Harvard Business Review
Annotated Table of Contents
This issue went to press before the Covid-19 crisis changed working patterns in the USA. Adi Ignatius, the editor in chief of HBR, reflects on how events provide tests for the relevance of ideas and arguments. He recommends several articles in this issue especially relevant now.
A study of almost half a million negative comments on the Facebook pages of 89 US firms in the S&P 500, between October 2011 and January 2016, shows that only 3% of comments go viral. These have an intense emotional tone and they are initiated by a high-engagement contributor, in a language typical to that community. Some tactics work better than others in containing the spread of complaints. If spotted early, strong complaints are best handled by offering an apology and a private channel for communication. Offers of compensation can work for incidents that have already drawn a great deal of attention; empathy could inflame feelings, while rational explanations might cool them down. An interview with Stephen Hahn-Griffiths, the executive vice president of brand and reputation intelligence at RepTrak, provides further advice and examples.
Eben Harrell interviews Lauren Eskreis-Winkler about her research with Ayelet Fishbach on the effectiveness of negative and positive feed-back following a test, involving respondents from the UK and the US. They found that when the emphasis was on what participants did well, the subsequent performance improved. Participants who were told what they did wrong failed to learn from the experience. It seems that the willingness to learn from failure depends on the stakes of the situation: people ignore negative feed-back when it is safe to do so, but become more motivated to learn in situations that are consequential for them. Advanced experts and people with a growth mind-set are more motivated to learn from failure and everyone tends to learn from others’ mistakes.
Ed Townley, who joined Cabot Creamery in 2004 and became CEO in 2015, describes the journey of this co-operative of around 900 farms in North-Eastern US as it began to engage with sustainability issues in the mid-2000s. In 2010 Cabot Creamery decided to pursue B-Corp certification and achieved it two years later, the only dairy certified in this way. Townley explains how the decision to pursue this certification, the motivation, the process and the consequences fit with the culture and the long-term commitments of the company. Attention to sustainability issues, carefully structured and monitored within the B-Corp community, ‘energizes the whole Cabot operation’ earning them some ‘very modest pricing power’, elevated demand and increased loyalty.
Spotlight: Confronting sexual harassment
This article reviews the impact of the two obligations mandated by the US Supreme Court, in 1998, to prevent sexual harassment as a form of discrimination in the workplace: training and formal complaints procedures. Dobbin and Kavel show that both of these measures have failed to protect the victims, women or men, allowing harassment to continue to stymie their careers. The authors also explain the mechanisms that account for this failure and suggest that forms of training that treat participants as by-standers rather than potential perpetrators have been shown to work much better. Informal channels for voicing and addressing problems, for instance through the office of an independent ombuds, are also more effective at removing harassment without leading to retaliation or other negative consequences for the victim.
Lawrence writes about her experiences of being harassed in different workplaces, contrasting positive and negative responses from the organisation. A victim has to decide how to react, from ignoring and avoiding unpleasant behaviour to sharing with friends and co-workers, telling managers and the HR department or contacting outside agencies. She needs to consider the likely negative reactions of others, who may not believe her, may dismiss her concerns or retaliate. These reactions are more or less likely depending on the organisational culture as a whole. Old-school cultures, overly reliant on formal processes in fact protect perpetrators, while informal, innovative approaches are more effective at removing harassment.
Santos is an employment lawyer who has delivered training to prevent sexual harassment in the workplace. She describes her experience of moving from perpetrator to by-stander centred training. And she shares the main techniques she uses to empower participants to step in and stop harassment in real time.
Howard is the president and the executive director of the International Ombudsman Association and in this article he explains the process of approaching an ombuds. Each harassment case is different, requiring a creative and sensitive response, as illustrated through examples. Importantly, however, the victim retains control over how she wants to pursue the issue and confidentiality is guaranteed.
The agile way of working has been gaining ground in many companies, especially at team level and in IT departments. This article takes up the challenge of explaining what the application of agile principles would entail at the executive level. In this case, the task would be to define the right balance between the stability of operations and innovation across the different domains of the enterprise operating system. This is illustrated through the discussion of a detailed case study in which the agile executive team was led by the CEO and came to comprise the CFO, CHRO, CIO and COO. They redefined the strategic direction of the company and set up 25 agile teams to deliver it. Further, they redesigned their own programme of work and that of their departments to support the mission. Agile leadership requires humility, and openness to consider feed-back and to change. The article closes with additional examples of leaders who have accomplished this agile transformation.
When markets are only just emerging, all the elements that go into the definition of a business model based on differentiation are in flux. For this reason, McDonald and Eisenhardt argue, successful start-ups in new markets have tended to use a more flexible approach to strategy, namely parallel play. This has three main elements. First, start-ups ought to borrow from peers but focus on established substitutes to create a realistic value proposition. Second, having experimented enough to determine plausible offerings, they should commit to one template to avoid confusion and costly waste. Finally, they should pause to observe developments in the market and to determine successful ways to optimise their offering. The article is based on original research including interviews with 200 entrepreneurs and provides a rich array of examples across tech sectors, including ride-sharing, payments systems and financial services, sharing apps and clothing subscriptions.
