September–October 2023

Should You Launch Products During a Recession?

Economic downturns are frightening. Consumers curb spending, companies cut costs, and we all wait anxiously for the economy to recover. In such a climate, launching a product—an expensive and uncertain endeavor in the best of times—would seem to make little sense. But a new study finds that products launched during recessions outperform on several important measures.

Even though people tend to limit spending during downturns, the timing may confer, for several reasons: There is less noise in the marketplace, making it easier to differentiate products and draw consumers’ attention; the cost of running ads is often lower; and going ahead with new products in the midst of a weak economy is often perceived as a signal of corporate health.

This article outlines other key insights from the research and offers guidance on how best to time product launches.

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People May Be More Trusting of AI When They Can’t See How It Works

New research looked at the extent to which the employees of a fashion retailer followed the stocking recommendations of two algorithms: one whose workings were easy to understand and one that was indecipherable. Surprisingly, they accepted the guidance of the uninterpretable algorithm more often.

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The CEO of ADM on Expanding Its Focus from Commodities to Consumers

In the early 2010s ADM, a century-old agricultural products and services company, embarked on a big transformation. It streamlined and reorganized its divisions, refocused its teams on smart investments and innovation, and became more strategic and disciplined about capital, costs, and cash. But then the leadership team turned its attention to another important C: customers. The goal was to reorient the business toward value-added nutrition products and services, a more stable sector in which it could build a broader base for growth and impact.

Now the company is split into three segments: agricultural services and oilseeds; carbohydrate solutions; and nutrition. All three units sell not just raw or processed commodities but differentiated products. And ADM’s leaders have identified three long-term global macro trends—food security, sustainability, and health and well-being—around which the company is making capital-allocation, strategic, and operational decisions.

This transformation has been methodical and mission-driven. In 2019 ADM unveiled a new corporate purpose—“to unlock the power of nature to enrich the quality of life”—and over the past decade its heightened focus on innovating for the customer has brought it even closer to fulfilling that purpose. This story offers lessons for other companies that are trying to envision and execute similar change efforts.

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Helping an Employee in Distress

Many managers are given first-aid training in the office. But very few receive any training for dealing with mental health crises that may arise in the workplace.

Amid heightened stressors, including the lingering effects of the pandemic and economic uncertainty, more employees than ever are experiencing issues such as anxiety and depression at work. And increasingly, employees are open to having—and even expect to have—conversations about mental health challenges that are affecting their performance.

This article introduces the basic tenets of cognitive behavioral therapy (CBT) as a mental-health first-aid tool to help employees address emotional distress and negative behavioral patterns.

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Free Your People from the Need for Social Approval

The best performers are able to push past the perceived limits of their potential, but the higher they rise on the career ladder, the more susceptible they become to scrutiny. They often fall prey to an anxious state the author calls fear of people’s opinions. FOPO is a hidden epidemic and may be the single greatest constrictor of individual and collective potential.

Concern about what others think is an irrational, unproductive, and unhealthy obsession—and a big contributor to the general anxiety people feel at work. This article discusses the causes of FOPO and how to help your employees break free from it.

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The Anxious Micromanager

The command-and-control management style has been on the decline for decades. Research has shown that companies perform better when leaders empower, encourage, and coach employees instead of delivering orders, micromanaging, and meting out discipline. Nonetheless, that style remains prevalent.

At root, the tendency to micromanage stems from a leader’s own anxiety and lack of confidence. To stop overrelying on a command-and-control style, leaders should look inward to understand what causes it.

This article offers guidance for managers on harnessing their energy to lead in a much more effective and sustainable way.

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Reskilling in the Age of AI

In the coming decades, as the pace of technological change continues to increase, millions of workers may need to be not just upskilled but reskilled—a profoundly complex societal challenge that will sometimes require workers to both acquire new skills and change occupations entirely. Companies have a critical role to play in addressing this challenge, but to date few have taken it seriously. To learn more about what their role will entail, the authors—members of a collaboration between the Digital Data Design Institute at Harvard’s Digital Reskilling Lab and the Boston Consulting Group’s Henderson Institute—interviewed leaders at some 40 organizations around the world that are investing in large-scale reskilling programs. In synthesizing what they learned, they became aware of five paradigm shifts that are emerging in reskilling: (1) Reskilling is a strategic imperative. (2) It is the responsibility of every leader and manager. (3) It is a change-management initiative. (4) Employees want to reskill—when it makes sense. (5) It takes a village. The authors argue that companies will need to understand and embrace these shifts if they hope to succeed in adapting dynamically to the rapidly evolving new era of automation and AI.

