November–December 2023

Reimagine Your Managerial Pipeline

Managers are struggling, with more and more varied responsibilities than ever before. A recent survey showed that 54% suffer from work-induced fatigue and stress; meanwhile, only one in two employees believes that their manager can help their team succeed.

Although any solution will need multiple facets, a new study from the research and advisory firm Gartner points to an essential first step: Organizations need to put the right people into the role to begin with. But promoting on the basis of performance as individual contributors is no longer a viable tack. By letting people nominate themselves for a role, conducting a rigorous and anonymized application process, equipping potential managers for the hardest parts of the job, and letting them opt out with stigma, organizations can build a robust and diverse pipeline of people ready to step into the role whenever needed. Those new managers will be more than twice as likely as others to find the job more manageable and to lead higher-performing teams.

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Unexpected Interruptions Can Boost Creativity

Researchers discovered a silver lining when a fire at a supplier’s factory forced a temporary shutdown at the plant of a consumer goods manufacturer: The downtime led to a flood of employee ideas for improvements.

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Adobe’s CEO on Making Big Bets on Innovation

In 1998 the author joined Adobe as vice president and general manager of the engineering technology group. Shortly thereafter he took on layout engineering as well, and the following year the company released InDesign, the powerhouse publishing platform that overshadowed Quark. In 2007 Narayen was named CEO. Two years later the company expanded from content creation to content management, measurement, and monetization with the acquisition of Omniture, a web-analytics software company with clients including Ford, TD Ameritrade, and Walmart.

“Any successful technology company needs to look around the corner and make some key assertions about how the world is going to change,” Narayen writes. Adobe’s shift to Creative Cloud was one response. And the company has invested in AI and generative AI for more than a decade, resulting in its introduction of Adobe Sensei (“which helps customers improve the precision, ease, and speed with which they do their work”) and Firefly (“a copilot that augments rather than replaces human ingenuity”).

“Leaders must be dissatisfied with the status quo,” Narayen says. “If you set unreasonable expectations, people will amaze you with their ingenuity.”

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How to Capitalize on Generative AI

Business leaders are struggling to understand how seriously they should take generative AI. It has already displayed breathtaking powers to create new content and is used to do things such as write software, transcribe physicians’ interactions with their patients, and let people converse with a CRM system. But it is far from perfect: It can produce distorted or entirely fabricated output and can be oblivious to privacy and copyright concerns. Is its importance being overblown? Are its risks worth the potential rewards? How can companies figure out where best to apply it? How should they go about taking their first steps? This article will provide guidance.

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Helping Employees Succeed with Generative AI

How can you manage employees when the capabilities at their fingertips are constantly changing, and the effects of those changes are unpredictable? Users have less and less time to learn from one another. And unlike virtually any other technology we’ve known, AI-enabled digital tools are designed to change by themselves—continuously. To help, the author has devised a framework—STEP—that consists of four interrelated activities: (1) segmenting tasks for either AI automation or AI augmentation; (2) transitioning tasks across work roles; (3) educating workers to take advantage of AI’s evolving capabilities; and (4) evaluating performance to reflect employees’ learning and the help they give others.

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Keep Your AI Projects on Track

AI—and especially its newest star, generative AI—is today a central theme in corporate boardrooms, leadership discussions, and casual exchanges among employees eager to supercharge their productivity. Sadly, beneath the aspirational headlines and tantalizing potential lies a sobering reality: Most AI projects fail. Some estimates place the failure rate as high as 80%—almost double the rate of corporate IT project failures from a decade ago. Approaches exist, however, to increase the odds of success. Companies can greatly reduce their risk of failure by carefully navigating five critical steps that every AI project traverses on its way to becoming a product: selection, development, evaluation, adoption, and management.

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Storytelling That Drives Bold Change

When tackling urgent organizational problems, leaders usually work hard to identify underlying causes, tap a wide range of knowledge, and experiment with solutions. But once they’ve mapped out a plan, there’s one more crucial step they must take: crafting a story so compelling that it will harness their organizations’ energy and direct it toward change. Drawing on decades of experience helping senior executives lead large-scale transformations, Harvard professor Frei and leadership coach Morriss present an effective way to approach that challenge. They outline four key steps: (1) Understand your story so well that you can describe it in simple terms, (2) honor the past, (3) articulate a persuasive mandate for change, and (4) lay out a rigorous and optimistic path forward.

