Showing papers in "Harvard Business Review in 2013"

Why the Lean Start-Up Changes Everything

Abstract: In the past few years, a new methodology for launching companies, called "the lean start-up," has begun to replace the old regimen. Traditionally, a venture's founders would write a business plan, complete with a five-year forecast, use it to raise money, and then go into "stealth mode" to develop their offerings, all without getting much feedback from the people they intended to sell to. Lean start-ups, in contrast, begin by searching for a business model. They test, revise, and discard hypotheses, continually gathering customer feedback and rapidly iterating on and reengineering their products. This strategy greatly reduces the chances that start-ups will spend a lot of time and money launching products that no one actually will pay for. Blank, a consulting associate professor at Stanford, is one of the architects of the lean start-up movement and has seen this approach help businesses get off the ground quickly and successfully. He believes that if it's widely adopted, it would reduce the incidence of start-up failure. In combination with other trends, such as open source software and the democratization of venture financing, it could ignite a new, more entrepreneurial economy. There are numerous indicators that the approach is catching on: Business schools and universities are incorporating lean start-up principles into their curricula. Even more interesting, large companies like GE are applying them to internal innovation initiatives. INSET: Idea in Brief.

Using the crowd as an innovation partner.

Abstract: From Apple to Merck to Wikipedia, more and more organizations are turning to crowds for help in solving their most vexing innovation and research questions, but managers remain understandably cautious. It seems risky and even unnatural to push problems out to vast groups of strangers distributed around the world, particularly for companies built on a history of internal innovation. How can intellectual property be protected? How can a crowd-sourced solution be integrated into corporate operations? What about the costs? These concerns are all reasonable, the authors write, but excluding crowdsourcing from the corporate innovation tool kit means losing an opportunity. After a decade of study, they have identified when crowds tend to outperform internal organizations (or not). They outline four ways to tap into crowd-powered problem solving--contests, collaborative communities, complementors, and labor markets--and offer a system for picking the best one in a given situation. Contests, for example, are suited to highly challenging technical, analytical, and scientific problems; design problems; and creative or aesthetic projects. They are akin to running a series of independent experiments that generate multiple solutions--and if those solutions cluster at some extreme, a company can gain insight into where a problem's "technical frontier" lies. (Internal R&D may generate far less information.)

The performance frontier: innovating for a sustainable strategy.

Abstract: A mishmash of sustainability tactics does not add up to a sustainable strategy. Too often, companies launch sustainability programs with the hope that they'll be financially rewarded for doing good, even when those programs aren't relevant to their strategy and operations. They fail to understand the trade-offs between financial performance and performance on environmental, social, and governance (ESG) issues. Improving one typically comes at a cost to the other. But it doesn't have to be this way. It's possible to simultaneously boost both financial and ESG performance-if you focus strategically on issues that are the most "material" to shareholder value, and you develop major innovations in products, processes, and business models that prioritize those concerns. Maps being developed by the Sustainability Accounting Standards Board, which rank the materiality of 43 issues for 88 industries, can provide valuable guidance. And broad initiatives undertaken by three companies-Natura, Dow Chemical, and CLP Group-demonstrate the kind of innovations that will push performance into new territory. Communicating the benefits to stakeholders is also critical, which is why integrated reports, which combine financial and ESG reporting, are now gaining in popularity.

The price of incivility

Abstract: We've all heard of (or experienced) the "boss from hell." But that's just one form that incivility in the workplace can take. Rudeness on the job is surprisingly common, and it's on the rise. Whether it involves overt bullying or subtle acts of thoughtlessness, incivility takes a toll. It erodes productivity, chips away at morale, leads employees to quit, and damages customer relationships. Dealing with its aftermath can soak up weeks of managerial attention and time. Over the past 14 years the authors have conducted interviews with and collected data from more than 14,000 people throughout the United States and Canada in order to track the prevalence, types, causes, costs, and cures of incivility at work. They suggest several steps leaders can take to counter rudeness. Managers should start with themselves-monitoring their own behavior, asking for feedback on it, and making sure that their actions are a model for others. When it comes to managing the organization, leaders should hire with civility in mind, teach it on the job, create group norms, reward good behavior, and penalize bad behavior. Lest consistent civility seem an extravagance, the authors caution that just one habitually offensive employee critically positioned in an organization can cost millions in Lost employees, lost customers, and lost productivity.

