Showing papers in "Harvard Business Review in 2019"

Creating Shared Value

Abstract: THE CAPITALIST SYSTEM is under siege. In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community.

A study of more than 250 platforms a reveal why most fail

Abstract: Platforms have become one of the most important business models of the 21st century. In our newly-published book, we divide all platforms into two types: Innovation platforms enable third-party firms to add complementary products and services to a core product or technology. Prominent examples include Google Android and Apple iPhone operating systems as well as Amazon Web Services. The other type, transaction platforms, enable the exchange of information, goods, or services. Examples include Amazon Marketplace, Airbnb, or Uber. Five of the six most valuable firms in the world are built around these types of platforms. In our analysis of data going back 20 years, we also identified 43 publicly-listed platform companies in the Forbes Global 2000. These platforms generated the same level of annual revenues (about $4.5 billion) as their non-platform counterparts, but used half the number of employees. They also had twice the operating profits and much higher market values and growth rates. However, creating a successful platform business is not so easy. What we call “platformania” has resembled a land grab, where companies feel they have to be the first mover to secure a new territory, exploit network effects, and raise barriers to entry. Uber’s frenetic efforts to conquer every city in the world and Airbnb’s desire to enable room sharing on a global scale are the two most obvious recent examples. The problem is that platforms fail at an alarming rate. By identifying the sources of failure, managers can avoid the obvious mistakes.

The Humans Working Behind the AI Curtain

Abstract: Whether it is Facebook’s trending topics; Amazon’s delivery of Prime orders via Alexa; or the many instant responses of bots we now receive in response to consumer activity or complaint, tasks advertised as AI-driven involve humans, working at computer screens, paid to respond to queries and requests sent to them through application programming interfaces (APIs) of crowdwork systems. The truth is, AI is as “fully-automated” as the Great and Powerful Oz was in that famous scene from the classic film, where Dorothy and friends realize that the great wizard is simply a man manically pulling levers from behind a curtain.

What Does Your Corporate Brand Stand For

Abstract: Companies are extremely good at defining their product brands. Customers, employees, and other stakeholders know exactly what an iPhone is and means. But organizations are often less sure-footed when it comes to the corporate brand. What does the parent company’s name really stand for, and how is it perceived and leveraged in the marketplace and within the company itself?A clear, unified corporate identity can be critical to competitive strategy, as firms like Apple, Philips, and Unilever understand. It serves as a north star, providing direction and purpose. It can also enhance the image of individual products, help firms recruit and retain employees, and provide protection against reputational damage in times of trouble. Many firms, however, struggle to articulate and communicate their brand. (Less)

When women are on boards, male CEOs are less overconfident

Abstract: A number of governments (notably those in India, California, and parts of Europe) are pushing for greater female representation in the boardroom. And several studies suggest why: Having women on the board results better acquisition and investment decisions and in less aggressive risk-taking, yielding benefits for shareholders. What’s less clear is why these effects happen. Our research suggests one potential reason: Having female board members helps temper the overconfidence of male CEOs, improving overall decision making for the company. We were interested in studying overconfidence because prior research has shown that it can be detrimental to the firm and is more prevalent among male CEOs. Overconfidence leads CEOs to overestimate returns and underestimate risk, which can result in overinvestment and excessive risk-taking, destroying shareholder value. We were curious about how the board — which is responsible for supervising the CEO — might moderate a CEO’s tendency to get overconfident.

How to Overcome the Bias We Have Toward Our Own Ideas

Abstract: Innovative manufacturers routinely encourage employees to generate ideas for improved products and processes. At Toyota, for instance, employees submit more than 700,000 implemented _kaizen_ process improvement ideas every year. A machine operator might propose a tool modification that would help increase the throughput rate, or a forklift driver might suggest that stacking containers in a different way could improve materials flow. [...]