Summer 2016 Issue
Volume 57, Issue # 4

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Special Report: Leading Data-Driven Change

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Do You Know What Really Drives Your Business’s Performance?

Performance topology maps offer managers a signpost pointing toward smarter strategies.

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Achieving Meritocracy in the Workplace

New research shows bias exists even in merit-based systems — but a data-centric approach can help.

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Improving Analytics Capabilities Through Crowdsourcing

Open-innovation platforms, used thoughtfully, can expand a company’s access to analytics talent.

Letter from the Editor

In Boardrooms, the Same Is a Shame

June 3, 2016 | Paul Michelman

Corporate boards around the world present a uniformly white, male face — and this is a problem when it comes to how firms approach the global marketplace. When too many people at the top look at the business landscape through the same lens, they are likely to miss both impending problems and potential opportunities. Institutional biases that suppress diversity in the C-suite create a hidden risk factor — one that boards can address by taking a long, hard look in the mirror.

Also Featured in This issue

Stop Jumping to Solutions!

To get the best results from a decision matrix, managers should expand the options used to frame it.

Intelligence

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Improving Analytics Capabilities Through Crowdsourcing

  • Research Feature
  • Read Time: 17 min 

Analytics capabilities can greatly expand a company’s ability to innovate — but what do you do when the talent you need just isn’t available? Agribusiness giant Syngenta, faced with an insurmountable analytics talent bottleneck, turned to crowdsourcing. Using a series of contests, it outsourced the development of a set of award-winning analytics tools to improve its decision making — and learned, in the process, some key factors supporting successful crowdsourcing.

Stop Jumping to Solutions!

  • Research Feature
  • Read Time: 23 min 

When presented with complex decisions, many executives turn to the tried-and-true decision matrix, spelling out the pros and cons of various options. One flaw in this method, however, is that executives don’t take the time to thoroughly frame the decision and explore the full scope of options. But the matrix’s real value is when it is also used as a process tool that helps executives expand their set of options and criteria.

Do You Know What Really Drives Your Business’s Performance?

  • Research Feature
  • Read Time: 14 min 

Although intuitively appealing, strategy maps and models such as the service profit chain have a common pitfall: They encourage managers to embrace general assumptions about the drivers of financial performance that may not stand up to close scrutiny in their own organizations. A more rigorous analytic approach called performance topology mapping may help managers avoid these assumptions, as well as the strategic mistakes they promote.

Achieving Meritocracy in the Workplace

  • Research Feature
  • Read Time: 19 min 

Rewarding employees based on merit can be more difficult than it first appears. Even efforts to reduce bias can backfire; disparities in raises and bonuses by gender, racial, and other characteristics persist in today’s organizations not only despite management’s attempts to reduce them but also because of such efforts. The author describes how a simple analytics-based approach can address these concerns and produce a truly meritocratic workplace.

The New Rules For Crisis Management

  • Research Feature
  • Read Time: 20 min 

Digital media have produced an explosion of nontraditional news outlets. When a crisis arises, managers must be aware of media controlled by various stakeholder groups, which may have significant influence on how the crisis evolves. Failure to recognize the power of stakeholder-controlled media has significantly affected the outcomes of past corporate crises. Companies need to know how stakeholders gained this power, how they use it, and what to do about it.

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Are Nonfinancial Metrics Good Leading Indicators of Future Financial Performance?

  • Research Highlight
  • Read Time: 9 min 

Although using nonfinancial metrics like customer satisfaction has become increasingly popular in assessing executive performance and determining compensation, the practice has some significant drawbacks. Not all metrics apply equally to all industries. Companies considering such metrics for strategic performance management frameworks should be mindful of the importance of knowing their strength as lead indicators and applying them appropriately.

What Makes Work Meaningful — Or Meaningless

  • Research Feature
  • Read Time: 26 min 

When employees find their work meaningful, there are myriad benefits for their productivity — and for their employers. Managers who support meaningful work are more likely to attract, retain, and motivate the talent they need to ensure future growth. But can companies ensure this experience for their employees? A groundbreaking study identifies five factors that support meaningful work — and the seven management sins that can destroy it.

Finding a Lower-Risk Path to High-Impact Innovations

  • Research Feature
  • Read Time: 27 min 

Pursuing a high-impact innovation strategy can have terrific payoffs — but it’s also extremely risky, and most companies won’t do it. Yet a comparatively less risky, proactive approach that strings together “lily pads” of capability-building investments, technical and conceptual advances, and market explorations into “enabling innovations” can bring companies closer to their goal and provide a long-lasting competitive edge.

In Boardrooms, the Same Is a Shame

  • Opinion & Analysis
  • Read Time: 2 min 

Corporate boards around the world present a uniformly white, male face — and this is a problem when it comes to how firms approach the global marketplace. When too many people at the top look at the business landscape through the same lens, they are likely to miss both impending problems and potential opportunities. Institutional biases that suppress diversity in the C-suite create a hidden risk factor — one that boards can address by taking a long, hard look in the mirror.

The Lost Art of Thinking in Large Organizations

  • Opinion & Analysis
  • Read Time: 4 min 

Making the transition from management to leadership requires managers to exercise skills in strategic thinking — skills they don’t often get to practice in the action-oriented environment they know best. Managers moving into senior leadership must learn to embrace ambiguity and uncertainty and learn the importance of taking time to think things through.

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How Scenario Planning Influences Strategic Decisions

  • Research Highlight
  • Read Time: 11 min 

Anecdotal evidence suggests that considering various scenarios helps strengthen decision making. To test this idea, researchers offered a scenario-based workshop to executives to see how considering scenarios affected decisions. They found that though participants’ confidence in their choices never wavered, the strategic choices they made before the exercise often changed dramatically after viewing the scenarios, with a tendency to become more flexible and focused on long-term value.

The Real Lessons From Kodak’s Decline

  • Opinion & Analysis
  • Read Time: 11 min 

Former photography giant Kodak is often cited as having lacked the vision to recognize the effects digital technology would have on its business. The reality of what happened — and the true lessons of Kodak’s experience with digital disruption — highlight the complex challenges posed by fast-moving technological innovation.

Managing Tensions Between New and Existing Business Models

  • Research Highlight
  • Read Time: 7 min 

Exploring new business models may be a good way to stay competitive, but doing so can create tensions internally, in areas such as organizational structure and competition for resources. Companies exploring business model innovation may not recognize the inevitability of these tensions and thus be poorly prepared to manage them. But understanding these issues may lessen some of the organizational challenges associated with business model innovation.

Navigating the Patent Minefield Through Consortia

  • Research Highlight
  • Read Time: 10 min 

Bringing high-tech inventions built on patented technologies to market can be complicated and risky. The threat of added costs from patent infringement lawsuits has led technology companies to pool their talents — and patents — in technology consortia. Joining a tech consortium requires managers to weigh intellectual property value against the value of future collaborations and assess the consortium’s pros and cons for innovation, competition, and market creation.

How Boards Botch CEO Succession

  • Research Highlight
  • Read Time: 10 min 

The strategic importance of CEO succession is indisputable, and the elements of effective succession planning have long been known. So why do many boards plan poorly for CEO succession when the cost of failure is so high? Research finds three key reasons: Hiring criteria are not aligned with strategic needs, boards are reluctant to antagonize the incumbent CEO, and many boards aren’t developing the executives below the CEO and top team.