E-commerce: How consumer brands can get it right

Consumer brands need to make direct-to-consumer economics feasible and the customer experience seamless.
E-commerce: How consumer brands can get it right

The biopharma marketer of the future: Closing the gap

Commercial leaders share the new skills brand marketers need in the digital era to move from brand building to revenue acceleration.
The biopharma marketer of the future: Closing the gap

Rethinking resilience: Ten priorities for governments

Due to the pandemic, governments are under increased pressure to act quickly and at scale. By reimagining how they work, they can create resilient societies and public services for the next normal.
Rethinking resilience: Ten priorities for governments

China’s Gen Z are coming of age: Here’s what marketers need to know

Gen Z represent the next engine of domestic consumption growth.
China’s Gen Z are coming of age: Here’s what marketers need to know

Strong minds, strong futures: Weaving together basic needs and behavioral health

Public and private institutions can play a role in marrying socioeconomic and mental health needs.
Strong minds, strong futures: Weaving together basic needs and behavioral health

Large technology programs: Digital capabilities, proven approaches

To successfully implement large technology systems, first accept the complexity, and then take these six actions.
Large technology programs: Digital capabilities, proven approaches

Challenges emerge for the US healthcare system as COVID-19 cases rise

Recent COVID-19 trends suggest demand for care in the coming months may be higher and more widespread than at any point in the pandemic, while providers are also facing intensified capacity, supply, and workforce challenges.
Challenges emerge for the US healthcare system as COVID-19 cases rise

Overcoming pandemic fatigue: How to reenergize organizations for the long run

Leaders must actively manage the energy of their workforces, cultivate the quality of employee relationships, and demonstrate a capacity for resilience to recharge their organizations during crises.
Overcoming pandemic fatigue: How to reenergize organizations for the long run

Flying start: Powering up Hungary for a decade of growth

Amid the social and economic pain brought by the global COVID-19 health crisis, remembering past strengths and looking beyond the pandemic might be difficult. But as they work to mitigate the impact of the pandemic, Hungary’s public and private leaders must also set aside time to envision and implement measures that will build on the country’s solid fundamentals and seize opportunities, new and old.
Flying start: Powering up Hungary for a decade of growth

Will India get too hot to work?

Extreme heat and humidity could put millions of lives and billions of dollars at risk across India. What will it take to reduce the risk?
Will India get too hot to work?

Managing presidential transitions: Eight tips for taking care of the team

People are your best asset in a transition. Eight best practices can help you to ensure that your team functions at the highest level during the short transition period.
Managing presidential transitions: Eight tips for taking care of the team

The future of European payments: Strategic choices for banks

A joint report from McKinsey and the Euro Banking Association examines the options for banks in a changing landscape.
The future of European payments: Strategic choices for banks

Six golden rules for ecosystem players to win in Vietnam

Focusing on customer engagement, talent, and data analytics could unlock success in the country’s emerging ecosystem economy.
Six golden rules for ecosystem players to win in Vietnam

Climate risk and response in Asia

In many ways, Asia is on the frontline of a changing climate. We analyze the extent of climate risk facing the region and effective responses for adaptation and mitigation.
Climate risk and response in Asia

Driving for resilience: An interview with the CEO of India’s Tata Motors

Guenter Butschek, CEO of Tata Motors, shares his perspectives on the COVID-19-era challenges of leading a major global automotive company based in India, and the opportunities just up the road.
Driving for resilience: An interview with the CEO of India’s Tata Motors

Managing presidential transitions: Five tips for agency review teams

Agency review teams are often the largest function of governmental-transition organizations and critical for continuity of government. A few best practices can help maximize their effectiveness.
Managing presidential transitions: Five tips for agency review teams

Indirect procurement: Insource? Outsource? Or both?

A more thoughtful balance between homegrown capabilities and outsourcing can help companies generate more value from an often-overlooked opportunity.
Indirect procurement: Insource? Outsource? Or both?

The potential of advanced process controls in energy and materials

Optimizing advanced process controls can create significant value for critical industrial processes. Maximizing that value requires a comprehensive approach across people, processes, and technologies.
The potential of advanced process controls in energy and materials

What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries

Hybrid models of remote work are likely to persist in the wake of the pandemic, mostly for a highly educated, well-paid minority of the workforce.
What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries

When will the COVID-19 pandemic end?

Recent news on vaccine and antibody trials has raised hopes worldwide. When will vaccines be available? And is the end of COVID-19 nearer? Here we update our September 21 outlook.
When will the COVID-19 pandemic end?

Four ways to accelerate the creation of data ecosystems

Public and private organizations rapidly set up data ecosystems to help fight COVID-19. Even in the absence of a crisis, companies can fast-track ecosystem development.
Four ways to accelerate the creation of data ecosystems

Executives see superior capabilities as the key to future growth

In a new global survey, 1,200 businesspeople—many of them leaders—say the pandemic has alerted them to the urgent value of learning. And that their companies are struggling to get it right.
Executives see superior capabilities as the key to future growth

Finance 2030: Four imperatives for the next decade

Over the past decade, finance departments reduced costs by almost 30 percent. The next decade’s focus: achieving even higher levels of effectiveness.
Finance 2030: Four imperatives for the next decade

Scaling sustainable aviation fuel today for clean skies tomorrow

The move to sustainable aviation is now an imperative.
Scaling sustainable aviation fuel today for clean skies tomorrow

‘Prepare for the marathon and be ready for the course to change’: An interview with the Boston Logan Airport CEO

Massachusetts Port Authority CEO Lisa Wieland discusses why the contactless passenger journey is here to stay and how she’s building agility and flexibility for her organization.
‘Prepare for the marathon and be ready for the course to change’: An interview with the Boston Logan Airport CEO

The board’s role in embedding corporate purpose: Five actions directors can take today

A large spotlight is shining on corporate actions these days, and all stakeholders have growing expectations. A board’s involvement in defining purpose helps meet those expectations.
The board’s role in embedding corporate purpose: Five actions directors can take today

‘An environment where everybody can thrive’: A conversation with U.S. Bank’s Tim Welsh

The vice chairman for consumer and business banking at the fifth-largest bank in the United States describes how setting an environment of mission, purpose, and individual generosity is central to building capabilities that achieve strategic outcomes.
‘An environment where everybody can thrive’: A conversation with U.S. Bank’s Tim Welsh

Organizing for speed: Agile as a means to transformation in Japan

Japanese working practices may help or hinder the adaptation of agile approaches that can increase an organization’s speed and customer centricity. Addressing five main areas can allow leaders to master the transition to enterprise agility.
Organizing for speed: Agile as a means to transformation in Japan

The shift to virtual and home care: An interview with Annie Lamont

Holistic healthcare, virtual care, and the integration of mental-health care and primary care are among the trends the COVID-19 crisis moved ahead of schedule. Annie Lamont is keeping tabs on them all.
The shift to virtual and home care: An interview with Annie Lamont

Holiday shopping in 2020

Consumers, longing for normalcy and eager for something to celebrate, plan to spend money during the holidays—but differently from the way they have in the past.
Holiday shopping in 2020

Resilience in a crisis: An interview with Professor Edward I. Altman

One of the leading researchers in corporate financial health discusses what executives can do to help their companies endure the financial stresses of crisis times.
Resilience in a crisis: An interview with Professor Edward I. Altman

Eight lessons on how to get the growth you planned

Now is not the time to slow down. Growth initiatives are critical for value creation, even survival, throughout an economic cycle.
Eight lessons on how to get the growth you planned

Climate change and P&C insurance: The threat and opportunity

Many in the property and casualty insurance industry have underestimated the immediacy of physical—and systemic—effects from climate change. Business models must adapt.
Climate change and P&C insurance: The threat and opportunity

Think fast: How to accelerate e-commerce growth

The most critical tools in successful e-commerce expansion are customer-centricity and a test-and-learn mindset.
Think fast: How to accelerate e-commerce growth

Addressing society’s pain points: An interview with the CEO of Ayala Corporation

Jaime Augusto Zobel de Ayala reflects on Asia’s imperative, and his own, to find inclusive and creative solutions to complex and uncertain challenges.
Addressing society’s pain points: An interview with the CEO of Ayala Corporation

Reimagining the way businesses operate

To reimagine their organizations for the future, leaders must address three critical questions.
Reimagining the way businesses operate

The future of payments is frictionless—now more than ever

Amrita Ahuja, the CFO of Square, explains how the company’s payment platform and services have helped small enterprises stay afloat during the COVID-19 crisis.
The future of payments is frictionless—now more than ever

Five questions to answer before you finalize your media plan

New consumer behaviors require CMOs to rethink their media-spend plans.
Five questions to answer before you finalize your media plan

Hong Kong businesses need to evolve, or risk being left behind

The COVID-19 pandemic has changed the way companies across Asia operate, notably by enabling their employees to work remotely. In Hong Kong, where the culture of “presenteeism” has traditionally run deep, top executives have realized that working from home does not necessarily mean a decline in productivity.
Hong Kong businesses need to evolve, or risk being left behind

The state of AI in 2020

Our 2020 AI survey shows artificial intelligence has become more of a revenue driver. Companies earning the most from AI plan to invest in it more in response to COVID-19.
The state of AI in 2020

Finance 2030: Four imperatives for the next decade

Over the past decade, finance departments reduced costs by almost 30 percent. The next decade’s focus: achieving even higher levels of effectiveness.
Finance 2030: Four imperatives for the next decade

Agility in the time of COVID-19: Changing your operating model in an age of turbulence

Can organizations be transformed while employees are working remotely? Four real-life stories suggest that they can.
Agility in the time of COVID-19: Changing your operating model in an age of turbulence

Diverse employees are struggling the most during COVID-19—here’s how companies can respond

New global research shows that despite companies’ recent efforts, diverse employees need more. Businesses should ask themselves new questions for a changed workplace.
Diverse employees are struggling the most during COVID-19—here’s how companies can respond

Airline data: What next beyond crisis response?

