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Building the AI-Powered Organization
Artificial intelligence seems to be on the brink of a boom. It's now guiding decisions on everything from crop harvests to bank loans, and uses like totally automated customer service are on the horizon. Indeed, McKinsey estimates that AI will add $13 trillion to the global economy in the next decade. Yet companies are struggling to scale up their AI efforts. Most have run only ad hoc projects or applied AI in just a single business process. In surveys of thousands of executives and work with hundreds of clients, McKinsey has identified how firms can capture the full AI opportunity. The key is to understand the organizational and cultural barriers AI initiatives face and work to lower them. That means shifting workers away from traditional mindsets, like relying on top-down decision making, which often run counter to those needed for AI. Leaders can also set up AI projects for success by conveying their urgency and benefits; investing heavily in AI education and adoption; and accounting for the company's AI maturity, business complexity, and innovation pace when deciding how work should be organized. -
Nimble Leadership
Nobody really recommends command-and-control leadership anymore. But no fully formed alternative has emerged. So mature companies often struggle to balance the need for innovation with the need for discipline. The authors studied two exceptions: the new-product-development stars PARC and W.L. Gore. Both companies, they learned, have three distinct types of leaders. "Entrepreneurial leaders," found at lower levels, create new products and services and move their firms into unexplored territory. "Enabling leaders," in the middle, make sure the entrepreneurs have the resources they need. And "architecting leaders," near the top, monitor culture, high-level strategy, and structure. This system allows both companies to be self-managing to a surprising degree. Employees choose their work assignments and dream up new projects, whose success rests on colleagues' volunteering to join in--making the companies collective prediction markets. And the mechanisms that enable self-management also balance freedom and control: The companies function efficiently and exploit new opportunities even as they minimize rules. -
The Soul of a Start-up
There's an essential, intangible "something" in start-ups--an energy, a soul. It inspires enthusiasm and fosters a sense of deep connection and mutual purpose. While this spirit persists, engagement is high and businesses keep their edge. But all too often, companies lose their souls as they mature. Firms add new systems and structures and bring in experienced professionals--and in the process somehow crush their original energizing spirit. In research into more than a dozen fast-growth ventures and 200-plus interviews with founders and executives, the author has discovered how firms can overcome this problem. His work shows that there are three crucial dimensions to a start-up's soul: business intent, or a loftier reason for being; unusually close customer connections; and an employee experience characterized by autonomy and creativity--by "voice" and "choice." All three provide meaning to stakeholders. Drawing on the experiences of Netflix, Warby Parker, Study Sapuri, and others, this article describes how sizable companies can still protect and nurture the three elements. Doing that is the secret to staying great as you grow. -
Digital Doesn't Have to Be Disruptive
Managers struggle to understand what digital transformation actually means for them in terms of which opportunities to pursue and which initiatives to prioritize. It's not surprising that many of them expect it to involve a radical disruption of the business, huge new investments in technology, a complete switch from physical to virtual channels, and the acquisition of tech start-ups. To be sure, in some cases such a paradigm shift is involved. But the authors' research and work suggest that wholesale disruption is often quite unnecessary. Some companies have successfully responded to the digital challenge by making major changes to their manufacturing processes, distribution channels, or business models, but many others have fared equally well using a more incremental approach that leaves the core value proposition and supply chain essentially unchanged. -
The One Thing You Need to Know About Managing Functions
There's a secret about strategy that no one tells you: Every function has one, whether or not it is written down and whether or not it is the product of an official strategic-planning process. If functions do not adopt a strategy consciously, they almost inevitably end up defaulting to one of two unconscious models, both of which are likely to result in their becoming a drag on corporate performance rather than a driver of it. Most leaders acknowledge that companies and business units need strategies. But for corporate functions--shared services such as IT, HR, R&D, finance, and so on--the need for strategy is less widely understood. In many firms, functions just exist, serving the company in whatever manner and at whatever scale the business units demand. In this article, the authors describe the problems of the unconscious strategies and outline a strategy-making framework to help functions strengthen the capabilities that set their company apart. -
When a Colleague Is Grieving
Grief is a universal human experience, yet workplace culture is often inhospitable to people suffering profound loss. Managers come to work prepared to celebrate births and birthdays, and even to handle illnesses, but when it comes to death, they fall silent and avert their gaze. The default approach is to try to spare the office from grief, leaving bereaved employees alone for a few days and then hoping they'll return expediently to work. This article provides guidance on how to humanely help team members return to productivity. Grief rarely unfolds in a neat progression, and managers should understand the phases the bereaved will experience and the most helpful response to each. Immediately after a death, acknowledging the loss without making demands is the best a manager can do. After grieving employees are back on the job, managers should be patient with inconsistency in performance and attitude. And as workers eventually emerge from mourning, managers should support this opportunity for growth. In confronting grief, managers help fulfill their promise to bring out the best in their employees. -
The Elusive Green Consumer
