Though celebrity influencers get lots of attention, they often don't produce sales. When Bocconi University's Maximilian Beichert and colleagues looked at the data on close to 2 million purchases and hundreds of paid influencer endorsements, they discovered that influencers with fewer than 10,000 followers delivered far better returns. In this article Beichert shares his findings along with tips on getting the best results from influencer campaigns.
In a recent study of European start-ups, one technique consistently boosted performance: the scientific method, a centuries-old discipline of formulating, testing, and tweaking hypotheses. Ventures employing it generated more revenues than those that didn't and were also more likely to pivot away from unviable ideas, a necessity for early-stage firms. The key to pivoting is focusing not on your ideas but on the answers to your experiments, which should provide insight into customer demand and industry pain points. That approach helped Osense, a start-up focused on technology for tracking carbon emissions, find its successful model. Its first idea was for peer-to-peer product rentals, and its second was for a platform for renting e-vehicles. If it hadn't applied the scientific method, "we would have ended up with a product that wasn't viable," says cofounder Cosimo Cecchini.
Twenty years ago, consultants at Bain & Company published a book that explored a dispiriting reality: Although companies spent billions of dollars a year pursuing deals, 70% of mergers and acquisitions wound up as failures. But today those odds have inverted. According to new research by Bain, over the past 20 years firms have done more than 660,000 acquisitions, worth a total of $56 trillion, with deals reaching a peak in 2021. And close to 70% of them have succeeded. Even among the roughly 30% that were less successful, many of the deals still created some value. What has changed? This article presents four explanations for the turnabout.
No one doubts ChatGPT's ability to generate lots of ideas. But are those ideas any good? A recent real-world experiment showed that teams engaged in a creative problem-solving task saw only modest gains from AI assistance for the most part-and some underperformed. Surveys conducted before and after the exercise showed that the teams using AI gained far more confidence in their problem-solving abilities than the others did, but that much of their confidence was misplaced. But don't blame the technology, says Kian Gohar, CEO of the leadership-development firm GeoLab and one of the study's authors. "Brainstorming with generative AI requires rethinking your ideation workflow and learning new skills," Gohar says. This article offers guidance for approaching the exercise as a structured, ongoing conversation, opening up a staggering capacity to develop better and more-creative ideas faster.
Family businesses are infamous for nepotism and infighting, especially when it's time to appoint a new CEO. But when global talent adviser Claudio Fernández-Aráoz and colleagues set out to help family firms improve their leadership transitions, they were surprised to find that large family businesses had much better succession practices than their nonfamily counterparts, and they outperformed on several measures after new appointees took the reins. Four practices could help other types of businesses ensure successful CEO transitions: approach succession proactively rather than in reaction to short-term performance issues, bring on a few long-term directors and empower them to lead the process, don't obsess about formal procedures but double down on rigor, and empower new leaders from day one.
Managers are struggling, with more and more varied responsibilities than ever before. A recent survey showed that 54% suffer from work-induced fatigue and stress; meanwhile, only one in two employees believes that their manager can help their team succeed. Although any solution will need multiple facets, a new study from the research and advisory firm Gartner points to an essential first step: Organizations need to put the right people into the role to begin with. But promoting on the basis of performance as individual contributors is no longer a viable tack. By letting people nominate themselves for a role, conducting a rigorous and anonymized application process, equipping potential managers for the hardest parts of the job, and letting them opt out without stigma, organizations can build a robust and diverse pipeline of people ready to step into the role whenever needed. Those new managers will be more than twice as likely as others to find the job more manageable and to lead higher-performing teams.
Economic downturns are frightening. Consumers curb spending, companies cut costs, and we all wait anxiously for the economy to recover. In such a climate, launching a product-an expensive and uncertain endeavor in the best of times-would seem to make little sense. But a new study finds that products launched during recessions outperform on several important measures. Even though people tend to limit spending during downturns, the timing may confer, for several reasons: There is less noise in the marketplace, making it easier to differentiate products and draw consumers' attention; the cost of running ads is often lower; and going ahead with new products in the midst of a weak economy is often perceived as a signal of corporate health. This article outlines other key insights from the research and offers guidance on how best to time product launches.
Researchers from the University of Missouri studied the auto insurance industry to learn more about what drives sales success. The analysis showed that experienced reps found fewer prospective customers than novices did. But that didn't necessarily hurt their overall performance, because they excelled at conversion. Advertising boosted both prospecting and conversion efficacy but was most beneficial among experienced reps. And the success of managerial levers to enhance both kinds of efficacy depended in part on reps' level of experience. In this article, the researchers offer several recommendations for sales managers looking to bolster their reps' productivity.
Even as companies devote increasing shares of their marketing budgets to paying social media influencers to tout their products, researchers know little about the tactic's effectiveness or its overall impact on influencers, their followers, and their partner brands. So, a team of researchers decided to investigate. HBS assistant professor Shunyuan Zhang and doctoral student Magie Cheng analyzed more than 85,000 influencer videos posted on YouTube from August 2019 to August 2020. Comparing similar posts with and without paid promotions, they found that putting out a sponsored video caused significant numbers of followers to doubt the influencers' authenticity and drop off. The study's findings suggest several ways for influencers and brands, along with the platforms hosting their content, to minimize the damage.
Corporate training isn't all fun and games, but maybe it should be. Most of us have (often grudgingly) used corporate learning systems. We skim through 50-slide PowerPoint decks hoping to correctly guess enough answers to pass so that we can get back to our "real work." Much of what we learn is often forgotten by the time we receive our certificate of completion. But a new study, conducted at the professional services firm KPMG, shows that gamified training done right-lessons conducted carefully and over time, incorporating elements such as progression through challenges and levels, instant feedback, points, and competition-can significantly improve employee performance.
When an established consumer-packaged-goods (CPG) company introduces a new product, it faces a potentially make-or-break decision: how to brand it. Tying it to an existing brand (as was the case for Cherry Coke and Avon Hand Lotion) is tempting. Customers are more likely to try a new product with a familiar association, and companies have to expend fewer marketing resources to launch it. But the strategy has risks, too: Weak or failed brand extensions can harm the parent company. When the maker of Coors beer introduced a nonalcoholic beverage, Coors Rocky Mountain Spring Water, customers were confused, with some wondering about the alcohol content of the beverage. Sales of both water and beer suffered, and the new product was ultimately discontinued. A new study can help companies make the right branding decision-and shows that those who do will be rewarded with higher returns.
Harvard Business Review published its first issue 100 years ago with a mission to help leaders put the best management thinking into practice. To mark our centennial, we asked eight current and former CEOs from some of the world's top companies to describe the ideas that have propelled their own careers and organizations. Stephane Bancel, the CEO of Moderna, on planning from the future back; Anish Shah, CEO of Mahindra, on purpose-driven strategy; Roz Brewer, CEO of Walgreens Boots Alliance, on listening as a leader; Nicolas Hieronimus, CEO of L'Oreal, on global vision with local execution; Joey Wat, CEO of Yum China, on continuous innovation; Mo Ibrahim, former CEO of Celtel, on inclusive capitalism; Ignacio Galan, CEO and chairman of Iberdrola, on transparent sustainability reporting; Indra Nooyi, former CEO of PepsiCo, on performance with purpose. As we at HBR look to the future, we recommit to our mission of helping leaders build a better world for customers, employees, partners, and communities.
Three strategies can help employees anywhere feel connected. Plus, one way to beat inflation, what umpires' calls reveal about our "attention budget," and more.
Corporate boards are more diverse than ever before. So why aren't firms seeing the expected results? Plus, one way to encourage consumers to upgrade, the headphone advantage, and more.