The Hidden Biases in Big Data

Abstract: This looks to be the year that we reach peak big data hype. From wildly popular big data conferences to columns in major newspapers, the business and science worlds are focused on how large datasets can give insight on previously intractable challenges. The hype becomes problematic when it leads to what I call “data fundamentalism,” the notion that correlation always indicates causation, and that massive data sets and predictive analytics always reflect objective truth. Former Wired editor-in-chief Chris Anderson embraced this idea in his comment, “with enough data, the numbers speak for themselves.” But can big data really deliver on that promise? Can numbers actually speak for themselves?

The third wave of virtual work

Abstract: In three major waves of change over the past 30 years, employers and workers have converged on new arrangements for getting knowledge work done. First, home computers and e-mail spawned an army of freelancers, offering both workers and employers new flexibility. Next, mobile technology and global teamwork gave the same kind of work-anywhere, work-anytime flexibility to full-time employees, without asking them to forsake career progress and development within their companies. Now, in a third wave, new ways of providing community and shared space are curing a side effect of virtualization- worker isolation-and driving increased collaboration. The authors write that to make the most of this third wave of change, employers should rethink the compact they forge with workers. Five fundamental aspects of knowledge work require fresh thinking: the value of the relationship with a larger enterprise; the settings in which work is done; the organization of workflows and how individual contributors add value; the technologies used to support higher achievement; and the degree to which employment arrangements are tailored to individuals. The three waves of transformation surge forward at differing velocities across sectors and geographies and mix together in societies. Understanding how your business participates in each wave will help you make wise decisions about technology, work models, talent sources, and people practices.

In the company of givers and takers.

Abstract: Employees make decisions every day about whether to contribute to others-and their willingness to help is crucial to group and organizational effectiveness. But in a competitive, often zero-sum, world of work, generosity can be a dangerous path. How can leaders foster it without cutting into productivity, undermining fairness, and allowing employees to become doormats? The key, explains Wharton's Adam Grant, is to help givers reach a more nuanced understanding of what generosity is and is not. They'll be better positioned for sustainable giving when they can distinguish generosity from three attributes that often travel with it: timidity, availability, and empathy. Givers can overcome timidity, Grant says, by learning to act as agents-using "relational accounts" to advocate for others while negotiating for themselves. They can set boundaries on when, how, and whom to help. And they can strive to be perspective takers, not just empathizers, gathering knowledge about others that can lead to more productive allocations of time that will benefit the organization as a whole.

The network secrets of great change agents.

Abstract: Change is hard, especially in a large organization. Yet some leaders succeed--often spectacularly--at transforming their workplaces. what makes them able to exert this sort of influence when the vast majority can't? The authors tracked 68 change initiatives in the UK's National Health Service, an organization whose size, complexity, and tradition can make reform difficult. They discovered several predictors of change agents' success--all of which emphasize the importance of networks of personal relationships: Change agents who were central in the organization's informal network had a clear advantage, regardless of their position in the formal hierarchy. People who bridged disconnected groups or individuals were more effective at implementing dramatic reforms. The resisters in their networks did not necessarily know one another and so were unlikely to form a coalition. Change agents with cohesive networks, in which all individuals were connected, were better at instituting minor changes. Their contacts rallied around the initiative and helped convince others of its importance. Being close to people who were ambivalent about a change was always beneficial. In the end, fence-sitters were reluctant to disappoint a friend. But close relationships with resisters were a double-edged sword: Such ties helped push through minor initiatives but were a hindrance when attempting major change.

Strategic leadership: the essential skills.

