Cameron (Cam) Barker, CEO and Founder of Blake Sports Apparel, sat in his office at his company's headquarters in Birmingham, England, feeling stunned and disappointed. Only a few minutes prior, he had wrapped up a meeting with CFO James Ryan, a highly-respected star executive who had just abruptly given Barker his notice of resignation. When Barker hired Ryan in November 2020, he had asked Ryan not to take the position unless he intended to stay for at least five years, which Ryan agreed was his plan. Yet, here Barker was just eighteen months later and Ryan was ready to walk out the door, citing Barker's leadership style as one factor in his decision to leave. After years of struggling to find the right executive team structure and size and to fill the positions with the right people, Barker thought he had finally gotten it right. The executive team had proved that they were capable of communicating, collaborating and making smart decisions in ways that put the organization's priorities ahead of their own. Furthermore, Ryan had proven himself to be just the kind of CFO the growing company needed. Baker knew his departure was a loss. Why did Ryan resign? What issues had he taken with Barker's leadership? Should Barker take Ryan's feedback to heart, or was it simply a case of conflicting styles? After years of managing dysfunctional executive teams, did Barker need to change the way he managed his reports now that his executive team was collaborative and high-performing? If so, how?
In October 2019, the regional chief data and analytics officer at Allianz AG, Belgium, attended a two-hour strategy meeting with the Allianz Benelux chief executive officer, who had expressed concerns about the company’s digitalization strategy. A few days earlier, the marketing department had found that online sales channel results had fallen unexpectedly. The chief executive officer was worried that the company could lose market share if it did not react accordingly, which would damage the company’s competitive position in the market. Therefore, the regional chief data and analytics officer was asked to gather a team to investigate why online sales were low and to design an effective customer acquisition strategy. In addition to his data office staff, the regional chief data and analytics officer asked for the business transformation unit to provide assistance. He had to consider how best to approach this challenging task.
The case describes how Lemonade, a leading Insurtech startup, expanded its business with a unique AI-powered digital insurance model and a "giveback" charity scheme after its spectacular IPO in 2020. The focus is how its scale-up efforts encountered challenges both externally and internally when it expanded its product portfolio and geographic scope. Lemonade is an exemplary case of hyper-growth startups who aspire to disrupt a legacy industry with digital technologies and novel business models. Yet, how these startups become scalable and sustainable is less understood by both scholars and practitioners. For example, Journal of Business Venturing (JBV), a leading academic journal on entrepreneurship, announced a call for special issue in 2022 with a theme on "Scale-ups, Scaling, and Scalability: Entrepreneurial Scaling in the Digital Age". This case fills in this gap by examining how Lemonade scaled up during its growth stage, how its scale-up efforts met internal and external resistance, and how to draw valuable lessons.
Digital technologies are increasingly changing the nature of competition and generating externalities that impact society. On the one hand, digitalization allows organizations to create substantial economic value in shorter periods of time through improved economies of scale, scope, and learning, resulting is increasing returns on capital and competitive concentration. On the other hand, ensuing societal concerns with inequities, regulatory lapses, and lack of transparency and truthfulness represent significant challenges for effective corporate governance. This article addresses the consequences to stakeholders that emerge from the digital economy, discussing how traditional governance mechanisms are ill-equipped to subvert negative externalities. We offer a stewardship-based model of corporate governance as a solution to the pressing problems plaguing consumers, employees, and other salient stakeholders of digital business excesses, with an emphasis on truthful disclosures, enhanced transparency, improvements in equitable allocation of organizational resources, and heightened trust relationships. The focus is on the positive role that organizational leaders can play as exemplars of virtuous stewardship in a highly networked society. The article redefines a modern view of stewardship in a digital economy and applies its principles to the four Ts of virtuous stewardship, a practical corporate governance model that encompasses truthfulness, transparency, trust, and technological equity.
The legal and compliance departments in organizations have more influence than ever before. Why then are companies so vulnerable to legal liability? The problem may not be with talented legal professionals, but with the lack of legal knowledge held by MBAs and other business school graduates that make day-to-day decisions in modern organizations. Firms can close this knowledge gap and minimize legal liability by training their managers in legal astuteness--the ability of a manager to address legal issues successfully--by instilling four essential traits: respecting the rule of law, recognizing legal issues, resolving problems proactively, and reporting complex legal issues to experts. Job candidates should also be screened for traits of legal astuteness. A legally astute candidate, especially a graduate of a business school that requires legal education for all its students, can be a cultural ambassador for legal astuteness and a valuable liaison between legal and compliance departments and the candidate's functional area. A legally ignorant candidate will require significant training and a frank assessment of the legal risk they bring to the organization. Modern firms in today's legal environment face two choices: hire a legally astute manager now or deal with a compliance headache later.
