It’s never easy to whittle down a year’s worth of Harvard Business Review’s research, ideas, and advice to the few articles gathered in this volume, but this past year was particularly tough. In addition to staple HBR topics such as leadership and strategy, the complex and difficult issues we were turning over in our minds and discussing in boardrooms and on social media also filled the pages of HBR. Recurring themes included machine learning, the place of business in society, and the implications of intersectionality—where harassment and discrimination can affect any one of the multiple layers of our identity. The standout articles of the year covered an array of topics, from integrating cognitive technology with human work to speaking up—whether as a CEO activist or as a manager amid the #MeToo movement. Our authors gave you new lenses through which to view the evolving context in which we work. This collection of articles showcases these and other critical themes from the past year of Harvard Business Review.
We’ve all been working in teams for years. The challenge today is how to manage work and communication when you and everyone you work with are all on a half-dozen other teams too. “The Overcommitted Organization” affirms that some standard advice for working on teams still applies while also providing new strategies for managing this growing modern-day dilemma, from mapping overlap to sharing insights across projects to helping teams maintain progress when key members are yanked for “all hands on deck” emergencies. Authors Mark Mortensen and Heidi K. Gardner conduct research, teach, and consult on collaboration and leadership issues. They have identified several ways in which both team and organizational leaders can reduce the negative aspects of overlap and take advantage of the benefits, including skill sharing across teams, better time management, and opportunities to learn.
MBA students are taught that companies can’t expect to compete on the basis of management competencies—they’re too easy for rivals to copy, so they won’t sustain competitive advantage over time. However, a decade-long research project undertaken by authors Raffaella Sadun, Nicholas Bloom, and John Van Reenen reveals that the conventional wisdom is flawed, raising the question “Why Do We Undervalue Competent Management?” In their study of 12,000 organizations the authors found vast differences in how companies execute 18 core management practices, including such basic ones as setting targets, running operations, and grooming talent. Those differences matter: Companies with strong managerial processes do significantly better on high-level metrics such as profitability, growth, and productivity. The authors identify the main challenges hindering the adoption of essential management practices, suggest solutions, and make the case that senior leaders should focus on operational excellence as a crucial complement to strategy.
To overcome organizational bias, leaders are relying on people analytics to make data-driven decisions and to hire and promote fairly. But some leaders who take this approach say they can’t counteract or reverse bias with data: They can’t “apply analytics to the challenges of underrepresented groups at work” because “the relevant data sets don’t include enough people to produce reliable insights—the sample size, the n, is too small.” In “‘Numbers Take Us Only So Far,’” Facebook’s global director of diversity, Maxine Williams, explains why data must be paired with qualitative research to give leaders the insights they need to increase diversity at all levels of their organizations. By drawing on industry or sector data, learning what other companies are doing, and deeply examining the experiences of their own employees, companies can advance their goals of improving diversity and inclusion.
CEOs have always lobbied publicly for political or social issues that are good for their business. But this year we saw a significant phenomenon emerge: “The New CEO Activists.” Taking stands on issues that are not directly related to their business model and their success can hurt sales (or help them) when consumers respond with their wallets. So why take the risk? Duke’s Aaron K. Chatterji and Harvard Business School’s Michael W. Toffel offer a guide leaders can use in assessing whether to speak out and how, choosing which issues to weigh in on, and balancing the likelihood of having a positive effect with the possibility of a backlash.
Artificial intelligence and machine learning have generated lots of hype, but what do they mean for you and your business? In “Artificial Intelligence for the Real World,” Thomas H. Davenport and Rajeev Ronanki encourage readers to look at AI “through the lens of business capabilities rather than technologies.” Instead of a transformative approach, the authors advise, companies should take an incremental approach to developing and implementing AI and focus on augmenting rather than replacing human capabilities. They assert that AI can support three important business needs: automating business processes, gaining insight through data analysis, and engaging with customers and employees. Their four-step framework for integrating AI technologies, along with the real-case examples they provide, will allow companies to explore how they might best use cognitive technologies.
