Harvard Business Review (July–August 2019)

142 Pages·2019·23.576 MB·English

by  Harvard Business Review

136 Marvel’s
Blockbuster Machine
94 Digital Doesn’t
HBR.ORG
Have to Be Disruptive
July–August
2019
116 When a Colleague
Is Grieving
The AI-Powered
Organization
The main
challenge
isn’t
technology.
It’s culture.
62
Contents
July–August 2019
41
42 ETHICS
How to Scandal-
Proof Your Company
SPOTLIGHT
A rigorous compliance
system is not enough.
WHITE-COLLAR Paul Healy and
George Serafeim
CRIME
51 AUDIT
Where Is Your
Company Most
Prone to Lapses
in Integrity?
A simple survey to
identify the danger zones
Eugene Soltes
54 Q&A
“W e Were Coming
Up Against
Everything
from Organized
Crime to Angry
Employees”
A conversation with
Erik Osmundsen, CEO
of Norsk Gjenvinning
58 BUSINESS LAW
What I’ve Learned
About White-
s
e
g
ma Collar Crime
y I
ett
G
p/ Insights from a
o
hp former prosecutor
s
a
Fl Mary Jo White
er:
v
o
c
n
o COVER ILLUSTRATION
ot
b Brobel Design
o
R
5
Harvard Business Review 
Photograph by SAM KAPLAN July–August 2019
July–
August 2019
61
FEATURES
62 TECHNOLOGY
Building the
AI-Powered
Organization
Technology isn’t the
biggest challenge.
Culture is.
Tim Fountaine,
Brian McCarthy, and
Tamim Saleh
74 INNOVATION
Nimble
Leadership
Walking the line between
creativity and chaos
Deborah Ancona, Elaine
Backman, and Kate Isaacs
84 ENTREPRENEURSHIP
The Soul of a
Start-Up
124
Companies can sustain
their entrepreneurial
energy even as they grow.
Ranjay Gulati
104 OPERATIONS 116 MANAGING PEOPLE 124 CUSTOMERS 136 INNOVATION
The One Thing When a The Elusive Green Marvel’s
94 STRATEGY
Digital Doesn’t
You Need to Know Colleague Consumer Blockbuster
Have to Be
About Managing Is Grieving Machine
People say they want
Disruptive
Functions sustainable products,
How to provide the How the studio balances
but they don’t tend to
The best results can right kind of support buy them. Here’s how continuity and renewal
They require their own
come from adaptation Gianpiero Petriglieri to change that. Spencer Harrison,
strategies.
rather than reinvention. and Sally Maitlis Arne Carlsen, and
Katherine White,
Roger L. Martin and
Nathan Furr and David J. Hardisty, and Miha Škerlavaj
Jennifer Riel
Andrew Shipilov Rishad Habib
6
Harvard Business Review
July–August 2019 Illustration by LLOYD MILLER
July–August 2019
21 147
IDEA WATCH EXPERIENCE
New Research and Advice and
Emerging Insights Inspiration
21 ORGANIZATIONS 147 MANAGING
The Wrong Ways YOURSELF
A Working
to Strengthen
Parent’s
Culture
Survival Guide
The three missteps that
thwart many efforts The five big challenges—
PLUS The kind of network and how to deal with them
women need, the futility Daisy Wademan Dowling
of venting about the boss,
152 CASE STUDY
and more
When One Division
32 DEFEND YOUR
Makes All the
RESEARCH
Instant Feedback
Money but the
Hurts Our
Other Gets All
Performance
the Attention
A new study shows that it
A CEO considers
changes our behavior—but
whether to invest in
not for the better.
innovation or focus
35
on the core.
35 HOW I DID IT
Richard G. Hamermesh
Match Group’s
158 SYNTHESIS
CEO on Innovating
Fixing the Internet DEPARTMENTS
EDITOR’S NOTE: The original version of the article “Your
in a Fast-Changing Approach to Hiring Is All Wrong,” in the May–June issue,
Where it went wrong named three recruitment outsourcing companies and stated
Industry
and how to improve it 12 FROM THE EDITOR that they use subcontractors in India and the Philippines.
