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The rate of cyber breaches at organizations in Canada is relatively low. Yet this has created a false sense of security, leading to delayed discovery and response along with other serious consequences for companies. In Canada, the average organization faces 96 targeted attacks each year, a third of which result in a security breach. And yet most Canadian companies do not have effective technology to monitor for cyberattacks. Companies also tend to focus on risks and outcomes that have not kept pace with threats. Despite hacker success, Canadian organizations are confident that they are managing cybersecurity correctly. There is still too much emphasis on compliance and passing audits conducted within the business. The following steps can help organizations deal with the high-impact cyber threats they face: 1) define cybersecurity success; 2) pressure-test security capabilities the way adversaries do; 3) protect from the inside out (e.g., limit internal access to key information); 4) make security everyone’s job; 5) lead from the top; 6) build on past lessons; and 7) invest to innovate and outmaneuver. As their digital security strategies mature and new solutions emerge, Canadian organizations that tie cybersecurity efforts to real business needs will gain a more justifiable confidence in their ability to deal with cyber threats.

Despite reviews being a widespread practice, business units still fall short of their goals. A number of organizations use the Balanced Scorecard (BSC) method, although opinions vary on its efficacy. The review process in most organizations suffers from being unfocused and uncandid and using tools for review that are not structurally defined. Reviews must primarily track and assess the relevance of a destination, the direction of progress toward the destination, and the momentum needed to reach the destination before someone else gets there. Reviews should be asking questions on an ongoing basis: What is working and what is not? What needs to be escalated, how, and by whom if intended outcomes are not manifesting? What dependencies are impeding or facilitating the outcomes needed to achieve the goals? Strong strategic reviews are those where leaders and managers have focused on five objectives: 1) assess the manager’s understanding of the measures used to evaluate progress toward a goal; 2) evaluate the manager’s acumen; 3) judge the manager’s ability to navigate market uncertainties, understand customers’ needs, and make decisions; 4) scrutinize the operational plan and the events the team must successfully manage to move toward the goal; and 5) consider the manager’s ability to utilize resources amid unforeseen contingencies.

In this Ivey Business Journal interview, the digital information technology pioneer Tom Jenkins talks to Ivey Business School Professor Gerard Seijts about profound public policy challenges being created by the digital revolution and what Canada can do to overcome them. Despite real concerns about Canadian productivity and the ability of its largest corporations to remain competitive, Canada is doing well in the digital race. But it is not thinking enough about the implications of the Fourth Industrial Revolution and has not sufficiently discussed the public policy challenges presented by an “always on” world that will continue to evolve rapidly. Significant change is coming and we need to consider it in terms of major public policy issues: productivity and innovation, infrastructure, information and security, governance and machines, talent, and education. Many professions may be eliminated within a decade because the big data analytics trend reduces the need for humans to perform deductive reasoning. The sharing economy along with autonomous vehicles could dramatically reduce our need for infrastructure investment. To support business development in the future, we must realize that digital enterprises will require “digital roads” and better Internet infrastructure. Sectors like transportation and financial services are being transformed by computer scientists, and future breakthroughs in other areas such as healthcare and education are probably also going to be driven by computer scientists.

If your company can be counted among the many that have adopted the language of “internal and external customers” as a way to improve service quality delivery, you may be doing harm to your organization. Far too many organizations promote a popular misconception: that co-workers, other business units, company task forces, branch offices, and company-owned sales and distribution channels are “internal customers.” It is indeed important to treat employees well if you want them to treat customers well, and it is generally agreed that when employees are treated with respect, they put forth more effort and get more job satisfaction. However, employees who are told that they and their fellow employees are the company’s customers—and are rewarded for satisfying co-workers’ expectations as their first priority—will assess their own efficacy by how efficient they are at serving other employees. Service to the bureaucracy becomes the benchmark of excellence. The idea of the internal customer is popular because it is easy to embrace. By comparison, the needs and wants of “external customers” and the paths to creating value for them are abstract, elusive, and difficult to quantify and satisfy. A better approach to guide employees is to adopt the adage “If you are not serving a customer directly, you’d better be serving someone who is.” Never lose sight that unless customers are more satisfied with your offering than with the alternative, they won’t be your customers for long, no matter how satisfied your employees are with the service they provide and receive from each other. Customers, not employees, decide the fate of businesses.

