Harvard Business Review
September/October 2023
Annotated table of contents
Adi Ignatius, the editor in chief of HBR, suggests that since the Covid-19 pandemic a call for empathy has been an important objective for the magazine, alongside providing expert advice, as illustrated by the spotlight section in this issue.
Idea watch
2. HBR Team, Should you launch products during a recession?
Research on product launches during a recession, including fast-moving goods (1995 – 2012, UK) and auto categories (1946-2008, US) has found that the relative lack of noise in the marketplace could help prolong product-life. However, the struggle to survive might be overwhelming during severe recessions while launches at the tail end of recessions have a better chance to be successful. Products launched before a recession underperform, while those that catch the window of opportunity just after a recession are more likely to thrive. An interview with David Figler, the executive VP of product and brand management at Infinity Massage Chairs substantiates these points.
3. Juan Martinez, People may be more trusting of AI when they can’t see how it works
Martinez interviews Timothy DeStefano on his research, with colleagues, of the role of AI in stocking decisions at 186 stores for more than 400 products of a US luxury retailer. The research shows that managers are more likely to trust the recommendations of an AI algorithm that is less transparent to them, when it has been constructed with input from peers. When the AI algorithm is rules-based, however, managers tend to distrust its recommendations and overrule it more often. Taking advice from the AI led to higher sales and fewer stock-outs, justifying the investment in the technology.
4. Juan Ricardo Luciano, the CEO of ADM on expending its focus from commodities to consumers
Archer Daniels Midland, formerly the Daniels Linseed Company, started in 1902 as an agricultural commodities company in the US, expanding to Europe, Mexico, and North America in subsequent decades. In this article, Luciano explains his approach to product development that ultimately lifted the company to a higher position in the value-added chain. Analysis of capital, cost and cash led to the identification of resources to invest in new product lines such as emulsifiers, nutritional supplements, and plant-based proteins. Moreover, a good balance was achieved between innovation and operational effectiveness, increasing revenue by 40% in only two years, while net income reached $4.38bn in 2022.
Spotlight: Leading the anxious workforce
5. Kiran Bhatti and Thomas Roulet, Helping an employee in distress
Bhatti and Roulet argue that it is necessary for managers to learn how to provide mental health first aid and present a framework, based on cognitive-behavioural therapy, that could be safely used in the workplace. The effectiveness of CBT is backed up by research and once learned the approach can be easily self-administered. Moreover, CBT benefits from a well-honed set of tools that help develop awareness of the links between body sensations, feelings, thoughts, and behaviours, enabling self-interventions to disrupt negative patterns and restore equilibrium. The article uses a stylised case study to illustrate and specifies boundaries that managers should not overstep.
6. Michael Gervais, Free your people from the need for social approval
Adapted from a forthcoming book from HBR Press, The first rule of mastery: Stop worrying about what people think of you, this article argues that concerns about others’ perceptions and dependency on contingent feelings of self-worth detract from performance. To be able to screen out such distracting influences, Gervais suggests a focus instead on developing identities that are based on commitment to certain values, and a specific sense of purpose. As we examine actions and ask ‘Am I being true to my purpose?’, the locus of evaluation remains internal, fostering a healthier sense of agency and control.
7. Julia DiGangi, The anxious micromanager
A neuropsychologist by background, DiGangi discusses interactions between individuals in terms of energy exchanges. For anxious micromanagers, the most common pattern is an energetic tug-of-war whereby their command energy, their desire to impose a certain course of action, takes over and eventually depletes their reports. She recommends a process for changing this dynamic, what she calls ‘dropping the rope’, by addressing root causes, which are usually linked to lack of trust in oneself.
Features
Reskilling, acquiring new skills in order to change occupations is predicted to become an imperative for companies in the coming years, as the shelf-life of skills shortens to 5 years or less. In this article based on research by the HBS Digital Reskilling Lab and the BCG Henderson Institute, the authors suggest several shifts that leaders need to consider. Reskilling becomes a strategic imperative as companies need to anticipate labour market trends and act to create capacity. This also means that reskilling becomes a company-wide responsibility, for all leaders and managers, not just the HR department. To ensure success, reskilling also requires a broad change management approach that takes account of all related factors, from targeted recruitment to changing the mindset of middle managers and building skills in the flow of work. Employees themselves will need to be treated as partners while reskilling efforts could extent to the whole ecosystem. Numerous examples from companies such as Infosys, Amazon, McDonald’s, Ericsson, Novartis, Wipro, Vodafone, CVS, Ibedrola and ICICI Bank provide illustration.
9. Willy C. Shih, The new era of industrial policy is here
The need to respond to challenges, such as the Covid pandemic, climate change, and intensified global competition, has led democratic governments in the US and Europe to try to steer their market economies and introduce stimulus programmes ushering in a new era of industrial policy. In this article, Shih proposes that there are four types of industrial policy: horizontal (affecting all firms), vertical (targeting a particular sector), supply-side (trying to stimulate production) and demand-side (trying to stimulate consumption). The tools used might be similar, including subsidies, tax preferences and credits, but their targeting is important, and firms would do well to understand the mix of competing government priorities. They can help the decision-making process by providing sound industry evidence of likely impact and need to consider carefully whether their long-term prospects are helped or harmed by accepting subsidies.
10. Jay B. Barney, Manoel Amorim, and Carlos Júlio, Create stories that change your company’s culture
Cultural change is notoriously difficult but, this article argues, it can benefit from a thoughtful and targeted approach that taps into powerful learning moments and effectively fashions them into enduring lessons and stories. The authors suggest several guidelines for this process: authentic alignment between personal values and behaviour; ownership and self-inclusion in the stories; embracing discontinuity of practices and processes, where necessary; combining an appeal to emotions with business rationale; a flair for drama; and empowerment of others. Each of these is illustrated through a detailed example of an instance when being able to tap into underlying emotions and processes and fashioning a narrative for change were successful.
