Harvard Business Review

March 2016

Annotated table of Contents

1. Adi Ignatius, Making start-ups more resilient

Adi Ignatius, the editor-in-chief of HBR, points out the contributions made by the three articles in the spotlight section, from providing a framework for how start-ups can evolve, to advice on how to integrate strategy and entrepreneurship, to tackling ‘stall-out’.

Idea watch

2. HBR Team, Winning back lost customers 

High churn industries, such as wireless carriers, insurance companies, gyms, online streaming services, typically have information about past behaviours of customers who have defected and can experiment with strategies about whom to try to entice back and how to match an offer (discount, upgrade, a combination of these) to their particular profile. There is practical advice here on how to pitch the right offer and consider costs, success rates and ROI.

3. Nicole Torres, Fast thinkers are more charismatic

Professor William von Hippel of the University of Queensland is interviewed about an intriguing fact he established through studies of groups of friends: quick responders to a common knowledge test were perceived as more charismatic, irrespective of their IQ, knowledge, or personality. Answering a question within 400 miliseconds will get you recognised as a wit, especially if you say something unexpected, while taking 900 miliseconds, still under a second, might get you tagged as ‘slow’. Read to find out how the assessment of charisma was made, how charisma interacts with other social skills such as getting along and putting other people at ease, and the many questions that require further research.

How I did it

4. Sam Walsh, CEO of Rio Tinto, on managing in a hyper-cyclical industry

A fascinating account from the front line of dealing with enormous volatility in the prices for minerals, this article was written three years into the process of transformation at Rio Tinto prompted by their first year of net losses in 25 years, in 2012. Sam Walsh goes into considerable detail about three initiatives that have now begun to turn around the 153 year old mining company, the second-biggest in the world, with 60,000 employees and a market cap of $50 billion. These initiatives are: new checks and balances on investment projects; cash accounting, with monthly forecasts of earnings; and cost-cutting while investing in new technology. Rio Tinto’s ‘mine of the future’ now has 66 driverless trucks and a remote management operations centre in Perth that looks after 15 iron ore mines, 17,000 kilometers of rail, four ports and three power stations among others.

Big Idea

5. Douglas Holt, Branding in the age of social media 

Douglas Holt suggests here that content marketing has delivered disappointing results. Attempts by companies to leverage social media channels gained little traction, despite huge investment. In contrast, rankings of followers and subscribers to YouTube channels, for instance, reveal the power of crowd cultures, subcultures and art worlds that used to be isolated and fragmented, but can coagulate a formidable following on digital platforms. Gaming subcultures, for example, have been especially visible, and unexpectedly successful on YouTube. Holt argues that in order to harness this kind of social interest, companies need to think in terms of cultural branding and produce campaigns that tap into feelings and desires below the surface. He discusses a number of cases, ranging from the revival of Jack Daniel, the whisky brand, to the positioning of Chipotle as champion of back to nature farming methods, to personal care brands such as Dove, Axe, and Old Spice.

Spotlight: Entrepreneurship for the long term

6. Ranjay Gulati and Alicia DeSantola, Start-ups that last 

Gulati and DeSantola identify four common challenges for the scaling up of start-ups: definition of specialist roles, adding management structure, planning and forecasting with discipline, and sustaining the culture. Each challenge is defined, solutions are proposed and examples discussed to give a vivid appreciation of this momentous, crucial transition from the effervescence of daring beginnings, to stability and measured growth. There are fascinating examples presented in rich detail, with testimonies from founders, early employees and newer talent of start-ups, including: Birchbox, a company that sends monthly samples of beauty products to subscribers; CloudFare, a provider of content and security for small and medium-size websites; Micromax Informatics, an Indian firm producing mobile handsets; and Practice Fusion, a cloud platform for electronic health care records. Established small and medium enterprises looking to expand may encounter similar difficulties and the framework presented here might be relevant for them too.

