have. Companies could encourage this by identifying the ten core skills for every job and supporting workers to keep them up to date. Introducing a company-wide learning programme ought to come after it has been tested on small groups. Emerging skills should be added when they have become useful and relevant. These findings are explored further in an interview with Carlos Rivero, senior VP of global talent management at Wolters Kluwer, who oversees learning for 21,000 employees in 40 countries. His priorities are recruiting employees that embrace a growth mindset, getting managers to help their reports to close any skills gaps, and cultivating a culture of continual learning that supports the adoption of emerging skills as needed.
3. Eben Harrell, Just because you want to lead doesn’t mean you should
Shilaan Alzahawi and her colleagues at Stanford University surveyed 472 participants in an executive education program about their level of ambition while asking their peers to provide an assessment of their 10 top leadership skills. Researchers found no relation between ambition and leadership aptitude, which is consistent with the fact that relatively incompetent people nonetheless raise to the top and are tolerated in such positions. An explanation may be that motivated reasoning and misperceptions obscure the gap between ambition and achievement, and ambition might be taken as a signal of competence, especially in job interviews. Recruiting from a larger pool including people with low ambition but high leadership potential, intelligent and sociable, could lead to the selection of more capable people for positions of responsibility.
4. Tarang Amin, the CEO of e.l.f. Beauty on maintaining a start-up culture while scaling
Producing and selling $1 cosmetics for eyes, lips and face was the original business plan of father and son founders of e.l.f. Alan and Joey Shamah two decades ago, using the price competitive advantage to drive exceptional quality. Ten years later, when the company was acquired by the private equity group TPG Growth, it had 120 employees and $100 million in net sales. With a family background in entrepreneurship and professional experience at P&G and TPG Growth, Tarang Amin recognised the cultural strengths that helped e.l.f. rise to the top in a large, fragmented industry, including the ability to launch new products that were already vetted by online followers. Strong foundational values of positivity, inclusivity, accessibility and innovation at speed brought the company to its current position as the leading mass-selling cosmetics brand in the US. These values also sustain the ambition to become a beauty-industry powerhouse globally.
Spotlight: AI and Organizational Transformation
5. Thomas H. Davenport and Thomas C. Redman, How to marry process management and AI
Linking together several AI use cases to cover a whole industrial process is still in its infancy. However, Davenport and Redman find some useful examples, including at Mars Wrigley, Siemens, and Reckitt and use them to provide a 7-step sequence for how to bring AI into existing order-to-cash processes. The project owner would be a senior manager who can exert influence even in the absence of formal authority over representatives from the departments involved in OTC cycles. The overall objectives need to be derived from customer priorities, building on existing patterns of collaboration and data sets. The revised process will meet specific performance measures and targets. The redesign itself would be the work of functional representatives from all the relevant departments, using external vendors to acquire applications where necessary. The AI-enabled process should be monitored and updated continually.
6. H. James Wilson and Paul R. Daugherty, The secret to successful AI-driven process redesign
The history of breakthroughs in process design, such as the Toyota Production System based on the principle of continuous improvement, suggests that involving all employees in business transformation is the critical element to success. Companies that have made data and analytics available to many if not all employees are seeing best results. This is the case in car manufacturing and pharmaceuticals as well as the big tech companies of Silicon Valley.
7. Julian De Freitas, Why people resist embracing AI
HBS professor Julian De Freitas shows that companies need to understand the push-back against the AI technology. He explains the barriers – employees often find AI too opaque, too emotionless, too inflexible, and too autonomous – and suggests remedies.
Features
8. Jason Jay, Kate Isaacs and Hong Linh Nguyen, Getting strategic about sustainability
Multiple criteria and frameworks contend for attention to shape sustainability reporting and actions, which typically leads to confusion and indecision. This article suggests that companies focus on the issues that are simultaneously relevant from four perspectives: business value, stakeholder influence, science and technology, and purpose. Each of these lenses is defined by specific questions and tools, bringing rigour to the evaluation and enabling the selection of a few clear, strong priorities. Several examples are used to explain each lens and all four are sequentially applied to shed light on the issue of coffee pod waste at KPD.
9. Max H. Bazerman, What people still get wrong about negotiations
Commonly, the instinctive position in a negotiation is to see the pie as fixed, the other party as adversary and the outcome as zero sum. However, it is possible to reframe negotiations as opportunities for collaboration with the aim to create more value for everyone. To start, take stock of all the issues that are important for a particular transaction, rank their relative importance and even draw up a weighted score sheet (template and examples are included in the article). Based on this preparation, four strategies may become available: share information to uncover beneficial links and trade-offs between different aspects of the transaction; ask thoughtful questions to help map how the other party feels about the broader context and related issues; invigorate the conversation by giving away information; and make multiple offers.
