Today markets are being reshaped by a new kind of firm--one in which artificial intelligence runs the show. This cohort includes giants like Google, Facebook, and Alibaba, and growing businesses such as Wayfair and Ocado. Every time we use their services, the same thing happens: Rather than relying on processes run by employees, the value we get is delivered by algorithms. Software is at the core of the enterprise, and humans are moved off to the side. This model frees firms from traditional operating constraints and enables them to compete in unprecedented ways. AI-driven processes can be scaled up incredibly quickly, allow for greater scope because they can be connected to many kinds of businesses, and offer very powerful opportunities for learning and improvement. And while the value of scale eventually begins to level off in traditional models, in AI-based ones, it never stops climbing. All of that allows AI-driven firms to quickly overtake traditional ones. As AI models blur the lines between industries, strategies are relying less on specialized expertise and differentiation based on cost, quality, and branding, and more on business network position, unique data, and the deployment of sophisticated analytics.

Discussions about reining in health care costs invariably turn to the sickest 5% of the population, who account for 50% of all health care spending. Most of these patients have multiple chronic conditions, and the hope is that through disease-management programs that use registered nurses and social workers to monitor and help them, we can care for them better and achieve big savings. But these programs are expensive. Typically each focuses on just one disease, which means that many patients deal with multiple teams. The programs also operate outside primary-care practices, so they often duplicate doctors' work as well. And in the experience of the authors, the former CEO and associate executive director of Kaiser Permanente (KP), they do not reduce net costs. KP has come up with a better approach: providing coaching and support to patients through IT and inexpensive assistants who are integrated into primary-care practices--avoiding duplication. KP applies it judiciously, focusing only on patients whose chronic conditions can truly be improved (about a third of the most expensive 5%). This strategy has not only led to better medical outcomes but cut costs so much that KP has been able to lower premiums for millions of members by 10% to 15%.

Culture is easy to sense but hard to measure. The workhorses of culture research--employee surveys and questionnaires--are notoriously unreliable. Studying the language that employees use in electronic communication has opened a new window into organizational culture. New research analyzing email, Slack messages, and Glassdoor postings are challenging prevailing wisdom about culture. Some of the findings: (1) Cultural fit is important, but what predicts success most is the rate at which employees adapt as organizational culture changes over time. (2) Cognitive diversity helps teams during ideation but hinders execution. (3) The best cultures encourage diversity to drive innovation but are anchored by shared core beliefs.

In today's fast-changing business environment, employees' continual development is essential. That's leading to a new and more powerful role for chief learning officers: They're not just trainers anymore; they're transformers who are reshaping organizational capabilities and culture. The authors interviewed CLOs at 19 large companies and found that transformers are revamping their organizations' learning goals, learning methods, and learning departments. Their efforts offer a road map for anyone wishing to build a stronger workforce. With respect to learning goals, the aim should be not just to teach employees specific skills but to cultivate broader capabilities, including strong leadership, digital literacy, and a growth mindset. With respect to learning methods, the trend is to move away from traditional classroom instruction and adopt approaches that can provide learning to more employees, in more-customized ways. (Think online and audio courses, videoconferencing, interactive simulations, and formal opportunities for employees to reflect on and apply what they've been taught.) Finally, with respect to transforming learning departments, the key is to make them leaner, more agile, and more strategic by curating useful external content, encouraging peer teaching, measuring the impact of training, and providing tools to tailor learning plans to individuals.

Many executives assume that customer data can give you an unbeatable competitive edge. The more customers you have, the more data you can gather, and that data, when analyzed, allows you to offer a better product that attracts more customers. You can then collect even more data, repeating the cycle until you eventually marginalize your competitors. But this thinking is usually wrong. Though the virtuous cycles of data-enabled learning may look similar to those of network effects--wherein an offering increases in value to users as more people adopt it and ultimately garners a critical mass of users that shuts out competitors--they are not as powerful or as enduring. Nevertheless, under the right conditions, customer data can help build competitive defenses. It all depends on whether the data offers high and lasting value, is proprietary, leads to improvements that can't be easily imitated, or generates insights that can be quickly incorporated. Those characteristics do give firms an advantage. And when learning from one customer rapidly improves an offering for others (think Google Maps), people will care about how many other people are adopting it, and it will enjoy those sought-after network effects.

