Senior leaders, particularly CEOs, confront a central paradox in their work: They generally have access to more lines of communication than anybody else, but the information that flows to them is suspect and compromised. Warning signals are tamped down. Key facts are omitted. Data sets are given a positive spin. All of it isolates leaders in a dangerous information bubble. But they can escape that bubble, the authors argue, by working actively to create a more expansive "listening ecosystem." They first have to learn how to listen actively themselves, without distraction or judgment, purely for comprehension; then they have to create systems and processes all around them that elevate listening to a constant state of hypervigilance. This sort of sustained attention to listening allows leaders to pick up on early signs of both danger and opportunity--and that, in turn, allows them to do their jobs and serve their organizations better. The authors conclude this piece by sharing advice--gleaned from interviews and personal experience--about how leaders can learn to listen better.
Despite the high rate of churn in the labor market today, many companies pay scant attention to offboarding employees. That's a mistake, say the authors, who argue that offboarding is an increasingly vital part of talent management--and an opportunity to create long-term value. Drawing on their scholarly research and interviews with HR professionals, the authors recommend a number of best practices. One is to plan well in advance for employees' departures: Because few people stay at one company for their whole career, it's important to have frank conversations throughout their tenure about their goals and prospects for advancement. When employees do choose to leave or get laid off, managers should acknowledge their contributions, provide resources to support them through the transition, and use exit interviews as an opportunity for mutual learning. Companies should also create formal alumni programs to keep former workers connected to the organization. Together, these offboarding practices can create a cadre of ex-employees who become valuable customers, suppliers, boomerang employees, mentors to current workers, and ambassadors for the firm.
During economic slowdowns, consulting, law, and accounting firms often start offering services and taking on clients they really shouldn't, just to keep the lights on. This path is perilous. If a firm's practices have a diffuse mix of clients and unclear strategic positioning, it will weaken the firm's market profile and lead to internal conflicts, especially about the organization's future direction. This article presents two tools that professional service firms can use to manage their client mix and optimize their strategic position. The first is the practice spectrum. All practices fall on a continuum of sophistication that ranges from "commodity" to "rocket science." Any position on this spectrum can be profitable, though the forces driving profits change as you move along it--as do the capabilities and skills required. Successful practices understand their true position on the spectrum and know which performance levers to pull. The second tool is the client portfolio matrix, which separates clients into four categories on the basis of cost to serve and willingness to pay. Rather than spreading clients across all four, firms should target their acquisition efforts and follow different relationship strategies for each type of client.
The pandemic has placed a new spotlight on working conditions in factories that supply global companies. To avert problems, firms often impose codes of conduct on their suppliers and perform audits to assess compliance. Do these measures help identify unethical suppliers and lead to improvements? After an unsatisfactory audit, what are the chances the supplier will remedy matters? To answer these questions, the authors studied code-of-conduct audits of thousands of factories around the world. They found that suppliers are more likely to improve conditions if they do one or more of five things: certify compliance with management system standards, adopt lean management, use union workers, avoid piece-rate pay, and serve once-tarnished buyers. The research also identified monitoring methods that can boost the odds of improvement and uncovered several factors that result in more-accurate audit reports. Managing working conditions in global supply chains is an ongoing challenge. The authors' findings can empower managers to better predict which factories are likely to improve working conditions and to design monitoring programs that will foster improvement and accurately track performance.
The natural experiment forced on the world by the coronavirus demonstrates that the academics and tech visionaries who have been talking since the 1980s about the possibilities of remote work were not exaggerating. After months of working remotely, we have all learned that most tasks are accomplished and most meetings go just fine without the office. But that, the authors warn, doesn't mean companies should suddenly abandon their workplaces. Going to the office, they argue, has never been just about work. And technology won't make socializing less dependent on direct interpersonal contact anytime soon. In this article they describe the important social functions of an office: It's where people build trust through personal interaction, learn the nuances of their job, and build and maintain organizational culture. And it's through random in-person encounters between people from different functions and cultures that many of the most innovative business ideas are born. The authors conclude by showing how design, technology, and management practices can be used to make tomorrow's offices more effective as social, learning, and innovation spaces.
