Showing papers in "Harvard Business Review in 2012"

Big data: the management revolution.

Abstract: Big data, the authors write, is far more powerful than the analytics of the past. Executives can measure and therefore manage more precisely than ever before. They can make better predictions and smarter decisions. They can target more-effective interventions in areas that so far have been dominated by gut and intuition rather than by data and rigor. The differences between big data and analytics are a matter of volume, velocity, and variety: More data now cross the internet every second than were stored in the entire internet 20 years ago. Nearly real-time information makes it possible for a company to be much more agile than its competitors. And that information can come from social networks, images, sensors, the web, or other unstructured sources. The managerial challenges, however, are very real. Senior decision makers have to learn to ask the right questions and embrace evidence-based decision making. Organizations must hire scientists who can find patterns in very large data sets and translate them into useful business information. IT departments have to work hard to integrate all the relevant internal and external sources of data. The authors offer two success stories to illustrate how companies are using big data: PASSUR Aerospace enables airlines to match their actual and estimated arrival times. Sears Holdings directly analyzes its incoming store data to make promotions much more precise and faster.

Data scientist: the sexiest job of the 21st century.

Abstract: No sales force consists entirely of stars; sales staffs are usually made up mainly of solid perfomers, with smaller groups of laggards and rainmakers. Though most compensation plans approach these three groups as if they were the same, research shows that each is motivated by something different. By accounting for those differences in their incentive programs, companies can coax better performance from all their salespeople. As the largest cadre, core performers typically represent the greatest opportunity, but they're often ignored by incentive plans. Contests with prizes that vary in nature and value (and don't all go to stars) will inspire them to ramp up their efforts, and tiered targets will guide them up the performance curve. Laggards need quarterly bonuses to stay on track; when they have only annual bonuses, their revenues will drop 10%, studies show. This group is also motivated by social pressure-especially from new talent on the sales bench. Stars tend to get the most attention in comp plans, but companies often go astray by capping their commissions to control costs. If firms instead remove commission ceilings and pay extra for overachievement, they'll see the sales needle really jump. The key is to treat sales compensation not as an expense to rein in but as a portfolio of investments to manage. Companies that do this will be rewarded with much higher returns.

Making advanced analytics work for you.

Abstract: Senior leaders who write off the move toward big data as a lot of big talk are making, well, a big mistake. So argue McKinsey's Barton and Court, who worked with dozens of companies to figure out how to translate advanced analytics into nuts-and-bolts practices that affect daily operations on the front lines. The authors offer a useful guide for leaders and managers who want to take a deliberative approach to big data-but who also want to get started now. First, companies must identify the right data for their business, seek to acquire the information creatively from diverse sources, and secure the necessary IT support. Second, they need to build analytics models that are tightly focused on improving performance, making the models only as complex as business goals demand. Third, and most important, companies must transform their capabilities and culture so that the analytical results can be implemented from the C-suite to the front lines. That means developing simple tools that everyone in the organization can understand and teaching people why the data really matter. Embracing big data is as much about changing mind-sets as it is about crunching numbers. Executed with the right care and flexibility, this cultural shift could have payoffs that are, well, bigger than you expect.

Creating sustainable performance.

Abstract: What makes for sustainable individual and organizational performance? Employees who are thriving-not just satisfied and productive but also engaged in creating the future. The authors found that people who fit this description demonstrated 16% better overall performance, 125% less burnout, 32% more commitment to the organization, and 46% more job satisfaction than their peers. Thriving has two components: vitality, or the sense of being alive and excited, and learning, or the growth that comes from gaining knowledge and skills. Some people naturally build vitality and learning into their jobs, but most employees are influenced by their environment. Four mechanisms, none of which requires heroic effort or major resources, create the conditions for thriving: providing decision-making discretion, sharing information about the organization and its strategy, minimizing incivility, and offering performance feedback. Organizations such as Alaska Airlines, Zingerman's, Quicken Loans, and Caiman Consulting have found that helping people grow and remain energized at work is valiant on its own merits-but it can also boost performance in a sustainable way.

Leadership is a conversation.