Airlines are using a wealth of new data sources in 2020. Strategy should now replace adrenaline as the fuel for decisions around data adoption and usage.
Airline data: What next beyond crisis response?

Using ecosystems to reach higher: An interview with the co-CEO of Ping An

Expect digital to further blur industry lines, supercharge scalability, and loosen geographical restraints for professional services, says Jessica Tan.
Using ecosystems to reach higher: An interview with the co-CEO of Ping An

Moving teams from campaign to transition: Five things to get right

How the shift from campaigning to transitioning is managed can set the foundation for an administration.
Moving teams from campaign to transition: Five things to get right

Meeting the future: Dynamic risk management for uncertain times

The world is changing in fundamental ways, leading to dramatic shifts in the landscape of risks faced by businesses.
Meeting the future: Dynamic risk management for uncertain times

The economic case for reskilling in the UK: How employers can thrive by boosting workers’ skills

In about 75 percent of cases, it pays for an organisation to reskill an employee—yet few do this systematically. Here’s why, and what companies should do differently.
The economic case for reskilling in the UK: How employers can thrive by boosting workers’ skills

Data will decide success in the next normal of bulk and tanker shipping

COVID-19 and commodity-related trends are likely to depress medium-term demand, but companies that can leverage deep market insights will have the opportunity to outperform in the postcrisis economy.
Data will decide success in the next normal of bulk and tanker shipping

When do you need a chief restructuring officer?

When external shocks rock the business, a chief restructuring officer brings a specialized skill set to restructure the balance sheet.
When do you need a chief restructuring officer?

Closing the capability gap in the time of COVID-19

Building capabilities that durably change workforce behaviors has never been easy, and the pandemic has made it harder. But some organizations have found approaches to thrive in recovery and beyond.
Closing the capability gap in the time of COVID-19

Shaping university boards for 21st century higher education in the US

Many university boards have not revised their governance models in decades and struggle to deliver on their mission. To update their current operating model, boards can focus on three best practices.
Shaping university boards for 21st century higher education in the US

How retail can adapt supply chains to win in the next normal

Retailers in consumer discretionary categories were already struggling in the US before COVID-19. Better supply-chain management could be critical to their recovery.
How retail can adapt supply chains to win in the next normal

Pioneer of healthy aging

Using the tools it has today, China can transform its aging population into a vital social and economic force supporting the country’s growth, writes Jonathan Woetzel in China Daily.
Pioneer of healthy aging

The Best of This Week

The Hidden Values Driving Strategy

Research shows that our subconscious values influence how much risk we are willing to tolerate and how open we are to pursuing innovation — and thus, how we make decisions and achieve our goals as managers. By understanding and acknowledging these biases in themselves and others, leaders can better align decisions with company goals and strategy.

Reaping the Benefits of Conflicting Advice From Mentors

Research shows that mentees tend to make better decisions if they embrace and work through conflicting advice. These tips can help mentees reap the benefits of conflicting advice — and help mentors offer sufficient support.
 

6 Counterintuitive Rules for Being a Better Manager

In an interview with First Round Review, Lambda School chief operating officer Molly Graham shares her six rules for how to be a good manager. From the unassuming traps that even great managers can fall into to why the best leaders spend more time with the highest — not the lowest — performers, this collection of practical tactics can help you take your management game to the next level.

Responding to Growing Regulatory Risks

The blizzard of regulatory action swirling around Big Tech platforms is producing outcomes that will affect many other companies across industries that have adopted — or are considering adopting — platform business models. Yet, few platform operators and owners have fully considered the growing regulatory risk and how it could derail their businesses. Here are the internal and external responses they should consider now.

Social Media Managers Are Essential — and Struggling

In 2020’s relentless news cycle, social media managers are first responders. They make important — and very public — decisions constantly, responding to news and conversations quickly at a very delicate time. While in high demand, their job is still belittled as one that anybody could do, but for such a demanding and psychologically tough role, relief may require more than personal coping skills.

What Else We’re Reading This Week

• In a pandemic, every day is “bring your child to work day” — but not nearly as fun
• Organizations have become flexible about where and when employees work, but they also must attend to the essentials of productivity: energy, focus, coordination, and cooperation
• From strategy+business, a list of 2020’s best business books

Quote of the Week:

“For us, AI has not meant artificial intelligence. We have always talked about amplified intelligence, because we’re amplifying an existing knowledge and competence of our colleagues.”

— Arti Zeighami, H&M Group’s chief data and analytics officer, in MIT SMR’s latest Me, Myself, and AI podcast, “Fashion Forecasting”

The Best of This Week

The conflicted Continent: Ten charts show how COVID-19 is affecting consumers in Europe

European consumers are emerging from lockdown at their own pace—and with new priorities that include personal safety and social values.
The conflicted Continent: Ten charts show how COVID-19 is affecting consumers in Europe

Rethinking the future of American capitalism

American capitalism has evolved time and again, and we may be poised for another such shift. Will the future of capitalism involve tweaks, reforms, or wholesale change?
Rethinking the future of American capitalism

Healthcare innovation: Building on gains made through the crisis

Leaders should consider the lessons and achievements of the COVID-19 crisis in forging new innovation aspirations—and the mechanisms needed to execute them.
Healthcare innovation: Building on gains made through the crisis

The case for stakeholder capitalism

Consumers and society at large are expecting more from business. Embracing these responsibilities can help shareholders, too.
The case for stakeholder capitalism

Scaling digital in the public sector: Building blocks for the future

The upcoming government transition presents public-sector leaders with the opportunity to establish processes for successfully scaling digital technologies.
Scaling digital in the public sector: Building blocks for the future

Making the Most of Conflicting Advice From Mentors

Knowing how to handle conflicting advice is a critical workplace skill. Conflicting advice is more common today because amplified complexity and uncertainty open the door to multiple opinions. Greater workplace diversity also makes conflicting advice more likely: When mentors bring different perspectives, experiences, or backgrounds to the table, they may offer clashing guidance.

For example, Oscar was just offered a new job at another company. Taking the job would mean a higher salary and more leadership responsibilities. But he loves working with his current boss and colleagues, and he really likes his company’s culture.

Faced with this big career decision and unsure what to do, Oscar hopes his three longtime mentors will guide him as they have in the past. But each of them steers him in a very different direction. The first mentor, his boss, strongly urges Oscar to stay in his existing job. She says waiting for a promotion and pay raise at a place he really likes makes the most sense. A second mentor — a colleague in another department — urges Oscar to take the new job, reminding him that he’s been bored for a while and wants more responsibility. The third mentor, whom Oscar met at a conference years ago, advises Oscar to use the job offer to negotiate a promotion at his current company.

Getting conflicting advice from his mentors might seem like a good thing; Oscar can now see three different possible paths and consider which one to follow. Yet his situation is stressful. He looks to his mentors for guidance, but their disagreement about the job offer makes his decision seem less clear, not more. And because he relies on his mentors for sponsorship and support, he worries that any decision he makes could damage his relationship with one or more of them. If he chooses one mentor’s advice, will he annoy or even anger the others?

Our research shows that mentees tend to make better decisions if they embrace and work through conflicting advice. For example, if Oscar sees his mentors’ differing suggestions as a platform for thoughtful reflection and discussion, he can figure out what he really wants and values. He can rationally compare the pros and cons of each idea — and use his gut reaction to identify which path feels right to him. He might choose to follow one advised path, or he might arrive at a decision that matches none of his mentors’ suggestions — perhaps pursuing a more senior position in a different department at his current company.

An added benefit to making the most of conflicting advice is personal growth. Being pushed to make choices without unified guidance from mentors teaches people to find their own voices and trust their internal compasses. As Oscar processes his three mentors’ suggestions and ultimately makes a decision about whether to take the job, he learns to chart his own way. He also gets better at maintaining his mentor relationships by learning how to stay connected despite differences of opinion.

Being able to use conflicting advice effectively is challenging at all career stages. Entry-level employees, who are often young, struggle to figure out what is right for them when they receive conflicting advice. This is because their internal compasses may not be fully developed. Entry-level employees may also be less comfortable disagreeing with their mentors, especially with mentors in powerful positions. Senior employees may struggle less with deciding what to do amid disagreement, but — because their jobs are often more challenging and ambiguous — they are more likely to encounter work issues that provoke especially deep disagreement among their mentors.

So how do you reap the benefits of conflicting advice from your mentors? Below, we offer tips to help mentees.

