This case explores the decision that Bill Ackman, CEO and founder of the hedge fund Pershing Square Capital, was considering in late February 2020 about hedging the exposure of the fund's portfolio from the potential financial fallout ensuing from an extreme event like a global pandemic. Bill Ackman had become increasingly concerned about the hedge fund's exposure to a novel, highly infections, and lethal coronavirus that was spreading across the globe. Ackman and his team needed to decide whether this was a risk worth hedging, and if so, which hedging instruments would best balance risk mitigation, explicit costs (fees and premia), opportunity costs, and the long-run objectives of the fund. Ackman and his team considered fully liquidating their portfolio, as well as hedging it with futures, options, and credit default swaps. For each alternative, they also needed to determine the optimal size and maturity of the hedging position, after accounting for uncertainty over the trajectory of the virus. This case provides students with ample opportunities to analyze and understand tail risk and how to manage it in practice, including explicit calculations of position sizing, costs, risks, and benefits of hedging alternatives.

This case explores the decision that Bill Ackman, CEO and founder of the hedge fund Pershing Square Capital, was considering in late February 2020 about hedging the exposure of the fund's portfolio from the potential financial fallout ensuing from an extreme event like a global pandemic. Bill Ackman had become increasingly concerned about the hedge fund's exposure to a novel, highly infections, and lethal coronavirus that was spreading across the globe. Ackman and his team needed to decide whether this was a risk worth hedging, and if so, which hedging instruments would best balance risk mitigation, explicit costs (fees and premia), opportunity costs, and the long-run objectives of the fund. Ackman and his team considered fully liquidating their portfolio, as well as hedging it with futures, options, and credit default swaps. For each alternative, they also needed to determine the optimal size and maturity of the hedging position, after accounting for uncertainty over the trajectory of the virus. This case provides students with ample opportunities to analyze and understand tail risk and how to manage it in practice, including explicit calculations of position sizing, costs, risks, and benefits of hedging alternatives.

In this interview, the second in MIT Sloan Management Review's Leading With Impact series, Urvashi Tyagi discusses her role as CTO at ADP with coach and consultant Chris Clearfield. She also describes ADP's systems-first approach to its payroll and HR solutions business and shares what she has learned about creating a healthy corporate culture and evaluating employee performance.

Y Combinator (YC) was a business startup accelerator based in Mountain View, California. Originally founded in Cambridge, Massachusetts, in 2005, by 2021, YC listed 2,830 companies amongst its alumni. More than 80% of these companies were still active, had been acquired, or had gone public in June 2021 (see Exhibit 1). By comparison, more than 80% of companies receiving traditional early-stage investment failed within 10 years. In 2021, YC's alumni included 125 companies valued at over $150 million and 25 worth over $1 billion. In total, YC's alumni had a combined valuation of over $300 billion. Its success had attracted many imitators, but YC had continued to innovate its business model over the years and was still the leader in its field. The challenge for Geoff Ralston, President of YC since May 2019, was what to do next to maintain this position. Should YC retain its focus on early-stage funding? Or, should it broaden its product and geographic scope like many of its imitators?

You might assume that independent contractors hired to tackle core management tasks would be hobbled by their lack of history and relationships in the client organization, but research shows that they often succeed because of their outsider status. These findings expand our notion of what it means to be an effective manager, and they have practical value for organizations seeking flexibility.

Instructor Spreadsheet to accompany product 8B21E013.

Student Spreadsheet to accompany product 9B21E013.

The Sagrada Família was one of Barcelona’s most popular tourist attractions. Designed by famed architect Antoni Gaudí, the as-yet unfinished basilica was set to be completed in 2026. Initiated in 1882, the basilica was one of the longest-running architectural projects ever undertaken, and its construction had faced both opportunities and challenges over the years, with obstacles such as inadequate funding, a change in leading architects, and no firm deadline in place. The most recent obstacle to the completion of the basilica’s construction was the COVID-19 pandemic, which had cast uncertainty over when construction would resume. Despite the focus on the Sagrada Família’s completion, there was potential for tension between the artistic process and traditional project management practices. The current construction team had to determine how to proceed with the project to ensure its long-term recognition while also honouring Gaudí’s legacy.

This negotiating exercise is set at the time of the 2020 round of collective bargaining between the National Football League (NFL) owners and representatives from the NFL Players Association. The six parties at the bargaining table (three representatives on each side) have interests—both conflicting and compatible—regarding the preferred ultimate outcomes as well as a strained previous relationship, which serves to complicate the bargaining process.

A note on regulatory technology (RegTech) describing its evolution, use cases, and the competitive environment in 2021.

This (C) case provides an update on the work of the Global Coalition for Adaptive Research (GCAR) and also illustrates how adaptive platform trials can nimbly respond to a global pandemic.

As founders of the software company Basecamp, Jason Fried and David H. Hansson were used to being the subjects of social media attention. Both maintained active and dedicated Twitter followings for their unique perspectives on management and life. But on April 26, 2021, Fried and Hansson found themselves in the spotlight for a very different reason: they had just publicly announced a new policy that would curtail the discussion of politics at work. The co-founders argued that this policy would prevent distractions and polarizing political differences that Basecamp employees could not hope to resolve amicably or productively. But just one day later, a number of their employees reached out to a journalist to report that Fried and Hansson were simply using their new policy to chill dissent about problematic practices within the company. The subsequent exposé yielded public outcry, and the co-founders were firmly in the crosshairs. In response, Fried held an all-hands meeting at the company to address the events, but tensions quickly escalated. Two hours into the meeting, one of his employees challenged Fried to publicly denounce another employee who had voiced an opinion on matters of racial bias and white supremacy that some viewed as deeply troubling. Basecamp, Fried had argued, could not afford to get distracted by talking politics at work. But could it afford not to?