10. A.G. Lafley and Roger L. Martin, Leaders shouldn’t try to do it all
Lafley and Martin link leadership to comparative advantage and suggest that leaders should only do what nobody else in the organisation can do as well. They show that it is possible for a leader to define his own role, playing to his or her strengths, by following four rules of thumb. The first rule is one of elimination: remove the tasks for which you can make no distinctive contribution (and others can do just as well or even better). Next, evaluate and eliminate the tasks for which the comparative advantage is small. Having cleared the ground, do commit to tasks that fit well with your strengths and where you can contribute the most, even when these might not have been typically associated with the leadership role, allocating your time appropriately. Examples illustrate how this series of choices allowed Lafley, Martin and others they have coached or advised to make an exceptional contribution.
The effective management of digitised supply chains entails understanding recommendations and considering a variety of scenarios, activities that require a great deal of time and effort. According to Menache et al, this work can be automated with the help of LLMs. The article considers in detail possible queries regarding shifting demand, the enforcement of contracts, what-if questions about costs and impacts of potential decisions, as well as assessments of supplier performance and switching costs to alternative suppliers. A case study of managing the supply of servers and other hardware for 300+ data centres across the world by Microsoft provides illustrations.
To yield consistent results over time, experimentation needs to be made available to the whole workforce. The enabling platform should have user-friendly built-in features and embed statistical rigour and safety. Data scientists should take an active role in training employees and focus their testing work on large scale, impactful questions. Experiments that specifically test hypotheses and provide explanations are more likely to be useful. Organisations should archive experimental results for further analysis and reference, comparing results across programs. Ideally, this democratisation of experimentation would allow all ideas to be tested and evaluated, leading to sustainable product innovation and improvements in customer experience.
13. Gianpiero Petriglieri, Three ways to lead learning
Achieving the right mix of control and openness in learning programmes in the workplace is a balancing act. Success depends on the match between the approach to learning and the needs of the enterprise at a given time. Thus, an emphasis on conformity, the execution of strategy and culture, as promoted by custodians, typically works well during periods of consolidation, following intense change. When deep transformation becomes necessary, developing a culture of innovation that embraces humanistic values of self-expression and open-endedness, as championed by challengers, is likely to have the desired effect. Finally, a combination of instrumental and humanistic values is sought by connectors; this could offer a continual, gradual, inclusive learning experience beneficial for both individual employees and the enterprise but requires a great deal of tolerance for complexity and conflicting values.
14. Timothy J. Rowley and Laurence Capron, How the best boards engage with management
In many companies, doing things as they have always been done is considered enough guidance for action, including the engagement between boards and management. However, as Rowley and Capron argue, it pays to develop a broader repertoire, recognising several modes of engagement, including: passive (the executive has almost complete discretion); mentor (with early discussion between board and management); partner (boards give formal approval for decisions); or control (boards retain decision-making authority). Each of these modes is appropriate in particular circumstances. By learning to distinguish their relative strengths and weaknesses and deploying them appropriately, boards can develop greater agility and effectiveness.
Experience
15. Anton Skornyakov, How project leaders can tame unpredictability
Skornyakov identifies four areas of uncertainty: human behaviour, interpersonal dynamics, technological change and interoperability, and organizational interdependencies. New developments in any of these areas can occur over the lifetime of the project with material impact on its prospects. For these reasons, the typical approach of building prototypes or running tests for the whole project at the outset may not provide a solid basis for successful implementation. Instead, Skornyakov suggests a slicing technique: leaders should identify the most challenging aspects of a project, design solutions and run targeted tests for each one by one before coming up with an integrated plan. The slicing technique is illustrated with examples from all four areas of unpredictability.
16. Jean-François Manzoni, Case study: The CEO suffered a breakdown. Now what?
The CEO in charge of a complex turnaround at a German company, a market leader in renewable energy, has a fainting episode in the office, after eights months of intense work. Can he be trusted to run the company on his own after a period of recuperation? Should he share the responsibility with a co-CEO? Experts weigh in.
17. Stefanie Fernández, Will you make good on your new year’s resolution?
In this review of three books and two youtube channels, Fernández reviews several strategies for effective goal setting, some overly complex and structured, others guided by curiosity and open-ended, thoughtful exploration and consideration.
18. Alison Beard, Life’s work interview with Rick Steves
Rick Steves developed his love of travelling in Europe into a life-long commitment to teaching and helping other Americans to make the most of their holidays on the continent. He believes that international travel widens horizons and builds strong foundations for peace, and advocates for careful consideration of environmental impact.
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