Top 10 Downloaded HBR Articles in 2014 by CIO Forum Members
Getting Value From Your Data Scientists
MIT Sloan Management Review: Fall 2014
MIT Sloan Management Review - Winter 2014
Raising the Bar With Analytics
More than half of managers surveyed strongly agree that their organizations need to step up analytics use, according to a 2013 global survey by MIT SMR and SAS Institute. In addition, survey data suggests that in companies where analytics has improved the ability to innovate, managers are more likely to share data with partners and suppliers.
DATA & ANALYTICS, BIG DATA
DAVID KIRON, PAMELA KIRK PRENTICE AND RENEE BOUCHER FERGUSON
Thriving in a Big Data World
Words have become data; the physical states of our machinery have become data; our physical locations have become data; and even our interactions with each other have become data. Three recent books offer expert perspectives on the increasing power and importance of analytics.
DATA & ANALYTICS, BIG DATA
ALDEN M. HAYASHI
Should You Outsource Analytics?
Outsourcing analytics activities can offer benefits, but it requires a carefully constructed relationship between the company and the business process organization (BPO). Customers must be careful not to lose their expertise or their core intellectual property. Research suggests that companies with superior analytics capabilities will approach outsourcing differently than companies that are analytically challenged.
DATA & ANALYTICS, ANALYTICS & STRATEGY
DAVID FOGARTY AND PETER C. BELL
Overheard at MIT
“Big Data in Manufacturing” was the theme of a daylong conference held in Cambridge, Massachusetts, in November 2013 and sponsored by the MIT Forum for Supply Chain Innovation and the Accenture and MIT Alliance in Business Analytics. But the speakers’ insights weren’t restricted to manufacturing.
DATA & ANALYTICS, BIG DATA
REPORTED BY BRUCE POSNER
What’s Your Information Footprint?
Wealth once was measured by the amount of land, employees or equipment you had. Today we are on the cusp of a period in which another factor is an indicator of potential wealth: how much information you have. Information has the potential to be a valuable asset, and a new framework, dubbed “the information footprint,” presents a way for companies to assess their information assets and the opportunities it gives them for new value creation.
TECHNOLOGY, IT STRATEGY
JEFFREY L. SAMPLER AND MICHAEL J. EARL
The Problem With Online Ratings
Studies show that online ratings are one of the most trusted sources in e-commerce decisions. But research suggests that these ratings are systematically biased and easily manipulated. The heart of the problem lies with herd instincts — natural human impulses characterized by a lack of individual decision making — that cause us to think and act in the same way as other people around us.
MARKETING, SOCIAL MARKETING, DIGITAL MARKETING
Stories That Deliver Business Insights
Companies are gaining value from ethnography, the in-person study of how people actually use a product or service. Through its attention to the details of people’s lives, ethnography can be a powerful tool to help executives gain insights into their markets. Ethnographic stories can also be indispensable in helping executives rethink their assumptions about what customers care about and about overall strategic direction.
MARKETING, MARKETING STRATEGY
JULIEN CAYLA, ROBIN BEERS AND ERIC ARNOULD
Rewriting the Playbook for Corporate Partnerships
In fast-changing markets, some companies are developing flexible, adaptive strategic partnerships to leverage the resources of both customers and suppliers. Incentive arrangements focus partners on joint value creation, and companies are sharing information extensively to solve problems together. These partnerships make the most sense when the product or service is of strategic importance to the customer, when the vendor has superior expertise and when there is uncertainty in the relationship.
OPERATIONS, PARTNERSHIPS & ALLIANCES
F. ASÍS MARTÍNEZ-JEREZ
Strategic Decisions for Multisided Platforms
Some of the fastest growing businesses in recent years — companies such as Facebook, eBay and LinkedIn — are “multisided platforms” that enable interactions between two or more sets of participants. The spectacular success of some of these MSPs has caught the attention of many entrepreneurs and investors. But building a multisided platform business requires savvy decisions on everything from design to governance to pricing.
STRATEGY, BUSINESS MODELS
Why Customer Participation Matters
These days, many businesses are focused on increasing customers’ positive word of mouth. But emphasizing customer participation — such as providing feedback or suggestions — may be a more important vehicle for generating valuable repeat business. As one COO said, “Levels of feedback is a way we identify our most profitable customers. Those that bother to write to us do care. And they do spend money with us.”
MARKETING, MARKETING STRATEGY
OMAR MERLO, ANDREAS B. EISINGERICH AND SEIGYOUNG AUH
The Real Savings From IT Outsourcing
Research suggests that outsourcing IT can help reduce sales expenses and general and administrative costs, which are often four to five times IT costs. Managers need to take a balanced approach to their investments in internal systems and outsourcing to reap greater benefits in terms of cost savings. Analyzing the impact of outsourcing on non-IT costs and formulating strategies for maximizing the savings on these expenses can help companies get the most out of outsourcing spending.
