Future Retail Limited (Future Retail) had a unique business model and an aggressive growth strategy that helped to make it India's largest retailing organization. In 2017, Future Retail was expanding its network of stores, but a new retail landscape was emerging, as customers were shifting to e-commerce for large purchases, due to changing lifestyles and customer preferences, while continuing to shop at small mom-and-pop stores for smaller, quick purchases. Amid such changes, how would Future Retail be able to maintain its leadership position? As it sought a larger share of the retail pie, how would it deal with an increasing customer preference toward the convenience of online ordering? How would it handle the competition from omnipresent neighbourhood stores and cart vendors?
Many people thought the #MeToo movement would have a deterrent effect. A group of researchers weren't so sure. In early 2018 they began a survey to determine whether their fears of fallout were justified. Indeed, both men and women predicted that men would be more reluctant now to engage with women at work in certain ways, such as meeting one-on-one or going for after-work drinks, even though such activities can be crucial for advancement. People of both genders also said they would be more reluctant to hire attractive women and to hire women for jobs that require close interpersonal interactions with men (for example, traveling). And a follow-up survey found that the backlash was even bigger than respondents had anticipated. The study shows that traditional sexual harassment training has little effect; instead, the researchers say, companies should educate employees about sexism and character.
Is it time to rethink the way we assess job applicants? A recent review of 81 workplace studies suggests that it is. In it Chad Van Iddekinge of Florida State and his colleagues found only a very weak relationship between workers' experience at previous employers and their performance on the job.
Apache Corporation had survived and excelled more than 50 years in one of the world's most challenging industries, the exploration and production of oil and natural gas. And it had done so in its own way, with a unique set of skills that allowed it to be one of the industry's lowest cost producers. But in 2019 its fortunes were clearly on the decline. Following the 2008 financial crisis most of the major oil and gas firms enjoyed an extended period of growth and profitability. But not Apache. The company's financial results and share price had been sliding for years. Beginning in 2015 the company undertook a change in direction, exiting most of its major international projects to focus on U.S. operations, specifically the Permian Basin. A major discovery in the Permian of West Texas in 2016, Alpine High, was expected to be the turning point. But three years later the company's performance continued to slide. Investors wanted to know what was next.
This case exposes students to franchising and the pros and cons of becoming a franchisee entrepreneur. The context of the case is a franchise in the casual dining industry segment (a hybrid between fast food and fine dining). A couple has opened two franchisee stores of the Trio Burger chain. The case covers their story, how they ultimately decided to acquire their own Trio Burger franchise, the pains they faced in opening their first store, and finally, challenges for opening their second store. The case then transitions to the decision they would later face - to sell the two stores they had developed to an interested party or to continue operating them and open more stores down the road.
In 2014 Laureate Education, Inc. (Laureate) was the largest for-profit post-secondary education company in the world, with almost one million students enrolled in more than 50 institutions across 20+ countries. During that year, this multinational corporation (MNC) was considering modifying its legal status to become a Public Benefit Corporation (PBC) in Delaware (U.S.) and completing the certification process to become a certified benefit corporation (B Corp). They had also decided to file an initial public offering (IPO). The IPO was planned for late 2015, so Laureate could potentially become the largest PBC and the first one to go public in the world. The case presents Laureate's founder and CEO, Doug Becker, in late 2014, evaluating the long-term value of the B Corp certification. To evaluate the decision, students must first understand what the B Corp certification and PBC legal status are and assess if they are helping the organization to fulfill its mission and to manage stakeholders' interests within the context of soon to be a publicly traded company. To do so, the case describes Becker's entrepreneurial background, Laureate's history, and critical developments up to 2014. The case highlights key points in the evolution of the for-profit higher education industry from the late nineties through 2014, as well as an introduction to the B Corp certification and its B Impact Assessment (BIA). The case also clarifies the difference between the B Corp certification and the legal statute of the same name adopted in 27 states by the end of 2014.
The case examines two entrepreneurs who were considering opening a Sola Salon Studios franchise in Pennsylvania, despite a challenging regulatory environment and intense competition. Sola is an innovative salon business model in which stylists (aka Solapreneurs) license fully equipped salon studios to run their own businesses. Sola's business model epitomizes the entrepreneurial opportunities available in the sharing economy, resulting in its rapid expansion across the United States. Despite this opportunity, Sola and its franchisees faced significant legal risks, similar to those encountered by other pioneers in the sharing economy, because the laws in the state of Pennsylvania, as currently written, could be interpreted as preventing the Sola business model from operating. The case prompts discussion of various business concepts including: the sharing economy, the inherent risks and likely tradeoffs of entering an uncertain market, and behavioral aspects of decision making.