Walter Frick 16 CONTRIBUTORS The three company names have been removed because the
Acquisitions were specifics of their subcontracting practices were unverified.
an important driver 160  EXECUTIVE
164 LIFE’S WORK
SUMMARIES
of growth. Vera Wang
Mandy Ginsberg
10
Harvard Business Review
July–August 2019 Photograph by JUSTIN CLEMONS
From the Editor
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The Thing About Integrity
LATELY, THE NEWS has been filled with stories of embezzlement,
bribery, and other kinds of corporate corruption. In a 2018 survey,
PwC found that nearly half the 7,228 participating organizations had
experienced economic crimes or fraud in the previous year—up from
30% in 2009. So it’s no exaggeration to say that white-collar crime is a
growing problem. And it’s one that has considerable costs: It destroys
shareholder value, drains management resources, and tarnishes
brands, sometimes irredeemably.
The same PwC survey also found that more than half the white-
collar criminals were “internal actors”—a phenomenon that Paul
Healy and George Serafeim of Harvard Business School explore in
“How to Scandal-Proof Your Company” (page 42). They argue
that the cause isn’t weak regulations or compliance systems. At firms
hit by scandals, they say, “a culture of making the numbers at all costs
HBR’s editor, Amy Bernstein, with Adi Ignatius
trumped any concerns about how the targets were being met.”
The root of all this is leadership: “Senior executives at most
companies that suffered highly publicized transgressions didn’t
see these incidents as their personal responsibility to address or as
evidence that something was fundamentally amiss in their organi-
zations,” say Serafeim and Healy. While these leaders accepted the
importance of compliance, they placed greater emphasis on beating
competitors and wowing investors—a message that can foster a
culture of wrongdoing.
It shouldn’t come as a surprise, then, that the opposite is also
true: The leaders who prioritize integrity themselves tend to run
organizations that discourage winning at any cost and, in the process,
cultivate higher employee engagement and more-profitable growth.
ADI IGNATIUS
Editor in chief
n
e
y
u
g
N
w
e
dr
n
A
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Harvard Business Review
July–August 2019
Contributors
Paul Healy’s interest Daisy Wademan When he was young, Deborah Ancona loves “Electronics are
in corporate crime Dowling first noticed Spencer Harrison doing research: “You becoming objects
was sparked by the the struggles working had a box of “very get your arms around of worship,” says
scandals at Enron parents face while she important papers”— an interesting problem Leonardo Ulian, a
and Worldcom in the was running global cutouts of his drawings and then go into an London-based artist
early 2000s. “I was talent-development of superheroes, movie organization to learn whose work is featured
intrigued,” says Healy, efforts at two Fortune monsters, and other from practice.” For her in this issue. “I want
a professor at Harvard 500 companies. She is invented characters. article in this issue, to show what’s hidden
Business School. “I now the founder and Although he never Ancona, a professor inside the devices we
wanted to understand CEO of Workparent, bought comic books as at MIT’s Sloan School, use all the time.” Ulian
why such seemingly a training, coaching, a child, he was deeply and her coauthors builds his delicate
successful companies and advisory firm for interested in that style gathered data from sculptures by welding
and executives had working parents and of art and wanted to be meetings, interviews, together hundreds
become embroiled the organizations that an animator for Disney. and team observations of symmetrically
in wrongdoing.” The employ them. And Today he is a professor and categorized their patterned electronic
result was years of as the mother of two at INSEAD, where findings. Done well, components. He’s
research—much of it young children, she’s much of his research qualitative, structured inspired by mandalas,
conducted with his HBS no stranger to working- focuses on how serially research can be used to the Indian and
colleague and coauthor parent life herself. “I creative organizations— shift theory as well as Tibetan geometric
George Serafeim—on founded this company including Marvel practice, she says, but religious symbols.