TECHNOLOGY, IT GOVERNANCE & LEADERSHIP
KUNSOO HAN AND SUNIL MITHAS
How to Position Your Innovation in the Marketplace
Should a new product or service launch at the high end of the market and move downward or at the low end and move up? In truth, there’s no one-size-fits-all approach for entering the market, but a new research-based framework helps identify the best strategy for a particular product or service. The two key questions to ask: Is the basic functionality of the new offering better or worse than that of existing competitive products? And how groundbreaking are the novel attributes of the new product?
INNOVATION, NEW PRODUCT DEVELOPMENT
GLEN SCHMIDT AND BO VAN DER RHEE
The Art of Strategic Renewal
What does it take to transform an organization before a crisis hits? How can leaders initiate major transformations proactively? The key often lies in strategic renewal — a set of practices that can guide leaders into a new era of innovation by building strategy, experimentation and execution into the day-to-day fabric of the organization. It’s not easy: leaders find it much easier to resist change than to embrace it.
LEADING YOUR TEAM, LEADING CHANGE
ANDY BINNS, J. BRUCE HARRELD, CHARLES O’REILLY III AND MICHAEL L. TUSHMAN
The Discipline of Creativity
Managers can’t afford to rely on haphazard, hit-or-miss approaches to idea generation. Ideas must fit with an organization’s strategy or take it in a new, purposeful direction, and they must solve real problems for stakeholders. A new seven-step process for idea generation is designed to help managers understand their problems deeply, generate tangible ideas for solutions and translate those ideas into action.
INNOVATION, INNOVATION STRATEGY
JOSEPH V. SINFIELD, TIM GUSTAFSON AND BRIAN HINDO
Acquisitions That Make Your Company Smarter
It’s challenging to successfully integrate any acquired company. It’s even more complicated when you purchase a business for its knowledge. From Pfizer Inc.’s acquisition of Icagen Inc. to Walt Disney’s acquisition of Pixar, knowledge-based acquisitions are focused on acquiring new knowledge — related to product features, customer needs, processes or technologies — and depend on assimilating the two companies’ expertise. Included: a sidebar on “Six Steps for Smoother Knowledge Transfer.”
STRATEGY, EXECUTING STRATEGY
NIMA AMIRYANY AND JEANNE W. ROSS
The Power of a Good Logo
The authors’ research found that corporate logos that express a brand’s symbolic, functional or sensory benefits, have a significant positive effect on customer commitment to a brand — and thereby a significant impact on company performance in terms of revenues and profits. The research also indicated that separate visual symbols used as logos tend to be more effective than brand names at creating a sense of emotional connection with consumers.
MARKETING, MARKETING STRATEGY
C. WHAN PARK, ANDREAS B. EISINGERICH AND GRATIANA POL
Harvard Business Review,Jan-Feb 2014
ORGANIZATION & CULTURE
IDEO's Culture of Helping
Teresa Amabile, Colin M. Fisher, and Julianna Pillemer | page 54
Leaders can do few things more important than encouraging helping behavior within their organizations. In the highest-performing companies, it is a norm that colleagues support one another's efforts to do the best work they can. That has always been true for efficiency reasons. Collaborative helping becomes even more vital in an era of knowledge work, when positive business outcomes depend on high creativity in often very complex projects.
A help-friendly organization has to be actively nurtured, however, because helpfulness among colleagues does not arise automatically: Competition, pride, or distrust may get in the way. The trickiness of this management challenge -- to increase a discretionary behavior that by definition must be inspired -- makes all the more impressive what the design firm IDEO has already achieved. Its help-seeking and help-giving culture is behind the firm's success. But how has IDEO managed to make helping the norm? To answer this question, the authors spent two years observing, interviewing people, and conducting surveys at one office of the firm.
Are there principles that leaders of other organizations could learn and apply to similar effect? The authors posed this question and came out with four principles.
Leaders at IDEO prove their conviction by giving and seeking help themselves
The Two Sides of the Helping Coin
IDEO's leaders know that the relationships between help givers and help receivers -- and levels of accessibility and trust -- can be heavily influenced by features of the organization
Processes and Roles
How pervasive is helping at IDEO? Our network mapping revealed an extraordinary fact: In the office we studied, nearly every person was named as a helper by at least one other person. Even more amazing, an overwhelming majority of employees (about 89%) showed up on at least one other employee's list of top five helpers.