For those who work outside the technology realm, the acronyms AI and AR can sound a bit like alphabet soup. We found value in reading the previous piece and “Why Every Organization Needs an Augmented Reality Strategy” together, because that can help define what those acronyms are and how they’re used. AR—technologies that superimpose digital data and images on physical objects—has familiar entertainment applications, such as Snapchat and Pokémon Go. But AR is now being used in business in far more consequential ways; Michael E. Porter and James E. Heppelmann assert that it will become the new interface between humans and machines. They define AR, describe its evolving technology and applications, and discuss its importance. The authors provide both a primer for Luddites and an expansive review of the opportunities AR presents, from expected applications such as logistics and design to surprising ones such as allowing HR to tailor training according to an employee’s experience or repeated errors.
Whether we’re freelancers who have lost access to the security and support of traditional employers or corporate employees logging in from home offices, the way we work has changed. In “Thriving in the Gig Economy,” the organizational behavior professors Gianpiero Petriglieri, Susan Ashford, and Amy Wrzesniewski report on their study of freelance workers to understand what it takes to be successful in independent work. They found that the most effective independent workers “cultivate four types of connections—to place, routines, purpose, and people—that help them endure the emotional ups and downs of their work and gain energy and inspiration from their freedom.” Addressing these core areas can help you stay motivated, boost your productivity and focus, and ward off feelings of rootlessness and isolation.
As individuals, we’re working in new ways, but the context in which we work and our organizations grow—or fail—has changed too. “Managing Our Hub Economy” offers a fascinating, forward-looking, and sometimes chilling examination of the place of business in society. Hub firms such as Alibaba, Apple, and Amazon create real value for users but also concentrate data and power in the hands of a few companies that employ a tiny fraction of the workforce. Harvard Business School professors Marco Iansiti and Karim R. Lakhani argue that the hub economy will continue to spread across additional industries, concentrating power even more. “To remain competitive, companies will need to use their assets and capabilities differently, transform their core businesses, develop new revenue opportunities, and identify areas that can be defended from encroaching hub firms and others rushing in from previously disconnected economic sectors.”
Another new perspective on an old issue is found in “The Leader’s Guide to Corporate Culture.” The conventional wisdom has it that leaders are expected to create and change strategy, but culture is ingrained, unchangeable, and “anchored in unspoken behaviors, mindsets, and social patterns.” Not so, say Harvard Business School professor Boris Groysberg and his coauthors. They argue that it is possible to change your company’s culture, but first you must understand how it works. By integrating findings from more than 100 of the most commonly used social and behavioral models, the authors created a framework that will allow you to model the impact of culture on your business and assess its alignment with your strategy. When properly managed, culture can help leaders achieve change and build organizations that will thrive in even the most trying times.
Most CEOs and boards are hyperfocused on creating wealth for their shareholders. But managing for the good of the stock is not always the same as managing for the good of the company—especially when it leads to a focus on the short term. In “The Error at the Heart of Corporate Leadership,” Joseph L. Bower and Lynn S. Paine examine the foundations and flaws of agency theory, which views shareholders as the “owners” of a company and is behind the current widespread idea that corporate managers should make shareholder value their primary concern. The authors offer eight propositions to provide a company-centered model that would have at its core the health of the enterprise instead. Their model would return companies’ attention to innovation, strategic renewal, and investment in the future.
Where do we go from here? The #MeToo movement and countless reports of sexual harassment in the workplace are transforming how we manage relationships at work. In “Now What?” the legal scholar Joan C. Williams and the feminist historian Suzanne Lebsock explore whether this is really the end of a harassment culture. Companies are moving away from quiet settlements with victims and toward firing abusers. But employers must still follow due process and evaluate the credibility of reports. They need clear policies and fair procedures for handling harassment. The authors surprised themselves with their closing advice: “If you are being sexually harassed, report it. We’re not sure if we would have advised that, in such a blanket and unnuanced way, even a year ago.”
The most important ideas of the year are at your fingertips in this volume. From ideas on managing your team, to issues for your board and senior executives, to harnessing artificial intelligence and augmented reality, to addressing meaty personnel issues such as diversity and harassment, the articles here will help you address the situations you’re facing today and prepare for what lies on the horizon.
—The Editors