Tips for Working Through Conflicting Advice:

• Ask for clarification. Reengage your various mentors and ask questions about their advice. Why did they make the suggestions that they did? Why would they recommend their suggested path over others? Also explain your own doubts or concerns about their guidance. Talking more with each mentor will allow you to think through each possibility collaboratively. It will also help you understand where your mentors are coming from and whether their suggestions are driven by the things that matter most to you.
• Ask others for further advice. Although it might seem counterintuitive to add to the pool of suggestions when you are already struggling to choose among the ones you have, gathering more perspectives can be helpful. Try to connect with people who you think understand you well and will support your decision, whatever it is. An added bonus: These people could become new mentors for you in the future.
• Evaluate the strength of each mentor relationship. If you’re worried that deciding not to follow a mentor’s advice will hurt your relationship, try having an open conversation about your concerns. If mentors express genuine support for you regardless of what you decide, you will rest easier. However, if any of your mentors signal conditional support — predicated on you taking their advice — you may want to question whether this person is someone you should continue to rely on.
• Get help with stress. Feeling anxious when you receive conflicting advice is normal. But don’t let stress become the main focus. Instead, try to identify why you are anxious. Are you uncomfortable disagreeing with your mentors or anxious about losing their much-needed support? Are you worried that you don’t know how to make a good decision? Ask someone you trust to help you think about what is causing your anxiety, since it can be hard to do this alone. As you discuss your feelings and what underlies them, you can see more clearly which concerns are valid and develop strategies for addressing them. This will reduce your stress and free up energy to process the conflicting advice.

It is easier for mentees to work through conflicting advice if their mentors offer sufficient support; the above strategies are most effective when mentors understand and respond appropriately to situations involving clashing guidance. With that in mind, mentors can consider the following tips.

Tips for Mentors:

• You are not mentoring in a vacuum. Recognize that your mentees are likely asking others for advice and may therefore be getting conflicting suggestions. Communicate that you are glad they are seeking multiple viewpoints. Be clear that you are open to hearing about and discussing other mentors’ ideas. And be willing to shift your own perspective based on what you learn about others’ guidance.
• Don’t make the decision for them. People often look to their mentors to tell them what to do, and it can feel good to satisfy their need for clear instruction. But you will be far more useful if you resist the temptation to choose among the pieces of conflicting advice yourself. Instead, encourage mentees to make decisions for themselves. Serve as a sounding board and ask good questions. This will lead mentees to choices that are right for them, not you. It will also allow them to grow — people only develop stronger internal compasses if you let them.
• Make disagreement feel safe. Tell mentees that it is not “your way or the highway,” and that two-way debate is expected and appreciated. Signal that your relationship with them will stay strong regardless of the decision they make. Show them that you support their efforts to make a decision for themselves. And let them know that learning to find their own way is an important part of their personal development.
• Share stories about your own mentoring experiences. Describe times when you found it difficult to be mentored by others. This helps people learn more about you and normalizes open dialogue about challenging mentor situations. By talking not only about what happened but also how you felt in such situations, mentees will feel more comfortable discussing their current feelings with you. Stories about times when you disagreed with but stayed close to a mentor are especially useful, since they show that mentor relationships are more resilient than people may think.

Getting conflicting advice from mentors is not easy, but the strategies outlined above can help people capitalize on divergent guidance to make better decisions. By working through mentors’ different viewpoints, mentees grow personally in key ways that equip them to cope better with future challenges.

Making the Most of Conflicting Advice From Mentors

Increasing decision-making velocity: Five steps for government leaders

Government leaders can challenge the norms of how their organizations work and dramatically increase their decision-making speed and agility.
Increasing decision-making velocity: Five steps for government leaders

Agile’s next level: ABN AMRO’s hybrid cloud–DevSecOps transformation

Transformation success required thoughtful mastery of multiple disciplines and coordination of many moving parts.
Agile’s next level: ABN AMRO’s hybrid cloud–DevSecOps transformation

Pathways to decarbonize the Czech Republic

The Czech Republic has reduced GHG emissions significantly after 1990, but it remains fourth-largest GHG emitter per capita in the EU.
Pathways to decarbonize the Czech Republic

Pathways to decarbonize the Czech Republic

Czech republic has reduced GHG emissions significantly after 1990 but remains fourth largest GHG emitter per capita in the EU. This report aims at presenting a cost-effective pathway for the Czech Republic to reduce GHG emissions in line with the expected targets of the European Green Deal, including the investments needed.
Pathways to decarbonize the Czech Republic

The next frontier in Asia payments

Five fundamental themes are reshaping Asia’s payments landscape, requiring a swift response—and in some cases, self-reinvention—from players across the value chain.
The next frontier in Asia payments

The Rising Risk of Platform Regulation

On Oct. 6, 2020, the U.S. House Judiciary Committee’s antitrust subcommittee released a 450-page report following a 16-month inquiry into the digital economy. It recommended fundamental changes to antitrust laws generally and targeted the Amazon, Apple, Facebook, and Google technology platforms specifically.1 Several weeks later, the U.S. Department of Justice filed suit against Google, accusing it of using “anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising and general search text advertising.”2 Similar regulatory initiatives aimed at platforms are underway around the world, including in the European Union, United Kingdom, Japan, Korea, and India.3

The blizzard of regulatory action swirling around platforms is producing new rules and laws, expanded powers for existing regulatory authorities, and the establishment of new regulatory authorities. These outcomes will not only affect Big Tech but also many other companies, in industries such as construction, health care, finance, energy, and industrial manufacturing, that have adopted or are considering adopting platform business models.

Few platform operators and owners have fully considered how the growing regulatory risk — which includes breakups, line-of-business restrictions, acquisition limits, and interoperability and data portability mandates — could derail their businesses. As a result, they could be caught off guard, just like many companies were caught off guard when the Sarbanes-Oxley Act of 2002 mandated board restructurings and expanded executive financial accountability in the aftermath of accounting scandals.4

The regulatory outcomes being proposed and adopted today could have varying degrees of impact on platform businesses. The most severe proposal in the House Judiciary Committee report would dictate a structural breakup, requiring “divestiture and separate ownership of each business.” This could unravel the network effects that drive platform growth and produce value. U.S. regulators have rarely pursued solutions this extreme, but there are notable exceptions, including the breakups of Standard Oil in 1911 and AT&T in 1984, and the attempted breakup of Microsoft, which settled with the DOJ in 2004. (It’s too early to say whether Google will join this list, but the DOJ complaint leaves open the possibility.)

A more likely outcome is the separation of platforms from the products and services sold on them, which some policymakers advocate to combat self-preferencing, a catchall term for actions that favor a platform owner’s offerings over those of its competitors. In its limited form, such a rule might restrict potential bias in search listings. In its extreme form, it could forbid vertical integration — a significant source of value in many platform models — by precluding a company from selling its own offerings on its platform, even when they offer superior value to users. In 2019, for example, India imposed a flat rule forbidding companies from owning more than 25% equity in any product sold on their platforms.5

Another outcome proposed in the House Judiciary Committee report is the forced sharing of commercial data with competitors, which is aimed at creating an even playing field by providing equal access to data. But giving competitors access to user data also entails privacy and security risks, including secondary misuse of data and ambiguities in accountability for data breaches.6

The report also recommends strict limits on the merger and acquisition activity of platform companies to prevent what the committee believes are anti-competitive activities, such as dictating prices and the rules of commerce in their markets. However, these limits can also hamper the ability of platforms to reach scale, to acquire new functionality that they can share with large pools of users, and to obtain the talent and capabilities needed if they are to innovate.

More generally, the House Judiciary Committee report proposes changing presumptions about how antitrust works in ways that would benefit plaintiffs — for example, by reducing the need to show causal harm (aka antitrust injury) to bring a claim. These presumptions, along with the extension of antitrust by adopting vague, noneconomic factors (such as “fairness”), could make many of the value-creating everyday business decisions currently made by platform operators (such as exclusive dealing, bundled offerings, and price cuts) more prone to antitrust litigation, fines, and other restrictions.

How should companies with platform businesses respond to the rising prospect of regulation? We suggest taking the following actions.

Internal Responses

Companies that own and operate platforms can forestall regulatory action and perhaps avoid the most draconian interventions by embracing self-regulation and shared governance. In doing so, they may be able to allay the fears of regulators without destroying the value-creating network effects on which they and their partners and users depend.

Toward this end, companies can erect firewalls between their platforms and their products by compartmentalizing employees and information into separate business units. Then they can offer third-party sellers the same competitive terms accorded to the walled-off product units. Google did this when, in response to a European Commission decision, it created equal access for its competitors by auctioning off positions in the shopping box adjacent to its search engine results.7

Companies also can offer their partners a role and a voice in the governance of platforms. The German software company SAP, for example, offers three tiers of platform access.8 The lowest tier provides access for apps that are vetted for security and compatibility. The middle tier represents products that SAP’s sales teams promote alongside SAP’s own products. The top tier of platform partners, who must be approved by SAP’s board, get a voice in determining platform strategy.

External Responses

Given that regulation can have such a powerful effect on markets and business results, platform companies should prepare to engage in the regulatory process as a more fundamental and integral element of business strategy. Toward this end, they should identify theories of value creation (platform effects that make society better off through more efficient outcomes) as distinct from theories of harm (platform effects that are detrimental to social welfare or competition) to better frame regulatory risks and their responses to regulatory initiatives.