We live in a world of digital disruption, hyper-personalization, just-in-time marketing, and artificial intelligence. To lead in today’s environment and meet the needs of today’s consumers, businesses must take advantage of the new tools that are available. Business leaders must empower their chief marketing officers (CMOs) to take control of their firms’ disruptive growth agendas. Failing to do so risks losing customers to a new wave of disruptive competitors. In order to take control of the disruptive growth agenda, CMOs must pivot and become more data-driven to better understand their customers. If they don’t, they will lose the opportunity to change consumer behaviours and will risk being forgotten. CMOs who want to reach their potential can try three approaches: 1) align with IT; 2) leverage intelligent automation and integrate analytics capabilities; and 3) understand the complexity of the change involved. Canadian CMOs are well positioned to take control of the disruptive growth agenda and generate new value for businesses. But that positioning is futile if they do not align with the CEO—and other business functions—to effect change.

Most companies already have plenty of creativity and technology. What they don’t have is the managerial skill to convert that creativity and technology into earth-shattering innovation. So how do they harness innovation? The first step is to understand what they need—the managerial skills, abilities, and traits that enable digital innovation. We need to not only acknowledge digital innovators, but promote their role as creators of economic and social value. In this article, S. Somasegar, a former senior executive at Microsoft, and Michael Volpe, former chief marketing officer at HubSpot, discuss the ideal digital innovator’s profile. Key excerpts, arranged under six major themes, deal with what an industry expert looks for in a potential digital innovator: 1) a playful attitude toward technology; 2) agile experimentation (including the use of minimum viable products); 3) mastery of the digital domain; 4) technological innovativeness; 5) a strong online identity; and 6) reliance on an extensive social network for expertise and advice. Entrepreneurs have historically taken one of two approaches to defining IT: it’s either a necessary evil or the product itself. Today there is a third approach, one that will become the dominant path for most innovators and entrepreneurs, especially those building information products.

Thanks to new technologies and innovative new ways of doing business, established incumbents across all industries have never been more vulnerable to attack by agile challengers with relatively little capital or resources. A triad of forces favours today’s disrupters: virtualization, digitalization, and capital superabundance. The half-life of business models has been shrinking and incumbents have been disappearing at an increasingly rapid rate—swallowed up in mergers, taken over by activist investors, or broken up. However, the rise of disrupters does not fully explain the ever-shorter lifespans of incumbents. When executives were asked what they believe are the obstacles to growth, 85 per cent of the reasons cited were internal barriers. Large, long-established companies suffer from “incumbency sclerosis,” which leads to strategic rigidity and an inability to adapt. Mergers and acquisitions (M&A) constitute one prescription, but their effectiveness depends on providing a catalyst for change in the acquirer’s business model, organizational model, and culture—if the acquired company is not destroyed in the process. The cure for incumbency sclerosis more often includes M&A along with other efforts to root out complexity, simplify the company, and build flexible operating models.

Amazon Go—grocery shopping without lineups and checkouts—is the latest in Amazon’s pursuit of new shopping experiences. Scheduled to open in 2017, Amazon Go will provide Seattle customers with the opportunity to shop for groceries without standing in line and then waiting while a clerk checks out groceries item by item. Instead, with a smartphone app and advanced technology, shoppers can take their items from the shelf and “Just Walk Out.” Amazon Go is a major step for the e-commerce giant, in both pursuing brick-and-mortar retail and creating an innovative shopping experience. The absence of checkout lanes and cashiers at these stores has captured media attention, but what’s more important for e-commerce merchants is understanding Amazon’s motives for opening a retail space, which are 1) to drive growth in new markets, 2) to tap into the common desire for in-store shopping (where 90 per cent of all retail sales still occur), and 3) to achieve more powerful technical innovation, such as through the use of beacons—in-store apps that connect with the customer’s smartphone to make fine-tuned suggestions—and hyperspecialization—understanding exactly what the customer is looking for, based on past purchases.

