Harvard Business Review
May/June 2023
Annotated table of contents
Harvard Business Review
May/June 2023
Annotated table of contents
Adi Ignatius, the editor in chief of HBR, highlights the article on market-creating innovation in this issue.
Idea watch
2. HBR Team, How brands and influencers can make the most of the relationship
Researchers at Harvard Business School set out to determine how posting sponsored content affects the following and standing of influencers. They analyzed more than 85,000 videos posted on YouTube by 861 English speaking influencers between August 2019 and August 2020. On average, influencers lose 0.17% of their followers over the three days after posting sponsored content. The influencers with large numbers of followers are more likely to lose them, especially when the sponsored content comes from large, well-known brands. Influencers who have smaller, tight-knit audiences may not be penalized to the same extent, especially if they support smaller brands that are well aligned with their own online personas. Yang Tianhao, co-founder of Erka Media, a Beijing-based company that supports influencers, reflects on how these findings apply to the Chinese market, where large brands are more readily embraced by consumers.
3. Amy Meeker, Conservatives are more open to seemingly inferior products than Liberals are
Meeker interviews Nailya Ordabayeva on her research with Monika Lisjak about the connection between shopping patterns and political orientation. They found that in the case of day-to-day purchases, such as groceries or online courses, US Conservatives are more likely to assume that an obvious disadvantage must be balanced by hidden qualities and to make a purchase. The price does not influence these choices, but the effect disappears for products that reflect social status.
In 2015, Amy and Ben Wright, who have two children with Down syndrome, Bitty and Beau, set out to create a business, a coffee shop, that works with people with unconventional skill sets. Starting in Wilmington, North Carolina, they devised a franchise that now has 17 locations in 11 states, employing more than 400 people with disabilities. In this article they describe how they reached out to the community to find and draw into employment people with unusual trajectories, and how they devised their training and supervision, valuing their unique qualities while adjusting procedures and processes. They argue that the learning curve for their employees has not been steep while the morale of their mixed workforce has been ‘exuberantly high’.
5. The 2022 HBR prize announcement
The first place and the two finalists for the 2022 HBR Prize have been selected by a panel of prominent business school professors and senior executives. The annual prize was established in 1959 to recognize breakthrough management thinking.
Spotlight: How to hang on to your front line workers
6. Joseph Fuller and Manjari Raman, The high cost of neglecting low-wage workers
Research by the Project on Managing the Future of Work, at Harvard Business School, has used extensive surveys among managers and frontline workers in hospitality, food services and retail, uncovering surprising insights that employers tend to miss. Low-wage workers in these sectors value location and stability, would like to keep their jobs, and have goodwill towards their employers. Leaving it to employees to initiate career discussion and disregarding their strategic importance, employers tend to fail workers by not providing mentorship, career pathways and learning and development opportunities. However, as Fuller and Raman show, some enlightened employers, have been able to develop practices that unlock the potential of low-wage workers, using better communication, tackling barriers to advancement, and collaborating with other companies.
7. Zeynep Ton, The obstacles to creating good jobs
MIT professor Zeynep Ton discusses four major beliefs that hold back performance in low-margin sectors, such as retail and hospitality, and shows how advanced companies are demonstrating that they can be overcome. She argues that contrary to received wisdom, it is possible to invest in people; frontline workers can be trusted; financial analysis can demonstrate that investment in people pays off; and system change of this kind is not too risky. This is backed up by companies such as Mercadona in Spain, Costco, QuickTrip, Mud Bay, Quest Diagnostics, Walmart, Children’s Hospital Medical Centre in Cincinnati, insurance giant Aetna in the USA and others.
Sam’s Club is a warehouse retailer owned by Walmart in the USA which offers a wide range of consumer products and services to members. In this interview, its chief product officer, Tim Simmons, explains how the Club transformed its operations and redesigned jobs, leading to spectacular improvements in job retention and satisfaction as well as sales. Roles were redefined broadly across whole groups of merchandise and schedules were simplified in three shifts: morning, midday and evening. Overnight stocking was eliminated, and pallet merchandise was preferred over items that require hand stocking of shelves. Pay increases and apps to enable easy location of stock were additional incentives. The interview also details how the new strategy was rolled out across all sites, the reasoning behind these changes and obstacles overcome.
Features
9. Darrell Zigby, Zach First, and Dunigan O’Keefe, How to create a stakeholder strategy
Zigby et al note that increasingly sophisticated measures of performance show that companies that excel at creating value in the long term do so across different stakeholder areas at the same time. In this article, they define a process to integrate such data sources to create a comprehensive stakeholder strategy at the enterprise level. This starts by analysing and reflecting on existing external rankings and their capacity to capture accurately the current competitive position, highlighting both strengths and weaknesses. Taking up broad insights from these rankings, the company should then articulate its best approach to integrating stakeholder interests. Further, existing processes would need to be adjusted and improved to sustain the new strategy. This approach is illustrated with detailed discussion of a stylised case study, HealthTech, a composite of several companies, and testimonies and examples from highly successful firms.
10. W. Chan Kim and Renée Mauborgne, Innovation doesn’t have to be disruptive
In their new book, Beyond disruption, from which this article is adapted, Chan Kim and Mauborgne are updating their Blue Ocean Strategy work to discuss scenarios when innovation creates completely new markets. With fewer social costs involved, nondisruptive innovation promises to create positive sum solutions for all and ultimately a socially responsible form of capitalism. The authors discuss inspiring examples, not least a vest with tactile capability for deaf concertgoers and the deployment of solar panels above aquaculture surfaces. More generally, they provide guidance for identifying nondisruptive opportunities by addressing unexplored or newly emerging issues or problems.