To avoid regulations that could confer advantage on some platforms over others, companies should seek commercially neutral regulatory outcomes that allow them to compete on their merits. For example, the Glass-Steagall Act, which was repealed in 1999, forced banks to separate retail from investment banking. This reduced the advantage that integrated banks had in terms of access to funds, but it also reduced investment banks’ bets with depositor funds. Studies have shown that there was more banking competition and that bank customers were better off both before Glass-Steagall was enacted and after it was repealed.9

Moreover, lobbying efforts should seek to promote regulation that’s narrowly targeted. Focused regulation can improve markets. In the EU, for example, a revised Payment Services Directive enables open banking by giving consumers more control over who can access their accounts. But overly broad regulation can distort markets. For example, the General Data Protection Regulation has made it harder for small advertisers to compete with larger ones and reduced investment funds available to technology startups.10

New regulations do not always work as intended. Nor do existing regulations, especially when they misapprehend new business models. The taxi industry, with its monopoly on medallions, clearly suffered from regulatory capture that drove up prices for drivers and riders until ride-sharing platforms arrived with expanded services and lower prices.11 Platform businesses and companies that want to build platforms can avoid these problems by using internal firewalls and shared governance to reduce bias and the need for regulation, and by identifying new external sources of value and highlighting specific market distortions to shape the ways and means of regulation.

The Rising Risk of Platform Regulation

Modernizing the investment approach for electric grids

Customer and community expectations for the US electric grid are evolving. Utilities must adapt by pursuing integrated modernization plans.
Modernizing the investment approach for electric grids

In conversation: Culture in M&A

Why assessing the cultural fit cannot be an afterthought in deal making
In conversation: Culture in M&A

Divesting with agility

Research shows that active, efficient reallocation of resources creates better returns for companies than simply standing pat does. Here’s how to make portfolio decisions faster.
Divesting with agility

Government transitions during crisis: How new leaders can take charge

Transfers of power are complex—in times of crises, especially so. Here are seven lessons for leaders at all levels of government transitioning into new roles.
Government transitions during crisis: How new leaders can take charge

Value creation in industrials

The industrials sector is vital to global economic health. What factors help top companies stand out from the pack and generate the greatest value?
Value creation in industrials

Elevating aftermarket services

Customers increasingly prefer digital and remote engagement, so industrial companies must build these capabilities quickly.
Elevating aftermarket services

Building new businesses in industrials

New digital offerings hold the key for industrial companies to counteract the effects of disruption and better serve their customers.
Building new businesses in industrials

Scaling voluntary carbon markets to help meet climate goals

Voluntary carbon markets help companies supplement their emissions-reduction efforts and finance climate action. The Taskforce for Scaling Voluntary Carbon Markets offers a draft blueprint for them.
Scaling voluntary carbon markets to help meet climate goals

The state of the chemical industry—it is getting more complex

Three trends may change the future of the chemical industry.
The state of the chemical industry—it is getting more complex

Creating value in US insurance investing

Despite market complexity, many opportunities exist for private equity players to create value in insurance. We studied the US industry and offer a set of investment recommendations to guide PE firms’ decisions.
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Taking a fresh look at temporary-labor sourcing amid uncertainty

With many industries operating remotely, companies that can implement new processes to harness fluctuations in the temporary-labor market may achieve greater flexibility in the recovery.
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The Hidden Values Driving Strategy

A growing cadre of managers is recognizing that their companies’ long-term prospects depend on demonstrating positive societal impacts.1 To that end, they’re taking pains to clearly articulate what they and their organizations value. This is helping them to define meaningful business goals, appeal to customers, and motivate a rising generation of workers who seek purpose, not just a paycheck.

But in doing all this, leaders tend to focus on values that are consciously held and shared in their organizations, such as sustainability or diversity and inclusion. They often fail to recognize how their very personal subconscious values — for instance, how much they value debate versus harmony — influence how they make plans and decisions and achieve their goals.2 These subconscious values shape our organizations’ strategies and tactics by directing our focus and influencing which plans we make and how we implement them.

Our research and consulting experience suggests that our values are among the biggest drivers of our strategic decisions. While conscious values may be clearly articulated by the CEO or other leaders, our very personal subconscious values are frequently not acknowledged. And knowing our values is crucial. As long as they are implicit, we can’t recognize and work to counter our biases.3

In our consulting experience, we have observed that leaders’ subconscious values particularly affect three aspects of their strategic decision-making: how and where they grow their businesses, how open they are to new ideas and new ways of solving problems, and how they interact with people. Within each of these areas, individuals typically lean toward one of two opposed values.

Our personal attitudes toward growth are shaped by how much we value security or embrace risk.4 Are we very risk averse, or can we tolerate uncertainty? Keep in mind that there is a significant difference between saying that we like risk and actually taking risks.

Our openness to new ideas and processes is influenced by whether we value learning or knowing.5 Are we willing to accept new ways of solving current problems, or do we stick with what we know has worked in the past? And, more important, how much do we value the intellectual development of ourselves and our team?

How we relate with people is based on whether we enjoy debate or prefer harmony. Do we suppress critical points of view to preserve harmony in the team? Our inclinations in these cases also reveal what kind of people we prefer to work with — those who are more confrontational or those who are more conformist.

Identifying Our Subconscious Values

Leaders who want to surface and understand the subconscious values that drive strategy creation need to interrogate themselves honestly. Given that our values affect both business and personal decisions, introspection about our preferences and behavior can yield insight into our hidden values.

To start this reflection process, use our assessment tool (see “What Values Drive Your Leadership?”) or simply consider the following questions: When it comes to personal investing, do you keep your savings in risky equities or stash them in capital-preserving funds? The answer to this question can indicate your tendency along the growth dimension. When it comes to interacting with people, do you enjoy a good argument or find those engagements stressful? And how do you feel about relying on existing knowledge versus developing new ideas? Now imagine your retirement: Are you more interested in finding ways to share your expertise or in signing up for classes to learn about a new subject?

Assessment: What Values Drive Your Leadership?

With enhanced self-understanding, leaders can strive to make less-biased choices. One way to begin investigating our own tendencies and building a values profile is to use the simple assessment tool and values map below, which we have used in our consulting work. In our experience, the knowledge gained by using this simple instrument can help leaders better manage, or even override, their subconscious leanings.

Take the assessment

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The answers to these questions offer a starting point for better understanding which of the opposed values we lean toward in each of the three areas — growth, ideas, and people.

How Our Values Shape Our Strategy

We make hundreds of decisions, large and small, that reflect our subconscious values. Whether we decide how aggressively to push for innovation, how much risk we are willing to accept, or how we enter new markets or territories, in all of these situations our values shape our choices, frequently without our being aware of it. For instance, favoring security or embracing risk will lead to drastically different strategic choices.6 When we tend toward risk, we will be more likely to explore new opportunities and create a bigger push for innovation or even disruptive projects. When our value system is more directed toward security, we will opt for a steadier path toward growth and choose multiple smaller projects to balance risk.

When our values lean more toward knowing than learning, we may like the status quo both in terms of our own as well as our team’s development. Rather than exploring new technologies, processes, or management practices, we prefer to stick to what we know.7 On the other hand, if we value learning, we will create an environment in which new ideas flow freely, we recruit people who have new ideas, and the development and growth of our people is a natural priority. This value dimension may thus also drive how we approach innovation and how open we are to change.

Regarding our values toward people, a tendency toward diversity means that we value discussion and a diverse set of opinions that also allow us to experiment. We believe that a certain level of arguments spices things up and leads to better results in the team.8 In contrast, if our value system favors harmony, we will create a more homogeneous team, in which quick discussions are the norm and decision-making is aligned. When creating a strategy, homogeneous teams may be less open to new trends and developments and thus tend toward a more steady strategy.

In summary, we can argue that the more our orientation is inclined toward risk, learning, and debate, the more our strategy will focus on dynamic adaption and innovation, whereas the more we lean toward security, knowing, and harmony, the more our strategy will favor a more consistent and long-term orientation.

Are Our Values Aligned With Our Company’s Goals?

Tim Cook is not Steve Jobs. Yet both executives led Apple at the right time — one in a phase of disruptive innovation that created an industry of its own, and one in a period of steady and strategic growth that made Apple the first company to surpass a valuation of a trillion dollars.

While it is crucial that leaders’ conscious personal values are aligned with their organization’s stated values, their subconscious values must also align with the approaches needed to attain organizational goals. Without that alignment, the executive’s values may drive the company in an undesirable direction with every major decision that is made.

Most of the time, we take for granted that executives’ values are aligned with their company’s goals. But often, that’s not the case, and it’s tough to address that, because values are stickier than we think and cannot be changed easily.9 In addition, many people are not even aware of their subconscious values or have not thought about how they shape their decisions and strategies.

Executives must have or develop sufficient insight into their own subconscious values to understand, and sometimes override, their tendencies — because they will scale their values throughout the entire organization.10 This is a consequence not only of the decisions that they make, but also the culture they create and whom they choose to hire. Many studies have shown that executives tend to hire employees who are like themselves and share their values.11 This creates a hidden force that underlies the company culture and affects every strategy, innovation, and transformation implemented in the organization.