The use of influencers in marketing is not new. However, the advent of the internet and, more recently, various forms of social media have both accelerated the use of influencers in marketing and also democratized its use considerably. In this article, we explore the nature of influence and power. We describe a study directed at understanding the promises and perils of influencer marketing from both the firm- and influencer perspectives to identify three key tensions that exist for marketers in the management of influencer relationships. We outline and explain these tensions and the lessons that can be learned from them, and then illustrate the lessons with a series of positive and negative cases. We close by speculating on the further evolution of influencer marketing.
Many organizations in the public, private, and nonprofit sectors have begun to take action to address the systemic racism entrenched in their processes, systems, and structures. This has included commitments to elevate initiatives for equity, diversity, and inclusion. Data indicate that such good-faith efforts are often not as successful as leaders and organizations had envisioned. Our assertion is that if we really want to address systemic racism in organizations, we must first attend to the people who work there. This is because their individual and collective character, revealed through behavior, drives and determines organizational processes, systems, structures, and culture. The purpose of this article is to connect character to the creation and sustainment of organizational cultures of equity, diversity, and inclusion with a specific focus on anti-Black racism. Character is not a subjective, amorphous entity but manifests as a set of observable behaviors. We explain that character equips people with consciousness and the conduct to embrace and cultivate equity, diversity, and inclusion in their organizations and in their lives. We provide concrete examples of the dimensions of character in action using brief illustrations.
Managing risk effectively is essential for business success, and thus understanding risk is vital for business executives. Effective risk management increases firm value, whereas poor risk management will damage shareholder wealth. In this article, we examine the risk literacy of business executives and find significant variation among the leaders we sample. Our findings suggest that business executives would be well served to evaluate their own risk literacy, and remediate, if necessary; to work to increase risk literacy in the company's employees; and to include risk literacy as an important and routine part of the firm's overall culture. Because the importance of risk literacy increases with business complexity, we believe that risk literacy will only become more important in the future.
Leadership is a prominent function within organizations and social entities, and research suggests leadership that is more active tends to be more effective. However, emerging research contends that more active leadership can place stressful demands on leaders, which can jeopardize their well-being and eventual effectiveness. In this article, we draw from research on job demands, job resources, and stress coping to outline an applied framework of leader strain management. The model explains how leadership demands (i.e., the challenges/hindrances leaders face) can influence leader strains (i.e., negative implications of the demands) and how leader resources (i.e., tangible/intangible assets) can be leveraged through coping activities to resolve demands or reduce strains. We propose five guidelines for leaders seeking to balance engaging their leadership responsibilities with maintaining their well-being and sustaining their effectiveness over time.
Prepandemic, small business exits were expected to increase dramatically owing to pent-up supply and the aging business owner population. COVID-19 may have dampened those expectations because of increasing information asymmetries that limited selling options for the small business owner (SBO). SBOs exit for many reasons (e.g., illness, family, retirement), so postponing a sale may not be a viable option. Alternately, SBOs can absorb crisis uncertainty by accepting different deal terms. We propose that one such strategy is to include seller financing as part of the deal terms, thereby signaling to the acquirer the SBOs' confidence that the purchase is sound. We examine the results of 1,909 exit transactions from both before and after the financial crisis of 2007--2009 and over a 10-year postcrisis horizon. We find that sellers accept a lower price and less favorable terms with increased seller financing in the 24 months postcrisis, and that waiting longer to sell after the crisis improves deal terms for sellers, as this affords SBOs time to exit. Additionally, reduced information asymmetry improves deal terms. Finally, we provide strategies for SBOs to lower information asymmetry in small business exits.
In recent years, greater disparities in incomes and growth in wealthy consumers have fueled new opportunities in luxury markets. As firms launched luxury brands, some have thrived as others stumbled. One important difference between those who succeed and those who struggle, we suggest, is brand authenticity. Scholars have studied authenticity extensively, and research has isolated different sources of authenticity. How firms draw on these sources to create legitimate luxury brands has, however, received surprisingly little attention. In this article, we discuss the research on the sources of brand authenticity, and we explore how brands rely on those sources to craft authentic luxury brands. Using the examples of Canada Goose and Shinola, we illustrate how one firm drew on multiple sources of authenticity and, through the symbolism of its actions, successfully created an authentic luxury brand. We conclude with a discussion of the implications for other firms seeking to enter the luxury market.