Supplement to the (A) case.

BlackNorth founder Wes Hall’s rags-to-riches journey is the quintessential story of liberal market capitalism rewarding resilience and hard work. But Hall’s success story has a dark side, since he climbed a corporate ladder that wasn’t designed to help him reach the top. Hall has warned companies to expect an open season of investor activism on companies that fail to take equity, diversity, and inclusion issues seriously. In this Q&A with Ivey Business Journal editor Thomas Watson, the self-proclaimed King of Bay Street explains why he thinks generational change is in the cards while offering advice to companies on how to make it happen. BlackNorth is talking to partners about reforming everything from healthcare and education to homeownership. Corporations have a responsibility to reflect society, he says, so change is a must. When it comes to issues like diversity and inclusion, he says too many organizations aim to address things internally and fail to bring in outsiders with a different perspective. Leadership is key to making progress and a board member who says, “We don’t think social issues are our responsibility” is demonstrating a lack of leadership. Hall advises professionals that if they feel that they will not get treated fairly based on who they are and not the contents of their character and abilities, they should seek other opportunities. In the long run, this will bring them closer to a genuine opportunity where they are empowered to succeed.

Mergers and acquisitions have picked up in the aftermath of the pandemic. As companies seek partners that can boost their competitive capabilities, it's important that they ensure compatibility between the two organizational cultures. New research suggests that looking at political leanings among the companies' employees can provide clues to whether the merger is likely to flourish or fail.

The case explores the origins of the Hong Kong-based remote working start-up FLYDESK. Part A centers on its founding and first fundraising round in 2019, when the tech accessories company Native Union seeks to invest in FLYDESK. First, it must obtain approval from Leitmotiv, the private equity firm that invested in Native Union. What are the benefits and risks for both FLYDESK and Native Union if they go ahead with Native Union's investment in FLYDESK? And are the potential synergies feasible enough for Leitmotiv to "green light" Native Union's investment in FLYDESK? Part B fast-forwards to 2020, when COVID-19 has hindered business operations and forced a large part of the workforce to work from home. After a successful first round of funding, FLYDESK faces a series of new challenges as many co-working spaces have had to limit capacity or shut down. The main one is to adapt its product strategy and incorporate new demands. Given its limited resources, what product offerings should it focus on? How to ensure that the product strategy is aligned with the business strategy? And can FLYDESK stay relevant and attractive to win another round of funding? The case captures various perspectives and factors that are key to the success of an early-stage start-up.

The case explores the origins of the Hong Kong-based remote working start-up FLYDESK. Part A centers on its founding and first fundraising round in 2019, when the tech accessories company Native Union seeks to invest in FLYDESK. First, it must obtain approval from Leitmotiv, the private equity firm that invested in Native Union. What are the benefits and risks for both FLYDESK and Native Union if they go ahead with Native Union's investment in FLYDESK? And are the potential synergies feasible enough for Leitmotiv to "green light" Native Union's investment in FLYDESK? Part B fast-forwards to 2020, when COVID-19 has hindered business operations and forced a large part of the workforce to work from home. After a successful first round of funding, FLYDESK faces a series of new challenges as many co-working spaces have had to limit capacity or shut down. The main one is to adapt its product strategy and incorporate new demands. Given its limited resources, what product offerings should it focus on? How to ensure that the product strategy is aligned with the business strategy? And can FLYDESK stay relevant and attractive to win another round of funding? The case captures various perspectives and factors that are key to the success of an early-stage start-up.

This case examines a small, high-growth women's athletic apparel company's activities to advance diversity, equity, and inclusion (DEI) and impact the apparel industry, while ensuring its internal organization and operations are aligned with its political and social stances. Founded as a "for women by women'' company, Oiselle (pronounced wa-zell) has a brand mission focused on women's empowerment. Its leaders support sociopolitical causes such as Planned Parenthood and Black Voters Matter. In the athletic retail industry, critics have found misalignment between companies' external branding and internal leadership. For example, Nike and Adidas marketing campaigns have championed female athletes and called for increased representation of women in sports, yet their own executive teams and board members are primarily men. Oiselle is led by women, who are increasingly elevating diversity in their branding, including highlighting gender, race, and LGBTQ+ disparities in the industry. The case presents background information on Oiselle and an overview of the business case for DEI. The case then asks students to wrestle with fundamental questions like the role of business in advancing DEI and how companies can incorporate DEI in a manner consistent with their business model.

SkySpecs is a company that helps the wind energy industry optimize performance of wind farms to improve productivity and efficiency and minimize downtime. It has developed a proprietary drone system to automate the task of inspecting wind turbine blades. This core technology allows rapid turbine blade inspections and provides analytics capability. The case first describes the stakeholders in a wind energy ecosystem and the challenges the industry faces. It then presents SkySpecs' product strategy and explores how the company brings value to different stakeholders in the wind energy ecosystem. Looking to the future, SkySpecs is exploring two options for growth. These are broadly classified as pursuit of depth, offering a broader set of solutions within the wind energy industry, or pursuit of breadth, leveraging its expertise to offer similar solutions within other industries. Students will discuss the pros and cons of these two directions and make a recommendation.