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The New Era of Industrial Policy Is Here

Governments around the world are increasingly intervening in the private sector through industrial policies designed to help domestic sectors reach goals that markets alone are unlikely to achieve. Companies in targeted sectors—such as automakers, energy companies, and semiconductor manufacturers—may experience dramatic changes in their operating environments.

The policies could create new costs or deliver significant financial incentives to shift R&D or manufacturing investments. They might also incent firms to alter their supplier networks or change their trading partners. Managers who have grown up in markets without such interventions are now facing an unfamiliar environment.

In this article, HBS professor Willy C. Shih outlines some of the policy approaches and offers a framework for responding to them. Business leaders need to understand the competing interests shaping the policies, engage and educate political leaders and their staffs, collaborate with upstream and downstream partners, and weigh the pros and cons of accepting government incentives.

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Create Stories That Change Your Company’s Culture

Does your firm’s culture support its strategy? If not, you’ll need to retool your culture, and that’s not so easy to do. The values, beliefs, and norms that make it up are intangible and diffused throughout your organization, and employees tend to resist anything that threatens established behaviors and relationships.

To figure out the secret to doing cultural change well, the authors examined how business leaders around the world approached it. They learned that successful ones didn’t begin with workshops, studies, or new HR policies. They began by creating stories highlighting actions that were deeply inconsistent with a firm’s established culture but reinforced an alternative culture more aligned with its strategies. The most effective stories were authentic, featured the leaders themselves, offered a break with the past and a path to the future, appealed to hearts and minds, and were dramatic and memorable. Most critically, they empowered employees to begin crafting their own stories about cultural change so that everyone in the organization ended up co-creating a new culture together.

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When Diversity Meets Feedback

In recent years leading executives—from firms like Google, Bridgewater, and Netflix—have touted the advantages of a work environment marked by candid feedback. Employees seem to have bought into the benefits too. In a 2019 survey, 94% said that corrective feedback improved their performance when it was presented well. Unfortunately, the increased diversity of our workplaces has made it much more likely that feedback won’t go over well and will be misinterpreted as an act of hostility. That’s because people from different cultures, genders, and generations have varying expectations for how feedback is delivered and by whom. What’s standard in America, for instance, can come off as harsh or baffling in other countries. Boomers and Millennials hold radically different ideas about what’s appropriate too. And gender differences add to the complexity. Women who are frank are often seen as aggressive, and men have a bad tendency to offer unwelcome advice.

This article explains how to navigate the divides: Understand the norms of feedback recipients and adjust for them. Follow the three A’s—make sure any advice is intended to assist, actionable, and asked for. Last, get everyone on your team on the same page by establishing a common approach and building regular feedback loops into your collaborations.

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We’re All Programmers Now

Generative AI and other easy-to-use software tools can help employees with no coding background become adept programmers, or what the authors call citizen developers. By simply describing what they want in a prompt, citizen developers can collaborate with these tools to build entire applications—a process that until recently would have required advanced programming fluency.

Information technology has historically involved builders (IT professionals) and users (all other employees), with users being relatively powerless operators of the technology. That way of working often means IT professionals struggle to meet demand in a timely fashion, and communication problems arise among technical experts, business leaders, and application users.

Citizen development raises a critical question about the ultimate fate of IT organizations. How will they facilitate and safeguard the process without placing too many obstacles in its path? To reject its benefits is impractical, but to manage it carelessly may be worse. In this article the authors share a road map for successfully introducing citizen development to your employees.

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What Does “Stakeholder Capitalism” Mean to You?