Companies that introduce sustainable offerings face a frustrating paradox: Most consumers report positive attitudes toward eco-friendly products and services, but they often seem unwilling to follow through with their wallets. The authors have been studying how to encourage sustainable consumption for several years, performing their own experiments and reviewing research in marketing, economics, and psychology. The good news is that academics have learned much about how to align consumers' behaviors with their stated preferences. Synthesizing these insights, the authors identify five approaches for companies to consider: use social influence, shape good habits, leverage the domino effect, talk to the heart or the brain, and favor experiences over ownership. -
Marvel's Blockbuster Machine
Marvel Studios has redefined the franchise movie, in part by finding the right balance between creating innovative films and retaining enough continuity to make them all recognizably part of a coherent family. The authors analyzed 338 interviews with producers, directors, and writers and 140 reviews from leading critics. They digitally analyzed each movie's script and visual style and examined its network of actors and behind-the-scenes workers. They argue that Marvel's success rests on four principles: (1) selecting for experienced inexperience, (2) leveraging a stable core, (3) continually challenging the formula, and (4) cultivating customers' curiosity. -
A Working Parent's Survival Guide
If you're passionate about your career--and about being a great mom or dad--you're facing an ongoing struggle for at least 18 years. But you can learn techniques to reduce the stress and successfully balance your professional and family roles. The author, an executive coach who specializes in helping working parents, suggests that you start by identifying the kinds of challenges you're confronting. There are five core types: those involving transitions (such as returning to work after parental leave, or hiring a new caregiver); practical challenges (dealing with errands, appointments, and all your other responsibilities); communication issues (conversations and negotiations about working-parent matters); feelings of loss (fear that you're missing out at work or at home); and identity concerns (uncertainty about your priorities and how you define yourself). To mitigate these challenges, the author recommends five powerful strategies: (1) Rehearse to prepare for transitions; (2) audit your commitments and plan your calendar so that practicalities don't overwhelm you; (3) frame your working-parent messages effectively; (4) use "today plus 20 years" thinking to put losses into perspective; and (5) revisit and recast your professional identity and brand. -
When One Division Makes All the Money but the Other Gets All the Attention (HBR Case Study and Commentary)
The CEO of a computer peripherals manufacturer considers whether to invest in innovation or focus on the core. This fictional case study by Richard Hamermesh features expert commentary by Vijay Sankaran and Carine Clark. -
Life's Work: An Interview with Vera Wang
The famed fashion designer describes why she waited until age 40 to launch her own business, what she learned from working for Ralph Lauren, and how she balances her two roles as creative director and business head. -
When One Division Makes All the Money but the Other Gets All the Attention (HBR Case Study)
The CEO of a computer peripherals manufacturer considers whether to invest in innovation or focus on the core. This fictional case study by Richard Hamermesh features expert commentary by Vijay Sankaran and Carine Clark. -
When One Division Makes All the Money but the Other Gets All the Attention (Commentary for HBR Case Study)
The CEO of a computer peripherals manufacturer considers whether to invest in innovation or focus on the core. This fictional case study by Richard Hamermesh features expert commentary by Vijay Sankaran and Carine Clark. -
Baldor Specialty Foods: The "SparCs" Challenge
Baldor Specialty Foods, a family owned, New York City-based food intermediary, served business customers in the country's north east corridor. A key activity that Baldor performed, called the "Fresh Cuts" program, was sourcing and preparing various vegetables for use by its customers. An outgrowth of Fresh Cuts was the approximately 150,000 pounds per week of produce scraps generated that was unfit for sale. Thomas McQuillan, Baldor's Vice President of Corporate Strategy, Culture, and Sustainability was charged with the disposal of these scraps in an environmentally friendly way that would also help the company's bottom line. After McQuillan designated Baldor's food scraps as "SparCs," ("scraps" spelled backwards) he and the company had early success in selling "SparCs" primarily for animal consumption and partly for human use. However, in 2018, waste disposal continued to be a significant cost for the company. At an upcoming offsite company retreat, McQuillan had to present a plan to address Baldor's food waste disposal that would help the company both financially and, in its sustainability standing. -
Brita's Stephen Curry Sponsorship Splash
Brita's Stephen Curry sponsorship splash is set in the U.S. water filtration industry in the first nine months of 2016. The case study documents the initial period of market-leader Brita's sponsorship of the NBA's Golden State Warriors' point guard Stephen Curry. Curry was regarded as one of the greatest basketball shooters of all time, had recently won his second Most Valuable Player (MVP) award from the NBA League, and was ranked as the ninth most powerful celebrity endorser in the United States. Although the announcement of the sponsorship deal had generated substantial and positive media reaction, sales of Brita products were still declining nine months into the period of the sponsorship deal, after several years of sluggish growth. By August 2016, Brita had experienced a 7.2 percent annual decline in total sales, including its well-known water pitchers and filters. The case documents the communication activities related to the Curry sponsorship undertaken by Brita's Director of Marketing, Tad Kittredge, during 2016. Given the pressure to deliver weekly sales and the regular NBA season scheduled to begin in just three weeks' time, Kittredge needed to find a way to use the Curry sponsorship to contribute to a sales turnaround in the coming months. The case offers four strategic alternatives that Kittredge was considering in October 2016 to change the way Brita used Curry. -
Lockheed Martin and Leidos Holdings: A Reverse Morris What?