Martin explains the differing perspectives of company insiders and investors when they assess the value of companies and business units. Company insiders use a methodology that calculates rates of return on investment by taking account of the book value of assets and the cost of borrowing against cash flow generated. Investors on the other hand are only interested in the way investments and cash flow results move share value to their advantage. Based on their calculations, corporations are sometimes willing to sell-off apparently unpromising assets; but purchased cheaply and reorganised by private equity companies, the same units could generate market enthusiasm and large profits. To close this gap and create a more realistic framework for evaluating the value generated by companies and their units, Martin suggests that companies should use a methodology that incorporates expectations about future performance from the start. In concrete terms, capital value should be calculated as expected cash flow divided by expected cash flow return on market capitalisation.
Gaur and Gaiha compare and contrast the principles and applicability of blockchain against existing Enterprise Resource Planning systems. Based on their research at seven global companies developing blockchain applications, they suggest that blockchain has proven ability to ensure superior results in three major areas: traceability of components for pharmaceutical companies and the food chain; efficiency and speed in the allocation of production capacity and parts for fulfilling orders in complex manufacturing; and visibility of financial transactions to enable cross-border trade and banking support. The article identifies the crucial rules that would need to be specified and agreed between known participants: membership rules; consensus protocols for establishing the authoritative record of a chain of transactions; and the security of physical assets, ensuring that assets are recorded correctly in the chain.
Originating in political and military organisations, the designation of chief of staff has become more common in corporations in the last decade. At lower levels of complexity, this is a new name for existing roles, but in more demanding contexts, working for a CEO or another C-suite executive leading major change projects, the CoS role can approximate the sophistication, responsibility and reach of positions in political organisations. In this article, Clampa, a former CEO and current advisor to CEOs and boards, draws on his own experience and on interviews to define three levels of responsibility and kinds of chiefs of staff, with their respective responsibilities, skills and typical organisational context.
Frei and Morris argue that genuine leadership empowers others to achieve their best and can only be achieved through trust, a form of foundational leadership capital. In this analysis, trust has three drivers: authenticity (people feel they are interacting with us as we really are); logic (colleagues have confidence in our judgement) and empathy (they believe that we have their best interests at heart). In situations when we fail to convince it is because one of these drivers becomes, for whatever reason, unreliable, wobbly. The article goes on to provide advice on how to self-reflect and self-diagnose our capacity to foster trust and how to work to develop it. Authenticity for instance is necessary to move diverse teams from a narrow base of shared knowledge to true inclusion. These concepts are useful tools in analysing trust in company cultures too, and the article offers a detailed account of the turnaround at Uber since 2017.
The increasing availability of digital technologies is challenging established markets and legacy companies. Attempts to compete by launching large digital projects have not always been successful, however, and in this article McGrath and McManus suggest that established companies use a discovery-driven planning approach. This consists of several steps, starting with the identification of problems that could be fixed through innovative use of digital technology. Incremental projects should be measured on a ‘from-to’ basis, specifying the starting point and the improvement to be achieved. As a rule of thumb, companies should think about their competition in a wide sense, as an arena that satisfies a particular customer need. Where opportunities exist, companies should consider providing platforms to help match-making between supply and demand. And finally, expectations and assumptions employed at each step in the transformation should be clearly stated and tested to facilitate learning. A wealth of examples of both successful and failing digital projects further elucidate these suggestions.
Public health education is the responsibility of many organizations, including governments, schools and NGOs. In this article, Sidibe, a former social mission manager at Unilever, spells out the contribution that brands can make: they provide the products necessary to support public health and they use marketing to intensify the messaging and education that ensures they are taken up. She proposes a framework for considering and developing this type of marketing with a mission, in a few steps: determining the most effective behavioural change that could bring about an increase in public health to focus messages; creating support within the organisation; defining measurable outcomes, for the brand, the organization and the public; developing partnerships; and driving changes in social norms and behaviours. The article reports in detail some major successes linked to marketing campaigns for Unilever’s Lifebuoy soap, helping to reduce diseases through better hygiene, for AB InBev’s Carling Black Label persuading men to abstain from violence against women while drinking, and a few others in countries across Africa and Asia.
This article is based on a survey and interviews with more than 100 executives who have embraced work opportunities alongside their regular, often very demanding jobs. By enriching their experiences and networks, and finding opportunities to learn about different types of projects and organisations that complement their major interests, they were able to recharge and sustain their energy and to reach higher levels in their careers. Their observations are distilled to provide guidance on how to find the time, identify suitable roles, and ask for permission from your employer and family.
The resignation of a star employee at a bank challenges her manager to determine whether to make a counteroffer and how to ensure important work on deals is carried out. He needs to consider the deeper issues underlying the decision to leave or stay and find a solution that balances the long-term interests of the employee and the organisation.
Morse reviews five recent books on AI, pointing to the many fears associated with the current stage in the development of the technology, linked to the loss of jobs and the use of AI applications for non-democratic or coercive purposes. It remains possible to create regulatory frameworks and other policies to moderate the negative impact of AI.
Marie Kondo, the author of several books on tidying up, most recently Joy at Work, runs a consultancy business and has certified over 400 consultants to use her eponymous method for riding homes and offices of unnecessary clutter. She explains how she aligns with clients around values and goals, taking a systematic approach and focusing on the belongings they want to keep.