Annotated table of contents
Ignatius, the editor in chief of HBR, explains the rationale behind the spotlight section on the changing role of the CEO.
This article summarises research on factors that mediate the influence of minority board members on decision-making, based on an analysis of transcripts of board meetings at 54 US public companies, between 1994 and 2006. Women and black directors tend to speak less than others, which may be the result of active exclusion or self-censorship. However, previous experience in a high-level position and support from other minority directors can strengthen confidence. An interview with John W. Rogers Jr, a co-CEO of Ariel Investments, explains the multiple channels board members have for exerting their influence, including in writing and side-meetings, as they choose how to focus and sequence their interventions.
Harrell interviews Daniel Lerner about his research examining the medical and professional trajectories of nearly 75, 000 Danish women. Perhaps surprisingly, those diagnosed with Toxoplasma gondii, a parasite carried by mice and cats and estimated to infect between 10 and 50% of the human population, are more likely to have started a business by 27 – 29% compared to those not infected. This suggests that the parasite’s effects on humans might be similar to its effects on rodents: novel-seeking behaviour and lower aversion to risk. The link between infection with TG, even when it remains latent, and greater inclination towards entrepreneurial behaviour has also been established through studies of students and professionals. Unfortunately, the TG parasite has serious medical consequences especially for immune-compromised people.
Xendit, currently valued at $1 billion, is an excellent example of the large opportunities available to entrepreneurs from developing countries when they can use the latest technology to address specific pain points in their locales. In this case, Lo and Wijaya, who are Indonesian natives but studied for advanced degrees in the US and Australia and participated in the YC start-up incubator, have been able to gain the trust of large financial institutions and companies for an innovative payments system, serving over 3000 business in around 20 sectors. In this article, they explain how they tackled infrastructure challenges to the data and internet networks as well as the pandemic. Resolving product development, operational and personnel problems has gone hand in hand with the creation of an enterprise culture that responds well to the stringencies of global competition and to local sensitivities.
Spotlight: Choosing your next CEO
Analysis of a data set of nearly 5000 job descriptions for CEO and other C-suite positions, composed by the executive search firm Russell Reynolds Associates and their clients during 2000-2017, reveals that expectations regarding the skill set for success have expanded beyond traditional technical, administrative, and financial competencies. Superior social skills, such as self-awareness, listening, communication, and ability to motivate a variety of groups and interests, are now required as well. The authors suggest that this is especially noticeable in large, complex organizations with high coordination demands, where basic information processing has been automated making higher order skills, such as judgement, creativity, and perception necessary. Developing knowledge around the measurement of social skills and their cultivation across the organization is a priority.
The performance of 87 companies led by co-CEOs shows that they generate almost 3% higher average total shareholder returns, suggesting that despite some high-profile cases of failure, the model may have significant merits. Looking in detail at how effective co-CEOs work together, Feigen et al. identify and discuss 9 conditions for success: willing participants; complementary skill sets; clear responsibility and decision rights; mechanisms for conflict resolution; an appearance of unity; fully shared accountability; board support; shared values; and an exit strategy.
Dey’s research shows that materialism and recklessness and risk-taking outside work correlate with similar attitudes and behaviours on the job. Perhaps surprisingly, a large amount of public information about private transgressions is available and recruiters would do well to head its relevance when assessing candidates for top positions. One analysis of the records of 1000 US executives shows that one private criminal infraction by a CEO doubles the chances that their firm would be involved in fraud and the likelihood that the CEO is named as the perpetrator is seven times higher. Equally, a materialist orientation, the pursuit and display of wealth (expensive houses, cars, boats), is also consistent with lack of concern for workers and the environment.
Nohria describes the emergence of a new zeitgeist, creating new constraining factors that leaders need to understand and navigate effectively. The features of this new climate include the return of (potentially) global conflict, a greater appetite for government intervention, an increase in the ability of workers to question the existing bargain between capital and labour, a concentration of companies in technological fields, demographic shifts with larger cohorts leaving the workforce and increasingly liberal social mores. Leaders of established and new companies are challenged to broaden their thinking and address larger, societal responsibilities.
The article constructs a matrix defined by zooming in an out on one dimension and focus on mainstream or unconventional users on the other, defining four strategies for identifying unmet needs: telescope, kaleidoscope, microscope, and panorama. Conventional social research methods, such as close observation, participant observation, and interviews can be complemented by real-time digital data from smartphones, in a microscopic approach, or social media sites, which can be observed at a distance, for a telescopic one. For a 360-degree investigation, all these strategies would have to be deployed in turn. The analysis of both digital and non-digital data will remain important, as they contribute different strengths and compensate for weaknesses. Examples include Lego, new sweeteners, Mars Petcare, games and sports, kitchen utensils for arthritis sufferers among others.
Diversity, equality, and inclusion efforts are dogged by legal uncertainties, which may open companies up to costly allegations of reverse discrimination or use of (impermissible) quotas in hiring and promotion. While operating with risk is a fact of corporate life, accepting DEI-related risks requires quantification and a conscious, measured evaluation of the amount of risk that a company can take on. This article explains how DEI leaders can drive this process by engaging with their legal departments early, learning the structural and procedural foundations for HR policies, enlisting their lawyers’ support to achieve specific goals, and using a nuanced understanding of risk.