Building the Right Teams for Change

As leaders, once we better understand our own values, we need to ask ourselves whether they match the goals of the company or division we are in. Maybe if we prefer growth and innovation, there is a new and upcoming business that we can manage rather than working to sustain a core business. And conversely, an executive oriented toward security and harmony might not be the best candidate for running a high-growth or new division.

If change is needed either by restructuring or by designing and implementing new strategic initiatives, senior executives should carefully consider the value dimension when deciding who should be responsible for carrying out the project. This is true both for individual executives and for teams.

Ensuring that the values of a team tasked with implementing change are aligned with the new company goals is crucial. This creates a common subconscious pull toward the desired outcome. It motivates the team and translates into a unified focus and strategy. This fit between the team and the revised goals can support transformation of the organization by gradually changing people’s mindsets and practices and ultimately aligning them with the new company goals.12

Examining ourselves and honestly recognizing our deep-seated preferences in the areas of risk, new ideas, and interpersonal relations can be challenging and uncomfortable. But the more self-knowledge we bring to decision-making, the better able we are to manage the extent to which we allow our subconscious values to steer our choices — and potentially move beyond our natural comfort zones to better align decisions with company goals.

The Hidden Values Driving Strategy

Global Economics Intelligence executive summary, October 2020

Economic recovery is sustained by manufacturing, trade, and the consumer sector; public health has been restored in China while European countries impose new restrictions amid rising COVID-19 levels.
Global Economics Intelligence executive summary, October 2020

Subscribed to future auto finance yet?

Auto financing’s future will be dynamic, disruptive, and different. Here’s our perspective on the European market.
Subscribed to future auto finance yet?

Five Fifty: The big experiment

Crisis-fueled experimentation has become a primary source of organic growth during the pandemic. But you’ve got to escape pilot purgatory first.
Five Fifty: The big experiment

How to find and maximize digital value in any M&A deal

Even when digital capabilities aren’t the centerpiece of a deal, they still can provide significant deal value with the right due diligence and integration planning.
How to find and maximize digital value in any M&A deal

China: Still the world’s growth engine after COVID-19

Consumers, one of the key drivers powering China’s economic rebound, have regained confidence and are spending at levels seen before the outbreak of the COVID-19 pandemic.
China: Still the world’s growth engine after COVID-19

How industrial companies can jump-start a rapid revenue recovery

Five analytics-driven go-to-market strategies can give organizations valuable insights to boost revenues.
How industrial companies can jump-start a rapid revenue recovery

To unlock better decision making, plan better meetings

How can senior managers get better, faster business decisions from the meetings they attend or lead? Planning is key.
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Four Principles to Ensure Hybrid Work Is Productive Work

Leaders and the teams they manage are experimenting with new ways of working — both in the short term during COVID-19 and longer term for a post-pandemic world. The axes of work are pivoting simultaneously in terms of both place and time, with leaders designing hybrid ways of collaborating that have few precedents. It’s tough and, not surprisingly, causing confusion. How much flexibility around where and when people do their jobs is best? What strategies are most effective? Some CEOs envision that work will happen “anywhere” going forward, while others are asking employees to return to central office spaces. Some are accommodating flexible time commitments, while others are requiring their staffs to be available 9 to 5.

To find the right way forward, leaders must understand the axes of hybrid work — the upsides and downsides of where and when people work — and align them so that they feed the energy, focus, coordination, and cooperation needed to be productive.

In this article, I’ll lay out what I’m seeing in the evolution of hybrid workplaces and describe four emerging principles: Use office space to amplify cooperation, make working from home a source of energy, take advantage of asynchronous time to boost focus, and use synchronized time for tasks that require coordination.

The Axes of Hybrid Work: Place and Time

The place of work for many people has historically been the office. Separate from personal space and outfitted with all the furniture and technology necessary for people to do their jobs efficiently, the office has been a place of congregation, where people gather for one primary goal — to work.

During COVID-19, this has changed dramatically. For many people, work is now located in their personal spaces — their homes — while others are working in coffee shops, local hubs such as smaller satellite offices or flexible shared office space, or various combinations of remote locations.

But place is not the only axis that is pivoting.

There is now much flexibility around time — the periods when people are actively engaged in work. Time is being reassigned as schedules are extending into what was “private” time, with people fitting work into personal schedules that might include caring for family and friends, taking time out to keep healthy and fit, and even doing professional upskilling. At play is chronological time (based on a specific schedule, such as 9 to 5); synchronous vs. asynchronous time (the extent to which colleagues’ schedules coincide); and control of time (the degree of autonomy that can be exercised about work hours).

The Goal Is Productivity

To ensure that a hybrid work arrangement works, leaders have to build a context of place and time that accentuates rather than depletes productivity. As they do this, they need to consider the elements of productivity that are particularly sensitive to these features.

The essentials of productive work begin with energy. In most jobs, people are more productive when they experience positive vitality and well-being, and their productivity is depleted when they are exhausted or stressed and their working habits become unhealthy. The next essential for many jobs where real concentration is necessary is focus. When the context — that is, the place and time of work — allows people to focus, they can be highly productive. Their focus suffers when their context is distracting and their attention is scattered.

Beyond these independent aspects of work are those tasks that require teamwork. Some tasks demand significant coordination with others. When people can fluidly align with one another, they are able to be goal-oriented and efficient; when this alignment breaks down, teams become divided and disjointed. And then there are jobs and tasks that require teams to cooperate and actively share ideas in ways that enable them to ideate and innovative. When the contexts of place and time create barriers to cooperation, productivity can suffer. People can become resistant, and infighting can break out.

Choices about place and time present trade-offs. For example, with regard to place, working in an office aids cooperation because colleagues are better able to develop trusting face-to-face relationships, but it can also deplete energy if it involves a long commute and hours sitting at a desk. With regard to time, working constrained, inflexible hours aids coordination since colleagues’ time can be easily synchronized. But it depletes focus because it fails to respond to individual rhythms of concentration.

What these trade-offs mean is that while aspects of hybrid work have the potential to bolster productivity, they need to be designed with a level of intentionality about place and time that is not practiced in traditional work systems, where both aspects are constrained. This intentionality means understanding the crucial productivity drivers necessary for clusters of jobs (such as the ability to focus) and the context of work that best accentuates these drivers while being aware of the trade-offs. Addressing these design choices in ways that enable productivity to flourish will be crucial to facing the economic challenges stemming from COVID-19.

New Principles of Place and Time

I’ve been studying a range of companies to see how this intentionality is being played out. These are companies I was following even before the pandemic began. In a recent webinar for the companies in my research consortium that I hosted with HSM colleague Anna Gurun, we talked about the hybrid/productivity model. I asked the companies one question: How are you going to successfully navigate the next year of your company?

What I heard is hopeful: Across the world, some organizations are rapidly building practices and processes that enable them to use hybrid work to accentuate the elements of productivity (energy, focus, coordination, and cooperation). Others are honing procedures that have been their signature management practices for years. Taken together, we see the emergence of new principles for a productive workplace. They are designing short-term fixes to the challenges that COVID-19 has created while looking into the future to be sure that they build practices that are sustainable.

Place Principle: Design the Office for Cooperation

Being in the office is essentially a social activity. In my April column on how to help employees work from home with kids, I cited Stanford professor Nicholas Bloom’s celebrated study of call center workers who were given the option to work from home. After six months, over half wanted to return to the office, even with long commutes. They yearned for the sociability and face-to-face cooperation of being in a shared space with colleagues.

As companies begin to coax or expect employees to return to offices, it will be important to make the most of the experience. That will mean creating a place where cooperation and interaction can thrive right now while COVID-19 is still a concern — and in the longer term as hybrid work becomes the norm.

Making an office a place of cooperation depends a great deal on how a space is designed. This idea was uppermost for the global design group Arup and its design leader Joseph Correnza in building its Melbourne office. While the design decisions were made pre-pandemic, they were sufficiently flexible and “hackable” to be reconfigured for current circumstances while not losing the long-term aim of creating a highly collaborative, dynamic space allowing informal movement.

“We need these encounters with each other, and the quality of the space is crucial to how we listen and how we learn,” said Jenni Emery, Arup’s global people and culture leader. “We had to be really intentional and considered.” The number of closed offices was limited and much of the space was opened up. Sight lines across the entire building allow people to easily catch a glimpse of one another and see that they are part of something bigger. Emery says this has created all-important moments of serendipitous encounters. Cork flooring helps reduce the ambient noise and let human voices be heard.

I asked Correnza how a company without the mighty resources of Arup could approach this cooperative principle. He had three ideas: Reduce small personal spaces and give them back to cooperative space (when such seating arrangements are safe again); encourage teams to meet in the open, outside of meeting rooms, so others can feel the buzz; and move groups of people every quarter to new seating so that they meet new people.

Place Principle: Make Working From Home a Source of Energy

One of the overwhelmingly positive results of working from home during the pandemic is that people are able to reassign their former commuting time to activities that boost their physical energy (through exercise and recreation) and their emotional energy (by spending time with family and friends). Many home workers are also boosting their energy by walking in parks, eating healthy home-cooked food, and establishing closer links to neighbors.

That said, those with young children have found it tough to manage the boundaries between being a worker and a parent. If home working is to continue to be a source of energy in the longer term, it requires a level of intentionality in the expectations of both employees and employers.