As firms respond to stricter regulations and increasing consumer expectations, reverse logistics programs to support end-of-life product management strategies have become more prevalent. Despite a growing body of theoretical literature on this topic, many firms struggle to implement efficient and effective reverse logistics systems. In this article, we identify common strategic, tactical, and operational considerations needed to design reverse logistics programs and offer industry examples to show how organizations have excelled in these areas. Through a synthesis of literature and examples, we provide key takeaways across a range of reverse logistics activities. We present ways in which managers can implement best practices in reverse logistics that not only benefit the environment but also generate societal and stakeholder value, augment and improve customer service and loyalty, and increase market share and revenue capabilities.
Non-fungible tokens (NFTs) are a highly nascent and emerging phenomenon revolutionizing how digital assets are traded. NFTs embody immutable rights to unique digital assets such as digital art and collectibles and are represented as digital tokens that can be traded across marketplaces utilizing blockchain technologies. NFTs engender new ways to organize, consume, move, program, and store digital information and have experienced a rapid rise in various adaptations across art, sports, broadcasting, content creation, and tech-crypto businesses. In this article, we define NFTs and look at how they fit with blockchain and cryptocurrencies, how they are used by various industries, and the opportunities and risks they present. Our key contribution is a conceptual map of an initial NFT ecosystem. In doing so, we provide relational mapping between and among key stakeholders: content creators, core and related technical and business intermediaries, consumers, investors, and speculators. We also highlight implications for managers and tie them to conceptual exploration and exploitation frameworks.
We live in an age of massive global disruption. Technological advancements threaten century-old business models, globalization is reordering supply chains, and people need to work with colleagues and customers who have vastly different backgrounds. On top of that, we have been in the midst of a global pandemic, and customers, employers, and investors are demanding more than just a Black Lives Matter social media post from organizations that purport to take social justice seriously. Organizations with high cultural intelligence (CQ) are able to navigate this volatility and complexity effectively. Over the last two decades, scholars from across the world have published hundreds of articles on CQ, the capability to relate and work effectively in complex, culturally diverse situations. Most of the work has examined CQ at the individual level. But what about organizations? Can organizations be culturally intelligent? The emerging research on CQ at the organizational level offers leaders and organizations critical insights for navigating today's diverse, digital world. Organizational CQ is a firm's capability to function effectively in a complex and unpredictable multicultural world. This article stresses the importance of the culturally intelligent organization and explains how to develop organizational CQ.
Fake it 'til you make it--that is, deceptively claiming a new endeavor exhibits characteristics of successful entrepreneurial ventures to gain support from others--has become an accepted practice in entrepreneurship. One overlooked hazard of this strategy is that entrepreneurs' efforts to fake it can become a slippery slope in which the deception escalates to a point where stakeholders accuse entrepreneurs of committing fraud. We delineate that the responsible use of faking it in entrepreneurial endeavors rests on entrepreneurs' full appreciation of the determinants that make turning fiction into fact less and not more difficult. Leveraging prior research to offer new insights, we outline these determinates as controllable vs. uncontrollable elements, sole vs. contingent entrepreneurial action, and limited vs. extensive stakeholder interactions. We also look at faking it examples Lordstown Motors and uBiome, two startups whose founders engaged in and escalated faking it to the point where stakeholders accused them of fraud.
In today's rapidly changing but data-rich environments, managers at all organizational levels need to use appropriate intuition, balanced with analytic thinking, to create and capture opportunities. Intuition is often thought of as a single construct, but our 2-year longitudinal study of multiple managers developing opportunities uncovered four distinct types of intuition: expert intuition, based on previous experience; creative intuition, based on a sense of direction for a novel solution; social intuition, based on a sense of interpersonal relationships; and temporal intuition, based on a sense of the timing being right to create or capture an opportunity. We offer a range of recommendations regarding the strengths and limitations of each type of intuition. With a more nuanced understanding of the types of intuition, managers will be better equipped to leverage the strengths--and be wary of the limitations--of intuition in their own decision-making and that of others.