The growing size of the private equity sector, already large at $6.3 trillion in assets in 2021, compared to $90 trillion for public companies, has raised the stakes of their practices around environmental and social responsibility, in the current climate. This article draws on interviews with industry experts and limited partners that contribute capitals to PE firms, as well as general partners, to present some early examples of effective ESG practice in the sector and their experiences with integrating these objectives, ensuring transparency, and improving performance. The authors identify several areas that require attention, including standardization of reporting standards, commitment to net-zero objectives, improved diversity and more equitable distribution of wealth.
Gopaldas and Siebert find that customer journeys fall into one of four categories, or archetypes, depending on the level of effort and predictability expected of them: routine, trek, joyride and odyssey. A successful offering will match the structure of the customer experience with the structure of the appropriate archetype, influencing for instance when and how to cue purchase decisions and where to streamline the journey. With routines, for instance, customers are likely to stay, or come back, if their experience is seamless and consistent. Where more effort is required, despite the predictability, goal posting becomes a major motivator. Different customer segments may want to consume the same product differently, requiring a specific journey: casual users of an app might be attracted by predictability, while those prepared to go deeper might like more unpredictable high and lows, as well as the greater pay-offs characteristic of a joyride or odyssey.
Desai and his collaborators suggest that companies may structure how they use their data internally by treating it as a product, to respond to ‘consumption archetypes’ such as digital applications, advanced analytics systems, reporting systems, discovery sandboxes and external data-sharing systems. This would standardize access to data, allowing data scientists to track performance and quality, to adjust their offerings and increase the accessibility of data across the business. Examples from mining, banking and telecoms illustrate how the management and development of data products can be embedded in the organisation and suggest criteria for focusing on particular kinds of data products.
Kteily and Finkel ground their discussion on current research on intergroup conflict and intimate relationships, specifically explaining that the values and ideas we hold tend to distort systematically how we perceive emotionally charged situations. Motivated reasoning (selective use of facts and information to support our view) and naïve realism (treating perceptions as truths) are every day, virtually universal phenomena. Building on this, Kteily and Finkel offer advice for two scenarios. To avert conflict, intervene early with new cohorts of employees, inducting them into a culture that takes differences for granted and puts in place the norms we need to be able to deal with them: tolerance for distorted perceptions, commonly agreed metrics and standards of evidence, structures for channelling disagreement. When conflict has already burst into the open, create a safe environment to air differences and exchange views, and channel energies towards finding solutions and implementing changes.
It has become widely recognised that biases in the data used to train AI are picked up and reproduced in the new models, creating large risks for companies when this leads to discriminatory practices against historically disadvantaged groups. This article spells out the questions companies need to ask to surface ethical risks surrounding AI and their reputational, regulatory, financial, and legal implications. These are best addressed by a designated ethical committee and Blackman sets out criteria for defining the function, jurisdiction, and membership of such a committee to ensure its effectiveness.
This case study of the Haier platform, COSMOPlat, shows that a specialised supply-chain management platform can be used to solve a plethora of innovation problems in response to specific product challenges in changing circumstances across the globe. Created in 2012 to improve basic procurement functions, COSMOPlat now brings together partners in 20 countries, impacting every aspect of Haier’s work. The article illustrates how COSMOPlat has been used to resolve innovation issues, reducing production cycles, trimming procurement costs, and increasing customer orders. The authors then distil several recommendations for companies seeking to expand the role of their supply chain platforms, including fast enlargement of the supplier network, adding the development of new products and services, and generating new opportunities and solutions.
Uncertainty can be deeply unsettling. Even though to an extent uncertainty is all around us, all the time, for the most part we seem able to establish a baseline of known facts and certainties about our situation. However, when this baseline of security is threatened, or we decide to expand it, becoming comfortable with higher levels of uncertainty can lead to innovative, unexpected positive results. The authors organise their learning from research and personal experience around four themes: how to reframe the situation and make a habit of seeing flux where all would appear fixed, in a kind of infinity game; how to develop the appetite to seek uncertainty in some areas while cultivating simple, stable habits in others; how to actively test out possibilities; and how to self-care to avoid debilitating negativity or self-blame.
A chain of fast casual eating spots, specialising in meat offerings responds to an offer to add an innovative, plant-based meat alternative to its menu. The executive team weigh the pros and cons and devise a time-limited trial for the idea.
Is the metaverse really the great new thing, the future of human interaction? In this review essay, Stackpole assesses three new books that make the case and cautions against the risks: dystopia as well as the disappointment of ‘more of the same’.
Copeland started her training as a ballerina impossibly late by most standards, at 13, but has gone on to become the first Black female principal dancer at one of the most prestigious and competitive companies in the world: the American Ballet Theatre. In this interview she discusses the values that have taken her this far and will shape her writing, and her charity and advocacy work: patience, consistency, allowing vulnerability to learn and grow, while staying strong in the face of challenges.