Companies worldwide spent US$1 trillion on digital technology in 2016. Unfortunately, for many businesses, this investment is not corresponding with financial returns. While some companies excel at adopting innovative digital technologies, many are only achieving incremental business improvements. Organizations need to radically rethink their approaches and develop bold digital strategies to harness technologies and unlock new sources of growth. Only 6 per cent of companies that invested in digital managed to translate those investments into sustained financial gains. We identified these as Digital High Performers. To make the leap from Digital Leaders to Digital High Performers, Digital Leaders must master using digital to drive revenue growth and increase investor confidence. Their overemphasis on efficiency and profitability indicates that Digital Leaders might be making trade-offs they cannot afford, putting their growth potential at risk. Four strategies are critical to organizations that want to get the most out of their digital investments: 1) get immersed in new ecosystems; 2) unlock opportunities to commercialize innovative ideas; 3) move beyond purely transactional customer relationships; and 4) embrace cultural and structural shifts. Digital Leaders must continuously assess the effectiveness of their digital investments and pursue overhauls and organizational designs, even if the initial efforts are risky. Commitment to digital alone does not guarantee financial success. New, bold strategies that leverage digital technology as an enabler and a driver of change in a legacy organization are vital for companies that wish to move beyond the verge of high performance. Digital Leaders don’t need greater investment; they need greater follow-through and the courage to lead transformation with tenacity.

Though some organizations recognize that learning from failure often leads directly to innovative products, processes, and services, discussing failure is often avoided in today’s business world. Failure is not just overlooked; it is routinely covered up. And when organizations are preoccupied with error avoidance, instead of error acceptance, innovation suffers because creative processes are inherently error-prone. Organizations have a choice. Instead of fearing failure, they can create a culture that accepts it, encouraging innovation through prudent risk-taking and exploration. So, how do you create a culture that “fails well”? Firms should: 1) create a culture of experimentation and creativity; 2) encourage risk-taking from the top; 3) celebrate failures like wins; 4) stimulate creativity and experimentation; and 5) hire entrepreneurs who are eager to learn. As innovation leaders, managers and organizations need to build a culture that removes the fear of failure and directs employees to learn, avoid mistakes, and pursue innovation through failing smart (maximizing learning with the expectation that failure will occur) and failing forward (taking the next step forward in the most efficient manner possible).

Is there a place for corporate social responsibility (CSR) in effective executive compensation? This author’s research says “yes.” Compensation for CSR both helps to serve shareholder interests and is a sign of good corporate governance. The author’s research on corporate governance and executive compensation for CSR examined whether incentives for CSR in executive compensation contracts were systematically related to more (or less) shareholder-friendly corporate governance. It found consistent evidence that firms with more shareholder-friendly corporate governance were more likely to observe executive compensation contracts with incentives linked to CSR outcomes. Identifying the types of social responsibility that are important for the firm’s bottom line is the first step in determining whether compensation for CSR might improve executive compensation incentives. If the right performance metrics are chosen, CSR can be an important part of a shareholder value-maximizing executive compensation plan for many firms, where social performance can impact financial performance. Corporate boards that weigh their responsibilities to society and their fiduciary duty to their shareholders can benefit from implementing CSR incentives effectively. Stakeholders who wish to see improved social performance, and shareholders who are concerned about financial return on investment, can both equally reach their goals.

As a small-scale hospital located in the city of Faridabad in northern India, Drishti Eye Center (Drishti) had recently expanded its operations by diversifying into pharmaceutical sales. The founder and managing director of the hospital soon faced conflict among the members of his sales force when a young sales representative received a poor performance evaluation, which he viewed as unfair. In response to this situation, the salesman decided to join a union, a move that was completely unprecedented at Drishti. Facing a high-performing team that now found itself operating in a hostile environment, the hospital’s director had to decide how best to manage the conflict.

In the spring of 2016, the director of finance and administration for the Calgary Drop-In & Rehab Centre was frustrated with the organization’s legacy donor and volunteer information system. The technology platform was outdated, data integrity was out of control, costs were spiralling, and most importantly, required information was not available on demand. The director was concerned that these issues with the organization’s information systems would interfere with its ability to maintain positive relationships with existing donors and to secure new financial supporters—ultimately, that it could have an impact on the agency’s efforts to achieve more good in the community. He was contemplating three options to solve this problem: build a new in-house system to replace the current Microsoft Access database system; purchase customer relationship management software specifically developed for non-profit fundraising and relationship management and install this on personal computers and servers in the offices; or adopt a cloud-based fundraising solution, where the organization’s data would be stored on a secure, shared platform administered by the vendor.

In October 2013, future prospects for TransCanada’s pipeline project were uncertain, as the company had to find ways to establish and manage relationships with Aboriginal communities along the proposed Energy East pipeline in Canada, particularly in the province of New Brunswick. Following Supreme Court rulings that reinforced the duty to consult and accommodate, Aboriginals came to have a powerful voice in the development of energy infrastructure, creating new requirements for companies wishing to expand into areas subject to Aboriginal title and treaty claims.