Help is embedded in the entire design process, from IDEO's famous brainstorming sessions, through formal design reviews, to the many forms of support and encouragement for project teams seeking feedback on ideas
Slack in the Organization
Part of the case for building a help-friendly organization is that it produces greater efficiency. It may seem paradoxical, then, that one of the keys to collaborative help at IDEO is allowing slack in the organization.
ORGANIZATION & CULTURE
Building a Game-Changing Talent Strategy
Douglas A. Ready, Linda A. Hill, and Robert J. Thomas | page 62
When most of the world's financial services giants were stumbling and retrenching in the aftermath of the 2008 recession, the asset management firm BlackRock was busy charting a course for growth. Its revenues, profits, and stock price all performed consistently through this tumultuous period. The authors looked at BlackRock and other game-changing companies -- the Mumbai-based global conglomerate Tata Group, and Envision, an entrepreneurial alternative energy company based in China -- and found significant commonalities. These three companies demonstrate the essential attributes of a game-changing organization: They are driven by purpose, oriented toward performance, and guided by principles.
In the process of conducting interviews with these companies, the authors discovered a fourth thread that weaves them even more tightly together: Each is supported by a game-changing talent strategy. But, they write, the path to such a strategy seems rife with complexity and ambiguity. How can both strategy and execution be consistently superior? How can they support a collective culture yet enable high potentials to thrive as individuals? How can the strategy be global and local at the same time? And how can its policies endure yet be agile and constantly open to revitalization? BlackRock's approach provides the answers.
How Netflix Reinvented HR
Patty McCord | page 70
When Netflix executives wrote a PowerPoint deck about the organization's talent management strategies, the document went viral -- it's been viewed more than 5 million times on the web. Now one of those executives, the company's longtime chief talent officer, goes beyond the bullet points to paint a detailed picture of how Netflix attracts, retains, and manages stellar employees. The firm draws on five key tenets:
Hire, reward, and tolerate only fully formed adults. Ask workers to rely on logic and common sense instead of formal policies, whether the issue is communication, time off, or expenses.
Tell the truth about performance. Scrap formal reviews in favor of informal conversations. Offer generous severance rather than holding on to workers whose skills no longer fit your needs.
Managers must build great teams. This is their most important task. Don't rate them on whether they are good mentors or fill out paperwork on time.
Leaders own the job of creating the company culture. You've got to actually model and encourage the behavior you talk up.
Talent managers should think like businesspeople and innovators first, and like HR people last. Forget throwing parties and handing out T-shirts; make sure every employee understands what the company needs most and exactly what's meant by "high performance."
HBR Reprint R1401E
THE BIG IDEA
Focusing Capital on the Long Term
Dominic Barton and Mark
Wiseman | page 44
Since the financial crisis of 2008, there has been widespread agreement on the need for public companies to build value for the long term. Nonetheless, because of pressure from financial markets, a detrimental focus on short-term performance persists. Reversing this trend, the authors say, depends on the leadership of major asset owners such as pension funds, insurance firms, and mutual funds. They should act by taking four practical, proven steps:
Define long-term objectives and risk appetite, and invest accordingly. Major asset owners should set a multiyear time frame for creating value, decide how much underperformance they can tolerate in the short term, and then align their investments with this agenda.
Practice engagement and active ownership. Big investors should cultivate ongoing relationships with the companies they invest in, collaborating with management to optimize corporate strategy and governance.
Demand long-term metrics from companies to improve investment decision making. Rather than focusing on quarterly financial statements, investors should seek to obtain and analyze data that indicate a company's long-term health.
Structure institutional governance to support a long-term approach. Big investors must have competent board members committed to investing for the long term, as well as policies and mechanisms to translate this philosophy into action.
STRATEGY & COMPETITION
The Big Lie of Strategic Planning
Roger L. Martin | page 78
Managers must learn to keep strategy outside the comfort zone.
Strategy making forces executives to confront a future they can only guess at. It's not surprising, then, that they try to make the task less daunting by preparing a comprehensive plan for how the company will achieve its goal. But good strategy is not the product of endless research and modeling; it's the result of a simple process of thinking through how to hit a target and whether it's realistic to try. Discomfort is part of the process. If you are entirely comfortable, you're probably stuck in one or more of the following traps.
Strategic planning. Planning arguably makes for more thorough budgets, but it must not be confused with strategy.
Cost-based thinking. Costs lend themselves wonderfully to planning, because the company controls them. But for revenue, customers are in charge. Planning can't make revenue magically appear.
Self-referential strategy frameworks. Even managers who avoid the first two traps may end up using a framework that leads them to design a strategy entirely around what the company controls.
