When our editorial team met—some members on-screen, and some gathered around a conference table—to discuss the past year’s issues of Harvard Business Review, we were still adjusting to what we could only assume was the new normal. During the past few years many organizations were in reactive mode, shifting how they worked as the changing environment—and the Covid-19 pandemic—dictated, for reasons of safety or out of a sense of urgency. But now leaders, managers, and individuals alike have an opportunity to define a different path, not by reacting to the present but by creating a new future. The 11 articles we’ve selected for this volume reflect that.
Organizations are experimenting with and adopting flexible work practices that increase employee engagement, retention, and satisfaction, and reassessing their strategies to create greater value for customers, employees, and suppliers. In this volume we see that employees want to get up to speed faster in new roles, not just for their own sake but for the betterment of their organizations and networks. We look across geographic borders to learn how new technologies can create better customer experiences. We reevaluate two established practices—the Net Promoter System and unconscious bias training—to make them applicable in a more purposeful and equitable future. And as pressure grows to fight greenhouse gas emissions and create sustainable—and efficient—supply chains, we spotlight new accounting practices to hold corporations to high standards and rethink product life cycles.
We start with “The Future of Flexibility at Work,” which asks, “What does flexibility at work look like in practice?” Most organizations approach it in one of two ways: as an ad hoc work-life accommodation available on request, or as giving people permission to get their work done on their own schedule—as long as they’re available 24/7 to answer emails or put out fires. Neither approach is sustainable over the long term. Ellen Ernst Kossek, Patricia Gettings, and Kaumudi Misra, researchers who have been studying workplace flexibility for years, advocate an approach to more equally balance employer and employee needs. In this article they outline the tenets that organizations should follow as they develop their own flexible programs and policies.
At any given time your company is focused on more than a handful of strategies at once— marketing, social, and global, among many others—but companies have little to show for an uptick in initiatives. In “Eliminate Strategic Overload,” Felix Oberholzer-Gee argues that managers face an attractive, back-to-basics opportunity. He explains that a strategic initiative is worthwhile only if it creates value for customers, employees, or suppliers. And as companies increase the total amount of value created, they position themselves for enduring financial success. Oberholzer-Gee offers advice on how to select fewer initiatives with greater impact so that companies can make their strategies more powerful.
One area that often derails strategy execution is innovation. In “Drive Innovation with Better Decision-Making,” Linda A. Hill, Emily Tedards, and Taran Swan declare that today’s discovery-driven innovation processes are an outdated, inefficient approach to decision-making. Those processes involve an unprecedented number of choices, leading to slow decisions that are informed by obsolete information and narrow perspectives. Drawing on the transformation at Pfizer’s Global Clinical Supply, which went on to play a critical role in supporting the rapid development of the pharma giant’s Covid-19 vaccine, the authors explain how organizations can apply agile and lean principles to decision-making to make rapid experimentation pay off.
Becoming more diverse, equitable, and inclusive has become a common goal in organizations, and to live up to that objective, many companies have turned to unconscious bias (UB) training. But according to research by Francesca Gino and Katherine Coffman, most UB training is ineffective. To get results, it must teach attendees to manage their biases, practice new behaviors, and track their progress. What’s more, proper training entails a long journey and structural organizational changes. In “Unconscious Bias Training That Works,” Gino and Coffman use examples from Microsoft and Starbucks to offer advice on implementing a rigorous UB program that will help employees overcome denial and act on their awareness, develop the empathy that combats bias, diversify their networks, and commit to improvement.
Fewer than 40% of companies that invest in AI see gains from it, usually owing to one or more of these errors: They ask the wrong questions, leading AI to solve the wrong problem. They assume that all prediction mistakes are equivalent, not seeing the difference between the value of being right and the costs of being wrong. Or they stick with outdated practices and don’t leverage AI’s ability to make far more frequent and granular decisions. In “Why You Aren’t Getting More from Your Marketing AI,” Eva Ascarza, Michael Ross, and Bruce G. S. Hardie suggest ways for marketers and data science teams to communicate better among themselves and to avoid those pitfalls, getting much higher returns on their AI efforts.
