The global CEO of the accounting firm Grant Thornton describes how as a boy he watched his father deal with customers and guide them toward the right tools for a project. The lessons he learned in his dad's hardware store are still pertinent today.
A Scottish engineer and economist named William Playfair pioneered line graphs, bar charts, and pie charts, making an inestimable contribution to what we now call data visualization. Here are three examples of his work, courtesy of the Baker Library Historical Collections.
The case tracks the creation and growth of a social enterprise, Made By Survivors (MBS), founded by Sarah Symons and John Berger. Inspired by a documentary on sex trafficking and a visit to a Nepalese non-profit that helped women freed from sex trafficking (survivors), Symons conceived the idea for a business that would help survivors become financially independent and restore their lives. With Berger's help, she launched MBS to sell handicrafts, stationery, and home goods in the United States, all products that were made by survivors in several countries, thus providing them a source of income. To grow sales, the co-founders tried different means of selling, altering the product mix, partnering with suppliers, starting production on their own, and designing products to increase appeal to U.S. customers. The case ends with the co-founders wondering how to multiply revenue to benefit greater numbers of survivors. Should they modify their business model or adopt a new one? Modify their organization's mission and identity? The case asks students to generate ideas for high growth and determine MBS's strategic direction.
What is a dedicated, well-intentioned public health practitioner to do when it starts to feel like the science supporting her recommendations is hardly more persuasive to her community partners than the daily horoscope? Pile on more evidence? Not by a long shot, as our case story protagonists find out the hard way in the tale of the town of East Point, a diverse and hard-working community in the fictitious US state of Columbia. East Point and its high school are faced with hard choices at every turn: Offer comprehensive sex ed, but then have to cut afterschool programs to address the town's budget crisis? Accept serendipitous outside funding for abstinence-only education, but then deprive the town's youth of effective school-based sexual health education?
Alaix began his career in finance and then spent years running businesses within large pharmaceutical companies. He was heading the animal health division at Pfizer when the company decided to spin off the division in an IPO and make him the CEO. Alaix knew that sophisticated external communication skills would be especially important in the months leading up to the IPO: He would be telling the company's story to analysts and potential investors, and their opinion of its strategy would have a direct impact on the value of the stock offering. He had about two years in which to pursue an aggressive training program and gain the skills he hadn't previously developed. Working with the HR department, he defined a development plan and then identified a mentor--the former CEO of a big European company. He used two communications trainers to help him hone his message and sharpen his delivery--and then practiced for interviews and road show pitches over and over again. Finally he met monthly with Pfizer executives and internal board members to learn the art of dealing with directors.
How can a person who seems so qualified for a position fail miserably in it? How can someone who clearly lacks relevant skills and experience succeed? The answer is potential, the ability to adapt and grow into increasingly complex roles and environments. For the past several decades, organizations have based their hiring decisions on competencies. But we have entered a new era of talent spotting. Geopolitics, business, industries, and jobs are changing so rapidly that it's impossible to predict the capabilities employees and leaders will need even a few years out. The question now is not whether people have the right skills; it's whether they have the potential to learn new ones. Research points to five markers of potential: a strong motivation to excel in the pursuit of challenging goals combined with the humility to put the group ahead of individual needs; an insatiable curiosity to explore new ideas and avenues; keen insight into connections that others don't see; a strong engagement with work and people; and the determination to overcome obstacles. Once organizations have hired true high potentials--a challenge, given the increasing scarcity of senior talent--and identified the ones they already have, it's crucial to focus on retaining them and on helping them live up to their potential by offering development opportunities that push them out of their comfort zones.
Sixty months after the 2008 recession ended, the economy was still sputtering, producing disappointing growth and job numbers. Corporations seemed stuck: Despite low interest rates, they were sitting on massive piles of cash and failing to invest in new initiatives. In this article, a leading innovation expert and his HBS colleague explore the reasons for this sluggishness. The crux of the problem, they say, is that investments in different types of innovation have different effects on growth but are all evaluated using the same (flawed) metrics. "Performance-improving innovations," which replace old products with better models, and "efficiency innovations," which lower costs, don't produce many jobs. (Indeed, efficiency innovations eliminate them.) "Market-creating innovations," which transform products so radically they create a new class of consumer, do generate jobs for their originators and for the economy. But the assessment metrics that financial markets--and companies--use always show efficiency and performance-improving innovations to be better opportunities. This is the capitalist's dilemma: Doing the right thing for long-term prosperity is the wrong thing for investors, according to the tools that guide investments. Those tools, however, are based on an unexamined assumption: that capital is scarce, and that performance should be assessed by how efficiently companies use it. The truth is, capital is no longer scarce, and our tools need to catch up to that reality.
