Annotated table of contents
Adi Ignatius, the editor in chief of HBR, notes the changes one year has brought in terms of using AI: it is now part of regular white-collar work, incorporated in everyday applications, email, word processing, web browsing. While human judgement remains decisive, working well with AI assistants has become a must-have skill.
Idea watch
2. HBR Team, When it comes to influencers, smaller can be better
Most US-based companies have a budget for influencers and decisions on how to allocate it have increased in importance. New research looking at nearly two million global purchases and hundreds of paid influencers in Europe suggests that the return on investment for using small influencers is orders of magnitude higher than using celebrities: 20 times compared to just 6 times more. To assess the effectiveness of spend on influencer marketing, companies could: take account of the full spectrum of engagement offered, from number of followers to views, to reactions and to purchases; determine how the customer has been reached by collecting transaction data; make use of platforms to select and manage large numbers of smaller influencers; prioritise authenticity of engagement over mere awareness of products. An interview with Dominik Buchar the general manager and CFO at Paul Valentine, an affordable jewellery company based in Germany, offers perspective on how these strategies can work in practice.
3. Juan Martinez, There really is a ‘sales gene’
Martinez interviews Juanjuan Zhang, of MIT, about her research, with colleagues in China, on the relationship between genetic makeup, phenotype, capacity for adaptive learning and sales performance. The study collected samples for DNA analysis, phenotype profiles and performance data in controlled conditions from workers at a telemarketing company, concluding that employees with more genes associated with adaptive learning (16% of the total) perform better. Most employees (68%) had some degree of adaptability. To harness these findings, the researchers recommend that employers allow workers to self-select for the tasks they feel they are most suited for. Those with natural talent for adaptability and/or a willingness to develop this capability will then step forward to tackle appropriate challenges.
4. Robert B. Ford, the CEO of Abbott, on revamping its breakthrough diabetes device
Ford joined Abbott in 1996 and by 2008 he oversaw the commercial side of the diabetes business just as Navigator, their first device for monitoring glucose levels in real time, was coming to the market. Despite some success, the clunky design and unintuitive interface posed significant barriers to adoption, creating a dilemma for the company: press ahead or go back to the drawing board? Despite some initial resistance, the second path was chosen and Ford helped put in place a rigorous process to discontinue Navigator and embark onto a comprehensive redesign, around the core technology, the sensor giving accurate glucose data from interstitial fluid in the arm. The redesign required coordination of multiple teams to resolve product features such as longevity and calibration of the sensor, automation of production to reduce costs, pricing and so on. The new product, FreeStyle Libre, is now used by more than 6 million people worldwide and continues to expand. It is also the basis for Lindo, a biowearable that could help healthy people optimise their glucose levels.
Spotlight: Build better teams
5. Angus Dawson and Katy George, New rules for teamwork
Dawson and George describe three core principles that could optimise teamwork: the formulation of an operating system, development of real-time performance measurement, and implementation of continuous adjustment and improvement. They illustrate with the Way We Work operating system used by McKinsey and some of their clients, which begins with a structured kick-off that sets out the main rules and values, followed by regular one-to-one feed-back, and a fortnightly review. Weekly measurement of team sentiment and engagement team surveys every two weeks allow senior leaders to intervene where necessary. Clients are also involved through confidential surveys about the performance of consultants. Continuous improvement is driven by a dedicated team within the company that monitors the active application and the results of the operating system, collecting and spreading best practices.
6. Thomas Keil and Marianna Zangrillo, Why leadership teams fail
Keil and Zangrillo identify three main types of disfunction within teams: shark tanks (where relentless competition derails cooperation); petting zoo (excessive deferential cooperation hampers open discussion and competition); and mediocracy (where both cooperation and competition are weak, and teams are not able to do what they need to do). These dynamics can be reversed by using specific approaches. For instance, to inject more open debate in overly nice teams, make data available to all, focus the discussion on objective metrics or lift the conversation above policy and regulation and onto interpretation of principles and purpose. To perform well, teams need clarity of vision and purpose, division of individual and collective responsibilities and acceptable behavioural norms.