Next you need to get others behind your story. Emotions can bring it to life and help drive employees’ commitment to change. You also should promote your narrative aggressively. Share it wherever the opportunity arises—in speeches, interviews, town hall meetings, one-on-ones—and incorporate it into different formats, from videos to images to guidebooks.

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What Today’s Rainmakers Do Differently

As “doer-sellers,” professional services partners are responsible for not just delivering services but also the entire business-development process. As “rainmakers,” they must build awareness of their expertise in the market to generate demand, identify and close new client business, deliver the work to the client, and then renew and expand the relationship over time.

But there is a growing problem with this long-standing practice: Clients are much less loyal to firms and partners than they once were. Competition for business among professional services firms is intensifying, which has cast in sharp relief the troubling gap in the ability of high performers and core performers to bring in work.

In this article, the authors identify five statistically determined profiles that professional services partners fall into, only one of which is correlated with positive performance, and they lay out the three key behaviors of a successful business-development approach: (1) building connected networks of colleagues and clients, (2) creating value through collaboration, and (3) committing to a proactive and consistent business-development routine.

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The Resale Revolution

The average U.S. household contains a trove of potentially reusable goods worth roughly $4,500. That’s a lot of trapped value, and companies are at last getting serious about accessing it—by developing new resale capabilities. Resale has been with us for a very long time, of course—at yard sales, on used-car lots, in classified ads. But the magnitude of the market is changing, boosted by Gen Z consumers and a growing demand for sustainability. Some major brands, including Apple, Nike, Rolex, and Walmart, are moving into the market. And GlobalData estimates that the total resale market in the United States is around $175 billion.

In this article, Robertson, a former dean of the Wharton School, focuses on the potential benefits of resale and helps leaders think about whether resale makes sense for their brands. Drawing on interviews with executives who work at companies that are actively pursuing resale and at third-party platforms that have become important partners in the resale ecosystem, he offers five guidelines for resale success: (1) design friction-free processes, (2) work with a third-party platform, (3) transition to the Gen Z consumer, (4) integrate brand-loyalty initiatives, and (5) build an integrated portfolio.

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A Step-by-Step Guide to Real-Time Pricing

In today’s fast-paced world of digital retailing, the ability to revise prices swiftly and on a large scale has emerged as a decisive differentiator for companies. Many retailers now track competitors’ prices via systems that scrape rivals’ websites and use this information as an input to set their own prices manually or automatically. A common strategy is to charge X dollars or X percent less than a target competitor. However, retailers that use such simple heuristics miss significant opportunities to fine-tune pricing.

Some companies are now applying machine-learning models to guide their pricing decisions, but even these retailers tend to take an overly limited approach. They try to match or undercut competitors’ prices without taking into account factors such as whether rivals are out of stock or how consumers make their purchasing decisions.

In this article, the authors present a step-by-step process for dynamic pricing that focuses on building computer models that consider not just competitor pricing but also product availability and customer behavior to recommend optimal prices in real time.

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Middle Management Is the Key to Sustainability

While the executive in charge of the sustainability function plays the starring role in any social or environmental initiative, its success often depends on an organization’s hidden heroes: its critical midlevel team leaders. But how this group drives sustainability will vary with a company’s sustainability maturity. In their work the authors have identified four levels of it and goals and actions that are appropriate for middle managers at each one.

At level one, lagging and skeptical, middle managers should focus on getting sustainability on the agenda by exploring customer demand, gathering outside perspectives, and finding easy wins. At level two, building a base, the goal is to develop capabilities and start to embed sustainability into core processes. At level three, accelerating, middle managers increase the speed and scale of efforts through internal councils and by increasing transparency and rethinking business activities. At level four, leading, middle managers strive to build lasting sustainability infrastructure and set up transformative partnerships in their sectors or value chains.