This case is from the point of view of Peter Clarke, Vice President of Mergers and Acquisitions for Lockheed Martin's Information Systems and Global solutions (IS&GS) division. Clarke has a personal decision to make about keeping his substantial Lockheed stock holding or converting to the partner company (Leidos Holdings) stock. About a year prior to the decision point in the case, Lockheed made a strategic decision to divest its IS&GS division, which engaged in consulting (largely defense and other governmental agency consulting). Clarke reviews Lockheed's actions which led up to the decision to divest the IS&GS division through a Reverse Morris Trust (RMT), which included rejecting a more conventional spin-off or outright sale. The RMT, a complex transaction which required the creating of a new company and a merger with a second company, Leidos Holdings, allowed the divestiture to be tax-free. There were a number of rules required for this transaction; for example, former Lockheed shareholders needed to own more than 50% of the resulting company. Clarke believed the enterprise IT, cybersecurity, intelligence, health IT, and engineering business was a good growth area. Clarke needed first understand this unusual financial transaction and make a personal decision about whether keeping his Lockheed shares or exchanging them for Leidos shares would be the best decision for him. -
Meat the Needs: Giant Foods' Meat Rescue Program
The decision focuses on sustainable green retailing strategies surrounding meat donations by Giant Foods in their meat rescue pilot program called "Meat the Needs." John MacDonald needs to decide whether to expand or to eliminate the pilot program, now that the Central Pennsylvania Food Bank (CPFB) will no longer be picking up the meat after 2012. Green retailing strategies include opportunities and risks. The opportunities include reducing food waste by increasing food donations; risks include risk to brand, cost, and logistics for safe food handling. Will Giant Foods' disposition decision fit with the company's new focus on zero-waste and its desired edict of "Living Here, Giving Here"? Are the risks and costs too much for the future of the program? MacDonald and his team need to work through these important sustainability issues. This case is complemented with video components throughout the written narrative. The videos are accessed by students clicking on links imbedded in the case which take the student to the appropriate video available in youtube. -
Validate or Pivot? Using Content Analysis to Assess Green Zebra's Customer Value Proposition
CEO Lisa Sedlar was two weeks from the start of meetings with venture capital funders to raise $10 million for a West Coast expansion of her urban, convenience-store startup - Green Zebra Grocery. Delivering a healthy take on the traditional c-store assortment, Sedlar was positioned to leverage growth trends that signaled a shift from the traditional fuel fill-ups that defined the c-store industry, toward urban food retailing. However, a massive oversupply of retail square footage dedicated to grocery, had made investors skittish about putting money behind another brick and mortar retail chain. On top of that, Amazon had just announced plans for a 3,000-store national rollout of Amazon-Go, their high-tech, self-serve concept store, described as the future of c-store retailing. To preempt investor concerns, Sedlar was considering using a content analysis of customer reviews to let shoppers speak for themselves. She needed evidence that either validated the Green Zebra 'healthy convenience' positioning or customer insights that would help her decide how to pivot her customer value proposition to create a differentiated positioning relative to key c-store competitors. -
Global Climate Cooperation and Conflict: Brazil and the Paris Agreement
It is March 2019, and Jair Bolsonaro, Brazil's newly elected president, is deciding what to do about Brazil's participation in the 2016 Paris Agreement on climate change. Bolsonaro must weigh the economic and political costs and benefits of taking drastic action to curb environmentalism and environmental protections in Brazil. Exiting from the Paris Agreement would provide far greater freedom to reboot Brazil's economy, which is one of Bolsonaro's campaign promises. Ignoring climate change would enhance Bolsonaro's ability to roll back fines and regulations aimed at protecting the Amazon Basin, the world's largest carbon sink. This move would likely boost his popularity with the agribusiness sector, but draw ire from social and labor groups in Brazil that have fought long and hard to improve environmental protection throughout the country. And there are broader international considerations: Would leaving Paris mean objections from trading partners and the broader global community? -
Autonomous Vehicles: Smooth or Bumpy Ride Ahead?
In early 2019, transportation was set to undergo a major transformation with the advent of autonomous vehicles (AVs), also referred to as driverless cars, which were nearing completion from an R&D and testing phase. Yet many questions remained open regarding exactly how and when that transformation would occur. The case lays out key issues to consider with respect to the marketplace penetration of AVs and delineates several predictions for how things might play out. The case further describes the motivations and potential courses of action of the multiple stakeholders involved (firms, consumers, government). Students are tasked with examining the various factors that will likely impact the future success and widespread acceptance of AVs, identify potential barriers to customer adoption, describe how a number of industries will be impacted, and propose effective business-models for firms to embrace. Students should also suggest what role they believe government (local and federal) should play in regulating AVs. The case provides relevant information for conducting both qualitative and quantitative analyses.