Climate change is a pressing concern for Bill Gates, who has just published a new book on the subject. He spoke with HBR's editor-in-chief about the need to reduce carbon emissions to zero by 2050--and the difficulty of that undertaking. It will require new government policies, changes in corporate and individual behavior, and, above all, more R&D funding and innovation to create cleaner technologies and green products. Gates is optimistic that we can succeed but clear-eyed about what lies ahead if we don't: rising temperatures, the disappearance of ecosystems, disastrous crop failures, economic pain, and massive loss of life.
We live in an age of polarization. Many of us may be asking ourselves how, when people disagree with or discount us, we can persuade them to rethink their positions. The author, an organizational psychologist, has spent time with a number of people who succeeded in motivating the notoriously self-confident Steve Jobs to change his mind and has analyzed the science behind their techniques. Some leaders are so sure of themselves that they reject good opinions and ideas from others and refuse to abandon their own bad ones. But, he writes, "it is possible to get even the most overconfident, stubborn, narcissistic, and disagreeable people to open their minds." He offers some approaches that can help you encourage a know-it-all to recognize when there's something to be learned, a stubborn colleague to make a U-turn, a narcissist to show humility, and a disagreeable boss to agree with you.
In this fictional case, a customer experience manager is torn between loyalty to her family and to her employer after she gets inside information from her cousin suggesting that one of the company's suppliers might not be able to make good on its contractual obligations. If she shares what she's learned with her manager, her company might elect not to renew its contract with the supplier. But passing along the information would mean betraying a promise to her cousin and might put her cousin's job at risk. This fictional case study by Joseph L. Badaracco features expert commentary by Stacey Peck and Mita Mallick.
Remote working seems like it's here to stay, even after the pandemic ends. Employees enjoy the flexibility, and research shows that they can be more productive. But what do we lose when we never see our coworkers in person? The author explores several new books on the topic.
In this fictional case, a customer experience manager is torn between loyalty to her family and to her employer after she gets inside information from her cousin suggesting that one of the company's suppliers might not be able to make good on its contractual obligations. If she shares what she's learned with her manager, her company might elect not to renew its contract with the supplier. But passing along the information would mean betraying a promise to her cousin and might put her cousin's job at risk. This fictional case study by Joseph L. Badaracco features expert commentary by Stacey Peck and Mita Mallick.
In this fictional case, a customer experience manager is torn between loyalty to her family and to her employer after she gets inside information from her cousin suggesting that one of the company's suppliers might not be able to make good on its contractual obligations. If she shares what she's learned with her manager, her company might elect not to renew its contract with the supplier. But passing along the information would mean betraying a promise to her cousin and might put her cousin's job at risk. This fictional case study by Joseph L. Badaracco features expert commentary by Stacey Peck and Mita Mallick.
Since the young age of 15, Andre Giraud, the owner-chef of Lux, a 1 Michelin-star French restaurant located in Hong Kong, had devoted his life to cooking. After 17 years of working for top chefs in Europe, he decided that it was time to bring his talent to Asia. Andre and his wife decided to invest their life savings to open Lux, a 35-seater at the heart of Hong Kong's central business district. Having never been involved in the business side of running a restaurant, Andre needed his business partner Brandon to evaluate and manage the restaurant's finance, marketing and operations. In 2017, Lux was awarded 2 Michelin stars. However, the following year, it suffered a demotion, resulting in a massive drop in restaurant reservations that left him with only three months of runway. Andre contemplated closing the doors to his restaurant, as he had no idea about what needed to be improved. However, the local food guides and his social media feeds seemed to indicate he was doing great things in the kitchen. He suffered from depression as a result of the unexplainable loss of the Michelin star, and decided to reach out to Pierre E., a long-time friend and a former Michelin inspector, to find out more about the criteria the guide adopts in reviewing an establishment.