7. Gregory LeStage, Sara Nilsson DeHanas, and Pete Gerend, Teamwork at the top
Drawing on a study of hundreds of top teams in 11 industries on six continents, LeStage et al. distil five traits that account for high effectiveness: direction in terms of purpose, vision and strategy serves to focus efforts; discipline requires the subordination of individual agenda to the common purpose and considerate participation in decision making; drive results in sustained, disciplined delivery over the long term; dynamism reflects openness to change and adaptability; collaboration is a measure of connection, inclusion and trust. LeStage et al have worked with numerous teams confronting challenges and they define four stages of a process that can reset dynamics, starting from recognising that working as part of a team is a core skill that needs development, accepting frank reflection of how the team works, setting new expectations and sustaining commitment over time.
8. Tom Brady and Nitin Nohria, The art of leading teammates
This collaborative article identifies guiding principles from Brady’s highly successful career in the NFL, winning seven world championships. These principles amount to a philosophy that consistently puts team interests above individual interests, even in moments of personal adversity, and in relation to all colleagues, acknowledging differences in what motivates team members to sustain a culture of high effort, complementing and supporting the leadership styles of others, and availability to develop personal relationship outside the workplace. Exercising leadership within a team is akin to an art that requires awareness and savvy in dealing with limitations such as ingrained character traits in others, the competing priorities set by other elements in the wider system as well as internal limitations as one develops as a leader over time.
Features
9. Jay B. Barney and Martin Reeves, AI won’t give you a new sustainable advantage
Barney and Reeves explain the erosion of competitive advantage as AI becomes a table stakes, baseline technology. To stay in the race, companies need to have or be able to make use of open access AI capability. For a short time, they could build an advantage around proprietary datasets and AI algorithms trained on them. But in time other AI machines would be able to copy or reverse engineer such solutions and make them widely available. Only for a selected few companies, such as Amazon, Walmart or Costco, that have a large advantage in their markets, using AI to sharpen their offerings even more could be an effective competitive strategy.
10. Michael Luca and Amy C. Edmondson, Where data-driven decision-making can go wrong
Correct use of research results for decision-making in a specific situation can be easily derailed by common mistakes. Luca and Edmondson describe five common errors and propose remedies. To avoid conflating correlation with causation, it might be useful to ask additional questions about the research design and test additional relevant variables. Small sample sizes can lead to oversize effects that would not be replicated in other circumstances. Measuring what is easy to measure may distract from more important outcomes that ought to be considered. Research results may be bound to a particular context and difficult to transpose to other settings. One study is typically not enough as a source of truth and additional corroboration should be sought. Creating a climate where colleagues feel free to stress-test research findings is critical, and the article offers further advice on how to achieve it.
11. Ivanka Visnjic and Ronnie Leten, The legacy company’s guide to innovation
Visnjic and Leten have studied innovation practices at several large legacy companies in Europe, such as Enel, Atlas Copco and Epiroc. These companies have significant experience exploring the world of start-ups to find promising ones, hedging their bets by establishing multiple partnerships and hubs as well as grooming intrapreneurial talent. Once a solution achieves breakthrough, it enters the ‘corridor of uncertainty’ when companies need to gauge carefully the pace and size of their involvement, assessing the business model, the ecosystem and potential supply chain partners and customers, and canvassing opinion among stakeholders. Successful innovations then need to move to scale quite quickly if they are to remain viable and the article suggests several tactics to expand support from the CFO and the board, to provide leadership and other resources.
12. Robert G. Eccles, Moving beyond ESG
Eccles argues that the ESG terminology has lost its descriptive power, becoming overly politicised, and suggests instead a focus on the role of business in society. As they take responsibility, corporations need to be specific and realistic about what they can achieve, focusing on those ESG issues that have a material impact on value creation for them, bearing in mind that ultimately regulation is necessary to mitigate negative externalities. Companies benefit when their sustainability reporting is candid and should listen to ESG proposals coming from shareholders, seeking to learn from their critics even when they cannot provide completely satisfactory answers.