Business leaders are being urged to adopt a multistakeholder approach to governance in place of the shareholder-centered approach that has guided their work for several decades. But through hundreds of interviews with directors, executives, investors, governance professionals, and academics over the years, the author has found wide differences in how those leaders understand stakeholder capitalism. That lack of clarity can put boards and executives on a collision course with one another when decisions requiring difficult trade-offs among stakeholders’ interests arise. It also creates expectations among stakeholders that if unfulfilled will fuel cynicism, alienation, and distrust.

To help reduce the risk of such negative consequences, the author has created a guide for corporate leaders that illuminates four versions of stakeholder capitalism: instrumental, classic, beneficial, and structural. They reflect significantly different levels of commitment to the interests of stakeholders and rest on very different rationales.

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A New Approach to Strategic Innovation

Companies typically treat their innovation projects as a portfolio, aiming for a mix of projects that collectively meet their strategic objectives. The problem, say the authors, is that portfolio objectives have become standardized, and innovation projects are often only weakly related to a company’s distinctive strategy.

This article introduces a new tool to help leaders better align their innovation investments. The strategic innovation tool kit has two elements: a strategy summary framework and an innovation basket. Leaders start by clarifying a unit’s strategy and determining what needs to change to achieve it. The change needs are translated into innovation goals, and leaders create their “innovation basket” by plotting each project against those goals. They can then cut projects that aren’t aligned and create new ones that are. It’s an iterative and creative process: Projects are adjusted to fit the strategy but can also shape it.

Examples from the authors’ research demonstrate how the process of creating an innovation basket gives managers fresh insight into what their innovation activities are really doing for their strategy.

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How AI Affects Our Sense of Self

The increasing frequency of interactions we have with AI and automated technologies means it is vital to understand how those things make people feel about themselves. Why? Because how people feel about themselves affects a wide range of success factors, including sales, customer loyalty, word-of-mouth referrals, employee satisfaction, and employee performance. The authors have been studying people’s reactions to automated technology for more than seven years. In this article they focus on psychological responses to AI and automated technologies that they’ve observed in service and business-process design, product design, and communication, and offer practical guidance to help leaders and managers figure out how best to use these new technologies to serve customers, support employees, and advance the interests of their organization.

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How to Shine When You’re Put on the Spot

Mastering the art of spontaneous speaking is important for leaders. They must do more than just deliver a good prepared keynote—they need to nail the Q&A and small talk afterward, or crush off-the-cuff toasts and speeches. The author suggests that anyone can become proficient at this art using the right tactics and behaviors: Toasts, Q&As, and small talk don’t require any specific personality traits. He offers key strategies that include avoiding conventional responses in favor of establishing genuine connections, and prioritizing brevity while delivering messages. He also highlights the need to speak authentically without the pressure to be perfect—which means daring to be dull. An equally important aspect is active listening to understand and respond effectively to others’ needs. And structuring thoughts logically during impromptu conversations is a useful tactic. Fear or nervousness need not deter anyone from communicating effectively on the spot.

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Case Study: When the CEO Dies, What Comes First: His Company or His Family?

Shortly after the sudden death of her beloved husband, Priya Gowda learns that the company he built from a small dairy farm into a major Indian conglomerate is in deep financial trouble. Unbeknownst to her and his investors, her husband had taken on a lot of short-term, high-interest loans, and the company is struggling to make its payments. As sole heir to his majority stake in Splendid Ice Cream, Priya is now its de facto CEO. Her creditors advise her to sell or liquidate the company, but Priya is determined to preserve her husband’s legacy. Her daughters, however, worried that the business is taking too high a toll on her, beg her to let it go. Should she give in to them or keep trying to save Splendid? Expert commentators weigh in.

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Commerce After Covid

Three years after the coronavirus pandemic began, what lessons have we learned? Four new books—The Big Fail, Lessons from the Covid War, The Phoenix Economy, and Chaos Kings—and a blog series on Crooked Timber search for answers. They examine the response to the crisis, the systemic and societal weaknesses it revealed, and the ways it has fundamentally changed the world.

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Life’s Work: An Interview with Chris Paul

The 12-time NBA All-Star shares the insights he gained from his mentors and reflects on what it takes to lead both a team and the players’ union.

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