For the telecom company BT, COVID-19 has created an opportunity to hone and accelerate its long-established home working principles. BT was, in 1992, an early adopter of large-scale, experimental work-from-home trials when call center operators showed that, even using rudimentary technology, there was a positive impact on their energy, well-being, and productivity. Since then, BT has steadily introduced new technologies to support the significant proportion of its workforce who were remote workers even before the pandemic sent more people home.

When Nicola J. Millard, a principal innovation partner at BT, studied the most-veteran home workers, she found that their home office setups played a key role in their success. While each remote worker had fashioned a unique space, what made a real difference was having a separate room, a large computer screen, and a good chair. Rituals also were important, including dressing in work clothes and following a “getting ready” routine as if they were leaving the house.

Many of these veterans also maximized their energy by using technology to ensure that they maintained boundaries between “on” time, when they were available to respond and collaborate with others, and “off” time, when they could engage in energy-boosting activities. They took proper lunch breaks and made sure they symbolically left the workplace at the end of the day. They also negotiated with family and colleagues so these boundaries would hold up.

Culture and management style is essential, Millard explained. “We have used our communication platforms to build lots of virtual team check-ins so people don’t feel isolated, and we engineer virtual encounters like ‘virtual coffee’ so people have a chance to chat with people they don’t know so well.” Most important, BT home workers have been able to succeed in this model. “We’ve really learned that focusing on outcomes rather than being present in the office is crucial,” said Millard. That has meant developing processes for virtual performance management that include regular team check-ins, one-on-one conversations, and monthly reports to management.

Time Principle: Let Asynchronous Time Boost Focus

There are some jobs for which focus is a primary productivity driver. Crafting a schedule that allows employees to disconnect for a solid five hours to concentrate, and at a time that fits their natural energy rhythms, can be hugely beneficial, whether they do this in a corporate or a personal space. For these people, asynchronous schedules are ideal.

The Washington-based consulting practice Artemis Connection was built around giving its people the tools to work on complex tasks that require deep concentration, creativity, and focus. CEO Christy Johnson explained to me that to be focused and productive, everyone is able to define and control their time in terms of when — and how much — they work.

What lies behind the capacity is a well-honed project management system. Each piece of work is divided into its component tasks and analyzed based on the likely amount of time needed to achieve them. They are then bundled up into 15- to 20-hour blocks. These blocks are then considered within the group and assigned to individual employees. “For example, we are scoping a client project to write an intelligence brief,” said Johnson. “We think it’s going to be roughly 60 hours of work a week, in three 20-hour blocks. We look at the permutations — for example, one person doing two blocks and another doing one.”

Employees can decide that their maximum focus time is 20 hours a week, while others can take on more. An up-front agreement of time and tasks “ensures that work won’t expand to fill the time,” said Johnson. It also means that people can work at their own rhythms. “For example, my best work is when I intensely focus for 90 minutes and then take a break,” said Johnson.

For many Artemis employees who have come out of the big consulting firms, owning their time is a real source of liberation.

Time Principle: Enable Synchronized Time to Be the Basis of Coordination

While some tasks are best fulfilled when people can focus and work on their own, others require coordinating in real time on projects with in-the-moment dialogue and feedback.

Typically, synchronized time occurs naturally because people are in the same place at the same time. But technological advances have enabled the design of synchronized time that is place-agnostic and where it is possible to create opportunities for fruitful, real-time virtual interactions. That was the insight of Selina Millstam, who heads up talent management and culture change at the Swedish communications technology company Ericsson. Her goal was to have a companywide conversation that would encourage people to share and coordinate their beliefs about which values and behaviors would be crucial to the long-term success of the business. The moderated conversation took place over 72 hours, with more than 95,000 employees across 180 counties invited to participate.

Employees were asked to set aside time to join the online dialogue. Facilitators from locations across the world kept the jam from being a chaotic free-for-all. For example, when people joined in the first hours, they were encouraged to jump onto conversational threads about each of the focus areas being driven by the culture change initiative. The shared time allowed people in different time zones to connect. For instance, a software developer in India talked at length to a customer relations person in Germany, creating an important thread to which others contributed. “There was something raw and authentic about listening to people speak and contemplate in the moment,” said Millstam.

Each participant was encouraged to reengage with the exchange in an asynchronous way as well over the three days — creating, in the end, more than 20,000 conversational threads.

Looking Forward

Every organization will have to brainstorm how to heighten energy, focus, coordination, and cooperation to make hybrid work productive work. I suggest that leaders keep four recommendations in mind in the coming weeks and months:

Don’t move too fast. Individual preferences will take time to become clear. It took six months of home working for the Bloom study participants to decide they wanted to return to the office. And in the early stages of the BT experiments, the productivity of home workers fell sharply before rising. Be wary of making early decisions that will have long-term effects — leave your options open.

Keep the trade-offs in mind. In designing new ways of working, be prepared for the downsides of each model. Working from home will boost energy, but it will also deplete cooperation. Managing these trade-offs takes creativity — such as the way the BT team established satellite offices for people living in similar communities to come together occasionally.

Resolve to experiment. There is a great deal we do not yet know. It is crucial to be prepared to take risks. The team at Ericsson overcame the challenges of virtual coordination by using a state-of-the-art online participative and facilitated platform. It took courage to do so — but along the way, team members learned how to encourage chance meetings across the organization.

Nurture the leadership skills that managing preferences will require. The variety of combinations of time and place that are possible will require highly competent and motivated leaders committed to making this work. It will require a degree of intentionality that has not been necessary in traditional working practices. For leaders, that means being empathic and listening to individual needs while also being creative in developing solutions.

Four Principles to Ensure Hybrid Work Is Productive Work

The industrial CEO’s plan for the digital recovery

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How to Speak to Customers to Build Trust

Not only is consumer confidence and trust rather low these days, we’re also serving customers in a new, distanced way. The usual reliance on facial expressions and body language to make a connection with a customer and build trust is often no longer available. And given the generalized anxiety that comes with a global pandemic, feelings of trust can be especially hard to come by these days.

Related Reading

G. Packard, S. G. Moore, and B. McFerran, “Speaking to Customers in Uncertain Times,” MIT Sloan Management Review, August 11, 2020.

A growing body of research on language use in service interactions can help. Please join our speakers, authors of “Speaking to Customers in Uncertain Times,” as they show how very specific word choices and language strategies can make all the difference in connecting with customers. They’ll give practical advice on “speaking terms” that lead to customer trust.

In this webinar, you will learn:

• Why concrete language improves customer satisfaction.
• When to use “I” over “we.”
• How to manage the trade-off between speaking in a competent versus caring manner.

How to Speak to Customers to Build Trust

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The Best of This Week

Six Ways Companies Can Promote and Protect Human Rights

The extent to which corporations should react to human rights abuses by governments in their host and home countries has become one of the most dynamic discussions in the field of corporate responsibility. Companies have effective options beyond standing by or cutting ties.

When Cost Cutting, Keep Your Focus on Customers

The pandemic is forcing many B2B companies to cut costs, but conventional approaches to cost reduction may not serve them well. Instead, leaders should intensify their focus on customers by identifying the small, select group of customer value drivers in their companies and strategically cut costs.
 

Keeping Your Team’s Political Conversations Peaceful

Today’s politics seem increasingly divisive, and because it’s hard to compartmentalize political life from the rest of life, conversations between colleagues with differing views can get heated. This article offers strategies for managers to help maintain cohesion between teammates with opposing political views.

Employee Surveillance: Can It Be Done Ethically?

Long-term remote work has led to questions about monitoring employee productivity. Managers claim these surveillance measures provide valuable information about organizational productivity, but many workers harbor concerns about privacy and security. How can companies practice ethical surveillance?

How the Lockdown Unlocked Real Work

The global remote work experiment, driven by the pandemic, has revealed considerable untapped potential for major improvements in productivity and performance. Realizing that potential calls for a fundamental change in how managers approach their relationships and interactions with their people. Managers can nurture the value-adding relationships of leadership, engagement, and cooperation with these seven steps.

What Else We’re Reading This Week

• “Collaboration between the machine and the person is very important.” Mattias Ulbrich, CIO of Porsche and CEO of Porsche Digital, discusses how AI can drive change in business, engineering, and society in MIT SMR’s latest “Me, Myself, & AI” podcast.
• The digital health ecosystem is currently booming, but to survive and thrive, innovation partnerships will have to span international borders
• “Category kings” make three common but avoidable mistakes that open the door to competitors

Quote of the Week:

“The payoff for encouraging individuality and supporting inclusivity cannot be overestimated.”

— Ryan Bonnici, chief marketing officer of G2, in “Why Pronouns Speak To More Than Just Gender Differences”

The Best of This Week

Using public real estate to fuel a postpandemic recovery

As deficits mount, governments can use their real estate holdings to create breathing room.
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Will airline hubs recover from COVID-19?

Connecting traffic has been particularly hard hit by COVID-19. We believe the hub model will remain relevant postcrisis, but airlines will need to update their operations and network strategies.
Will airline hubs recover from COVID-19?