Over and over again, executives make decisions that aren't in their companies' best interests, in response to pressure from Wall Street. Though many believe this happens because firms have a "fiduciary duty" to maximize shareholder returns, U.S. executives do not, as a matter of law, have any such obligation. Yet it's hard for them to resist demands from a quarter that has amassed such a huge and disproportionate share of power. In the past few decades, as legislation that put controls on Wall Street was largely undone, the size and profits of the financial sector grew enormously. That increased its influence, particularly its ability to sway the government by spending billions of dollars on lobbyists and political contributions. Even after the financial crisis, Wall Street was able to slow down and weaken new regulations meant to rein in its risky practices. This "financialization" of the economy has serious downsides: It increases volatility, inhibits growth, and misallocates resources, such as talent and capital, away from wealth creation and toward wealth distribution. It distorts thinking. Restoring the balance of power is critical to the competitiveness and the health of the rest of the economy. Limits on the size and leverage of banks and changes to the tax code could promote better equilibrium--but courage will be needed to put such reforms in place.
Managers and academics often lament that Wall Street's short-term focus makes it impossible for corporations to plan for the long run. Palmisano disagrees. Yes, there are some on Wall Street, such as the sell-side analysts who dominate quarterly earnings conference calls, who can't see more than a few months out. But CEOs shouldn't participate in those calls anyway, he believes. They should instead focus their energies on the institutional investors who will embrace the long view if they are given ways to judge a company's progress. In this edited interview with one of HBR's executive editors, Palmisano describes how IBM's top management made significant changes to how the firm set goals and communicated them to investors. "The model," a rolling multiyear road map for earnings growth and cash generation, included an emphasis on R&D investment even during downturns, a plan for execution that involved every unit in the organization, and a shift toward long-term compensation. Transparency and open dialogues with large shareholders were also key. The CEO is a steward, Palmisano argues, charged with protecting a company and its returns for decades to come. But that vision need not clash with success on the visible horizon; during Palmisano's tenure, IBM's stock price soared.
Almost every retailer looks to Google to refer customers, and it's rare to find a manufacturer whose products aren't sold on Amazon. But these platforms can capture a disproportionate share of the value a company creates: Buy an app on iTunes, and Apple takes 30%. The author presents four strategies to help businesses reduce their dependence on powerful platforms: (1) Exploit the platform's need to be comprehensive. American Airlines' strong coverage of key routes made its presence on the travel website Kayak indispensable to Kayak's value proposition. As a result, AA negotiated a better deal; (2) Identify and discredit discrimination. Public complaints that eBay was giving search prominence to suppliers who advertised on the site forced a reversal of the policy; (3) Create an alternative platform. When MovieTickets was on the verge of dominating phone and online ticketing, Regal Entertainment and two other large theater chains formed Fandango; and (4) Deal more directly. People ordering takeout through online platforms like Foodler and GrubHub have often already chosen their restaurant. Restaurants that deal directly can exit the platform.
How can leaders build an organization that is capable of innovating continually over time? By creating a community that is both willing and able to innovate. To be willing, the community must share a sense of purpose, values, and rules of engagement. When Luca de Meo was Volkswagen's head of marketing communication, he fostered a sense of purpose in his team by asking its members to reflect on what being part of VW meant to them; strengthened their shared values by encouraging them to use the brand's three components--innovation, responsibility, and value--to guide their work; and built significant responsibility and autonomy into their rules of engagement. To be able, companies must generate ideas through discourse and debate; experiment quickly, reflect, and adjust; and make decisions that combine disparate and even opposing ideas. Bill Coughran, an SVP of engineering at Google, employed these capabilities both to solve the company's near-term data storage needs and to make progress toward a next-generation solution.