In the workplace, the very mention of Millennials can strike fear into the heart of the most seasoned manager. After all, we are talking about the “me” generation of employees who feel entitled and expect their opinion to be valued above all others, while also apparently being unwilling to work as hard as their parents. But, alas, broad generalizations are wrong a great deal of the time. We recognize this, and go out of our way to reject it in most cases. But how do we apply this same sensibility to Millennials? The first step is to recognize three important principles that apply to working with any individual or group: 1) Don’t assume that you know what motivates another person based solely on knowing his or her birthdate. 2) What motivates you is not necessarily what motivates others. 3) There are only two ways to find out what motivates another individual: asking and observing. We need to take this knowledge and incorporate it into our performance management process, aligning the individual’s rewards with their objectives, and with the objectives of the team. The process is simple but not easy. The biggest barrier is the time it takes. Ultimately, it’s much more expensive to have unproductive team members, high turnover on your team, and a demotivated workforce than to invest in how you manage performance.

Gathering the evidence required to back up a corporate claim has always been important, but the case for effective evidence gathering has never been greater than today. Unfortunately, while the data that organizations ordinarily collect can be useful, it is often insufficient to answer relevant questions. In other words, the evidence required typically isn’t ready to be analyzed and often must be developed using real-world experimentation. This paper examines how businesses can perform randomized controlled trials. To help you conduct better testing for your own business, we also address three questions: What if you can’t run a randomized controlled trial in a lab? Which organizations should conduct tests? How should you conduct your testing? The potential for confusing correlation and causation only becomes greater in a world of big data. Determine if an outcome is significant by using a simple statistical test such as the T-test, and specify your required level of significance before running the test. One way to achieve the best of both worlds is to use a field experiment—an experiment run in the real world but with as many confounding influences as possible removed. Although messier than lab tests, field experiments inspire greater confidence that the results will be relevant. Whenever it is feasible to randomize what you offer your customers, you have the potential to gain a better idea of what works best. Testing can save your organization money, make your actions more effective, and improve outcomes for your customers.

In 2015, AXE, one of Unilever’s largest and most well-known personal care brands, was experiencing challenges in growing sales across its full product portfolio. Historically, AXE’s unique activations and campaigns had been successful in generating high brand awareness and, ultimately, driving sales in Canada. However, sales growth had slowed over the past three years, and the AXE team wondered whether the brand’s current messaging still resonated with consumers. The previous year, Unilever’s global consumer insights team had conducted significant research to better understand the AXE consumer. The company now needed to prepare and present a client brief to AXE’s advertising agency in preparation for a major 2016 campaign.

Cervus Equipment Corporation, the major Canadian dealer group for John Deere and Peterbilt Motors Company equipment, had grown from CA$56 million in 2004 to close to $1 billion in 2014. It had achieved these results through an aggressive acquisition and growth-oriented strategy, by purchasing heavy-equipment dealerships representing John Deere, Bobcat, and other high-end original equipment manufacturers (OEMs). The company’s move into the long-haul trucking industry, beginning with the acquisition of 16 Peterbilt truck dealerships in 2013, was timely, as the agricultural and construction sectors entered what many believed would be a prolonged downturn in its base in western Canada. However, these acquisitions and this move into the trucking industry presented significant challenges related to integration, leadership and management skills at the dealer level, OEM partner control, and the presence of established competitors that served the major vocational and fleet markets. The bottom line: Cervus Equipment required its transport division to drive profitable growth in 2016 and beyond.

In the spring of 2016, Cyklop Packaging Systems India Private Limited (Cyklop) was facing the critical situation of high employee turnover. One out of every two employees was leaving the company each month. Although most employees were leaving voluntarily, some were being asked to leave because of below-par performance. The problem was not grave for major competitors as they were able to retain most of their employees. Cyklop’s managing director, was concerned about the impact the turnover would have on relationships with key clients. He was also worried about increasing managerial and other costs. He asked the head of human resources to analyze the problem and provide an action plan for containing turnover in the service domain.

In April 2016, Canopy Growth Corporation, one of Canada’s top producers of medical cannabis, was planning a strategy for its future. The government of Canada had just announced its plans to introduce a bill to legalize recreational cannabis use in 2017, followed by a rollout of the policy in early 2018. The company’s chief executive officer needed to plan a strategy that addressed three main issues: product messaging for recreational cannabis, establishing a retail footprint in recreational cannabis, and building an international business.