Sunrise Construction Ltd. (Sunrise) had a critical problem with the firm's Time Tracking System (TTS) business processes. The management team deemed the TTS fix a top priority for the firm since the failing system was crippling the firm's operations. Ben Smith, Vice President, Operations for Sunrise was given the responsibility of presenting a solution at the next monthly management meeting to fix the TTS problem. Problems with the TTS escalated leading to substantial indirect costs such as ill-informed decisions regarding resource availability, project costs and payments which negatively impacted the firm's operations, reputation and increased the risk of regulatory litigation. As a result, the sustainability of future business operations relying upon the TTS was brought into question. Furthermore, data integrity issues, redundant processes and bottlenecks with the current TTS were estimated to directly cost the firm $21,000 annually. Smith hired an Information Systems consultant to help him navigate the faulty processes of the TTS, determine key system requirements and evaluate potential off-the-shelf, custom and process re-engineering solutions. They had to work quickly to determine a solution as the next management meeting was fast approaching and the firm was struggling.
The Beiteddine Art Festival (BAF) is a non-profit organization that manages an art and musical festival in Lebanon with the aim of using cultural activity to bridge the political divide in a country torn by war and neighboring countries' conflicts. As a non-profit, the BAF relied heavily on donated funds and grants, which were at many times uncertain on all levels (amount and collection), forcing the festival to resort to bank loans to close the gap in its financing needs, often at a heavy cost. The insecurity and instability of its revenues, coupled with escalating expenses that were usually opportunistic given a deteriorating political and security situation in Lebanon and the region, posed a serious threat to the financial sustainability of BAF. In early 2017, the management of the festival was facing an exceptional situation. On one hand revenues were shrinking considerably because of a deteriorating political and financial situation in the region with Lebanon on the verge of bankruptcy; on the other hand, costs were ever more erratic because of difficulty of planning and budgeting, and with additional taxes being levied by a struggling government. The team had to decide on whether they could sign upcoming contracts with artists, and if so, create a process to ensure that financial ends met, with a clear focus on preserving the quality of performances while maintaining the impact the festival had on the social, humanitarian, and economic levels.
After working at his family's coat manufacturing company for a few years, the author realized that high-end coats made in Canada could become a luxury product globally. Targeting European consumers first, he introduced the brand and then marketed it in innovative ways, including outfitting polar explorers and TV and film crews who were shooting in remote cold-weather locations. Perhaps most important, he committed to domestic manufacturing and opened factories across Canada along with training centers for sewers. This paved the way for phenomenal growth and a successful IPO. Today the company has stores in 12 cities around the world and runs an international e-commerce business. Its focus on delivering an exceptional experience inspired the creation of "cold rooms" in the stores where shoppers can test products in temperatures as low as -25 Celsius before they make a purchase. As Canada Goose expands organically and through acquisition, Reiss says, the company will continue to make its coats in Canada and other products wherever it can get the highest-quality products at the scale it needs.
Every day, at almost every company, strategy is being hijacked by numbers. Because strategy is abstract, employees often mentally replace it with the hard metrics meant to assess whether the organization is succeeding at it. This tendency is called surrogation, and it destroys a lot of value. Take Wells Fargo. Executives there decided to track cross-sales to customers to measure performance on the bank's strategy of building long-term customer relationships. The focus on cross-selling goals led employees to open 3.5 million accounts without customer consent, which, with brutal irony, severely damaged the long-term relationships the bank sought. Though it's easy to fall into the surrogation snare, firms can take steps to avoid it. For instance, they can involve the people who'll implement a strategy in its formulation, so they'll be more likely to grasp it and less likely to replace it with a metric. Tying financial incentives to a metric is usually a mistake: It only increases the focus on the numbers. Using multiple yardsticks is very helpful, however; that highlights the fact that no single metric captures the strategy and makes people less apt to surrogate.
Eight years ago, Malnight, Buche, and Dhanaraj launched a study of high growth in companies, looking at three strategies known to drive it: creating new markets, serving broader stakeholder needs, and rewriting the rules of the game. To their surprise, they discovered a fourth driver they hadn't considered at all: purpose. Companies have long been building purpose into what they do, but usually it's seen as an add-on--as a way to, say, give back to the community. The high-growth companies in the study, in contrast, had made purpose central to their strategies, using it to redefine playing fields and reshape value propositions. The purpose of Mars Petcare, for instance--a better world for pets--guided its expansion from pet food into the larger ecosystem of pet health. The purpose of Securitas--contributing to a safer society--led the firm to redesign its offering to include not just physical guards but electronic services and predictive solutions. This article explains how executives can develop and implement a purpose at their organizations. It also describes the benefits they're quite likely to see once they do: a more unified organization, more-motivated stakeholders, broader impact, and more profitable growth.
