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Boeing 737 MAX: Company Culture and Product Failure
In October 2018, Lion Air Flight 610 crashed into the sea soon after takeoff from Jakarta, Indonesia. Investigators identified a problem with the new Boeing 737 MAX jet's stall-prevention system (known as the Maneuvering Characteristics Augmentation System, or MCAS). However, the Federal Aviation Administration (FAA) allowed airlines to continue flying the jet, while Boeing worked on some changes to the MCAS software. Less than five months later, Ethiopian Airlines Flight 302 crashed six minutes after takeoff. Once again, a faulty sensor triggered a misfire of the MCAS software. The system pushed the nose of the plane down repeatedly. The pilots could not determine how to stop the sharp descent, and the plane plunged into the ground at more than 500 miles per hour. Four days later, facing immense pressure from government officials around the world, Boeing grounded its entire fleet of 737 MAX jets. The Boeing board of directors faced a multi-part dilemma. Was the current CEO still the right person to lead the company, or to what degree, if any, was he responsible for the position Boeing found itself in? Had something gone awry with the company's culture after decades of engineering excellence? How did it come to happen that pilots suddenly experienced fatal difficulties flying the latest model of one of the world's most-used passenger jets? And, how could Boeing ensure such a situation would not happen again? -
Digital Internal Communications: How Organizations Can Stay Connected Within
External corporate communications and the rapidly changing ways in which companies engage with their customers received a lot of attention between 2010 and 2020. With social media, online chats, blogs, vlogs, and much more, consumers gained unprecedented access to corporate decision-makers, celebrity spokespeople, endorsement-driven athletes-even the US president. Internal communications, through which companies engage with their employees and inside stakeholders, changed just as quickly for organizations undergoing digital transformations during the same period-without receiving due attention. By mid-2020, the novel coronavirus (COVID-19) had made effective internal corporate communications even more essential. The virus shuttered the physical locations of many businesses, requiring huge swaths of corporate staff to work from home. As a result, employees became increasingly reliant on web-based tools-such as virtual meeting applications, email, Facebook, and Twitter-to collaborate, complete projects, stay in the loop on company developments, and simply keep in touch. This note explores the digital media and internal communications tools being used by firms worldwide, presents the importance of these tools, and gives examples from leading companies that are using information and communications technology. -
A Game Too Far
The protagonist in this case, founder of a successful, privately held tabletop board gaming company, has to make some tough decisions about whether to move forward with two of the company's board games. Recent years had seen a renaissance for board games and their audience, and the board game market, driven primarily by millennials, was estimated to be worth roughly $12 billion dollars by 2023. The decision is whether to print a second run of Taming the East or to publish a new game, Sixth Panzer Army. Both games had controversial elements. Taming the East, despite its wild success, had been the focus of some criticism because it involved maintaining a player's empire through often unsettling means: ruling through intermediary and puppet governments, adopting imperialist and colonialist tactics, and putting down rebellions, particularly in Asian countries, through suppressive, often strong-arm tactics. Although a bit more of a traditional game, Sixth Panzer Army nonetheless involved World War II combat and battles and prominently featured German soldiers, including some SS troops, many of whom had, in reality, been convicted of war crimes. It also referenced some horrific events, such as German soldiers massacring American POWs, and included war crimes as a playable event. While the gaming industry was no stranger to controversy, with a number of well-intentioned and even popular games attracting criticism for violent, sometimes atrocity-laden themes, this was still a tough decision. The protagonist, already conflicted about the nature of both games, will have to explain the decision to commission a second print of Taming the East, and likewise no doubt face criticism about going ahead with Sixth Panzer Army. The public and the gaming press would weigh in about the final decision, and not necessarily in a kind or understanding way. -
Dress Your Home
The case documents the evolution of Dress Your Home (DYH) into a profitable line of business for Colcerámica. This was a great achievement since, outside of micro-finance businesses, there were very few large companies that had created successful initiatives with the base of the socio-economic pyramid. DYH initially sought to generate positive social effects through a variety of ways. A decade later, the social effects were focused on two proposals: one, on a small scale, to generate labor inclusion for low-income citizens as sales promoters; the other, on a larger scale, to improve the living conditions of thousands of households through their home improvement products. This is the second pedagogical case about the DYH experience. The first one focused on lessons about the logistics needed to reach the "last mile" (case SKS-116 in the HBP case collection). -
The CEO of Iberdrola on Committing to Clean Energy