11. Fabrizio Fantini and Das Narayandas, Analytics for marketers
Fantini and Narayandas propose a framework for assessing how three analytical approaches – descriptive, prescriptive, and predictive – can help solve different management problems. In the descriptive approach, which is suitable for every day, business intelligence situations, analytics has a more limited role due to high uncertainty and lack of data. Predictive engines, on the other hand, can identify quick-win opportunities for relatively frequent decisions, with the proviso that their recommendations should be assessed by human decision-makers. For high frequency decisions where there are large volumes of readily available data, and which have the highest potential to create value, the authors recommend full automation.
Many large corporations operate internal talent marketplaces to help match staffing needs and employee preferences. In this article, Cowgill and his colleagues find that benefits range from reduced replacement costs and better placement within a large workforce to creating opportunities for generalists and better aggregation of insights. However, to realise this potential, they argue that companies need to make the right choices in terms of choosing the platform, preparing the organization, and taking account of company culture. Moreover, optimising an internal talent marketplace requires continuous attention, using nudges and incentives and making sure that the needs of the company and those of the employees are aligned through executive and HR oversight.
13. Herminia Ibarra, Claudius A. Hildebrand, and Sabine Vinck, The leadership Odyssey
The Odyssey metaphor neatly captures the fact that leadership journeys are long and difficult, with sometimes unavoidable (temporary) reversals. Producing results from an executive position typically requires developing collaborative skills, including ability to coach and listen, to coordinate and to motivate others while respecting their autonomy. Based on analysis of 75 CEO successions and 235 candidates at large-cap companies between 2009 and 2019, this article maps three stages for self-transformation: departure, the voyage, and the return. The impetus to get started builds up as leaders become aware of the gap between their existing skill and what they want to achieve. Gradually they acquire a more detailed understanding of what is involved, creating new contexts for learning, enlisting helpers, and staying the course despite setbacks. Moreover, as they achieve a more empowering leadership style, learning becomes self-sustaining and there is desire to share and amplify it for others.
14. Martin Reeves, Mihnea Moldoveanu, and Adam Job, Radical optionality
Reeves et al propose a model of strategy that engages directly with the high uncertainty and unpredictability of current business environments. This requires recasting some of the basic assumptions of strategy towards thinking while doing, creating options, exploring while exploiting, mass customization, and embracing ecosystems. Concretely, this means embracing external complexity, simultaneous search and execute, and facilitation and monetization of the customer’s exploration process, while changing some of the operating principles internally. To execute well this type of strategy, organizations need to embrace fluidity, to use technology well and to devise forward-looking metrics. Advanced companies, such as Alibaba, Google, EllisDon, Unspun, Dropbox or Smartwool illustrate this approach in certain areas and suggest its broader relevance.
Performance marketing, which drives short term sales, through offers and discounts, has an impact on a brand identity, which is built over the long term, but the tools for integrating the two are often missing. The metrics offered here bridge qualitative branding, which uses concepts such as purpose, emotional attributes, functional benefits, experiential qualities, and the more quantitative activation levers, such as product, price, place, people, and promotion (captured through structural equations). At the same time, brand equity which is also a composite of four elements – familiarity, regard, meaning, and uniqueness – can be assessed through surveys using 1-to-7 Likert scale questions. Detailed examples from an airline, a fast-food chain, and a wine maker show how they utilised the approach to identify and reach new audiences and to target investment.
16. Cait Brumme and Brian Tresland, Should your start-up be for-profit or nonprofit?
Many start-ups start life as vibrant, fast-moving projects and ideas for new products and services, but the form in which they are incorporated as enterprises, for profit or nonprofit, can also make a difference. Brumme and Tresland argue that the choice should be based on assessments about market readiness and capacity to generate profit, customers’ willingness to pay, the available sources of capital, and talent. For instance, when a particular sense of purpose motivates employees to work at below market rates, and there is sufficient philanthropic capital available, a start-up might make use of subsidies to survive and develop offerings in markets that are still fragmented and small. A variety of start-ups, including Greyston Bakery, Stonyfield Farm, Mass-Challenge, Reboot Rx, Wellthy, Healthpoint Services Global, VisionSpring, Rocket Learning, EatWell Meal Kits, Iora Health LifeBank illustrate the discussion.
Experience
17. Jill Avery and Rachel Greenwald, A new approach to building your personal brand
Crafting a personal and professional image is becoming a prerequisite for career success at all levels. In this article, Avery and Greenwald set out a seven-step process for creating and reviewing your brand: define your purpose; audit your brand equity; construct a personal narrative; embody your brand; communicate your brand story; socialize your brand; and re-evaluate and adjust your brand. These steps are designed to enable the cultivation of authenticity and skill, becoming thoughtful and intentional in any actions.
18. Nien-hê Hsieh, Case-study: Is it time to exit Russia?
Western companies have been under pressure to sanction Russia and exit its markets since the attack on Ukraine in February 2022. This case study explores the pros and cons of strategies to balance business priorities, responding to public expectations and ensuring viability of operations for the long term.
19. Curt Nickisch, Blue oceans in open space
Nickisch reviews three books and one podcast that reflect on emerging opportunities in the space economy, which is already a $424 billion market. Clearly, there is both a pull and a push to wanting to explore beyond our planet, but actual colonisation remains a long way away.
20. Maureen Hoch, Life’s work interview with Jacques Pépin
Jacques Pépin is going strong at 87. A famous chef, restaurant owner, and former writer for the New York Times, he is the author of 30 cookbooks and countless TV cooking shows. He currently sells more paintings than books and has set his sights on learning how to play the piano.
Liliana Pop Consulting Ltd 