7. David Collis, Lean strategy 

Strategy and entrepreneurship don’t have to be polar opposites, argues Collis in this thoughtful article on strategy for entrepreneurs. Although flair, improvisation, opportunism, ad-hoc deals are the great drivers of entrepreneurship, the basic questions that structure a strategy remain useful in guiding entrepreneurs on what not to do. Thinking in strategic terms helps entrepreneurs to choose a viable opportunity, to stay focused on the prize, to align the organization and make the necessary commitments. As the enterprise is still evolving very fast, Collis recommends a combination of deliberate and emergent strategy: articulate your vision, analyse the match between opportunities and capabilities, formulate a strategy but keep it open to continued learning from the front lines and adjust the strategy based on feedback and findings.

8. Chris Zook and James Allen, Reigniting growth 

Recent start-ups that have succeeded and are now leaders in their field as well as companies that have been around for a long time can hit a ‘stall out’, a sudden, steep drop in revenue and profit growth, as was the case with Starbucks in 2008, Perpetual, Australia’s oldest trust company, in 2011, Home Depot in 2006, Dell in 2013, eBay in late 2000s. To recover and reignite growth, these companies needed to reconnect with their original, insurgent mission, to obsess about the front line and instil an owner’s mind set in their employees. Zook and Allen provide detailed and insightful discussion of these companies’ transformations and recovery, clarifying lessons for others in this situation.

Features

9. Joshua Gans, The other disruption

Technological innovation can affect not only particular features of a product, but also its very architectural structure. This kind of disruption poses challenges that could easily lead to the demise of an established company overly tied to the old structure. Gans compares and contrasts companies that have survived and others that have gone under in photolithography, the standard method of fabricating printed circuit boards and microprocessors, typesetting and photography to identify three crucial factors that make the difference and need to be actively managed to ensure survival and success. First, the degree of integration between teams focusing on particular components will affect the extent to which a particular technological challenge can be absorbed by reconfiguring existing advantages and assets across features and components. Second, owning a crucial feature of a product can buy a company time to develop its own counter-offer to new technological challenges. Finally, the ability to define the identity of the company in a flexible and potentially inclusive manner also confers greater adaptability.

10. Adam Grant, How to build a culture of originality 

Refreshingly balanced between optimism and realism, this article shows that there are practical ways to open up an organization to innovative contributions from across managerial ranks. Letting a thousand flowers bloom, developing a nose for good ideas and cultivating cohesion and dissent are recommendations that come with many examples of techniques for how to achieve them, culled from settings as diverse as the US Navy, government departments and creative media companies. A syllabus for innovators is provided, including speeches, fiction and non-fiction books and TV shows. Along the way Grant challenges a few preconceptions: to do better work, do more, not fewer things; you’ll need around 200 ideas on the table before quality maxes out, not just 20; innovators are notoriously unreliable at assessing their own ideas, but can provide lucid analysis and assessment of others’ ideas; do bring solutions to your manager, but not before airing out all the problems and so on….

Experience

11. Erica Andersen, Learning to learn 

Shifting our internal mental dialogue can provide crucial stimulus for developing the four attributes that, according to Andersen, sustain our ability to learn: aspiration, self-awareness, curiosity and vulnerability. For instance, instead of saying ‘I don’t need to learn this’, try ‘what would my future look like if I did?’ to replenish inner motivation and aspiration. Or, to accept vulnerability, instead of ‘I’m terrible at this’, why not say ‘I’m making beginner mistakes but I’ll get better.’

12. Mary Anne Watson, Gabrielle R. Lopiano, Case study: Should he be fired for that Facebook post? 

This is a case study based on a real life situation; it raises several issues at the intersection between employment law, freedom of speech, performance, collaboration and legitimate forms of feedback within a company.

13. Walter Frick: The case for activist investors 

Two books about activist investors are reviewed here. Based on different methodologies, case studies and academic literature review, they try to shed light on the role played by activist investors: are their criticisms of management just naked pursuit of pay-outs and self-interest? Are they contributing strategic reflections that could improve the management and performance of a company?

14. Alison Beard, Life’s work: An interview with Kevin Spacey 

Alongside his many achievements as an actor, Kevin Spacey was also the director of a theatre company, Old Vic, in London, for ten years. In this interview he reflects on the values that have shaped both his managerial career and his acting practice. ‘When you act or direct you have a responsibility to bring the right energy to create something with the group’, he says.