A health care revolution is underway, and doctors must be part of it. But many are deeply anxious and angry about the transformation, fearing loss of autonomy, respect, and income. Given their resistance, how can health system leaders engage them in redesigning care? In this article, Dr. Thomas H. Lee, Press Ganey's chief medical officer, and Dr. Toby Cosgrove, the CEO of the Cleveland Clinic, describe a framework they've developed for encouraging buy-in. Adapting Max Weber's "typology of motives," and applying behavioral economics and other motivational principles, they describe four tactics leadership must apply in concert: (1) Engaging doctors in a noble shared purpose; (2) Addressing their economic self-interest; (3) Leveraging their desire for respect; and (4) Appealing to their sense of tradition. Drawing from experiences at the Mayo Clinic, Geisinger Health System, Partners HealthCare, the Cleveland Clinic, Ascension Health, and others, the authors show how the four motivational levers work together to bring this critical group of stakeholders onboard.
In India and other large emerging economies, rural markets hold great promise for boosting corporate earnings. Companies that sell in the countryside, however, face poor infrastructure, widely dispersed customers, and other challenges. To better understand the obstacles and how to overcome them, the authors--researchers with Accenture--conducted extensive surveys and interviews with Indian business leaders in multiple industries. Their three-year study revealed several successful strategies for increasing revenues and profits in rural markets: (1) Start with a good distribution plan. The most effective approaches are multipronged--for example, adding extra layers to existing networks and engaging local partners to create new ones; (2) Mine data to identify prospective customers. Combining site visits, market surveys, and GIS mapping can help companies discover new buyers; (3) Forge tight bonds with channel partners. It pays to spend time and money helping distributors and retailers improve their operations; and (4) Create durable ties with customers. Companies can build loyalty by addressing customers' welfare and winning the trust of community leaders.
Even at the highest levels of organizations, many otherwise dynamic women struggle in meetings. Some say their voices are drowned out; others can't find a way into the conversation at all. Their male counterparts perceive a problem, but they tend to dismiss it as resulting from timidity, defensiveness, lack of focus, or excessive emotion. Drawing on interviews, surveys, and decades of work as leadership coaches, the authors suggest steps women can take to feel more comfortable and become more effective. Women should master the "pre-meeting," connecting with colleagues to test ideas and gather support; come to meetings armed with cogent comments and questions that can move the conversation forward; keep an even keel, speaking in measured tones and being careful not to signal frustration through sarcasm or curtness; and move past confrontation without taking it personally. Bosses can also help ensure that women's voices are heard, by providing direct feedback about meeting behavior, inviting more women to the table, and proactively pulling women into the conversation. These changes can have profound results, enabling all team members, male and female, to contribute to their full potential.
An up-and-coming entrepreneur, Gil Lehner is looking ahead and deciding on his next move. But Gil's situation is unusual: He was just diagnosed with small-cell lung cancer and his prognosis is not good. His chance of surviving longer than five years is only 18%. So what should he do with his last few years? Should he return to his home country of Israel and spend the time he has left with his family? Should he continue to work at the promising and possibly lucrative tech start-up that he joined last year? Or should he join two of his former classmates in establishing a nonprofit initiative to award prizes for innovative research on the illness he was just diagnosed with? Expert commentary for this fictional case study is provided by Ben Munoz and Avichai "Avi" Kremer.
The cook, critic, and fiction writer discusses her years as the last editor of "Gourmet": how she handled being a manager, modernized the magazine, and dealt with its closing.
An up-and-coming entrepreneur, Gil Lehner is looking ahead and deciding on his next move. But Gil's situation is unusual: He was just diagnosed with small-cell lung cancer and his prognosis is not good. His chance of surviving longer than five years is only 18%. So what should he do with his last few years? Should he return to his home country of Israel and spend the time he has left with his family? Should he continue to work at the promising and possibly lucrative tech start-up that he joined last year? Or should he join two of his former classmates in establishing a nonprofit initiative to award prizes for innovative research on the illness he was just diagnosed with? Expert commentary for this fictional case study is provided by Ben Munoz and Avichai "Avi" Kremer.
An up-and-coming entrepreneur, Gil Lehner is looking ahead and deciding on his next move. But Gil's situation is unusual: He was just diagnosed with small-cell lung cancer and his prognosis is not good. His chance of surviving longer than five years is only 18%. So what should he do with his last few years? Should he return to his home country of Israel and spend the time he has left with his family? Should he continue to work at the promising and possibly lucrative tech start-up that he joined last year? Or should he join two of his former classmates in establishing a nonprofit initiative to award prizes for innovative research on the illness he was just diagnosed with? Expert commentary for this fictional case study is provided by Ben Munoz and Avichai "Avi" Kremer.