HBR March/April 2020: Productive innovation

Harvard Business Review
March/April 2020

Annotated table of contents

1. Adi Ignatius, The right thing to do

The workplace could be deeply unkind to individuals whose gender identity is different from that assigned at birth. In his introduction, Adi Ignatius, the editor in chief of HBR, draws attention to the article on the trans-gender inclusivity in this issue.

Idea watch

2. HBR Team, Why soliciting donations at the cash register can backfire

This article reports on research about the effectiveness of soliciting donations at the cash register. In some cases, customers feel a breach of trust when this additional demand is made. It is possible however to reduce the chances of triggering a negative response. To raise the funds for a chosen charity successfully, it would be useful to reward customers for donating, to make the process simple, to train employees to understand the motivation behind the program, and to demonstrate generosity towards a cause that is consistent with the brand. Maureen Carlson, the lead strategist at the consultancy On Purpose, provides examples and further nuance for these recommendations.

3. Amy Meeker, A subordinate’s criticism makes you more creative

Amy Meeker interviews Professor Yeun Joon Kim about this research on managers’ responses to critical feed-back from their reports, in Korea. In general, he finds that managers are able to respond creatively to suggestions from their subordinates. However, they may also retaliate against critics by lowering performance evaluations, becoming aggressive, and engaging in social exclusion. There is no stable positive effect linking praise and creativity, however, as praise could also encourage complacency. At the same time, top-down and horizontal critical feed-back tends to have an inhibiting effect, at least in this culture. Anonymized and data-based feed-back could enhance the positive effects of receiving criticism.

4. Brendan Kennedy, Tilray’s CEO, on becoming the first mover in a controversial industry

Brendan Kennedy became interested in the cannabis business when he was asked to assess a business proposal in this area while working for a subsidiary of the Silicon Valley bank, in 2010. He has spent the intervening years prospecting this emerging field, formulating a business model, raising funds, and setting up Tilray in 2013. By 2018 the company had a successful IPO in the US, the first cannabis company to do so. Now legal in 41 countries and 22 US states, cannabis for medical use is a growing field and this article illustrates the process of developing a whole industry in dialogue with policy-makers and investors.

Spotlight: Productive innovation

5. Stefan Thomke, Building a culture of experimentation

This article shows a culture of experimentation in action by looking closely at the development of practices and norms at booking.com. The company has demonstrated that an equalitarian ethos can work, that it is possible to allow any employee to design and implement experiments on its website, and let the data speak. To achieve this, and improve business results, the company has embraced a leadership model based on specific principles: grand challenges are broken down into testable hypotheses and associated performance metrics; systems, resources, and organizational designs are in place to support large-scale experimentation; and leaders model the desired behavior.

6. Iavor Bojinov, Guillaume Saint-Jacques, and Martin Tingley, Avoid the pitfalls of A/B testing

The authors draw on extensive experience with A/B testing at LinkedIn, Netflix and other large tech companies to clarify several common mistakes in the design of such tests. These include not looking beyond the average, failing to clarify the different behaviors of customer segments; ignoring the fact that customers are in fact connected and leaving out network A/B testing and time-series experiments; and missing out on the time-sensitivity of experiments, by making them too long or too short.

7. Dan McGinn interviews Jeremy King, senior VP for technology at Pinterest: The power of these techniques is only getting stronger

Jeremy King honed his data analytics skills working at eBay and Walmart before joining Pinterest. He shares here his observations about the place of A/B testing in company culture as high performance requires a commitment to taking data seriously and developing analytical expertise at all levels. Despite the expense of setting up and running experiments, they enhance competitiveness and the capacity to comply with complex ethical standards and regulations.


8. Robin J. Ely and Irene Padavic, What’s really holding women back?

Ely and Padavic report on an in-depth study of gender inequality at a global consultancy company. They investigated the reasons why the number of women at higher levels of management is lower than expected. Although both men and women expressed similar difficulties and tensions in balancing work and family, only women were encouraged to take up accommodations to meet these demands. In a culture of long working hours these accommodations, such as longer parental leave or lighter assignments, had a career-derailing effect for women. In fact, the expectation that women would want children and thus require such accommodations contributed to detrimental evaluations of single or childless women as well. In general, the culture favors a hard-charging, masculine style of doing business, and success, at the expense of more relational styles associated with women.

9. Andrew P. Chastain and Michael D. Watkins, How insider CEOs succeed

Chastain and Watkins identify five typical challenges for the insider CEO and provide advice on how to overcome them by drawing on testimony from interviews. For example, the shadow of one’s past may create a weight of expectations, and the insider CEO may need to take decisive steps to reset relationships as appropriate, including with former peers and reports. Erstwhile supporters may also become disappointed when decisions do not go their way; extra efforts to communicate and make sure that allies are kept on board as far as possible may be required. Equally, establishing the right pace of change and managing the departure of the outgoing CEO are important challenges to overcome early on in the new CEO tenure, requiring adequate support from the organization.