Abstract: Globalization and new technologies have sharply reduced the efficacy of command-and-control management and its accompanying forms of corporate communication. In the course of a recent research project, the authors concluded that by talking with employees, rather than simply issuing orders, leaders can promote operational flexibility, employee engagement, and tight strategic alignment. Groysberg and Slind have identified four elements of organizational conversation that reflect the essential attributes of interpersonal conversation: intimacy, interactivity, inclusion, and intentionality. Intimacy shifts the focus from a top-down distribution of information to a bottom-up exchange of ideas. Organizational conversation is less corporate in tone and more casual. And it's less about issuing and taking orders than about asking and answering questions. Interactivity entails shunning the simplicity of monologue and embracing the unpredictable vitality of dialogue. Traditional one-way media-print and broadcast, in particular-give way to social media buttressed by social thinking. Inclusion turns employees into full-fledged conversation partners, entitling them to provide their own ideas, often on company channels. They can create content and act as brand ambassadors, thought leaders, and storytellers. Intentionality enables leaders and employees to derive strategically relevant action from the push and pull of discussion and debate.

The real leadership lessons of Steve Jobs.

Abstract: The author, whose biography of Steve Jobs was an instant best seller after the Apple CEO's death in October 2011, sets out here to correct what he perceives as an undue fixation by many commentators on the rough edges of Jobs's personality. That personality was integral to his way of doing business, Isaacson writes, but the real lessons from Steve Jobs come from what he actually accomplished. He built the world's most valuable company, and along the way he helped to transform a number of industries: personal computing, animated movies, music, phones, tablet computing, retail stores, and digital publishing. In this essay Isaacson describes the 14 imperatives behind Jobs's approach: focus; simplify; take responsibility end to end; when behind, leapfrog; put products before profits; don't be a slave to focus groups; bend reality; impute; push for perfection; know both the big picture and the details; tolerate only "A" players; engage face-to-face; combine the humanities with the sciences; and "stay hungry, stay foolish."

What You Can Learn From Family Business

Abstract: Though the term "family business" may call to mind visions of local mom-and-pop firms, family-controlled companies play a huge role on the global stage. Not only do they include sprawling corporations like Walmart and Tata Group, but they account for more than 30% of all companies with sales in excess of $1 billion. And over the long term, their financial performance exceeds that of traditional public companies, according to a new study by BCG and Ecole Polytechnique. Family-controlled companies surpass their peers because they focus on resilience, not short-term results. During economic booms, this approach leads them to forgo some opportunities (and hence do slightly worse than their counterparts), but it puts them in a position of strength during downturns, when they shine. The researchers identified seven specific ways in which family-run businesses build their resilience: 1. They're frugal in good times and bad. 2. They set a high bar for capital expenditures. 3. They carry little debt. 4. They acquire fewer (and smaller) companies. 5. They're more diversified. 6. They're more international. 7. They retain talent better than their competitors do. Though these practices come more naturally to executives who feel an obligation to be stewards for the next generation, executives at any corporation can adopt them. Indeed, the researchers uncovered a number of nonfamily-controlled companies that mimicked the behaviors of family firms and saw very similar patterns of performance.

Cultural change that sticks.

Abstract: When a major change initiative runs aground, leaders often blame their company's culture for pushing it off course. They try to forge ahead by overhauling the culture--a tactic that tends to fizzle, fail, or backfire. Most cultures are too well entrenched to be jettisoned. The secret is to stop fighting your culture--and to work with and within it, until it evolves in the right direction. Today's best-performing companies, such as Southwest Airlines, Apple, and the Four Seasons, understand this, say the authors, three consultants from Booz & Company. These organizations follow five principles for making the most of their cultures: 1. Match strategy to culture. Culture trumps strategy every time, no matter how brilliant the plan, so the two need to be in alignment. 2. Focus on a few critical shifts in behavior. Wholesale change is hard; choose your battles wisely. 3. Honor the strengths of the existing culture. Every culture is the product of good intentions and has strengths; put them to use. 4. Integrate formal and informal interventions. Don't just implement new rules and processes; identify "influencers" who can bring other employees along. 5. Measure and monitor cultural evolution. Otherwise you can't identify backsliding or correct course. When the leaders of Aetna applied these rules while implementing a new strategy in the early 2000s, they reinvigorated the company's ailing culture and restored employee pride. That shift was reflected in the business results, as Aetna went from a $300 million loss to a $1.7 billion gain.

Reclaim your creative confidence.

Abstract: Most people are born creative. But over time, a lot of us learn to stifle those impulses. We become warier of judgment, more cautious more analytical. The world seems to divide into "creatives" and "noncreatives," and too many people resign themselves to the latter category. And yet we know that creativity is essential to success in any discipline or industry. The good news, according to authors Tom Kelley and David Kelley of IDEO, is that we all can rediscover our creative confidence. The trick is to overcome the four big fears that hold most of us back: fear of the messy unknown, fear of judgment, fear of the first step, and fear of losing control. The authors use an approach based on the work of psychologist Albert Bandura in helping patients get over their snake phobias: You break challenges down into small steps and then build confidence by succeeding on one after another. Creativity is something you practice, say the authors, not just a talent you are born with.