Human beings are categorization machines, taking in voluminous amounts of messy data and then simplifying and structuring it. That's how we make sense of the world and communicate our ideas to others. But according to the authors, categorization comes so naturally to us that we often see categories where none exist. That warps our view of the world and harms our ability to make sound decisions--a phenomenon that should be of special concern to any business that relies on data collection and analysis for decision making. Categorical thinking, the authors argue, creates four dangerous consequences. When we categorize, we compress category members, treating them as more alike than they are; we amplify differences between members of different categories; we discriminate, favoring certain categories over others; and we fossilize, treating the categorical structure we've imposed as static. In the years ahead, companies will have to focus attention on how best to mitigate those consequences.
In 2018, Fortune's Global 500 ranking included 111 firms headquartered in China--just a handful fewer than the United States' 126. In 1995, only three Chinese firms made the list; in 2018, three were in the top 10. No wonder some observers predict that China will soon overtake the U.S. as the home to the highest number of Global 500 firms. It's entirely possible that this could happen, but the triumph may be fleeting. In the late 1990s, Japanese firms came close to outnumbering U.S. companies on the list, until a combination of a graying workforce and declining productivity caused them to slide back off. Japan's experience, which is similar to that of China today, provides an uncomfortable precedent for the consequences of a slowdown in domestic growth. To keep their places on the Global 500, Chinese companies will have to develop a global mindset more characteristic of multinationals from small countries like Switzerland, a transformation that has to date eluded most Japanese businesses.
The agendas of company boards are so packed that it's hard to get to every question and concern during regular meetings. So between meetings, directors do what members of a team always do in this situation: They start having conversations on the side. Conducted properly, side discussions allow directors to work together efficiently--to trade opinions, share information, and exert influence. But conducted improperly, they encourage political maneuvering, marginalize members with key expertise, foster inappropriate alliances, and lead to poor decisions. They shut out diverse input, and they make boards dysfunctional. The authors started examining side conversations three years ago as part of a larger study of board dynamics. In this article they share what they've learned about how directors should approach them. High-functioning boards, for instance, set clear rules of engagement and regularly review whether they're following them. They create onboarding processes, help directors form personal relationships, and take measures to maintain trust--such as ensuring that every member is briefed on all relevant information before formal discussions restart.
In an era when businesses increasingly have to depend on their suppliers to lower costs, improve quality, and drive innovation, traditional contracts don't work. They often undermine the partnerlike relationships and trust needed to cope with external uncertainty. The remedy is to adopt a totally different kind of arrangement: a "formal relational contract" that creates a flexible framework designed to foster collaboration in complex strategic relationships over the long term. These contracts, which are legally enforceable, specify mutual goals and establish governance structures to keep the parties' expectations and interests aligned. They are especially useful for complex purchasing arrangements, outsourcing, strategic alliances, joint ventures, franchises, public-private partnerships, large construction projects, and collective bargaining agreements. Crafting a formal relational contract involves five steps: laying the foundation, co-creating a shared vision and objectives, adopting guiding principles, aligning expectations and interests, and creating systems for staying aligned.
In many contexts, the firm is no longer an independent strategic actor. Its success depends on collaboration with other firms in a designed ecosystem spanning multiple sectors. In these cases, traditional strategy frameworks are of little help. Instead, the author says, companies should focus on five questions: (1) Can you help other firms create value? Success is as much about helping other firms innovate as it is about innovating yourself. (2) What role should you play? You don't necessarily need to be the chief architect of your ecosystem; sometimes you're better off sharing the role or being a complementor. (3) What should the terms be? There are two key governance choices: who can access the ecosystem, and how exclusively attached your partners must be. (4) Can your organization adapt? Customers' needs and complementors' desire and ability to collaborate can shift dramatically, requiring changes in your allocation of resources. (5) How many ecosystems should you manage? Some successful orchestrators head up multiple ecosystems--each covering a different part of the business, and each leading to a different path for expansion.
Although companies spend billions on formal training for employees, most of the skills needed to perform a specific job can be learned only by doing it. This on-the-job learning (OJL) has long depended on mentorship, with experts coaching apprentices. But today OJL is under threat from the headlong introduction of sophisticated analytics, AI, and robotics into many aspects of work. These technologies are moving trainees away from learning opportunities and experts away from the action. The author describes the "deviant," rule-breaking work-arounds--"shadow learning"--that surgeons in training, police officers, M&A analysts, and others are figuring out on their own to overcome these obstacles and suggests how companies can benefit from studying them.