Abstract: The more uncertain your environment, the greater the opportunity--if you have the leadership skills to capitalize on it. Research at the Wharton school and at the authors' consulting firm, involving more than 20,000 executives to date, has identified six skills that, when mastered and used in concert, allow leaders to think strategically and navigate the unknown effectively. They are the abilities to anticipate, challenge, interpret, decide, align, and learn. This article describes the six skills in detail and includes a self-assessment that will enable you to identify the ones that most need your attention. The authors have found that strength in one skill cannot easily compensate for a deficit in another. An adaptive strategic leader has learned to apply all six at once.

Smarter information, Smarter Consumers

Abstract: A potent mix of modern technology and new government policy is about to transform disclosure-and with it the workings of many parts of the economy, say Richard Thaler of the University of Chicago and Will Tucker of ideas42. Increasingly, government-owned data and private-company disclosures will be made available in machine-readable formats, spurring growth of new services the authors call "choice engines"-technologies that interpret this data. Choice engines have already made significant inroads in revolutionizing markets. Consider the travel industry and websites such as Expedia and Travelocity that allow customers to bypass travel agents and quickly search for and purchase flights and hotels. And travel sites are just the beginning. Not sure whether you should buy a laptop now or wait until prices drop? Go to Decide.com. Worried that an unwanted subscription will automatically renew? Sign up for BillGuard, a service that monitors your bank and credit card statements and sends you alerts about recurring charges. Want to lower your household energy consumption? Check out your personal usage patterns through the industry-led Green Button initiative. Have a family member allergic to gluten? Get a choice engine to use your shopping history to analyze food purchases and highlight items to avoid. If this sounds too good-or scary-to be true, look at the history of GPS, the now ubiquitous global positioning system. When the U.S. government ordered the military to stop scrambling select data from Department of Defense satellites, in 2000, making the data freely available to the public, entrepreneurs quickly took over. GPS innovation has been a disaster for companies that sell maps on paper, but for consumers and the economy as a whole, it's been a boon. According to recent estimates, GPS added $90 billion in value to the U.S. economy just in 2011. The rise of choice engines, say the authors, will have an even greater, more transformative effect on the economy and on consumers' lives.

Living in the futures

Abstract: In 1965, a time when quantitative, computer-driven planning was very much in vogue, Royal Dutch Shell started experimenting with a different way of looking into the future: scenario planning. Shell's practice has now survived for almost half a century and has had a huge influence on how businesses, governments, and other organizations think about and plan for the future. The authors interviewed almost every living veteran of the Shell scenario planning operation, along with top Shell executives through the years. They identify several principles that both define the process at Shell and help explain how it has survived and thrived for so long. For instance, Shell scenarios are stories, not predictions, and are designed to help break the habit, ingrained in most corporate planning, of assuming that the future will look much like the present. They must above all be plausible, with a logical story line, in order to encourage intuition and judgment. They create a safe space for dialogue and for acknowledging uncertainty. They must also be relevant, not simply disruptive and challenging. And they need some quantification to be credible-but the numbers must flow from the stories, rather than the other way around. Otherwise, there's always the danger that quantitative models will hide assumptions and constrain thinking rather than refine it. Because scenarios follow a rhythm distinct from the annual strategy cycle, they allow an organization to see realities that would otherwise be overlooked. INSET: Idea in Brief.

Why IT Fumbles Analytics

Abstract: As managers seek to exploit the tremendous amounts of data now available from internal and external sources, they're likely to use the approach they use with all their IT projects-that is, they'll focus on building and deploying technology on time, to plan, and within budget. That works for projects designed to improve business processes and increase efficiency, but when it comes to extracting valuable insights from data and using information to make better decisions, managers need a different approach and mind-set. A big data or analytics project is likely to be smaller and shorter than a conventional IT initiative, such as installing an ERP system. It's also more like scientific research. Commissioned to address a problem or opportunity, such a project frames questions, develops hypotheses, and then experiments to gain knowledge and understanding. The authors have identified five guidelines for taking this voyage of discovery: � Place users-the people who will create meaning from the information-at the heart of the initiative. � Unlock value from IT by asking second-order questions and giving teams the freedom to reframe business problems. � Equip teams with cognitive and behavioral scientists, who understand how people perceive problems and analyze data. � Focus on learning by facilitating information sharing, examining assumptions, and striving to understand cause and effect. � Worry more about solving business problems than about deploying technology.