Your company's history as a leadership tool.

Abstract: When the history of an organization comes up, it's usually in connection with an anniversary--just part of the "balloons and fireworks" (as one business leader characterized his company's bicentennial celebration, knowing that the investment of time and money would have little staying power). A fast-changing world leaves little time for nostalgia and irrelevant details--or, worse, strategies for winning the last war. But the authors, business historians at the Winthrop Group, assert that leaders with no patience for history are missing a vital truth: A sophisticated understanding of the past is one of the most powerful tools they have for shaping the future. The job of leaders, most would agree, is to inspire collective efforts and devise smart strategies for the future. History can be profitably employed on both fronts. As a leader strives to get people working together productively, communicating the history of the enterprise can instill a sense of identity and purpose and suggest the goals that will resonate. In its most familiar form, as a narrative about the past, history is a rich explanatory tool with which executives can make a case for change and motivate people to overcome challenges. Taken to a higher level, it also serves as a potent problem-solving tool, one that offers pragmatic insights, valid generalizations, and meaningful perspectives--a way to cut through management fads and the noise of the moment to what really matters.

Why "good jobs" are good for retailers.

Abstract: Too many retail managers believe that they must offer bad jobs to keep prices low. As a result, almost one-fifth of American workers suffer low wages, poor benefits, constantly changing schedules, and few opportunitie for advancement. The author's research reveals, however, that the presumed trade-off between investment in employees and low prices is false. To meet short-term performance targets, many retailers cut labor. The unmotivated and poorly trained employees who remain often cannot keep up with their tasks in a complex operating environment. The result is a vicious cycle, in which lower sales and profits tempt managers to cut even more employees. Retailers such as QuikTrip, Mercadona, Trader Joe's, and Costco instead create a virtuous cycle of investment in employees, stellar operational execution, higher sales and profits, and larger labor budgets. They also make work more efficient and fulfilling for employees, improve customer service, and boost sales and profits through four practices: simplify operations by offering fewer products and promotions, train employees to perform multiple tasks, eliminate waste in everything but staffing, and let employees make some decisions.

Bringing science to the art of strategy.

Abstract: Many managers feel doomed to trade off the futile rigor of ordinary strategic planning for the hit-or-miss creativity of the alternatives. In fact, the two can be reconciled to produce novel but realistic strategies. The key is to recognize that conventional strategic planning, for all its analysis, is not actually scientific-it lacks the careful generation and testing of hypotheses that are at the heart of the scientific method. The authors outline a strategy-making process that combines rigor and creativity. A team begins by formulating options, or possibilities, and asks what must be true for each to succeed. Once it has listed all the conditions, it assesses their likelihood and thereby identifies the barriers to each choice. The team then tests the key barrier conditions to see which hold true. From here, choosing a strategy is simple: The group need only review the test results and choose the possibility with the fewest serious barriers. This is the path P&G took in the late 1990s, when it was looking to become a major global player in skin care. After testing the barrier conditions for several possibilities, it opted for a bold strategy that might never have surfaced in the traditional process: reinventing Olay as a prestigelike product also sold to mass consumers. The new Olay succeeded beyond expectations-showing what can happen when teams shift from asking "What is the right answer" and focus instead on figuring out "What are the right questions?".

The science behind the smile. Interview by Gardiner Morse.

Abstract: More and more companies recognize that their dispersed, global operations are a treasure trove of ideas and capabilities for innovation. But it's proving harder than expected to unearth those ideas or exploit those capabilities. Part of the problem is that companies manage global innovation the same way they manage traditional, single-location projects. Single-location projects draw on a large reservoir of tacit knowledge, shared context, and trust that global projects lack. The management challenge, therefore, is to replicate the positive aspects of colocation while harnessing the opportunities of dispersion. In this article, Insead's Wilson and Doz draw on research into global strategy and innovation to present a set of guidelines for setting up and managing global innovation. They explore in detail the challenges that make global projects inherently different and show how these can be overcome by applying superior project management skills across teams, fostering a strong collaborative culture, and using a robust array of communications tools.

The Darwinian workplace.

