Harvard Business Review
Annotated table of contents, INov/Dec 2021
Adi Ignatius, the editor in chief of Harvard Business Review, considers the importance of projects for staying innovative and building for the future.
This article argues that CMOs can make a decisive contribution to internationalisation efforts in multinational corporations when they have strategic, operational, and financial discretion. Under the right circumstances, CMOs can bring into the conversation first-hand experience from the frontline and can act as integrators of knowledge about the company and its environment. They can increase sales and profits in a greater number of foreign markets, especially when their compensation is linked to shareholder value; global experience at the board level can also support effective selection of expansion targets. Kevin Warren, the CMO of UPS, describes his role in building the global partnerships that help deliver for small and medium enterprises across the world. ‘One of the biggest things we have to avoid is the idea that the United States is the center of the universe and everything else is second fiddle’, he says.
Dukach interviews professor Siddhanth Mookerjee, from the University of British Columbia, who studied the impact of atypical products labelling on purchasing behaviour. Retailers and farmers discard huge amounts of edible produce, assuming that cosmetic imperfections make them unsaleable. However, this research recommends a strategy for overcoming this penalty. By labelling such produce ‘ugly’, sellers suggest that appearance is the only downside and create trust in their own honesty. To support this impression, ugly produce should not be discounted by more than 20%. Questions remain about the usefulness of this technique for selling high-value products or for neutralising bias towards personal or cultural traits.
Niccol was leading Taco Bell in 2017, when he became aware that Chipotle, a competitor focused on offering hormone- and antibiotic-free food in the fast-casual market, was looking for a new CEO. In this article he explains how he analysed the problems at Chipotle and articulated a turnaround strategy before being hired, in March 2018. This included a new marketing campaign, training managers and frontline team members to think like chefs, introducing a minimum wage of $15 per hour, better integration of service via an ordering app and on-site pick-up, and a rewards programme that now includes 22 million members. As a result, Chipotle, a 6 billion company, has continued to grow through the pandemic, opening 200 new restaurants and joining the Fortune 500.
Spotlight: Better project management
Nieto-Rodriguez has taken his vast experience as a researcher and educator to a new level in his recent HBR Project Management Handbook. This article previews his new framework of analysis based on the project canvas, a tool that can offer at a glance an overview of five related areas: purpose, people (sponsorship, stakeholders, resources), creation (deliverables, plan and change), investment and benefits. In addition, the article discusses six skill sets that are necessary for the successful delivery of projects: project management, product development and subject knowledge, strategy and business acumen, leadership and change management, agility and adaptability, and ethics and values.
Temporary agile teams are often crucial for the fast delivery of projects that depend on bypassing bureaucracy. Edmondson and Gulati spell out the design principles that are likely to make a large positive difference for such teams. For instance, they work on a project that is immediately recognised as important and actionable. They have permission from senior leaders to act quickly, without having to go through the usual processes for approval even as they follow well-defined, accountable processes of their own. Numerous examples, from GE, PepsiCo, Novartis, Sony and others illustrate these points.
Modularity within large projects facilitates learning, which is then scaled quickly and effectively, lowering costs, and leading to timely completion. This is illustrated by successful projects, such as the Tesla factory in Nevada and the Madrid metro. In contrast, lack of modularity contributed to such large- scale disasters as the Euro tunnel and the Monju nuclear plan in Japan.
Cross et al., argue that success in a new role often depends on the ability to build a strategic network of support and describe five fast-mover strategies that could support professional transitions even in the absence of formal on-boarding. These include tapping quickly into informal networks to determine who are the most influential and dynamic leaders that could become effective supporters. To generate pull, managers need to cultivate genuine connections, working to discover others’ thinking, needs and interests. While striving to contribute, it is also important to identify weaknesses and work to address self-development needs. Moreover, fast movers use networks to create scale and to nourish personal and professional well-being.
In this analysis, innovations are often inadequately embraced and implemented due to cumbersome legacy decision-making processes. Drawing on their research on 65 global companies, Hill et al, explain how implementing agile principles can free up such bottlenecks. Thus, decision-making processes should include diverse perspectives – from customers, local stakeholders, data scientists and outsiders. At the same time, there needs to be clarity about decision rights, consultation, implementation, accountability, and information-sharing. Discovery-driven learning should set the pace for decisions: the frequency and duration of meetings should be aligned with the specific needs of a project-phase, from data gathering to analysis and evaluation. Superficial agreement, as well as politicised infighting can be detrimental for the quality of the decision-making, but asking questions, focusing on data, and articulating a shared purpose can lead to good, necessary fights.