Judgment--the ability to combine personal qualities with relevant knowledge and experience to form opinions and make decisions--is "the core of exemplary leadership," according to Noel Tichy and Warren Bennis (the authors of Judgment: How Winning Leaders Make Great Calls). It is what enables a sound choice in the absence of clear-cut, relevant data or an obvious path. Likierman believes that a more precise understanding of what exactly gives someone good judgment may make it possible for people to learn and improve on it. He approached CEOs at a range of companies, from some of the world's largest right down to start-ups, along with leaders in the professions: senior partners at law and accountancy firms, generals, doctors, scientists, priests, and diplomats. He asked them to share their observations of their own and other people's exercise of judgment so that he could identify the skills and behaviors that collectively create the conditions for fresh insights and enable decision makers to discern patterns that others miss. As a result, he has identified six key elements that collectively constitute good judgment: learning, trust, experience, detachment, options, and delivery. He describes these areas and offers suggestions for improvement in each one.

It can be cognitively demanding to understand how a system or organization made up of many very different interconnected elements actually works. But the fact that such systems or organizations are difficult to understand doesn't make them inherently bad. In addition to its more obvious costs, complexity confers critical benefits, especially in dynamic and uncertain environments. The authors draw on their experience and perspectives in business, biology, and physics to offer some reflections on the nature, benefits, and costs of complexity and provide some guidance on managing it. Their recommendations: In growing your organization, make sure that it remains modular in structure and that all components and connections conform to a small number of simple operating principles. Embed a bias for change, avoid imposing too many controls on your people, and let the market judge which changes work. Finally, always optimize your organization globally and keep fixing, repairing, and pruning.

To conduct international commerce, businesses have built an intricate system of networks that move money, information, and components around the world. These networks may look decentralized, but all too frequently, they have major choke points. The majority of global finance transactions, for instance, are relayed through a single organization in Belgium. Many global tech firms depend heavily on the chips Qualcomm makes for Android devices. A huge proportion of global communications are routed through private servers on U.S. soil. Increasingly, these choke points are being turned into political weapons by governments, and companies are getting caught in the cross fire. The stakes are high: Firms can go out of business if they're cut off from critical networks. They need to analyze their exposure and develop a strategy to protect themselves.

Most of us think of ourselves as good people. We set out to be ethical at work, and we hope that in pivotal moments we will rise to the occasion. But when it comes to building an ethical career, good intentions are insufficient. Decades' worth of research has identified psychological processes and biases that cloud people's moral judgment, leading them to violate their own values, and often to create contorted, post hoc justifications for their behavior. How can we ensure that we will consistently do the right thing in our professional lives? The authors argue for a mindset shift to what they term "moral humility"--the recognition that we all have the capacity for ethical transgressions if we aren't vigilant. They suggest a three-stage approach for staying on the straight and narrow: Prepare in advance for moral challenges, including instituting proper safeguards; make good decisions in the moment; and reflect on and learn from moral successes and failures.

In this fictional case, an associate director of business development at a gaming company is selected for a prestigious cross-functional innovation group. When one of her peers in the work group isn't able to meet his deadlines because of his heavy workload, she picks up his slack. But at the end of the project, she needs to give him a rating in the company's new peer-feedback system, and she's worried that if she's honest, it will hurt his career and cause trouble for her. Should she give him the low rating she thinks he deserves? Or should she give him a pass this one time? This fictional case study by Anthony J. Mayo, Joshua D. Margolis, and Amy Gallo features expert commentary by Dan Goldenberg and Aiko Bethea.

During his 20-year career as a professional boxer, Sugar Ray Leonard won world titles in five weight classes, became the first in his sport to earn more than $100 million in prize money, and helped fuel fans' interest in boxing following Muhammad Ali's retirement. In this interview he talks about bypassing boxers' traditional reliance on promoters, why he retired repeatedly, which of his fights is most worth rewatching, and more.