Abstract: Its Own Silicon Valley Human genomics won’t reach its full potential until it has a sizable industry cluster. But how to create one? And where? by Fariborz Ghadar, John Sviokla, and Dietrich A. Stephan FIRST Sometime soon, in some location on Planet Earth, an assortment of companies, research institutions, entrepreneurs, and scientists will cluster together in an industrial ecosystem. Their goal: to exploit the rapid discoveries about the human genome—the DNA template that drives the development of a person’s biological functions. This new Silicon Valley will give rise to radical new ways of diagnosing and treating disease. With skillful management and luck, it will dominate the eld of genomics for many years, bringing jobs and prestige to the area that hosts it. But where will this ecosystem arise? The United States, the UK, and Canada are all well positioned to stake a claim. At this point it’s anyone’s guess as to which will prevail—or whether another player will come to the fore. We do know that the window of opportunity won’t remain open long and that as soon as one country or region makes a move, others will be at a serious disadvantage. The U.S. has a good start: It is creating a vast database of genetic information on military veterans . But more work is needed to turn that database into an e ective tool for diagnosis and treatment and an enduring wellspring of innovation.

The history of happiness.

Abstract: In the 18th century, the Enlightenment ushered in the notion that happiness was the attainment of a worthy life. Since then the pursuit of happiness has spread to every aspect of behavior, from religion and politics to work and parenting. Today the happiness imperative creates pressures that, paradoxically, can make us miserable. Sadness is often mistaken for a pathology. Understanding the cultural commitment to good cheer as an artifact of modern history, not as an inherent feature of the human condition, opens new opportunities for understanding key facets of our social and personal experience.

Does management really work

Abstract: HBR's 90th anniversary is a sensible time to revisit a basic question: Are organizations more likely to succeed if they adopt good management practices? The answer may seem obvious to most HBR readers, but these three economists cast their net much wider than that. In a decade long study of thousands of organizations in 20 countries, they and their interview team assessed how well manufacturers, schools, and hospitals adhere to three management basics: targets, incentives, and monitoring.They found that huge numbers of companies follow none of those fundamentals, that adopting the basics yields big improvements in outcomes such as productivity and longevity, and that good nuts-and-bolts management at individual firms shapes national performance. At 14 textile manufacturers in India, for example, an intervention-involving free, high-quality advice from a consultant who was on-site half-time for five months-cut defects by half, reduced inventory by 20%, and raised output by 10%. A control group saw no such gains.The authors' global data set suggests that implementing good management at schools and hospitals yields change more slowly than at manufacturers-but it does come eventually. And the macroeconomic potential-for incomes, productivity, and delivery of critically needed services-is huge. A call for "better management" may sound prosaic, but given the global payoffs,it's actually quite radical.

The CEO of Anglo American on getting serious about safety.

Abstract: When Carroll became the EO of Anglo American, in 2007, the company had suffered 200 worker fatalities over the previous five years. Some company veterans insisted that deaths were inevitable at such a large mining company, given the dangerous nature of the business. Carroll fundamentally rejected that assumption. She undertook a tour of operations in Australia, Chile, Colombia, Venezuela, and South Africa. The platinum business in South Africa had the worst track record in terms of safety, and Carroll was troubled by her conversations with its local managers. Immediately after her visit, another worker died. That was it. She ordered the world's largest platinum mine, which employed 30,000 people, to be shut down immediately. Intensive retraining began, and 3,000 leaders and 12,000 line managers, supervisors, and frontline employees have been through the program since 2008. Carroll also initiated the Tripartite Alliance, a collaboration with the South African Department of Mineral Resources and the National Union of Mineworkers, to study global best practices in safety and make recommendations. By 2011 she had reduced fatalities at Anglo American by 62% and had cut time lost owing to injuries by half.

The management century.

Abstract: In 1886, addressing the nascent American Society of Mechanical Engineers, Henry R. Towne proposed that "the management of works" be considered a modern art--thereby heralding the Management Century, when management as we know it came into being and shaped the world in which we work. Kiechel, a past editorial director of Harvard Business Publishing, elucidates the three eras that punctuate this period: the years leading up to World War II, during which scientific exactitude gave wings to a new managerial elite; the early postwar decades, managerialism's apogee of self-confidence and a time when wartime principles of strategy were adapted, sometimes ruthlessly, to the running of companies; and the 1980s to the present, years that saw fast-moving changes, disequilibrium, and a servitude to market forces but also ushered in globalism, unprecedented innovation, and heightened expectations about how workers are to be treated. Along the way he examines the contributions of thinkers such as Frederick Taylor, Elton Mayo, Peter Drucker, and Michael Porter. What lies ahead? Perhaps the biggest challenge facing the 21st-century company, Kiechel posits, is to truly free the spark of human imagination from the organization's tidal pull toward the status quo. There's almost always a better way, he concludes--and management will continue to seek it.