10. Ayelet Israeli and Eugene F. Zelek Jr. Pricing policies that protect your brand

Most goods reach final buyers through a chain of intermediaries, rather than directly from the producer, and the resellers’ financial calculations might lead to ad-hoc discounts that could damage a brand. This article looks in detail at existing tools for ensuring brand consistency, while avoiding charges of price-fixing. Specifically, manufacturers can set and enforce unilaterally the minimum resale (or retail) price and the minimum advertised price, which are most effective in relationships with their authorized resellers. Israeli and Zelek show in detail how effective pricing policies can be developed through planning, drafting, implementing, monitoring, and enforcing.

11. Verónica H. Vilena and Dennis A. Gloia, A more sustainable supply chain

This article reports findings from a research project on three multinational corporations, considered sustainability leaders in the automotive industry, electronics and pharmaceuticals and consumer products, and nine top-tier and 22 second-tier suppliers in Mexico, China, Taiwan, and the United States. In general, MNCs have little visibility in the sustainability practices of their suppliers, in regards to health, safety, labor, and the environment. However, they are developing a variety of practices to raise awareness of standards and mechanisms to enforce them, which can be direct, indirect, collective (industry-wide), and global (involving a variety of actors, including NGOs). Moreover, MNCs could also take steps to enforce higher sustainability standards internally, by including social and environmental considerations in their supplier pre-approval process, by training their procurement officers to use these criteria, and by involving second (and deeper) tier suppliers in sustainability activities.

12. Indra K. Nooyi and Vijay Govindarajan, Becoming a better corporate citizen

This article draws on Nooyi’s experience as CEO of PepsiCo where she introduced a comprehensive program, Performance with Purpose, which included four sustainability pillars: financial, human, environmental, and talent. The reorientation of PepsiCo around these objectives may well become a textbook case study of company transformation as it provides insight on how and why certain interventions work. These include the process of articulating a view of the future, ensuring board support, the sensitive use of language and communications, modeling desirable behaviors early with decisive actions, such as the creation of relevant posts, in this case, chief scientific officer and chief design officer, the development of specific capabilities and adaption to local conditions.

13. Dan Lovallo, Tim Koller, Robert Uhlaner, and Daniel Kahneman, Your company is too risk-averse

Lovallo et al. study the incentives of decision-makers regarding investment allocations at different levels in a company. They note that lower-level managers assess a small number of projects and as a result, the risk assigned to each may be quite high, especially since projects might reflect on the career prospects of individual managers directly. By comparison, at higher levels in the company, the risk associated with individual projects may be lower and the investment strategy may capture, as a result, more of the potential value. The article proposes the creation of an aggregated investment system, in which risky investment decisions would be made in batches, the risk would be clearly brought out into the open and it would become less personal.

14. Christian N. Thoroughgood, Katina B. Sawyer, and Jennica R. Webster, Creating a trans-inclusive workplace

This article documents the many barriers to career progression and fulfillment habitually met by transgender employees. Conventional gender socialization models are binary and offer little understanding of more complicated identities and trajectories. As a result, it is especially important for companies to support explicitly their trans workforce by adopting basic trans-inclusive policies, supporting gender transitions, developing trans-specific diversity training, and building resiliency. This is a comparatively new field of research and this article provides important guidance by drawing on best practices and the views of trans employees in a variety of companies.

15. Alex Lazarow, Beyond Silicon Valley

Lazarow previews here the research presented at length in his new book from Harvard University Press, Out-Innovate. He shows that there are rich and extensive tech start-up ecosystems across the world, including developing economies, which operate according to their own principles. He uses a wealth of examples to show how these start-ups pursue balanced growth while focusing on solving the real problems in the communities they belong to. These alternative start-up hubs lack the recognition, let along the glamour of Silicon Valley, but they nonetheless deserve support as they seek to develop their own talent pools and methods of working.


16. Joel Peterson, Firing with compassion

How firing is done may have important consequences for the resilience of those affected as well as the reputation of the company. This article provides detailed advice for those whose job it is to take and to communicate the bad news, around 10 dos and don’ts. Friends or family should not be shielded when signs of inadequate performance accumulate over time and all those affected should have adequate warning. Communicating the decision in person, having practiced delivery, shows a willingness to take responsibility and should be informed by promptitude and clarity, without over-explaining, and demonstrating humanity and generosity.

17. Sophus A. Reinert, Pursue your dream or move on?

This is a case study of a start-up in Africa that has developed a new local agricultural product for an underserved market. The lengthy process of experimentation and development has taken its toll on the remaining original founder and she considers the pros and cons of staying or moving on.

8. Scott LaPierre, One last chance to fix capitalism

This essay reviews five books that combine a big picture approach to capitalism with a more detailed analysis of particular crises and structural imbalances, especially inequality. There is hope that better tools for measuring the real costs of capitalism for the environment and for workers, as well as the determination of leaders, could help recalibrate the system before it is too late.

19. Alison Beard, Life’s work interview with Dean Koontz

Dean Koontz is one of the most prolific and best-selling novelists of our age. This interview probes the working processes that have allowed him not only to write more than 120 novels but also to build a financially successful operation, from finding the stamina to dealing with editors and balancing the expectations of fans and fame.