Getting acquainted with a more mindful Australian consumer

COVID-19 is reshaping the emotional needs of Australian consumers and, subsequently, their purchasing behaviour.
Getting acquainted with a more mindful Australian consumer

Insurers must rethink the SME segment: Lessons from the United Kingdom

UK small and medium-size enterprises are facing the recovery with a new set of needs. Insurers that can adapt their offerings could seize a sterling opportunity.
Insurers must rethink the SME segment: Lessons from the United Kingdom

Reimagine: Preparing for SG&A in the next normal

As the COVID-19 pandemic continues and its economic impact increases, the productivity and reallocation imperative for sales, general, and administrative (SG&A) activities continues to sharpen.
Reimagine: Preparing for SG&A in the next normal

More than a mission statement: How the 5Ps embed purpose to deliver value

Your company’s purpose strengthens resilience and creates value—if it’s genuine. A new framework highlights a detailed approach to embedding purpose throughout your organization.
More than a mission statement: How the 5Ps embed purpose to deliver value

How Would-Be Category Kings Become Commoners

Image courtesy of Richard Mia/theispot.com

The Research

• Author Rory McDonald spent several years studying companies pioneering new categories in several fields, most notably software and fintech. He interviewed hundreds of entrepreneurs, corporate innovation chiefs, market analysts, and journalists.

• Author Keith Krach built and led four category-creating enterprises in industrial robotics, mechanical design automation, B2B ecommerce, and digital signature.

• Using multiple-case methods, and melding their analysis with personal experience, the authors compared the emerging insights to develop a theory of the category creation process.

• They also reviewed prior research on category creation and market formation in organization theory and strategy.

Starting any business is hard, but creating a new category of business with a completely new model is a high-wire act. Companies have to convince investors, customers, the media, analysts, and others that something the world has long managed without is now a necessity and legitimately constitutes a new business category. While educating and selling the market on this new category, there’s also a business to build and a whole new business model to formulate. Pulling this off is like delivering a nonstop TED Talk while inventing the light bulb and building General Electric all at the same time.

Many people feel it’s a challenge worth taking. Category creation is the holy grail in business. Companies that succeed at creating entirely new markets, industries, or product categories — like Airbnb, DocuSign, and Salesforce — generate wealth beyond their founders’ wildest dreams. The spoils are so great that the winners are often referred to as category kings. Over time, their brand name becomes virtually synonymous with their category, effectively barring new entrants.

Once a king emerges, would-be competitors become also-rans, or commoners. These businesses find it increasingly hard to maintain support: Media and analyst attention dries up, leading to less investment and fewer customers. Ultimately, they are sold for parts or shut down altogether, like Napster or AltaVista.

Getting this high-wire act right is critical. Competition in new categories is more intense than ever. The cost of starting a digital company has shrunk by 90% in the two decades since the dot-com crash, thanks to the emergence of open-source software, cheap cloud computing, and social media platforms that offer low-cost advertising and free publicity.1 Low startup costs mean more startups, more categories, and more competitors vying for consumers’ limited attention. For example, shortly after Beyond Meat emerged, Impossible Foods, Hungry Planet, and a half-dozen other startups were offering plant-based meat and dairy products — all seeking to become king of the category.

Information overload makes it hard to get people’s attention. And while social media offers a cheap way to reach consumers, it’s increasingly difficult to keep their interest. Some pioneers of new categories assume that they should spend much of their time hyping products at trade shows and meeting with journalists and analysts. Many spend significant sums each year on marketing. Even those who are selling products with self-evident technical and economic benefits still spend enormous energy trying to convince audiences that they need this new thing and should choose their company to provide it.

It’s typically during this aggressive marketing-and-category-creation stage that we see companies lose their way. We have come to think of this phenomenon as the Commoner’s Curse: A prominent high-flying company succeeds at building a lucrative new category only to end up handing the keys to the kingdom to someone else. To understand how would-be kings wind up as commoners, we have spent several years studying companies pioneering new categories; interviewing hundreds of entrepreneurs, corporate innovation chiefs, market analysts, and journalists; and poring over years’ worth of press releases and media stories.2 We discovered that many executives undermine their own ventures’ standing during the category-creation phase by misinterpreting data and misfiring on strategies deemed fundamental to creating new categories.

Some self-destruct by ruthlessly and indiscriminately attacking incumbents. Others, in an effort to win legitimacy, funding, and early media and customer support, focus too much on promotions and too little on product development. Still others, in an effort to gain traction, adopt trendy labels that later limit their ability to articulate their unique value proposition and ultimately lose control of their strategy.

Over the years, we’ve seen very promising companies end up on the sidelines of categories they helped create — all because of three common and easily avoidable mistakes.

Mistake No. 1: Sloppy Attacks on the Establishment

In their fervor to identify themselves in opposition to the status quo, category creators sometimes aggressively discredit opponents early on. It’s an approach that can easily backfire, especially if they strike the wrong tone or attack those opponents indiscriminately. For instance, on the day Microsoft launched its competing team-chat product in 2016, Slack ran a full-page ad in The New York Times welcoming Microsoft to the category and offering “friendly” advice on how to build a good communications app.3 The stunt generated plenty of press, as intended, but much of it was unwelcome. Normally supportive media outlets characterized Slack’s ad as petty, disingenuous, and self-congratulatory, and some even accused the company of making misleading product claims. Reporters pointed out that Microsoft, which was integrating its app with its productivity tools, had a huge advantage, and they questioned whether companies should still pay extra for Slack. Soon thereafter, Facebook and Google entered the category. Although it’s premature to label Slack a commoner, the war of words launched four years ago served mainly to alienate members of the press and likely aroused sleeping giants.

There’s nothing wrong with going on the attack. Pointing out industry shortcomings is often necessary to challenge the status quo, as Salesforce has demonstrated over the years by calling rivals IBM, Oracle, and SAP dinosaurs. The trouble arises when companies attack in a sloppy and scattershot way. Two fintechs we studied in a nascent social-investing category illustrate the point. Early on, both devoted huge amounts of money and managerial time to public outreach. The goal was to sell the public on a new kind of social-investment platform. To capture attention, these leaders disparaged the entire investment industry as esoteric and old guard — saying it forced clients to pay pricey experts when they could instead rely on knowledgeable nonprofessionals for investing advice.

The news media bought into the appealing underdog tale, and the social-investing category took off.

Lessons From the Field

Coauthor Keith Krach’s advice to the would-be category creators he counsels includes these points drawn from his experience founding and leading four companies that have created and dominated their market category:

People support what they help create. The source of your competitive advantage is knowing the jobs that your customers need to get done better than your competitors do and using that knowledge in both product development and marketing — so get your customers on board. At Ariba (now SAP Ariba), for example, we began hosting quarterly customer advisory-council meetings to learn about our customers’ pain points and to listen to their ideas about features they wanted to have in the next version of the product. We took the council’s advice seriously, incorporating the best ideas into the product and building a mutually beneficial relationship with our key buyers. The council was such a hit with our early customers that it doubled in size every quarter, helping us grow the business. Before long, we started inviting new prospects to the council’s meetings. It’s hard to imagine a more powerful sales tool than a presentation by an existing customer on how well the new product helps the company do the job it needs to get done.

Focus on a strategic niche — then land and expand. Creating and winning over a new market requires storming the first beach and occupying a defensible position from which to expand. With DocuSign, there were dozens of potential submarkets available, but the company decided to focus first on real estate. Real-estate contracts, unlike many contracts in the B2B world, are typically handled by individuals and small businesses without large offices, legal departments, or support staffs. Many of the signatories and agents conduct their business from laptops and mobile phones, so tracking down and setting up a fax machine, printer, or scanner is a major inconvenience. Real-estate contracts are also high volume, which enabled DocuSign to iterate and refine the product and the subscription business model as it expanded into other sectors of document exchange.

Facilitate an industry standard. When a new technology opens up a new market or industry, the early going is likely to be chaotic. Standards, rules, and accepted practices take some time to develop. Consider railroad gauges: In the industry’s early days, each operator used its own gauge, making the interoperability of freight between lines expensive and difficult. Not until 1886 would the U.S. rail industry converge on a nationwide standard. Issues of this sort arise in nearly every instance of a new technology, and excessive splintering can stop the technology in its tracks. So category creators need to be on the front lines of both industry conventions and building trust. The best strategy is to create standards early, in cooperation with industry experts. In building the first B2B ecommerce at Ariba, we could have built in any language, but we saw the need for a common standard. By developing and pushing for the cXML standard, we did the industry (and ultimately ourselves) a long-term favor. We did the same thing at DocuSign when we facilitated the xDTM standard that quantified the level of trust in a digital transaction. Facilitating a standard shows new market participants that you are serious about building trust and are focused on the long term.

But the targets of these scattershot attacks — money managers, financial advisers, brokerages, investment gurus, hedge funds, and even the financial press — eventually struck back. Some took umbrage at the wholesale labeling of industry investment professionals as crooks. Bloomberg, perhaps unsurprisingly, dismissed one such site as an “upstart” and let analysts take potshots. “I think the website is well intentioned in concept but is full of misstatements, bogus statements, and statements that investors beat the market if they tag along with smart people,” wrote one analyst, adding that fraudsters could use the site and that it could undermine reputable advisers. He also complained that the website “makes financial advisers out to look like crooks trying to take advantage of the innocent public.”4

Soon, other market observers were questioning the entire conceit. How wise was it, really, to share precious stock tips with the masses? The financial press, which had been largely supportive early on, turned negative, savaging both brands. Meanwhile, lower-profile competitors swooped in to scoop up the spoils — much to the irritation of the category’s other contributors.