In 2001 Iberdrola, which had resulted from a merger between two Spanish utilities nearly 10 years before, held assets that were primarily sustainable but included some powerÂgeneration plants fired by oil and coal. Its footprint was limited to Spain and a bit of Latin America. Looking for a CEO who was willing to challenge traditional industry models and build a better future, the company tapped Galan. His values gave him the grounding to design and lead Iberdrola's green mission, and he describes the past two decades as some of the most rewarding of his career. He and his team focused an ambitious strategy on their core business of generating and distributing sustainable and renewable energy through plants, networks, and storage facilities, doubling down on a low-carbon future. Competitors thought they were crazy, and regulators raised a skeptical brow. Some senior executives retired or left. But since then Iberdrola has expanded into dozens of countries on four continents, grown to serve 100 million people with power, created one of the largest wind energy companies in the world, and closed all its oil and coal plants. Its net profit of 3.4 billion euros in 2019 represents a fivefold increase since 2001. -
Our Work-from-Anywhere Future
The pandemic has hastened a rise in remote working for knowledge-based organizations. This has notable benefits: Companies can save on real estate costs, hire and utilize talent globally, mitigate immigration issues, and experience productivity gains, while workers can enjoy geographic flexibility. At the same time, concerns include how to communicate across time zones, share knowledge that isn't yet codified, socialize virtually and prevent professional isolation, protect client data, and avoid slacking. Research into work-from-anywhere (WFA) organizations and groups that include the United States Patent and Trademark Office, Tata Consultancy Services, and GitLab (the world's largest all-remote company) highlights best practices and can help leaders decide whether remote work is right for their organizations. -
How to Develop Your Leadership Style
Bosses often sense that something is missing in an employee's tool kit but can't put a finger on what it is. They say something like "You need certain important intangibles" or "You don't have enough gravitas," but they fail to provide advice or guidance. What they're talking about is leadership style. In every interaction, we send signals to others that fall into two categories: power and attractiveness. Powerful markers are associated with confidence, competence, charisma, and influence but also arrogance, abrasiveness, and intimidation. Attractiveness markers are related to agreeableness, approachability, and likability but also diffidence, lack of confidence, and submissiveness. The more consistent our signals, the more distinctive our style. This practical guide offers concrete advice for developing a dynamic and effective leadership style that draws from both types of markers for maximum impact. -
Reinventing the Leader Selection Process
The U.S. Army has long struggled with toxic and inept leaders, and no wonder: It has historically chosen battalion commanders, a linchpin position, on the basis of 90-second file reviews. Last year it undertook an ambitious revamping of that selection process, which now involves four full days of physical, cognitive, and psychological assessments and interviews. The author, a lieutenant colonel who served as an adviser to the task force that designed and implemented the new process, describes it in granular detail, including a variety of rigorous measures for reducing interviewer bias and ensuring diversity and inclusion. Although specifically aimed at improving the validity, reliability, and developmental impact of the army's executive-leader selections, the redesigned process offers important lessons for any organization seeking to bolster its talent assessment and promotion practices. -
How Apple Is Organized for Innovation
When Steve Jobs returned to Apple, in 1997, it had a conventional structure for a company of its size and scope. It was divided into business units, each with its own P&L responsibilities. Believing that conventional management had stifled innovation, Jobs laid off the general managers of all the business units (in a single day), put the entire company under one P&L, and combined the disparate functional departments of the business units into one functional organization. Although such a structure is common for small entrepreneurial firms, Apple-remarkably-retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1997. In this article the authors discuss the innovation benefits and leadership challenges of Apple's distinctive and ever-evolving organizational model in the belief that it may be useful for other companies competing in rapidly changing environments. -
Rethinking the On-Demand Workforce
As companies struggle with chronic skills shortages and changing labor demographics, a new generation of talent platforms, offering on-demand access to highly trained workers, has begun to help. These platforms include marketplaces for premium expertise (such as Toptal and Catalant), for freelance workers (Upwork and 99designs), and for crowdÂsourcing innovation (Kaggle and InnoCentive). Almost all Fortune 500 firms use such platforms. But most do so in an ad hoc, inefficient way, according to a Harvard Business School/BCG study. Companies need to get much more strategic about their engagement with talent platforms and fully embrace their ability to increase labor force flexibility, speed time to market, and facilitate business model innovation. That will require rewiring policies and processes and redefining working norms. Most important, leaders must inspire the cultural shift needed to realize the platforms' transformative potential. -
Is Your Marketing Organization Ready for What's Next?