A company can avoid those traps by focusing on customers, recognizing that strategy is about making bets, and articulating the logic behind strategic choices.
The New Patterns of Innovation
Rashik Parmar, Ian Mackenzie, David Cohn, and David Gann page 86
The search for new business ideas -- and models -- is hit-or-miss at most firms. Tackling the problem systematically, of course, will improve your odds of success. Traditional ways of framing this search examine competencies, customer needs, and shifts in the landscape. This article proposes adding a new IT-based framework. It involves asking, How can data and analytic tools be used to create new value?
The authors have explored that question with many clients. In their work, they've seen IT create new value in five patterns: using data from sensors in objects to improve offerings (think smart energy meters); digitizing physical assets (such as health records); combining data within and across industries (to, say, coordinate supply chains); trading data (as mobile providers do with information on users' whereabouts); and codifying best-in-class capabilities (such as online expense management) as services.
Drawing on examples from their own experience and their clients', the authors walk readers through each of the five patterns and how to apply them. They also provide advice and questions that will help executives get started on their own searches.
From Superstorms to Factory Fires: Managing Unpredictable
David Simchi-Levi, William Schmidt, and Yehua Wei | page 96
Traditional methods of managing supply chain risk require estimations of how likely a disruption is to occur. For fairly common risks -- poor supplier performance, forecast errors, transportation breakdowns -- the traditional methods work quite well. But it's a different story for rare, high-impact events such as megadisasters, pandemics, and political upheavals. These risks are hard to quantify using traditional models, and as a result, many companies do not adequately prepare for them, which can have calamitous consequences when catastrophes do strike.
A new model allows managers to quantify the impact of a supply chain disruption on a company's operational and financial performance, rather than focusing on the cause or likelihood of the disruption. This type of analysis obviates the need to determine the probability of any specific risk's occurring -- a valid approach since the mitigation strategies are equally effective regardless of what caused the disruption.
In this article, the authors describe how companies can use the model to reduce their exposure to all types of supply chain risk.
HBR Reprint R1401H
How I Did It
SodaStream's CEO on Turning a Banned Super Bowl Ad into
Daniel Birnbaum | page 39
When Birnbaum joined SodaStream, in 2007, it was a sleepy company whose managers liked to boast that they had an 85% share of the "home carbonation business." He and his all-new management team brought enthusiasm and vision -- and shortly began talking about a new cola war to grow SodaStream's share of the $260 billion global soda business.
The ad they created for the 2013 Super Bowl reached more than 100 million viewers -- but in an unexpected twist, an ad that never even got on the air garnered more attention. The original spot (called "Game Changer"), which took a direct shot at Coke and Pepsi, was rejected by CBS. The legal wrangling that followed generated headlines around the globe -- and the controversial ad has been viewed more than 5 million times on YouTube. Newspapers in countries that don't even air the Super Bowl began doing stories on it. From a marketing standpoint, it was a great investment.
HBR Reprint R1401A
Find the Coaching in Criticism
Sheila Heen and Douglas Stone | page 108
Feedback is crucial -- but almost everyone, from new hires to C-suite executives, struggles with receiving it. The authors, who have spent 20 years working with managers on difficult conversations, outline six steps that can help you turn feedback into an important, and unthreatening, tool.
Know your tendencies. Look for patterns in how you respond. (Do you defend yourself? Do you lash out?) Once you understand your standard operating procedure, you can make better choices about where to go from there.
Separate the "what" from the "who." Your feelings about the messenger might be short-circuiting your ability to learn from the message.
Sort toward coaching. Work to hear feedback as well-meant advice, not as an indictment.
Unpack the feedback. Resist snap judgments; explore where suggestions are coming from and where they're going.
Request and direct feedback. Don't wait for a formal review; ask for bite-size pieces of coaching.
Experiment. Try following a piece of advice and seeing what happens.
Criticism is never easy to take -- but learning to pull value from it is essential to your development and success.
The New Rules of Globalization
Ian Bremmer | page 103
Until 2008 going global seemed to make sense for just about every company in the world. Since then, we've entered a different phase, one of guarded globalization. Governments of developing nations have become wary of opening more industries to multinational companies. They are defining national security more broadly and perceiving more and more sectors to be of strategic importance, taking active steps to deter foreign companies from entering them and promoting domestic, often state-owned enterprises. Indeed, the rise of state capitalism in some of the world's most important emerging markets has altered the playing field.
To factor globalization's new risks into strategy, executives must consider their industry's strategic importance to the host government and their home government. They can then choose among various approaches: strike alliances with local players, look for new ways to add value abroad, enter multiple sectors, or stay home.