13. Julian De Freitas and Elie Ofek, How AI can power brand management
De Freitas and Ofek identify several use cases for AI that impact directly on brand management. At Intuit, the productivity of customer service reps has been improved with the help of an AI model that detects the features of a customer interaction most likely to result in satisfaction. At Caterpillar, in Turkey, prediction of when the equipment needs maintenance has been incorporated in the brand promise from the start. Loop, the car insurance company, has built a business model where every insurance offer is personalised, reflecting a customer’s driving behaviour as measured in real time. Jasper AI can generate numerous draft marketing communications helping marketers to capture more quickly and easily a brand’s unique tone and personality.
14. Vikas Mittal, Alessandro Piazza, and Sonam Singh, Safety should be a performance driver
Considered separately, as a distinct area of concern, safety is often treated as a generic compliance issue that does not contribute directly to the bottom line. In the approach proposed here, companies can put safety at the centre of their operations by giving it a specific meaning that is relevant for them, generating appropriate metrics, identifying what constitutes a problem, who needs training and how employees need to be incentivised to adopt safe behaviours. Examples include focus on identifying incipient bed sores at a nursing-home chain, cell inspection rates and dispensation of medication in a US county jail, prevention of bullying in schools and risky behaviour on building sites among others.
15. Tarun Khanna, Mary C. Beckerle, and Nabil Y. Sakkab, Boards need a new approach to technology
Drawing on their experience as board members and interviews with peers, at Johnson & Johnson, Aptiv, JLABS, Delphi and several others, the authors define good practice principles for boards interested in setting up a committee for technology. Khanna et al. suggest that such a committee could help identify and prioritise relevant technologies, could assess risk and guide involvement with core technologies that enhance the company’s comparative advantage and prospects, and offer counsel to the board. Practical steps include decisions about the appropriate composition, agenda and cadence of meetings.
The structure of multibusinesses can differ depending on the extent of shared activities between units, common processes and skills, policies for incentives, governance, and control as well as portfolio selection, corresponding to a specific logic for value creation. With the help of five real-world examples of companies including a government pension fund, Berhskhire Partners, Danaher, Disney and Clorox, that illustrate these structural variations, Anand and Collis discuss which strategies have the greatest chance of success in each case. A given structure creates constraints for corporate vision, portfolio and organisational configurations, processes, reporting relationships and mindsets, and the size of the headquarters. Common mistakes include overestimating synergies, fixation on portfolio, and benchmarking that ignores structural features.
Experience
17. H. James Wilson and Paul R. Daugherty, Embracing Gen AI at work
Getting the most out of generative AI requires deep engagement from employees who need to become active trainers to improve the model to a sufficient degree. This article spells out techniques for intelligent interrogation, in the form of thinking step by step, training in stages and creative exploration. Moreover, employees need to be self-aware and pro-active in the integration of their own judgement, incorporating up-to-date information that may not have been available to the model protecting privacy and checking for suspect output. To become an effective apprentice, an AI model needs thought demonstrations and exposure to new processes. These fusion skills are rarely taught but they can be acquired through individual practice and study.
18. John D. Macomber, Should a family business accept a returning daughter’s radical proposal?
This case study of a family business in Cote d’Ivoire explores the differences in perspective between founders and next generation (potential) executives, contrasting long, local experience with the directness and dynamism of youth and education in the metropolis (France). Could they find a productive middle ground?
19. Rachel DuRose, Will psychedelics propel your career?
Four books and a podcast on different aspects of experimentation and consumption of psychedelics illustrate a variety of opinions on their effectiveness and usefulness for businesspeople. Praised for their potential to alleviate chronic pain and open new creative paths, some of these substances remain illegal in many states. In the absence of definitive evidence about their impact, consumption remains an individual, personal decision.
20. Alison Beard: Life’s work interview with Connie Chung
Refreshingly direct, the conversation with Connie Chung offers insight into the landscape of US news media and her rise to co-anchor the CBS evening news. Described as ‘Little Ms Fix-It’ early in her career, Chung discusses the glass cliff syndrome and her appetite for difficult assignments, and pays tribute to colleagues and mentors.
Liliana Pop Consulting Ltd 