Ant Group (螞蟻集團) was on course to raise HKD273bn in a dual offering on the Hong Kong Stock Exchange (SEHK) and the Shanghai Stock Exchange's (SSE) STAR Market. Pre-IPO, Ant's value as a fintech was estimated at HKD2.43tn. As investors were subscribing en masse, China's central bank and finance regulators published a new draft legislation to regulate "micro-lending business operated by internet." What would have been the largest IPO in history was cancelled just two days before its scheduled listing on 5 November 2020. Ant spun off from its parent, Alibaba. It owns Alipay, one of the two largest digital payment systems in China. Ant diversified into a fintech business that included lending, wealth management, and insurance business lines among others. Ant's lucrative lending business, explosive growth, and business model disrupted the Chinese traditional finance industry. After the new legislation came into effect, Ant's capital reserve ratio for its CreditTech business would have to increase from the current 2% to 30%. This was expected to impact the size and growth of its lending business and therefore its value.
Whether it's mobile phones or autonomous cars or telemedicine, a well-functioning robust 5G ecosystem will require licensing executives to have a deep understanding of the need for timely licensing to support technology development and adoption. It is important that the parties to patent licensing agreements understand that value doesn't depend on the numerosity of patent portfolios, but on use value. The ecosystem is impaired when parties to licensing transactions are recalcitrant and advance bogus indicia of value. The 5G stakes are sufficiently high that top management oversight is likely required.
Many organizations are embarking on digital transformation to be future-ready. However, there is a lack of conceptual clarity on the underlying design logic of a future-ready enterprise. A digitally transformed enterprise must be ready to respond to unpredictable dynamism and pervasive digitalization. Such an enterprise must incorporate the duality of exploitation and exploration as well as the fusion between business and technology into its organizational design. This article presents a framework based on the digital transformation journey of DBS Bank and draws new managerial insights for driving digital transformation strategically.
The leadership literature is replete with admonitions that successful leadership requires confidence. While that may be true, striving for greater confidence runs the risk of overconfidence. Overconfident leaders put themselves, their teams, and their organizations at risk. There are reasons to be skeptical that greater confidence improves performance, and substantial reasons to worry that greater confidence can undermine preparation. This article offers suggestions to avoid being fooled by overconfident charlatans. It also offers strategies for wise and honest leaders who would like to be both confident and truthful.
Facing constant pressures to grow, established firms increasingly harness external innovation by collaborating with and eventually acquiring startups. To succeed in their exit through acquisition, startup firms and incumbents have to master three steps (the "3 Cs") that enhance the co-specialization with the acquirer: establishing the Complementarity of offerings, generating Customer endorsement, and attracting an acquirer executive Champion. Drawing on a multiple-case, inductive study of seven Israeli startup acquisitions completed by two acquirers from the information and communications technology (ICT) industry, this article illustrates the different approaches pursued by the startup firms and their acquirers to succeed in managing pre- and post-acquisition processes.
Startups in entrepreneurial ecosystems such as Silicon Valley constantly generate potentially disruptive technologies and business models. Consequently, multinational companies are finding it essential to be connected to the ecosystems where these opportunities are emerging, and many have opened "innovation outposts" in these locations. However, not many outposts succeed in effectively connecting their companies with these ecosystems. This article details why outposts often fail to become "effective brokers" and what companies should do for their outposts to deliver their full potential.
Contrary to existing literature, startups can be successful orchestrators of ecosystems. Based on nine qualitative case studies, this article introduces four archetypes that shed light on how a startup can fulfill the tasks of an orchestrator and overcome challenges. The findings identify dimensions of standardization/customization and sources of value creation as defining the role of ecosystem orchestrators and demonstrate the consequences for small and medium-sized enterprises (SMEs), corporates, investors, and accelerators involved in such ecosystems.