11. Erin Meyer, When diversity meets feedback
When managed well, diversity can have extraordinary, positive benefits for engagement and performance. However, turning diversity into effective inclusion and creating a culture of candour remain difficult as most workers are reluctant to take the risk of being misunderstood or offending colleagues by offering critical feedback. In this article, Meyer shows that it is possible to give feedback well and offers a few rules of thumb to follow for specific situations. For instance, when giving feedback across cultures, it is important to take account of implicit norms around the balance between positive and negative observations. Across gender divides, it is more effective to solicit feedback before offering it. To tackle generational differences, an explicit team culture around giving and receiving feedback can help.
12. Thomas H. Davenport, Ian Barkin, and Kerem Tomak, We’re all programmers now
In the wake of generative AI, coding skills are no longer indispensable for creating new applications or automations. This article explores the extent to which practices in companies are already changing as a result and discuss the implications. For instance, pro-active citizen developers may or may not find superior solutions to problems and their testing and integration within existing tech infrastructures remains a specialist and potentially fraught activity. To ensure an orderly innovation process, the authors suggest several steps, from recruiting and classifying citizen developers, to training and certifying them, building an infrastructure and community for them and creating the mechanisms to manage the value created. Two case studies, from PwC and AT&T illustrate both the upsides and the tensions surrounding the emergence of AI-supported innovation.
13. Lynn S. Paine, What does “stakeholder capitalism” mean to you?
An increasingly common umbrella term, “stakeholder capitalism” can nonetheless be usefully unpacked to distinguish four versions of it. Instrumental stakeholder capitalism is anchored in the primacy of shareholder value, while recognising that respecting the interests of other stakeholders could be useful to that end. Classic shareholder capitalism acknowledges that other stakeholders may have legitimate claims, as required by some of the basic company laws in many jurisdictions. Beneficial stakeholder capitalism is embraced by a variety of B-corp and other beneficial corporations and goes further by committing to increasing steadily the extent to which the interests of all stakeholders are considered. Finally, in structural stakeholder capitalism, a variety of stakeholders participate in the actual distribution of power in the governance of enterprises, at board level or through voting rights. The article also discusses tensions and challenges for each of these types of stakeholder capitalism.
14. Haijian Si, Christoph Loch, and Stelios Kavadias, A new approach to strategic innovation
Si, Loch and Kavadias propose a tool for aligning strategic goals and innovation projects in the pipeline. By comparing strategic objectives and internal weaknesses, vulnerabilities and external threats, companies can identify clear change needs. All innovation projects could then be put in a basket and analysed against the innovation goals that would satisfy these change needs. After the basket has been reviewed a few times, managers introduce numbers for targets and costs. This process is illustrated with two case studies: a diversified Chinese company producing telescopes, binoculars and optical sensors and a battery company going through a process of strategic reinvention. Success requires willingness on the part of managers to confront hard truths and abandon cherished ideas, sometimes leading to a veritable cultural shift.
15. Gizem Yalcin and Stefano Puntoni, How AI affects our sense of self
Yalcin and Puntoni take as their starting point the observation that for employees or consumers interaction with AI could be felt as a reflection on their values, their sense of themselves and their aspirations. This has important implications for the design of services, business processes and products and for communication. For instance, in several experiments described here, applicants who received positive responses from humans reported more joy at the result than those whose feedback came from AI. On the other hand, negative responses had less impact on attitudes towards the company, irrespective of who delivered them. Regarding products with high symbolic value, consumers tend to prefer products made by humans or those available in physical rather than digital form. This suggests that companies undertake research to assess whether their products and services are likely to trigger identity threats.
Experience
16. Matt Abrahams, How to shine when you’re put on the spot
Abrahams focuses on short, lower-key encounters that require spontaneous responses, providing guidelines for crafting answers, to lessen unnecessary nervousness and let the capacity to communicate shine through. He suggests that avoiding the default response could make responses more memorable; concision has a better chance to keep the audience engaged; being real is more effective than striving to shine; and careful listening and attention to small cues can help spot the real stakes for an interlocutor. Abrahams also suggests specific structures for pitching an idea or product, responding to a request to give an opinion, answering questions, making small talk.
17. C. Maria Rex Sugirtha, Case study: When the CEO dies, what comes first: his company or his family?
The wife of a CEO who has died unexpectedly is called upon to take over the company and tackle a debt crisis. Should she fight to keep the company afloat? Should she sell the company and focus on looking after her grown daughters and her grandchildren?
18. Walter Frick, Commerce after Covid
Frick reviews four books and a blog that analyse the response to the pandemic, and long-term consequences, especially in the US. Noting the lack of preparedness and the rigidity of government institutions, the consensus seems to be that post-pandemic the global economy will likely remain unpredictable, favouring daring bets from unconventional investors. The compassion and generosity seen during the pandemic might have enduring effects, but they would have to be harnessed by effective government action.
19. Alison Beard, Life’s work: An interview with Chris Paul
Chris Paul, a 12-time star of the NBA and president of the National Basketball Players Association for eight years, is the author of a new book: Sixty-one: Life lessons from Papa, on and off the court. In this interview he discusses his work ethic and early-life lessons, pushing through hard times, his development as a basketball player and a team leader. His leadership style has always been to overcommunicate, he says, to give everyone a chance to be heard and arrive at a common position in response to Covid, race issues and representation for players in the NBA.
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