21st Century Strategy in Four Words

Umair Hague

Here is an excerpt from an article written by Umair Haque. To read the complete article, check out other articles and resources, and sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

21st Century Strategy in Four Words
Umair Haque

It’s as predictable as the chorus of a power ballad. Every time I discuss good and evil, howls of protest erupt. Is it polemic? Is it deliberately controversial? Isn’t hard-nosed business beyond good and evil, anyways?

Not a chance.

Here’s 21st century strategy, summarized in four words: minimize evil, maximize good.

Forget a snot-nosed punk like me for a second. Adam Smith, Jeremy Bentham, John Stuart Mill, Friedrich Hayek laid the foundations (among others) of modern econ. Smith’s Theory of Moral Sentiments — the origin of the Invisible Hand — Bentham’s utilitarianism, Mill’s theory of liberty, Hayek’s catallaxy — all were fundamentally concerned with minimizing bad, and maximizing good. Economics is, at its heart, about good and bad. “Goods” and “bads”, remember? They’re the most elementary concept in econ 101.

But, in the search for a more perfect model, they’ve “rightsbeen left behind. Econ 1.0 assumed a perfect world — one of perfect information, rationality, zero friction, etc. That world, it was said, is a utopia: yesterday’s institutions — “free” trade, property ,” annual reports, self-interested managers, etc — are able to perfectly measure and weigh goods and bads. But the real world isn’t so simple. All too often, our economy works backwards. “Bads” literally overwhelm “goods.” Evidence? Try yesteryear’s mega-banking crisis on for size.

So the central, pressing question is this: How do we design better institutions that do minimize the production of bads, and maximize the production of goods? That is, of course, what Copenhagen is really about — not carbon. It’s about redesigning the fabric of the global economy, so bads are erased, and goods pop into existence.

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Umair Haque is Director of the Havas Media Lab, a new kind of strategic advisor that helps investors, entrepreneurs, and firms experiment with, craft, and drive radical management, business model, and strategic innovation. Prior to Havas, Umair founded Bubblegeneration, an agenda-setting advisory boutique that helped shape the strategies of investors, entrepreneurs, and blue chip companies across media and consumer industries. Bubblegeneration’s work has been recognized by publications like Wired, The Red Herring, Business 2.0, and BusinessWeek, and in Chris Anderson’s Long Tail, to which Umair was a contributor.

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To read the complete article, check out other articles and resources, and sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

How to create a “herd” of support to “unleash change”

In their latest book, Switch, be published by Broadway Books on February 16, 2010, Chip and Dan Heath share hundreds of adhesive ideas as they explain “how to change things when change is hard.” Of special interest to me are those that examine “contagious behavior” at the individual, group, and societal levels. Jay Winsten, a public health professor at Harvard, offers an excellent case in point. In the 1980’s, he became interested in the idea of a “designated driver.” At that time, the concept did not exist in the U.S. No one here knew what a “designated driver was. Winsted and his team at Harvard were determined to create a social norm “out of thin air.”

They established contact with the producers, actors, and writers associated with 160 prime-time television programs. They requested only five seconds of dialogue featuring or referring to the designated driver idea.

After three years, nine out of ten people were familiar with the term designated driver. Of much greater importance, alcohol-related traffic fatalities declined from 23, 626 in 1988 to 17,858 in 1992. “Winsten used the power of television to simulate a social norm. But you don’t need Hollywood to create a herd.” That is, almost anyone (regardless of available resources) can “unleash change” by executing the right strategies and tactics to create a critical mass of support. Switch is best viewed as both a “tool box” and an operations manual for doing that.

Do We Celebrate the Wrong CEOs?

Morten Hansen

Here is an excerpt from an article written by Morten T. Hansen and Herminia Ibarra. To read the complete article, check out other articles and resources, and sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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Do We Celebrate the Wrong CEOs?
Morten T. Hansen and Herminia Ibarra

If we asked you to make a list of the top 50 performing CEOs in the world, who would you name? Jeffrey Immelt? Jamie Dimon? Carols Ghosn? They’re on your list? They shouldn’t be.

What about Bart Becht? John Martin? John Lau? Not on your list? They should be. Becht, of Reckitt-Benckhiser, Martin, of Gilead Sciences, and Lau, of Husky Energy have had strong performance year after year, but yet they’re not well known outside their industries. They’re among the “quiet CEOs” getting the job done, and well. Immelt (GE), Dimon (JP Morgan Chase) and Ghosn (Renault-Nissan) get lots of attention in the business press. CEOs like them are often labeled as “most admired” or highest paid. Typically, they’re charismatic leaders, but seldom are they actually measured on overall performance.

This matters. After all, where do our leadership models and leadership lessons come from? We may just be learning from the most admired, but not the best-performing leaders.

We believe performance matters most, but how do we know who are the best-performing leaders? How do we know Becht has outperformed Dimon? We set out to create our own list, compiled from data on nearly 2,000 CEOs around the globe over the full length of their tenure to date. We measured performance based on hard metrics — the objective, cold reality of shareholder returns and changes in market value.

It’s a long-term metric that gets us away from the excessive focus on short-term performance. Granted, it is not the only metric for measuring CEO performance and we are not suggesting that the CEOs single-handedly created the performance — the team they led had a great deal to do with it.

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Hansen (morten.hansen@insead.edu) is a management professor at the University of California, Berkeley, School of Information, and at Insead. Ibarra (Herminia.ibarra@insead.edu) is a professor of organizational behavior and the Cora Chaired Professor of Learning at Insead.

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To read the complete article, check out other articles and resources, and sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

People want to work in a Place that Provides Opportunites to Grow

One annual survey of the best places to work (Southwest Airlines is at the top) reveals this important insight: people want to grow, so they appreciate companies that provide opportunites to grow. 

Here’s an except from the Reuters article, which is about the survey conducted by Glassdoor.com:

What the top companies had in common was providing opportunities for employees to grow, said Robert Hohman, co-founder and chief executive of Glassdoor.com.
“What I saw again and again in the reviews is employees referred to their ability to grow in their jobs. In an economic downturn like this, employees feel good if they’re growing as individuals and they’re becoming more marketable,” he said.
“Conversely at some of the companies that haven’t done so well, you see things like employees feeling like they still have a job but with no opportunity,” he said.

We have posted often about the need to grow, especially in skill development in both the hard and the soft skills.  But companies have to provide the climate and the opportunites to facilitate such growth.  So, congratulations to these exemplar companies.