Dysfunction in the Boardroom

Abstract: While several countries have passed legislation requiring boards to meet certain thresholds for female membership and others are considering such mandates, quotas remain a contentious and controversial subject. A central question is whether they have an overall positive or negative effect on board and company performance and under what conditions. The fact is, we do not yet truly know the effects of quotas. What we do know is that many myths and misconceptions infuse the debate, and more in-depth research is critically needed.

3-d printing will change the world

Abstract: The article presents the author's views regarding the effects of three-dimensional (3-D) printing as a disruptive technology. Topics include the social impact of 3-D printers on local manufacturing and household-level production; the effects of 3-D printing on the manufacturing industry in China; and changes to business strategy and supply chains as 3-D printing becomes more available.

Do you play to win--or to not lose?

Abstract: Some personality assessment tools are good at identifying what you like to do, but they tell you very little about whether you're good at it or how to improve if you're not. Fortunately, one way of grouping people into types is based on an attribute that does predict performance: promotion focus or prevention focus. Promotion-focused people see their goals as creating a path to advancement; they are comfortable taking chances, like to work quickly, dream big, and think creatively. Prevention-focused people see their goals as responsibilities; they are vigilant, risk-averse, thorough, and accurate, and like to maintain the status quo. Motivational focus affects how we approach life's challenges. It affects what we pay attention to, what we value, and how we feel when we succeed or fail. Once you know your focus, you can choose role models, frame goals, seek or give feedback, and provide incentives that will strengthen your motivation or your team's. This article details how you can create motivational fit, which enhances and sustains both the eagerness of the promotion-minded and the vigilance of the prevention-minded.

Making Sustainability Profitable

Abstract: Emerging economies are often thought of as environmental laggards; they're perceived to be focused more on addressing poverty than on protecting the planet. But when the Boston Consulting Group and the World Economic Forum went looking for the best sustainable business practices in the developing world, their researchers uncovered many visionary enterprises that defied that stereotype. These organizations show that in markets where resource depletion is most keenly felt, conservation efforts can be a wellspring of innovation-and a source of competitive advantage. Some of these enterprises pursue sustainability out of pragmatism; some out of idealism. But all have consistently generated above- average (and in some cases, astounding) growth rates and profit margins. They've achieved them by following one or more of three general approaches: (i) taking a long view and investing in initially more-expensive sustainable operating methods that eventually lead to dramatically lower costs and higher yields; (2) bootstrapping-making small adjustments that generate big savings, which then fund purchases of advanced technologies; and (3) extending their sustainability efforts to the operations of their customers and suppliers (and in the process, devising new business models). Collectively, these companies demonstrate that there need be no trade-off between sustainability and financial performance. Rather, the pursuit of sustainability can be a powerful path to reinvention for all. HBR Reprint R13O3K.

For Mobile Devices, Think Apps, Not Ads. (cover story)

Abstract: Many companies envision mobile ads becoming an integral part of their communications strategies. But there's a growing consensus that ads don't work on mobile devices; consumers just don't like them. Instead of creating tiny banner ads, smart marketers will turn to apps to reach customers and engage them. Effective apps will do one of the following: Add convenience. Banking apps, for example, let people pay their bills online, and airline apps let them check in and monitor the status of their flights. Offer unique value. In South Korea, commuters can use an app to order groceries while waiting for their trains. Provide social value. Apps on Facebook and other sites let users send gifts to their friends. Offer Incentives. Apps that give away mobile minutes, for instance, can entice customers. Entertain. Red Bull and other companies have devised popular games focused on their brands. "Mobile advertising" is often a hollow phrase, but mobile apps can enable marketers to communicate with consumers in a format that enhances their lives and offers long- term value. HBR Reprint R13O3D INSETS: Idea in Brief;Why Mobile Ads Don't Work.