Sweeping technological change has revolutionized marketing, while societal challenges have raised expectations about marketers' social performance. This has altered customer needs, accelerated the entry of new types of competitors, and generated novel opportunities for value creation. It has also transformed how the function must work, requiring that it become more agile, interdependent, and accountable for driving firm growth. The authors provide a framework to help leaders identify the organizational design and capabilities needed to build a competitive, next-generation marketing function. Their framework has been used to guide marketing transformations at companies across industries, including consumer packaged goods, transportation, financial services, and retail. -
Getting Serious About Diversity
Leaders may mean well when they tout the economic payoffs of hiring more women and people of color, but there is no research support for the notion that diversifying the workforce automatically improves a company's performance. This article critiques the popular rhetoric about diversity and revisits an argument the authors made 25 years ago: To fully benefit from increased racial and gender diversity, organizations must adopt a learning orientation and be willing to change the corporate culture and power structure. Four actions are key for leaders: building trust and creating a workplace where people feel free to express themselves; actively combating bias and systems of oppression; embracing a variety of styles and voices inside the organization; and using employees' identity-related knowledge and experiences to learn how best to accomplish the firm's core work. -
Innovation for Impact
When he was the CEO of SRI International, Curtis Carlson presided over the conception and development of Siri, HDTV, and other groundbreaking innovations. Since then he has shared his approach with more than 500 corporate, university, and government groups. His methodology is based on the principles of active learning, which emphasize concise mental models, the continual iteration of ideas, real-time feedback, teamwork, and frequent comparison of alternatives. Those elements are woven into a process that focuses on customers' needs, a compelling approach, valuable benefits relative to costs, and superiority to the competition. -
Be a Better Ally
The Black Lives Matter and #MeToo movements have forced people in positions of power--namely, the white men who dominate institutional leadership roles--to realize they must personally step up to make organizations more fair and inclusive. That means playing a truly active role in helping marginalized colleagues advance (instead of just delegating diversity efforts to human resources). How can white men be effective allies to those employees? First, by taking responsibility for their own behaviors, educating themselves about racism and privilege, and getting and accepting feedback from people in underrepresented groups. They can also become confidants to and sponsors of women and people of color and insist on diverse hiring pools and practices. They can vigilantly watch out for bias at work, intervening decisively if they discover it. Last, they can work to build a community of other allies against racism and sexism. -
When Your Brand Is Racist (HBR Case Study and Commentary)
A national brewing and distilling company grapples with its most profitable brand's racist history. This fictional case study by Joseph C. Miller, Michael A. Stanko, and Mariam D. Diallo features expert commentary by Geoff Edwards and Jim Birch. -
Unartificial Intelligence
A new wave of brain science is upending our understanding of the mind. -
Life's Work: An Interview with Erno Rubik
The inventor of the Rubik's Cube on creativity and innovation. -
When Your Brand Is Racist (HBR Case Study)
A national brewing and distilling company grapples with its most profitable brand's racist history. This fictional case study by Joseph C. Miller, Michael A. Stanko, and Mariam D. Diallo features expert commentary by Geoff Edwards and Jim Birch. -
When Your Brand Is Racist (Commentary for HBR Case Study)
A national brewing and distilling company grapples with its most profitable brand's racist history. This fictional case study by Joseph C. Miller, Michael A. Stanko, and Mariam D. Diallo features expert commentary by Geoff Edwards and Jim Birch. -
J. Crew: Private Equity Ruins Retailing (A)
Founded in 1947 as an affordable women's retailer, J. Crew launched a highly successful catalogue in 1983. J. Crew's brick and mortar operations and catalogue sales experienced healthy growth through the 1990s. Seeking a cash injection to further growth, and to compete with larger catalogue retailers, the company's founders sold a majority stake in 1997 to Texas Pacific Group. A controversial second private equity buyout in 2011 put the company in the hands of a subsidiary of Chinos Holdings, Inc.-a deal made at a time when there were signs that J. Crew was failing to adapt to changing customer trends. A series of debt restructurings dug an even deeper financial hole for the company-leading to J. Crew becoming the first retailer to file for bankruptcy during the COVID-19 pandemic of 2020. In Case A students will learn of the retail trends and private equity-guided deals that led to J. Crew's distress.