HBR June 2016: Managing teams

Harvard Business Review

June 2016

Annotated table of contents

1. Adi Ignatius, Wonder, adventure and learning

Adi Ignatius, the Editor in Chief of HBR, highlights the November 2015 HBR article by Francesca Gino and Bradley Staats, “Why organizations don’t learn” (https://hbr.org/2015/…. It won the 2016 Warren Bennis Prize for the best HBR article on leadership in the previous year.

Idea Watch

2. HBR Team, How private equity firms hire CEOs

Research by Jeffrey Cohn and J.P. Flaum, including surveys and interviews with 32 private equity firms, suggests that different criteria apply in hiring CEOs for firms owned by private equity firms, compared to hiring CEOs for public companies. PE executives, who have to hire CEOs more frequently and assess their performance more closely, find experience less important than ability to understand and appraise a situation quickly. They also appreciate team-building skills, resilience, candour and urgency. CEOs in PE owned firms are judged as successes or failures after only nine months in the job and let go accordingly. Success rates of 60% in hiring CEOs are considered high in the industry.

3. Nicole Torres, Generalists get better job offers than specialists

Torres interviews here Jennifer Merluzzi, an assistant professor at Tulane University about her research with Damon Phillips, a professor at Columbia Business School focusing on the post-MBA trajectories of 400 graduates of top U.S. business schools. Salaries, signing bonuses and number of offers are all superior for those who have a varied portfolio of skills, as reflected in job and study experience before, during and after MBA. Too much consistency, a focus on just one functional area, say finance or marketing, across the different stages of professional development might be seen as a sign of risk aversion and lack of imagination and may be penalised by employers. Regardless of their strategies, married women were consistently rewarded less than married men.

How I did it

4. Scott Dietzen, Pure Storage’s CEO on choosing the right time for an IPO

Scott Dietzen led Pure Storage, a provider of data storage solutions for companies, flash memory and cloud, to its Initial Public Offering (IPO) in 2015. The company was 6 years old, had undergone six rounds of funding (4 from venture capital and the last two from private equity companies that remained investors after the IPO). Dietzen provides here a detailed discussion of the array of factors that needed to be considered as the company prepared to become public from choosing the right moment, to involving employees and investors, to valuation and the changing patterns of expectations surrounding IPOs for technology companies. Pure Storage was valued at $3bn. It is expected to make an operating loss of $212 million on $440 revenue in FY2016, but investors were persuaded by the growth rate, improving margins and increasing operational efficiency.

The Big Idea

5. Roger L. Martin, M&A: The one thing you need to get right

Roger Martin, a professor and former dean of the Rotman School of Management at the University of Toronto provides a scathing assessment of the CEO ego-driven push for mergers and acquisitions. Most M&A deals fail and Martin provides detailed analysis of some well-known examples that, hailed as great ideas at the time, do not have a sound financial rationale, including the acquisition of Pixar by Disney and What’s Up by Facebook. However, Martin suggests that it is possible to make an M&A work especially when the acquirer is in a position to offer all or some of these four benefits: smart growth capital, better managerial oversight, valuable operational skills, and valuable capabilities. He provides compelling examples of both positive and negative scenarios across these four areas.

Spotlight: Managing teams

6. Amy C. Edmondson, Wicked-problem solvers

The great, iconic projects of our time, such as Olympic stadia, green cities, or major, integrated hospitals nearly always require teams drawing on specialists from a number of industries. In this paper, Edmondson (Harvard Business School) draws on her experience of observing a dozen cross-industry innovation projects to define the major challenges such teams face, as they deal with ‘wicked problems’. She then outlines four leadership practices that can help keep such teams on track: adaptable vision, psychological safety, knowledge sharing and treating execution as a learning process. To foster an adaptable vision, make project values explicit, invite and celebrate change. To promote psychological safety, acknowledge the experimental nature of the project, reduce legal concerns, by using integrated project delivery norms, and encourage social bonding. Knowledge sharing becomes more likely when professional values are emphasized and face-to-face interaction is part of the schedule. Finally, by accepting execution as a learning process it will be possible to assimilate emerging lessons and welcome changes.

7. Michael D. Watkins, Leading the team you inherit

Watkins (Genesis Advisers and IMD) discusses here the challenges of taking over large teams, involving multiple departments. He fleshes out his recommendations through detailed discussion of a case study from a medical devices company in which a new manager oversees functional teams (sales, marketing, personnel communications) linked to two surgical products (stents for blocked arteries and an electronic implant stabilizing cardiac rhythm). The three stages in leading an inherited team – assessing, reshaping and accelerating team development – appear straightforward, but, to succeed, each requires careful planning and execution along several lines. To assess the team, clarity and transparency around qualities looked for are important as well as careful one-to-one interviews and team meetings. Once the main issues are identified, reshaping the team needs to take account of composition issues, alignment of objectives, operating model and integration, and the establishment of ground rules respected by all. To sustain the new regime ensure early wins and consistent implementation of the new rules and norms.