In this fictional case, an associate director of business development at a gaming company is selected for a prestigious cross-functional innovation group. When one of her peers in the work group isn't able to meet his deadlines because of his heavy workload, she picks up his slack. But at the end of the project, she needs to give him a rating in the company's new peer-feedback system, and she's worried that if she's honest, it will hurt his career and cause trouble for her. Should she give him the low rating she thinks he deserves? Or should she give him a pass this one time? This fictional case study by Anthony J. Mayo, Joshua D. Margolis, and Amy Gallo features expert commentary by Dan Goldenberg and Aiko Bethea.

In this fictional case, an associate director of business development at a gaming company is selected for a prestigious cross-functional innovation group. When one of her peers in the work group isn't able to meet his deadlines because of his heavy workload, she picks up his slack. But at the end of the project, she needs to give him a rating in the company's new peer-feedback system, and she's worried that if she's honest, it will hurt his career and cause trouble for her. Should she give him the low rating she thinks he deserves? Or should she give him a pass this one time? This fictional case study by Anthony J. Mayo, Joshua D. Margolis, and Amy Gallo features expert commentary by Dan Goldenberg and Aiko Bethea.

Brazilian logistics company Rumo operated 13,500 km in railway networks, port terminals, and inland transshipment terminals, connecting major Brazilian ports to the agriculture hubs of Mato Grosso and São Paulo state. Controlled by Cosan, Brazil's leading sugar and ethanol producer, Rumo had been through a turnaround over the last 3 years, including heavy investment in operational improvements, financial deleverage, and taking cash flow generation from a negative $278 million in 2015 to positive $15.3 million in 2018. In 2019, as the company planned its new expansion cycle ($3.4 billion would be invested from 2019 to 2023), Rumo's executives had to find the best way to continue to capture the value created, while preserving its relations with customers and other stakeholders.

Smoking was once considered as American as apple pie, but times change. Cigarette sales in the United States dropped to 216.9 billion in 2018, marking the industry’s lowest level in demand since the tracking of cigarette sales began in 1967. But today’s smokers are not just being banned from lighting up at work—they are being banned from employment by companies like U-Haul, at least in the United States. (In Canada, the Human Rights Act theoretically protects nicotine users from this sort of selective hiring policy.) There is no question that well-designed wellness programs can benefit employers and society alike. But on the other hand, besides having the potential to negatively impact employee morale, aggressive wellness initiatives can spawn a culture of deceit, fostering unhealthy attempts to beat the system. In the case of weight-loss programs with financial incentives, studies have found that employees often attempt to manipulate results by binge eating and crash dieting. As a result, wellness programs must be well designed. Providing employees with knowledge, risk management tools, and positive incentives has a role to play in today’s workplace. But refusing to hire people who, for better or worse, use any legal product can do more harm than good.

In January 2020, a U.S. hunter-killer drone killed Iran’s second most powerful person, without congressional approval. During the fog of Iran’s response, Ukraine International Airlines Flight 752 was shot out of the sky over Tehran by jittery Iranian military defense personnel. Michael McCain, CEO of Toronto-based Maple Leaf Foods, blamed Trump for the accident, which claimed the lives of 176 people, including the wife and 11-year-old son of a Maple Leaf Foods employee. Without mentioning the president’s name, McCain used his company’s official Twitter account to express what he said were “personal reflections” about the tragedy. The corporate world was divided by McCain’s blunt assessment of Trump’s leadership, with critics insisting he had crossed a clear line by using the official Maple Leaf Foods Twitter account to spread personal opinions without any regard for the corporate bottom line. There is no question that CEOs are accountable to company stakeholders via corporate boards, but the guiding principles of corporate leadership and governance are constantly evolving. While fans of the shareholder primacy model are free to resist change, there is no universally accepted line that separates the duties of corporate leaders and the personal views they hold, especially not on matters of interest to the stakeholders they serve.