Since its introduction, in 2003, the Net Promoter System, which measures how consistently brands turn customers into advocates, has become the predominant customer success framework. But as its popularity grew, NPS was gamed and misused in ways that hurt its credibility. Over time its creator, Fred Reichheld, realized that the only way to correct that problem was to introduce a hard, complementary metric that would draw on accounting results. In “Net Promoter 3.0,” Reichheld, Darci Darnell, and Maureen Burns introduce the earned growth rate, which captures the revenue generated by returning customers and their referrals. This article teaches readers how to track metrics that help companies validate investments in customer service and convince investors of their businesses’ underlying strength.
In addition to focusing on earned growth rates, organizations should prioritize tracking customer data. In “How Chinese Retailers Are Reinventing the Customer Journey,” Mark J. Greeven, Katherine Xin, and George S. Yip explain why Western retailers trail their Chinese counterparts in leveraging customer data to make better business decisions, increase operational efficiency, and reduce costs. From their research on Chinese retailers the authors have drawn five lessons that Western companies can learn from China as they develop their own digital market offerings: create single entry points, embed digital evaluation in the customer journey, don’t think of sales as isolated events, rethink the logistical fundamentals, and always stay close to the customer.
More and more manufacturing companies are talking about what’s often called the circular economy—in which businesses can create supply chains that recover or recycle the resources used to create their products. But creating a circular business model is challenging, and taking the wrong approach can be expensive. Drawing on decades of research, Atalay Atasu, Céline Dumas, and Luk N. Van Wassenhove argue in “The Circular Business Model” that success depends on many factors, but perhaps the most important is choosing a strategy that aligns with a company’s capabilities and resources—while addressing the constraints on its operations. The authors identify three basic strategies for achieving circularity and offer a tool to help manufacturers identify which is most likely to be economically sustainable.
“How to Succeed Quickly in a New Role” speaks to the millions of individuals who have embarked on a role transition this past year. Whether it’s a promotion, a move to another organization, or a strategic new challenge in a different department, this professional shift can be an opportunity to develop yourself and progress in your career. But in today’s dynamic workplaces, successful moves aren’t as easy as they once were. After analyzing employee relationships and communication patterns across more than 100 companies and interviewing 160 executives in 20 of them, Rob Cross, Greg Pryor, and David Sylvester discovered an overlooked prerequisite for transition success: the effective use of internal networks. In this article they elaborate on five practices that will help those in changing roles get up to speed faster.
Corporations face growing pressure—from investors, advocacy groups, politicians, and even business leaders themselves—to reduce greenhouse gas (GHG) emissions from their operations and their supply and distribution chains. About 90% of the companies in the S&P 500 now issue some form of environmental, social, and governance report, which almost always includes an estimate of the company’s GHG emissions. Robert S. Kaplan and Karthik Ramanna describe these as “catchall reports that are often made up of inaccurate, unverifiable, and contradictory data.” They propose a remedy: the E-liability accounting system, whereby emissions are measured using a combination of chemistry and engineering, and principles of cost accounting are applied to assign the emissions to individual outputs. “Accounting for Climate Change” provides a detailed method for assigning E-liabilities across your entire value chain.
We close this book with “Persuading the Unpersuadable,” by Adam Grant. Many of us may be asking ourselves how, when people discount our views, we can persuade them to rethink their positions. Grant writes, “It is possible to get even the most overconfident, stubborn, narcissistic, and disagreeable people to open their minds.” An organizational psychologist, he has spent time with people who succeeded in motivating the notoriously self-confident Steve Jobs to change his mind and has analyzed the science behind their techniques. He offers approaches that can help you encourage a know-it-all to recognize when there’s something to be learned, a stubborn colleague to make a U-turn, a narcissist to show humility, and an argumentative boss to agree with you.
As you read through this collection, we hope you feel inspired to rethink your processes, assumptions, strategies, and priorities—not out of necessity but as an opportunity to shape the future you want and to move forward quickly and efficiently.
—The Editors