the causes of corporate because I needed its Studios, the subject it doesn’t deliver easy- “In mandalas,” Ulian
wrongdoing and how services,” she jokes. of his article in this to-digest takeaways. says, “everything grows
leaders can combat In this article, she issue—balance novelty “Our biggest ‘aha’ from a center, and it’s
them. Their article in provides a framework and continuity. He was that you had to the same in my work—
this issue shares their for men and women continues to draw and understand the whole everything starts with
findings. facing the demands of still sees his drawings system.” The challenge a central microchip
children and careers. as “very important is to distill insights and builds out.”
42 How to Scandal-Proof papers.” but not oversimplify
Your Company 147 A Working Parent’s a complicated reality. 62 Building the AI-Powered
Survival Guide 136 Marvel’s Blockbuster Organization
Machine 74 Nimble Leadership
16
Harvard Business Review
July–August 2019
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New Research and Emerging Insights
IN THEORY
THE WRONG WAYS TO
STRENGTHEN CULTURE
COMPARED WITH SOME other activities of business leaders,
such as hiring the right talent and setting strategy, changing
The three missteps that
corporate culture can be especially challenging. Culture
is amorphous; there are no direct levers for shifting it in one
thwart many efforts direction or another. Indications are that CEOs are putting
a higher priority on this aspect of leadership than in the
past. According to a study by the research and advisory firm
21
Harvard Business Review
Illustrations by LARS LEETARU July–August 2019
Gartner, CEOs mentioned culture 7%
more often during earnings conference
calls in 2016 than in 2010. In surveys
both CEOs and CHROs say that “man-
aging and improving the culture” is the
top priority for talent management.
But the data suggests that there’s lots
of room for improvement: Each year
companies spend $2,200 per employee,
on average, on efforts to improve the
culture (much of the money goes to
consultants, surveys, and workshops)—
but only 30% of CHROs report a good
return on that investment.
When trying to spearhead culture
change, many leaders use the wrong
tools. Having surveyed more than 7,500
employees and nearly 200 HR leaders
at global companies and conducted
in-depth interviews with 100 HR leaders,
Gartner has written a report identifying
the most- (and the least-) effective
ways leaders try to transform culture.
To increase their odds of success, the
report advises, they should avoid three
mistakes.
Don’t use simple adjectives to Gartner’s managing vice president for culture of innovation while continuing
describe culture. Because culture feels research, calls a say/do gap: Employees to seek growth and profits from legacy
“squishy” and hard to describe, leaders see leaders’ cultural aspirations as businesses.”
tend to resort to a generic, overused hypocritical. Other tensions evident in most
set of adjectives: Cultures are said to Instead of using a single adjective businesses include the need to achieve
be high-performing, collaborative, to describe the culture you aspire to, both short- and long-term goals and an
innovative, customer-focused, entrepre- illustrate it by acknowledging an import- emphasis on results and accountability
neurial, results-oriented, transparent, or ant tension. “The tension is about the while also caring about employees’
trusting. Gartner studied how compa- intersection of the ideal and prese nt well-being and work/life balance.
nies using these various buzzwords realities and how those play out day to Explicitly recognizing such tensions
compared with one another on prog ress day,” Kurey says. Talk about wanting avoids the disillusionment that can
toward revenue goals and found no sig- to create a “culture of innovation” might result when employees see leaders
nificant differences—meaning that none sound fanciful and out of touch if the espouse one set of behaviors but live
of the labels creates an advantage. One business currently devotes 80% of its by another.
reason: Often the chosen buzzword is resources and personnel to existing Don’t measure culture with data
at odds with how the company actually product lines. The CEO should instead alone. Because culture feels intangible,
operates. That causes what Bryan Kurey, speak to the tension: “We support a many companies depend on employee
22
Harvard Business Review
July–August 2019