HBR Nov/Dec 2020: Managing risk and resilience

Harvard Business Review
November/December 2020
Annotated Table of Contents

1. Adi Ignatius, Why we’ve stopped ranking CEOs

Albeit popular, CEO rankings have tended to reinforce known hierarchies of achievement, recognising mostly white male leaders. This year, the HBR has put aside this exercise, explains editor in chief, Adi Ignatius, and recommends articles on eliminating gender and racial discrimination in this issue.

Idea watch

2. HBR Team, Helping low-income workers stay out of debt

This article reports on research about two fintech offerings, PayActiv and Salary Finance, that manage access to funds due to employees, before pay day. Fees are low since salaries are a strong guarantee against defaults. Over time, these services can help increase the credit ratings of customers enabling them to tap into mainstream forms of credit. For employers, participation in these schemes has been shown to encourage retention and reduce churn in highly transient workforces. Jaime Donnelly, chief financial officer at Integrity Staffing Solutions explains how these schemes work from the point of view of employers.

3. Gardiner Morse, Confidence does not always boost performance

Morse interviews Professor Don Moore of Berkeley’s Haas School of Business about his research on the link between confidence and performance. In numerous experiments, subjects primed to feel confident or doubtful in their abilities performed variably, showing that there was no link between subjective feelings of competence and actual results, across tasks as varied as solving math problems, trivia quizzes, and endurance and athletic challenges. The research suggests that accurate beliefs about likelihood of success is the best mindset for any task and encourages realism and hard work to increase capacities in line with aspirations.

4. José Ignacio Sánchez Galán, the CEO of Iberdrola, on committing to clean energy

Galán has led Iberdrola for almost two decades overseeing its global expansion from its Spanish base and transformation into a clean energy company. It is now a leader in the environmental field, on course to reach carbon neutrality by 2030. This has been achieved through divestment of fossil fuel plants and acquisition of renewal energy companies, especially wind and solar, in a few countries, including UK, Germany, France, the US, Brazil and Mexico. Iberdrola has become a leading energy provider in many of its national markets, showing that companies can benefit employees and society as well as shareholders.

Spotlight: Managing risk and resilience

5. Robert S. Kaplan, Herman B. Leonard, Anette Mikes, The risks you can’t foresee

Novel risks are often triggered by events that are outside of the realm of imagination, by unanticipated combinations of multiple routine breakdowns and by sudden, overwhelming shocks. To a certain extent, organisations could put in place detection mechanisms that will make it more likely that they will recognise emerging risks for what they are. These include putting a senior executive in charge of scrutinizing incoming data from multiple sources, digitizing event reporting and regularly imagining what if scenarios. Comparatively effective responses to novel risks tend to be associated with the existence of a critical-incident-management team, while in other cases devolving responsibility for crisis management at the local level is more appropriate. Examples for each of these points cover a variety of industries and emergency scenarios.

6. Fernando S. Suarez and Juan S. Montes, Building organizational resilience

Suarez and Montes analyse in detail the decision-making processes of a team of successful mountaineers who climbed the Kangshung Face, the most remote and least explored face of the Mount Everest. They distinguish between routines, heuristics and improvisation and show how decision rules were applied in response to concrete pressures and resource constraints. By being aware of when these methods are effective, organisations can built-in more resilience, becoming able to switch from stable to more flexible coordination and decision-making processes in the face of sudden changes. The process of adaptation of health care services, not least hospitals, to the Covid-19 crisis, serves as another illustration.

7. Cassie Kozyrkov, To recognize risks earlier, invest in analytics

Kozyrkov distinguishes between branches of data sciences, including machine learning and statistics, suggesting that, despite being marginalised now, analytics has a great deal to offer to help prepare for novel situations and risks. All companies need to recognise the importance of formulating hypotheses and interrogating the relevance of their data.

Features

8. Prithwiraj (Raj) Choudhury, Our work-from-anywhere future

Before the current pandemic hit, Choudhury carried out research on several organisations that had adopted a work-from-anywhere regime, including United States Patents and Trademark Office, Tulsa Remote and Tata Consultancy Services, among others. Drawing on this data, Choudhury spells out the many benefits of WFA for individuals, organizations, and society. The concerns related to WFA are also readily apparent, touching on communication and problem-solving, knowledge sharing, socialisation, camaraderie and mentoring, performance evaluation and data security. However, as Choudhury shows at length, organisations implementing WFA have also developed strategies to counter some of these drawbacks and continue to thrive.

9. Suzanne J. Peterson, Robin Abramson and R.K. Stutman, How to develop your leadership style

On balance, would you say that your leadership style tends towards powerful or attractive? Do you tend to emphasize your dominance, or do you prefer being liked? For most people, the answer would be complicated. And this article spells out in thoughtful detail the many types of cues and behaviours we employ, as status markers, nonverbal and verbal styles to define our position. Directing our attention to this level of detail, the authors propose both that we define our styles concretely and make informed choices to adjust our behaviours and create the type of leadership we want to project.