Reichheld, the creator of the Net Promoter Score returns to the drawing board to address a major weakness: reliance on surveys makes net promoter scores both popular and unreliable. Instead, he and his collaborators introduce the concept of earned growth, based on basic customer accounting which considers existing, earned, and bought customers. They explain the procedures for calculating net revenue retention and the economic value of referrals, discussing in detail examples of companies that already implement this system and providing a reliable guide for investors.
Feldberg and Kim identify three areas in which bias in the provision of services may occur and the forms it takes: in core exchanges, regarding prices, availability of appointments or criteria for approvals; in service extras, such as upgrades, discounts, detailed information; and in service etiquette, in the use of formal title, eye contact, tone of voice. While sometimes subtle, bias can nonetheless be diagnosed by using feed-back from customers, by examining existing data for unusual patterns, and by conducting experiments. Additional training could help frontline workers to become aware and overcome these limitations. Employers should set explicit standards for interactions with customers and encourage accountability.
Many direct-to-consumer (DTC) brands have grown rapidly, based on first-mover advantage in the implementation of digital media methods to refine their products and deliver services more effectively. They have been able to side-step established marketing principles, such as the expectation that customers would be able to evaluate their product before actual delivery; have learned by doing and have relied on calculations of projected customer lifetime value to raise funds from investors. As DTC business models are increasingly copied, not least by incumbents, and competition intensifies, other principles should come to the fore. The article recommends a deepening of customer relationships, beyond the initial transaction, the implementation of omnichannel strategies to add value, and a strengthening of the core proposition before considering extensions.
Nalebuff and Brandenburger argue that all the participants in a deal should receive an equal share of the additional benefits generated by their collaboration. This runs counter to the common expectation that participants should receive a share proportionate to their respective contributions. On closer examination, the solution proposed here satisfies more fully expectations of fairness, since all the participants are necessary for the generation of the surplus, and it removes incentives for bluffs or misrepresentation during the negotiation process. Arguably, this applies even when the size of the pie is uncertain; one side cares more about the distribution of the benefits; and there is a reputation at stake.
Current processes for assigning greenhouse gas emissions to companies are imprecise and open to abuse. To make clear who generates greenhouses and how they are transferred along supply chains, Kaplan and Ramanna propose a method for tracking emissions by allocating e-liabilities to products. This is a form of cost accounting that is familiar and should be easy to implement. It would encourage transparency and could be deployed across the economy. Moreover, such precise measurement would be useful in guiding the most important areas for product development and policy interventions.
Companies can play an important role in the continued moral development of their employees. Work represents an important part of our lives and the demanding ethical situations we encounter in this context may challenge us to gain new understanding and form new prototypes for moral judgements. To facilitate this, companies should: provide experiential learning and create a safe space of reflection; make group discussions about ethics part of everyday responsibilities; anticipate ethical dilemmas and help employees determine behavioural red lines for particular scenarios; imbue the culture with a focus on serving others; and treat moral development as an important part of professional progression.
At an individual level, there are several traps that might divert and even neutralise well-meaning efforts to find new solutions and to innovate. Drawing on examples from successful entrepreneurs, this article identifies the pitfalls and proposes workarounds. For instance, the fear of getting started might be overcome by taking the point of view of a future self or by treating scary scenarios as practical, and thus solvable, problems. Setbacks are inevitable but they can be put to good use as a source of actionable information about what went wrong, as an opportunity to face facts and to let go or to execute a turnaround. Too many ideas and overdrive could also be counterproductive and need to be disciplined and limited, perhaps with the help of a partner.
This case study presents the dilemmas surrounding the adoption of crypto, as a method of payment and as investment on the balance sheet, at an online education platform. Promoted as a major breakthrough opportunity by the CEO, crypto appears as a speculative interest to other executives and a potentially dangerous diversion. Specialists weigh in outlining the pros and cons.
Four books and two podcasts attempt to take stock of the role of Big Tech companies in the economy, society and politics, and the seemingly irreversible changes to our way of life that they have brought about. Pushback from consumers as well as governments seems necessary in areas as diverse as privacy, tech education, and values-based design, as reform from within appears unlikely.
Danielle Steel is the author of 170 novels and has raised nine children. She reflects on the choices she has made to press ahead with her writing in the face of opposition and scepticism, learning to navigate the publishing world, taking pride in her craft and chasing excellence.