Leadership development in the age of the algorithm.

Abstract: By now we expect personalized content--it's routinely served up by online retailers and news services, for example. But the typical leadership development program still takes a formulaic, one-size-fits-all approach. And it rarely happens that an excellent technique can be effectively transferred from one leader to all others. Someone trying to adopt a practice from a leader with a different style usually seems stilted and off--a Franken-leader. Breakthrough work at Hilton Hotels and other organizations shows how companies can use an algorithmic model to deliver training tips uniquely suited to each individual's style. It's a five-step process: First, a company must choose a tool with which to identify each person's leadership type. Second, it should assess its best leaders, and third, it should interview them about their techniques. Fourth, it should use its algorithmic model to feed tips drawn from those techniques to developing leaders of the same type. And fifth, it should make the system dynamically intelligent, with user reactions sharpening the content and targeting of tips. The power of this kind of system--highly customized, based on peer-to-peer sharing, and continually evolving--will soon overturn the generic model of leadership development. And such systems will inevitably break through any one organization, until somewhere in the cloud the best leadership tips from all over are gathered, sorted, and distributed according to which ones suit which people best.

Learning charisma. Transform yourself into the person others want to follow.

Abstract: Many believe that charisma, the ability to captivate and inspire an audience, is innate But through research in the laboratory and in the field, the authors, who all work at the University of Lausanne, have identified 2 tactics that help managers become more influential, trustworthy, and "leaderlike" in the eyes of others Great orators and politicians employ these techniques instinctively, but anyone can learn how to use them Nine of the tactics are verbal: metaphors, similes, and analogies; stories and anecdotes; contrasts; rhetorical questions; expressions of moral conviction; reflections of the group's sentiments; three-part lists; the setting of high goals; and conveying confidence that they can be achieved Three are nonverbal: animated voice, facial expressions, and gestures Though there are other tactics that leaders can use--repetition, humor, talking about sacrifice-the 12 singled out by the authors have the greatest effect and can work in almost any context And the research shows that they also have a larger impact than strong presentation skills and speech structure This article explores the 12 tactics in detail, providing examples from business and politics, and offers guidance on how to start implementing them A manager's goal should be to incorporate them not only into public speaking but also into everyday interactions They work because they help you create an emotional connection with your audience, even as they make you appear more powerful, competent, and worthy of respect People who use them effectively will be able to unite their followers around a vision in a way that others can't And in the authors' study, executives who practiced them saw the leadership scores that their audience gave them rise by about 60%

You'll feel less rushed if you give time away.

Abstract: The research: In a battery of studies, Wharton’s Cassie Mogilner assigned some subjects to help another person—by writing a note to a sick child, for example, or editing a student’s essay—and instructed another group of subjects to do something else. In one study the other group wasted time by counting the letter e’s in Latin text, in a second study they did something for themselves, and in a third they simply left the academic lab early. In each experiment the people who lent a hand to others felt as if they had more time than the people who did not. 12:26

How managers become leaders. The seven seismic shifts of perspective and responsibility.

Abstract: Few managerial transitions are more difficult than making the move from leading a function to leading an entire enterprise for the first time. The scope and complexity of the job increase dramatically, in ways that can leave executives feeling overwhelmed and uncertain. It truly is different at the top. But how, exactly? Career transition expert Michael Watkins set out to explore that question in an extensive series of interviews with leadership mentors, HR professionals, and newly minted unit heads. What he found was that at this turning point, executives must navigate a tricky set of changes in their leadership focus and skills. Watkins calls these the seven seismic shifts. New enterprise leaders must move from being a specialist to a generalist; from analyzing data to integrating knowledge from multiple sources; and from implementing tactics to developing strategies. They also need to transform themselves from bricklayers into organizational architects; from problem solvers into agenda setters; and from warriors intent on beating the competition into diplomats who engage with a full range of stakeholders. Finally, leaders must move out from the wings and get used to living on center stage in the full spotlight. To make the transition, managers have to acquire new capabilities quickly. And though what got them to the top may no longer be enough, there are steps that they and their organizations can take to prepare them to succeed.