“We were irked that all of the PR we’d generated gave free shout-outs to the others,” a vice president at one of the two category pioneers told us in an interview. “We earned that press; why are they getting to free-ride?”

Some critics of the two high-profile companies, mindful of the category’s potential, invested in the less aggressive and less visible social-investing startups. In the end, several companies that had helped build the new category were sold (losing investors’ money) and those waiting in the wings stepped in.

Our research shows that a subtler, more deliberate approach often works best. The successful fintechs we studied postponed their attacks, letting peer-competitors strike first and suffer the backlash. Successful kings also forge oppositional identities and challenge the status quo, but attacks are typically less petulant and more measured. Some, for example, go after inanimate targets that can’t strike back, such as waste and outdated ways of doing things. For instance, Kevin Plank of Under Armour, a maker of innovative sportswear, proclaimed cotton to be the enemy; Keith Krach at DocuSign, the electronic-signature category king, took aim at paper waste. By evading threats to the nascent brands, over time these companies enjoy greater audience support and are more likely to emerge as category kings.

Mistake No. 2: Promoting the Category Without Refining the Job

Another mistake that category commoners typically make is to spend too much time and money promoting the new category while failing to come to grips with the “jobs” that consumers would actually “hire” their products or services to do.5 Entrepreneurs in new categories need to raise money, legitimize the market, and attract customers. But some get carried away with extolling the virtues of their product. In category creation, drumming up early publicity can quickly become a full-time occupation. It’s easy to see how this happens. It’s seductive and fun to be in the limelight, chatting with reporters and speaking on panels. But product development — and customers — can take a back seat when founders become conference fixtures and media darlings. Our research shows that many promising entrepreneurs make this mistake. As a result, their goals get subverted.

Color Labs is a prime example of a company that put promotion before product. Bill Nguyen, who had previously sold a company to Apple, and his experienced cofounders raised $41 million without testing their idea with the public or even launching an app. They did so by hyping the product. Nguyen boasted to journalists that the social photo-sharing app would be a “Facebook killer.”6 The idea was that people would go to a cafe, museum, or park, take a photo, and post it on Color. Others nearby would do the same, and thus strangers could connect. But when the app launched in 2011, it was buggy and the site was eerily quiet. Negative reviews in Apple’s App Store called Color confusing and pointless. Eventually, the business shut down. Commentators later pointed out that Color Labs tanked not just because it failed to provide a satisfactory solution to a job to be done, but because the job it identified didn’t actually need to be done.7 People weren’t dying to find ways to connect with strangers in the moment.

Digg is another cautionary tale. In 2004, Digg launched as a link aggregator website. According to cofounder Kevin Rose, Digg would displace newspapers with a new kind of digital front page. Users would vote on stories, determining which articles others would see. It was an interesting concept — letting users, not editors, decide on story placement — and one that persists today, including in Facebook’s news feeds. Investors and journalists loved Rose and his disruptive tale. In 2006, BusinessWeek put the twentysomething on its cover, treating him as a wunderkind. Soon, though, generating traffic and buzz took priority over building community. A shortcoming of this strategy became apparent in 2010, with the rushed release of a new version designed to chase mainstream consumers instead of satisfying Digg’s loyal user base.8 Visits soon dropped by more than half, 40% of the staff had to be laid off, and Rose resigned.9 The media may have loved Rose, but customers didn’t want to hire his latest product version, and many of them moved to Reddit, a smaller competitor that had incorporated many of Digg’s original features. Ultimately, Rose succeeded at creating a new category that other companies would lead.

In contrast, WhatsApp avoided early category promotion altogether. Instead of hyping the market, cofounder Jan Koum quietly launched a product just one month after starting the business. Lack of visibility proved fortunate, since early versions kept crashing. As the app gained traction, Koum and cofounder Brian Acton continued to avoid the spotlight, steering clear of the press (and even investors) and working from an unmarked building in Mountain View, California. In a media profile in April 2014, Koum said they were more interested in building stuff than in talking about it and added that word-of-mouth endorsements from users were far more valuable than the media’s imprimatur.10 This profile, and others like it, appeared only after Facebook had acquired the company for $19 billion. By then it had created a new mobile-messaging category and become one of the world’s most popular phone apps.

This is not to say that promotions and marketing don’t matter. Without them, categories wouldn’t exist. The key, we’ve learned, is to view communication more broadly. Salesforce founder Marc Benioff, known for always having time for reporters, says it was communication with customers (not the media) that shaped his company from the beginning. From its earliest days, customers and prospects were invited to take a look at what the company was working on, test out products, and offer feedback. The feedback was used to better align products with the jobs that customers were trying to get done. Keeping the lines of communication open with customers and putting the job first continues to drive Salesforce’s growth today.11

Mistake No. 3: Embracing Trendy but Flawed Market Labels

Interested observers, such as media and analysts, are prone to inventing labels to describe new market categories. “Fantasy investing” and “social investing” were popular labels we encountered while researching a new category of fintechs. Routinely, such labels are shorthand analogies to high-profile brands: A company might be called “the Facebook of investing” or “Uber for lawyers.”

Far too often, though, pioneers — to legitimize their new category and to gain traction with audiences — embrace these trendy labels even when they’re not entirely accurate.

Thousands of entrepreneurs have used the “Uber for ____” label in pitch decks, including the Uber for makeup, laundry, private jets, ice cream, and medical marijuana.12 Occasionally, these descriptions accurately capture startups in emerging categories; usually, they don’t.

Some entrepreneurs even adopt these glib analogies in external communication. The trouble arises when it’s obvious that the label doesn’t accurately describe the business — or, worse, when it once did, but the original strategy isn’t working anymore and the business must pivot to a different (and probably less sexy) model to compete. Alas, now the company is trapped: Audiences remain firmly committed to the company identity sold to them by the founders — one that no longer applies. Meanwhile, competitors that resisted trendy labels are freer to switch to more promising models.

SoundCloud, an early music-sharing platform, embraced the externally imposed label “a YouTube for audio.” Initially, when the company was hosting underground and amateur artists who published their work, this formulation was helpful. But later, when it moved mainstream by targeting high-profile artists and adding a monthly subscription service, customers attracted by the original rebel image fled. Plagued by that problem and others, such as rights issues, mismanagement, and heavy losses, in 2017 the company laid off 40% of its workforce and shuttered offices in San Francisco and London.13

The fundamental risk of embracing glib labels early on, particularly in new categories, is that the strategy, the offering, or both usually need revising. Indeed, SoundCloud has since returned to its roots of attracting original content creators, such as indie artists and podcasters, with new software tools for uploading, sharing, and promoting content. But the company’s bumpy ride illustrates how embracing labels too soon can make it difficult to experiment and pivot. Leaders often cling to labels that have captivated audiences — or worse, they alter their own product-market strategies based on those labels long after it’s clear that they conflict with what the company should be doing.

Other commoner companies make the mistake of embracing a label that becomes passé and stigmatizes an entire category whose component companies become standard-bearers for dated ideas. Being a “daily deal” company suited Groupon (and the startups that emerged in its wake) until that business fad faded and vouchers became yesterday’s news. As revenues have declined, the company has worked to move away from its discount-coupon voucher business and has struggled to achieve results approaching those of its giddier days.14

Our research suggests a more productive way forward. Companies that reject observer-imposed labels (and the lure of easy comprehensibility) may sacrifice early media coverage but will ultimately maintain more control of their images, company narratives, and strategies. Then again, Ethan Brown, the founder of Beyond Meat, has managed to get plenty of attention while rejecting observers’ labels. He routinely challenges those who lump his business into the “fake meat” category: A car isn’t a fake horse-drawn carriage, he asserts, nor is Beyond Meat’s product an alternate chicken. Cars took horses out of the equation, he points out.15 Brown’s goal is to become mainstream by supplanting meat with plant-based protein, which, like meat, is made of amino acids, lipids, trace minerals, vitamins, and water. 

By sticking with their own labels and stories, innovators resist abdicating strategy to outsiders. Thanks to the efforts of Brown and others, the press now routinely refers to Beyond Meat’s category as “vegan meat brands” and to traditional meat products as “animal-based meat.” Indeed, Brown has fought successfully to sell his product to mainstream consumers, at fast-food chains, and alongside beef and chicken in grocery stores instead of in more specialized, less popular vegan sections. 

Category kings aren’t necessarily the first to market, the boldest, or even the most innovative companies. But those we’ve studied typically navigate the category-creation process in a distinctive way. They’re content to let others attack the establishment, including industry incumbents, early on and to devote their own time and resources into carefully defining the category. They attack, too, but in their own good time, often selecting targets that can’t strike back. They sacrifice early press while they fine-tune their solutions — products that customers will actually hire to do a job. And they reject trendy category labels that could lock them into undesirable models later. Ultimately, these companies, by taking a more systematic and measured approach, enjoy greater visibility and more favorable audience support than their peers. Then, when the early darlings become cautionary tales, the true kings step in to seize the throne.

How Would-Be Category Kings Become Commoners