Do You Really Want to Be an eBay

Abstract: Lured by the success of marketplaces such as eBay, many companies have tried operating as multisided platforms, which let buyers and sellers transact directly with one another. But resellers-which acquire and then resell products and services-often fare better. To determine the right position on the continuum between pure reseller and pure multisided platform, companies must consider four factors: Scale effects. Amazon draws on its formidable scale economies as a reseller for high-demand items but serves as a multisided platform for low-demand products. Aggregation effects. Resellers can extract value from buyers by bundling products and exploiting complementary relationships between them, as Apple has with its iTunes-iPod combination. The buyer and seller experiences. As Zappos realized in its early days as a multisided platform, some buyers do not want to deal with multiple sellers. And individual sellers might have a better experience selling to a reseller than to a buyer in a marketplace. Market failures. Many multisided platforms have avoided collapse by using mechanisms that keep buyers and sellers honest. It can take more than one move for a company to reach its optimal position: Companies that should ultimately be multisided platforms sometimes need to start out as resellers and vice versa. And as the competitive landscape changes, managers must be diligent about reevaluating their positioning. HBR Reprint R13O3J INSETS: Idea in Brief;How Companies Use Different Sales Models;Creating a Marketplace Is Harder Than It Looks.

Health care's service fanatics.

Abstract: The Cleveland Clinic has long had a reputation for medical excellence. But in 2009 the CEO acknowledged that patients did not think much of their experience there and decided to act. Since then the Clinic has leaped to the top tier of patient- satisfaction surveys, and it now draws hospital executives from around the world who want to study its practices. The Clinic's journey also holds lessons for organizations outside health care that must suddenly compete by creating a superior customer experience. The authors, one of whom was critical to steering the hospital's transformation, detail the processes that allowed the Clinic to excel at patient satisfaction without jeopardizing its traditional strengths. Hospital leaders: Publicized the problem internally. Seeing the hospital's dismal service scores shocked employees into recognizing that serious flaws existed. Worked to understand patients' needs. Management commissioned studies to get at the root causes of dissatisfaction. Made everyone a caregiver. An enterprisewide program trained everyone, from physicians to janitors, to put the patient first. Increased employee engagement. The Clinic instituted a "caregiver celebration" program and redoubled other motivational efforts. Established new processes. For example, any patient, for any reason, can now make a same-day appointment with a single call. Set patients' expectations. Printed and online materials educate patients about their stays- before they're admitted. Operating a truly patient- centered organization, the authors conclude, isn't a program; it's a way of life. INSET: Idea in Brief.

The Silent Sex

Abstract: The article reviews several books about the roles of men and women in society, including "The End of Men: And the Rise of Women," by Hanna Rosin, "Men on Strike: Why Men Are Boycotting Marriage, Fatherhood, and the American Dream�and Why It Matters," by Helen Smith, and "The Feminine Mystique: 50 Years," by Betty Friedan.

Ending the wage gap

Abstract: The article notes research has shown a wage gap concerning men's and women's compensation and also notes the authors' study on newly hired chief financial officers (CFOs) in the U.S. The study found the female CFOs' pay at two years into the job was about five percent less than the male CFOs. The assumptions that women want family-friendly working conditions and are less likely to leave the firm are mentioned. A strategy for preventing these stereotypes from impacting compensation is noted.