People can no longer always trust their eyes or ears thanks to generative adversarial networks (GANs), a special subset of artificial intelligence technology. This technology makes it relatively easy to create deepfakes—convincing clips of people doing or saying things that they never did or said. Deepfakes present a serious threat to Western civilization because they create an opportunity for bad actors to supercharge disinformation. National security experts worry about foreign actors deploying deepfakes to manipulate public opinion. The potential for an assault on reality has put a serious regulatory target on GANs. But the technology behind deepfakes might just be what democratic nations need to keep up in the AI race. The objective of this article is to highlight how GAN technology enables AI developers to augment or complete data sets where data is unavailable, incomplete, or otherwise lacking. GAN technology has plenty of other positive things to offer, including for medical research, automotive safety, and security and military applications. Instead of having a conversation based on fear and misunderstanding, Western nations need to explore deploying laws, policies, and regulations grounded in age-old legal concepts like defamation and slander to counter the threat posed by deepfakes. After all, knee-jerk calls for regulatory action risk putting unnecessary restrictions on the development of a technology that could hold the key to democracy’s survival.

People with higher rates of reported mental illness are entering the workforce and discovering that it has less accommodation for mental health issues than their high school or college did. As a result, a complex issue has become even more difficult because many people struggling with mental illness believe they have to hide it from their employer. Consider some findings from a recent Accenture study of almost 4,000 workers in Britain. Nearly half of the younger participants reported that they had experienced suicidal thoughts or feelings. They were twice as likely as older workers to be experiencing a mental health challenge. Yet they were also more hesitant than their older peers to tell employers what was going on. Employers shouldn’t underestimate the difference they can make, even by making a fairly modest (and low- or no-cost) effort to create a more supportive workplace. Numerous characteristics differentiate more supportive cultures from their opposite. But three stand out as being particularly significant—and they aren’t difficult to replicate. First, in more supportive cultures, 53 per cent of all workers note that senior leaders visibly support mental health at work. Second, in more supportive cultures, 87 per cent of workers can identify a senior leader they can approach for help with a mental health challenge. Third, it’s important that workers know about the supports that are already in place.

The 1999 strategic alliance between Renault and Nissan made this partnership the longest ever among large firms in the automotive industry. Together, the alliance partners are active in every important territorial market and in every customer segment worldwide.1 As the alliance was announced, automotive industry experts were very skeptical2 because both companies were having difficulties. The initial alliance partners started from weak positions as the collaboration was formed; however, today the alliance is a leader in electric vehicles,3 ranks among the top-three largest car manufacturers worldwide,4 and sold more than 10.6 million vehicles5 in 2017. Although the alliance encountered a number of challenges and difficulties over the years (e.g., increasing industry competition, pressure to generate synergies, the financial crisis of 2008, and recent trends disrupting the automotive industry), it has been extended over time, most importantly by the inclusion of Mitsubishi in 2016, as Nissan acquired a stake in its Japanese rival. Twenty years after its formation, the Renault-Nissan alliance is a prime example for strategic alliances because of its financial success in the past.

The case discusses the rise of a global chain of hotels that originated in India in 2015/16 and grew to become one of the top five leading hotel chains in the world in about four short years. The story of OYO's meteoric growth illustrates the power of technology to transform emerging markets and disrupt established industries. OYO represents a classic case of an organization that leveraged the fragmentation associated with emerging markets and used technology to bridge gaps across the value delivery model to offer a predictable customer experience. It believes a large part of the value it has created in India relies on its use of predictive analytics, big data analysis capabilities, and the integration of enterprise systems at variable scale to allow even the smallest of operators to be able to utilize valuable insights to take advantage of the boom in travel. Since its inception in India, where it has thoroughly dominated the industry landscape in terms of the number of hotel rooms it controls through its franchise/lease/manchise agreements, it has expanded into other emerging market countries such as Malaysia, Indonesia, UAE, Saudi Arabia, and China. It has been quite successful in these forays, barring some teething troubles that are typical of global expansion. However, as the case closes, the company had entered the developed markets of the UK, Japan, and had just arrived in the U.S., where it had made a large acquisition of a Hooter's hotel in Las Vegas, NV. The second round of expansion covering developed markets raises numerous questions regarding transportability of the model across two very different contexts, namely emerging markets, where the industry is fragmented, versus developed countries, where the industry is already dominated by famous brands.