10. Everett Spain, Reinventing the leader selection process

Spain, an active-duty colonel and associate professor at West Point, describes in detail the new approach taken by the US Army for their annual selection of around 450 battalion commanders. This is a departure from tradition, implemented for the first time this year, moving from quick-fire file assessments by superiors to a complex battery of tests and interviews carried out over five days. Interview panellists and other assessors have undertaken extensive training to raise awareness of biases and prevent them, a concern that is also incorporated in all the features of the process. Equally, key stakeholders have remained involved and early indications are that all participants have gained a deeper appreciation of the importance of cultivating a broader culture of evaluation and feedback.

11. Joel M. Podolny and Morten T. Hansen, How Apple is organized for innovation

Unusually for a company of its size, Apple has maintained, with some modifications, the functional structure introduced by Steve Jobs when he returned as CEO in 1997. Podolny and Hansen, who teach at the Apple Academy, explain the implications for leadership training. Three sets of skills become vital: deep expertise, immersion in the details and willingness to debate collaboratively. The article shows how certain breakthroughs in product development became possible as a result. At the same time, it is apparent that the adoption of new business areas at Apple, such as news and editing, have increased the pressure on senior leaders to learn new subjects and to delegate.

12. Joseph Fuller, Manjari Raman, Allison Bailey and Nithya Vaduganathan, Rethinking the on-demand workforce

This research article describes and analyses the current generation of varied and specialised talent platforms. They have increased access to contract workers, with different kinds of skill sets and a variety of motivations for gig work, depending on gender, care responsibilities or career stage. Equally, on the demand side, enterprises are increasingly taking advantage of this on-demand workforce. Overcoming resistance, however, will require finding answers for several challenges, from reshaping the culture, to organising and valuing the work, to reassessing the mix of internal and external capability and devising effective policies and process to interface with platforms and freelancers.

13. Omar Rodríguez-Vilá, Sundar Bharadwa, Neil A. Morgan and Shubu Mitra, Is your marketing organization ready for what’s next?

Rodríguez-Vilá et al. offer a framework for assessing the effectiveness of the marketing function, across six types of value and 72 dimensions, for customers and for the company. At a given level of marketing capability, it is possible to evaluate current performance and projected future performance needed and to estimate the gap between the two. Equipped with this comprehensive assessment, companies can identify the areas where maximum gains are available to them at a certain level of cost and direct their investment accordingly.

14. Robin J. Ely and David A. Thomas, Getting serious about diversity: Enough already with the business case

Ely and Thomas argue that in current practice, avowals of the importance of diversity tend to be based on faith rather than sound research, presuming that diversity by itself leads to better business outcomes. To reap the benefits of diversity, it is necessary to engage deeply with differences among the workforce, build trust, combat discrimination and subordination, and cultivate an appreciation for a wide range of styles and voices. Differences need to become an active source for learning before they can truly contribute to superior productivity and benefit all stakeholders. The article offers a range of suggestions for achieving this.

15. Curtis R. Carlson, Innovation for impact

Carlson, who led SRI International between 1998 and 2014, devised a process for accelerating innovation that helped the organization recover its edge and go on to create SIRI and HDTV among other technological breakthroughs. In this article he explains this process he calls NABC, an abbreviation derived from key words: a solution that addresses customer needs with a compelling approach and delivers superior benefits relative to costs compared to the competition. NABC is based on active learning for projects driven by champions and their teams, supported through a reiterative process of examination and feed-back in value creation forums.

Experience

16. Tsedale M. Melaku, Angie Beeman, David G. Smith and W. Brad Johnson, Be a better ally

This is a comprehensive list of actions that could help put minority colleagues at ease and create a genuine level playing field in the workplace. Suggested actions include self-education, owning one’s privilege, accepting feed-back, raising diversity issues in meetings, calling out discriminatory behaviours, sponsoring marginalized co-workers and more. In truth, these are legitimate expectations about the quality of relationships in any workplace and spelling out concrete ways of enacting them – things to say, things to do – can inspire and sustain commitment to creating equitable conditions across the board.

17. Joseph C. Miller, Michael A. Stanko and Mariam D. Diallo, Case study: When your brand is racist

While the racist origins of brands may appear to have been forgotten, the danger remains that old associations will surface. In this case study, a current brand manager confronts difficult choices between addressing such legacies and the risk of foregoing the financial success and feel-good factor of a popular whisky named Overseer.

18. Scott Berinato, Unartificial intelligence

Berinato reviews four recent books on the brain science and the understanding of the mind. They draw up a revised picture of the brain which insists on the capacity of its trillions of neurons to rewire and remodel their relationships, even as the constant communication between all cells in the body may indicate that they have brain-like attributes too. These insights suggest that we might be better off training our minds not to retain content but to improve thinking and processing skills as well as meditation, mindfulness, play.

19. Alison Beard, Life’s work: An interview with Ernő Rubik

Rubik, the inventor of the eponymous cube shares here the story of his invention and the early steps in making it the global phenomenon is has become. He believes that learning is not the accumulation of knowledge. It is building a capability to find new possibilities.