Creating the best workplace on earth

Abstract: No organization can fulfill every hope and desire of its employees, so it helps to know which matter most to people. Goffee and Jones have identified the six most essential imperatives for creating an ideal work environment. Their insights come from surveys and interviews of hundreds of executives from all over the world. Few organizations embody all six attributes of the dream organization, many are difficult to achieve, and some even conflict with one another. But they nonetheless stand as an agenda for executives who wish to create the most productive, most rewarding workplace imaginable. Agenda 1. Let people be themselves. 2. Unleash the flow of information. 3. Magnify people's strengths. 4. Stand for more than shareholder value. 5. Show how the daily work makes sense. 6. Have rules people can believe in. This list contains no surprises, but implementing the elements is no easy task. Almost all of them require leaders to carefully balance competing interests and to reallocate their time and attention. Companies like Arup, LVMH, Waitrose, and even McDonald's are doing it to varying degrees. Your challenge is to match-and then to exceed-what they have managed to accomplish.

Your brain at work

Abstract: Recently, technological advances have led neuroscientists to develop a new and more sophisticated framework. It shifts the focus of study from the activity of specific brain regions to how networks of brain regions activate in concurrent patterns. In this article, two experts in brain science explain important discoveries that have been made about four key networks: the default network, which is engaged in introspection and in imagining a different time, place, or reality; the reward network, which activates in response to pleasure; the affect network, which plays a central role in emotions; and the control network, which is involved in understanding consequences, impulse control, and selective attention. These discoveries hold major implications for managers. In particular, they shed light on: the best way to generate "Eureka!" thinking what motivates employees whether you should trust your gut and listen to your emotions in decision making the opportunities and pitfalls of multitasking These insights are just the beginning, say the authors, who believe that a hugely productive dialogue between neuroscience and business will develop as more findings emerge. INSETS: Idea in Brief;4 Networks in a Nutshell;Does the Brain Know Things Before We Do?.

Connect, Then Lead

Abstract: In puzzling over whether it's better to be feared or loved as a leader, Machiavelli famously said that, because it's nigh impossible to do both, leaders should opt for fear. Research from Harvard Business School's Amy Cuddy and consultants Matthew Kohut and John Neffinger refutes that theory, arguing that leaders would do much better to begin with "love"--that is, to establish trust through warmth and understanding. Most leaders today approach their jobs by emphasizing competence, strength, and credentials. But without first building a foundation of trust, they run the risk of eliciting fear, resentment, or envy. Beginning with warmth allows trust to develop, facilitating both the exchange and the acceptance of ideas--people really hear your message and become open to it. Cultivating warmth and trust also boosts the quantity and quality of novel ideas that are produced. The best way to gain influence is to combine warmth and strength--as difficult as Machiavelli says that may be to do. In this article, the authors look at research from behavioral economics, social psychology, and other disciplines and offer practical tactics for leaders hoping to project a healthy amount of both qualities.

Making star teams out of star players.

Abstract: Top talent is an invaluable asset: In highly specialized or creative work, for instance, "A" players are likely to be six times as productive as "B" players. So when your company has a crucial strategic project, why not multiply all that firepower and have a team of your best performers tackle it? Yet many companies hesitate to do this, believing that all-star teams don't work: Big egos will get in the way. The stars won't be able to work with one another. They'll drive the team Leader crazy. Mankins, Bird, and Root of Bain & Company believe it's time to set aside that thinking. They have seen all-star teams do extraordinary work. But there is a right way and a wrong way to organize them. Before you can even begin to assemble such a team, you need to have the right talent management practices, so you hire and develop the best people and know what they're capable of. You have to give the team appropriate incentives and leaders and support staffers who are stars in their own right. And projects that are ill-defined or small scale are not for all-star teams. Use them only for critical missions, and make sure their objectives are clear. Even with the right setup, things can still go wrong. The wise executive will take steps to manage egos, prune non-team-players, and prevent average coworkers from feeling completely undervalued. She will also invest a lot of time in choosing the right team Leader and will ask members for lots of feedback to monitor how that leader is doing.

The New Dynamics of Competition

Abstract: Letters to the editor are presented in response to an article published in the April 2013 edition of "Harvard Business Review" journal on topics including the need for companies to focus on quality before value in products and the importance of generating revenue.