HBR Oct 2015: The new global leader

Harvard Business Review

October 2015

Annotated table of contents

1. Adi Ignatius: Preparing for the new world

Adi Ignatius, the Editor in Chief of HBR, highlights the article on ‘The future and how to survive it’. The article is an exercise in forecasting, anticipating that profits for Western multinationals will diminish in the next decade.

2. HBR Team: When platforms attack

Have you noticed that it’s become harder to find the best deal on the Amazon platform recently? Their default offerings are those of Amazon and third party sellers using the platform are often overshadowed. Research by Harvard Business School professor Feng Zhu shows that Amazon tends to introduce its own products to match the best performing products offered by third party sellers. How might these sellers manage their relationship with Amazon to preserve their advantage and survive?

3. HBR Team: Do CMOs really add value?

In many companies, the head of the marketing function is not part of the executive team; there is no Chief Marketing Officer. Does it make a difference to performance if the firm has a CMO? Research shows that performance improves when there is a CMO: for small companies, frequent changes in CEOs, robust sales growth.

4. HBR Team: The wrong way to reduce churn

Are customers always happy to be offered a better package by their telephone companies? Intriguingly, a larger proportion of those receiving such offers subsequently changed their suppliers compared with customers who were not contacted at all. Why would customers respond in this way and what could companies do about it?

5. Amy Gallo: Setting the record straight on switching jobs

What is the best way to switch jobs? When should you search for something new? Research presented here challenges common wisdom, showing changing practice. Most employees leave a new job within a year for instance, rather than wait at least two years to make a move, and gaps in CV are not the problem they once were.

6. Sam Haas: Disappointment makes you more trusting

It’s official, how we feel when making a decision matters. According to this research, feeling disappointment inclines us to trust more, while feeling regret is more likely to make us cautious. Would you agree? Can you think of examples when your mood affected an important decision in this way? What do you think might be the underlying mechanism?

7. HBR Team: Enlightened farming

In Europe, innovation in agriculture accelerated with the Enlightenment in the 17th and 18th centuries. You may find here illustrations of improved machinery and crop rotation on French noble estates documented by a Swiss scientist in 1786.

8. Jeffrey Dunn: The CEO of Bolthouse Farms on making carrots cool

Dunn more than doubled revenues at Bolthouse Farms by taking a pro-active approach to marketing to stimulate the previously static demand for healthy foods. With a background in soft drinks, he re-purposed some of the tactics in that field to make consumption of healthy snacks and drinks the easy, cheap and done thing. Is the increased popularity of healthy snacks a noticeable trend already? What do you think about its future prospects?

9. Richard Dobbs, Tim Koller, Sree Ramaswamy: The future and how to survive it

This team of authors from the McKinsey Global Institute argue that while likely to grow in absolute terms, corporate profits will decline as a share of global GDP in the next ten years, returning close to their 1980 levels. This is due to faster expansion of global firms based in the developing world and to savings to customers created by the emerging tech sector. Large U.S. and West European corporations will likely see a reduction in their share of global profits, but the authors also identify a few tactics to fight these increased competitive pressures.

Spotlight: The New Global Leader

10. Erin Meyer: When culture doesn’t translate

Companies expanding abroad tend to encounter a variety of problems as implicit communication breaks down, fault lines appear, and cultural clashes between the corporate and local culture develop. As well as describing these problems, Meyer proposes that companies can prevent these problems by planning carefully in a few key areas: identify the dimensions of difference, give everyone a voice, protect ambiguity in your most creative units, train everyone in key norms and ensure diversity in each location.

11. Tsedal Neeley: Global teams that work

Neeley offers a systematic way of thinking about global teams around a framework she calls SPLIT, for structure (and the perception of power), process (how could members in different locations develop empathy for each other?), language (how differences in language proficiency could be taken into account to minimize negative impacts), identity (do people interpret each other’s actions and words taking account of each other’s cultural perspective?) and technology (do you want instant or delayed communication? How much redundant communication, i.e. repetition of message and intent is necessary to reach your objectives?).

12. Andy Molinsky, Sarah Cliffe: “Companies don’t go global, people do”

Andy Molinsky is the author of Global dexterity: How to adapt your behaviour across cultures without losing yourself in the process and in this interview he distils some of his ideas about coping in a strange cultural environment. He has advice about what to try to observe about differences, how to find points of commonality with the things you already do and tweak your responses to fit in effectively.


13. Leonard L. Berry, Scott W. Daivs, Jody Wilmet: When the customer is stressed

This is an article about customer relations at their most sensitive, in highly emotionally charged situations, such as cancer care. Drawing on research in several medical centres in the US, the authors propose four sets of actions and behaviours that could help patients to manage their emotions better and thus earn providers gratitude and loyalty: identify emotional triggers (what exactly are patients reacting to and why); respond early to intense emotions (right after the diagnosis, when treatment starts, during ‘bad news’ days); give patients control over the situation as much as possible; give special attention to hiring and training people who work in these kinds of customer facing roles.

14. Michael E. Porter, James E. Heppelmann: How smart, connected products are transforming your world

This is the second of a two-part series of articles on the topic. The first, How smart connected products are transforming competition, published last year, in the November issue, focused on changes brought by the internet of things on the environment for manufacturing firms. The current article looks at the changes within the firm. It spells out how all functions are changing and how new patters of integration are emerging, through the formation of new clusters, such as data management, development-operations units and customer success management units. This is ‘the most substantial change in the manufacturing firm since the Second Industrial Revolution, more than a century ago’, claim Porter and Heppelmann.

15. Kimberly D. Elsbach, Brooke Brown-Saracino, Francis J. Flynn: Collaborating with creative peers

The premise here is that artists are more sensitive than other kinds of workers because so much of what they do is tied up with their sense of identity, of who they are. However, I find that the advice offered may be relevant for collaboration in any circumstances. The authors show how we could create space around our own internal reactions, especially when they are powerful emotional reactions, to suggestions offered by our co-workers. Offer broad suggestions, temper your enthusiasm, delay the decision-making, show respect and like-mindedness, all sound like good advice for emotionally charged and even routine situations.

16. Karthik Ramanna: Is a promotion worth hiding who you are?

An American executive, who is gay, considers taking a promotion requiring him to move from the San Francisco office to the Seoul-based headquarters of his company on a three-year contract that also requires extensive travel to the Middle East.

17. Walter Frick: Question certainty

This is a review of three new books on forecasting. In a nutshell, better forecasting is possible. It is enabled by a certain style of thinking, including an analytically trained mind, openness, self-criticism, multiple data sources.

18. Andre Agassi: Life’s work interview

Agassi talks about his journey to the top in tennis, a second time, even though the hates the sport.