With the right skills and priorities, the unsung champions of sustainability can drive progress within companies at any level and across industries.

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Harness Your Network to Unlock Innovation

Why do so many big companies get poor returns on all the money they invest in innovation? A large body of research suggests that it’s because their managers tend to think novel ideas are “deviant” and resist them. As a result such ideas get watered down to make them less threatening—or get squashed altogether.

The solution, the authors’ studies show, is to inspire, support, and protect innovation by tapping into your networks. Three practices are especially useful. First, find and mobilize external innovation catalysts who are adept at synthesizing diverse perspectives and identifying creative solutions. Second, engage with internal sparring partners who can highlight potential objections and help fuse ideas with your company’s mission and turn them into compelling business propositions. Third, selectively sequence the introduction of those ideas within your social circles in the company to stress-test and gradually gain buy-in for them.

While there’s nothing inherently magical about these practices, if you follow them, you’ll find that innovating in a large, mature company is not only viable but highly promising.

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It’s Time to Define Your Company’s Principles

Companies need to develop strong guiding principles that go beyond generic mission statements and values, the authors argue. Well-articulated principles can provide direction for difficult decisions, especially in times of disruption. They should offer behavioral guardrails and be distinctive to the company, open to debate, transferable across the organization, and integral to its mission. Some strong principles include “Focus on the user and all else will follow” (Google), “Privacy is a fundamental human right” (Apple), and “We won’t release a product until we would use it ourselves” (Tableau Software). The authors recommend that leaders begin by identifying what makes the company unique and involving employees at all levels. When communicating decisions, they should reference principles to demonstrate their relevance. Over time, principles can shape company culture and empower employees to make decisions that align with corporate strategy. In this era of complexity and uncertainty, well-defined principles can provide much-needed clarity and direction.

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Private Equity Needs a New Talent Strategy

Historically, the efforts of private equity firms to address leadership challenges have been limited primarily to replacing portfolio-company CEOs. Now, in an era of higher interest rates and more competition for limited acquisition targets, these firms are realizing that they need to make more-systematic investments in leadership development. The author offers a variety of prescriptions for PE firms, portfolio companies, and dealmakers, including hiring and empowering “chief human capital officers” to create a firm-level talent strategy, developing a leadership playbook, tasking portfolio companies with creating a leadership agenda, and rigorously assessing organizational effectiveness and talent during due diligence for company acquisitions.

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Why Career Transition Is So Hard

The accelerated pace of technological change and, most recently, the advent of AI are reshaping jobs and organizations in ways that call for constant career reinvention. So we all need to learn how to get better at making the most of the frequent transitions that will constitute a long working life.

But no matter how often people change careers, they will probably experience the transition as an emotionally fraught process—one that involves confusion, loss, insecurity, and struggle. Big changes can be exhilarating, but they’re also terrifying.

For more than two decades, Ibarra, of London Business School, has been studying the process of career reinvention: what prompts people to do it, how they go about it, and how it affects them. In this article, drawing on new research, she explains why such transitions are still so hard for so many people, despite their growing frequency and prevalence. She also offers some ideas for managing them more intentionally and successfully.

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Case Study: How Should We Diversify Our Supply Chain?

In the wake of Covid-19’s disruptions, Kshore, a Chinese appliance maker, is thinking of realigning its supply chain. Like many other global manufacturers, it’s being pressured by its customers, which include Walmart and other large retailers, to reduce the time, expense, and environmental impact of shipping goods between countries.

On a trip to Monterrey, Mexico, Kshore’s CEO and COO tour factories that are closer to North American markets—and are impressed by their professionalism. But questions about transportation and staffing give the executives pause. Should Kshore start production in Mexico or consider other countries? Two experts weigh in.

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The Perils of an Achievement Culture

Three new books tackle how to escape the grip of perfectionism: MoneyZen, by Manisha Thakor; The Perfection Trap, by Thomas Curran; and Never Enough, by Jennifer Breheny Wallace.

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Life’s Work: An Interview with Viola Davis

The Oscar-nominated actress and outspoken human-rights advocate talks about acting as therapy, inspiration from her older sister, and more.

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