8. Martine Haas and Mark Mortensen, The secrets of great team work

Haas (University of Pennsylvania) and Mortensen (INSEAD) revisit here fundamental research on the bases of team effectiveness carried out in the 1970s by J. Richard Hackman. The current age of 4-D teams, diverse, dispersed, digital and dynamic, largely confirms earlier insights about the primacy of three enabling conditions: compelling direction, strong structure and supportive context. At the same time, Haas and Mortensen suggest adding to this list a shared mind set, that transcends ‘us versus them’ thinking and promotes the sharing of knowledge. The presence or absence of these enabling conditions is usually linked to team performance in terms of three criteria: output, ability to collaborate and individual development. When a team is evaluated along these seven dimensions, weaknesses in the performance criteria are usually linked to weaknesses in the enabling conditions.

9. Ginka Toegel and Jean-Louis Barsoux, How to preempt team conflict

Dysfunctions in the process of working together in teams are often as important as any issues related to the content of the work. Unaddressed, such dysfunctions can build up towards acrimonious, destructive conflict. In this article, Toegel and Barsoux, of IMD in Lausanne, Switzerland, suggest a method for heading off the kind of conflict that leads to bad blood between team members by surfacing views, attitudes and expectations that shape the process of work. Starting from the most obvious surfaces, of how colleagues look and expect others to look (dress, demeanour, education, experience, connections) through to ways of behaving, speaking, thinking and feeling, they describe five types of conversation that can help clarify expectations and facilitate exchange of knowledge about each other in an non-threatening environment. Applying this method creates a space where differences can be tolerated and the valuing of each other’s contributions becomes more likely.


10. Erin Reid and Lakshmi Ramarajan, Managing the high-intensity workplace

Based on hundreds of interviews and several surveys among white-collar workers, this article explores adaptation strategies to the pressures to be an ideal, ‘always on’ worker in the 24/7 workplace. Typically, employees and managers choose among three available strategies – accepting, passing and revealing/resisting. Critically, the analysis here highlights the tensions, vulnerabilities and long-term consequences of each strategy. Accepting or conforming builds long term vulnerabilities in the face of career setbacks. For those passing, the inability to own publicly non-work interests creates stress and ambiguity in relation to subordinates as well as superiors. Those who choose to be open about the fact that they have interests outside work often face costs in terms of career progression. According to one survey in a consultancy organization, the combined weight of those who pass (27%) and those who reveal their interests (30%) is greater than the accepting group (43%). The authors suggest that there may be a real opening for redefining models of the ideal worker to include more aspects of individual personalities and shift measures of success from time commitment to results.

11. Scott Berinato, Visualizations that really work

Berinato, a senior editor at HBR and the author of Good Charts: The HBR Guide to Making Smarter, More Persuasive Data Visualisations (2016), shares here the underlying framework that organizes his approach to data visualisation. He asks two basic questions: is the information conceptual or data driven, and is the purpose to declare or explore an idea. He then derives four types of charts and visualisations at the intersection of these two axes: idea illustration, idea generation, visual discovery and everyday dataviz. Berinato provides interesting examples of both successful and unsuccessful efforts for each type. Crucially, technique – and there are many software applications to transform data spreadsheets into charts – needs to be subordinated to strategy and broader understanding of purpose. Visualisation is becoming a necessary process for uncovering and understanding patterns within the big data and it is increasingly a required core skill in many jobs now.


12. Heather C. Vough, Christine D. Bataille, Leisa Sargent and Mary Dean Lee, Next-Gen retirement

Retirement is not what it used to be and this article shows the many ways in which this is the case by drawing on interviews with 100 retired executives and interviews with HR professionals in 24 companies in a variety of sectors. Four patterns stand out. When we retire may be out of our control, so being prepared to go ‘off script’ is important. Interviewees in this study came up with a variety of metaphors to capture the feeling and significance of retirement for them – from loss to renaissance, to liberation, staying the course, transformation and many others. Finding your own metaphor will help you grasp the meaning of this change for you. For some retirees, retirement specifically entails a redeployment of skills, either in a reduced commitment at their company or a similar one. Finally, some retirees choose to continue to make a difference not only through philanthropic giving but also through hands-on involvement in voluntary or entrepreneurial pursuits.

13. Sandeep Puri, Kirti Khanzode and Alison Beard, Case Study: Which customers should this restaurant listen to?

The restaurant in question has a specific offering – egg dishes of South East Asian inspiration, catering to expats from this region living in the United Arab Emirates. After ten years of successful expansion, could this restaurant chain continue to grow beyond the original market without compromising its value proposition and identity?

14. Walter Frick, Who controls the internet?

Frick reviews four books on the creation and development of the internet. While the creation of the internet is clearly a story of innovation ‘seemingly from the edges of the network’, its decentralized future appears less certain. The dominant internet companies seem well placed to centralize power.

15. Alison Beard, Life’s work interview: Yo-Yo Ma

Yo-Yo Ma is one of the world’s finest classical cellists active today. Now 60, he reflects on how he dealt with the burden of early fame (he was performing on television at 5) and shares insights on the pleasures of practicing and preparing for performance, choosing collaborators, finding purpose anew at different stages of his career and staying optimistic.