Our Guide to the Summer 2022 Issue

These summaries will help you navigate our summer 2022 lineup.

Reading Time: 7 min 


Unlock the Power of Purpose

Álvaro Lleó de Nalda, Alex Montaner, Amy C. Edmondson, and Phil Sotok

Key Insight: A new framework can help companies implement a corporate purpose that engages employees and drives their daily actions.

Top Takeaways: To benefit from corporate purpose, leaders need a deliberate, sustained approach to implementing it. The authors developed the Purpose Strength Framework, which provides a set of three processes for doing so. Purpose knowledge ensures that employees understand the purpose and its connection to business strategy. Purpose internalization connects the purpose with employees’ values. Finally, purpose contribution measures how the company has fulfilled its purpose and identifies how it can continue to do so.

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How a Values-Based Approach Advances DEI

Anselm A. Beach and Albert H. Segars

Key Insight: A new model provides a structured and measurable framework for transforming the workplace through diversity, equity, and inclusion.

Top Takeaways: Leaders seeking to advance diversity, equity, and inclusion in their organizations need approaches that frame DEI as an opportunity for all employees to meaningfully engage with. The authors advocate a new approach: the Values/Principles Model, or VPM. It is based on cultivating four values — representation, participation, application, and appreciation — along with seven guiding principles, including “Build a moral case” and “Develop new mental models.”

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Why We Don’t Talk About Meaning at Work

Marjolein Lips-Wiersma, Catherine Bailey, Adrian Madden, and Lani Morris

Key Insight: Managers can move beyond four key barriers to talking about — and cocreating — meaningful work in their organizations to improve employee engagement, productivity, and innovation.

Top Takeaways: The more employers try to tell employees where to find meaning in their work, the less likely people are to find it. An authentic sense of purpose is discovered, not imposed. But first, managers and employees must learn how to talk with one another about this broad and somewhat existential issue. The barriers that make such conversations difficult include discomfort talking about big issues in a work context, questions around the definition of meaning, trouble articulating the pain points that inhibit meaningful work, and a sense that only leaders deserve to find meaning at work.

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Fostering Ethical Conduct Through Psychological Safety

Antoine Ferrère, Chris Rider, Baiba Renerte, and Amy C. Edmondson

Key Insight: Psychological safety plays an integral part in shaping the ethical climate of an organization and influences whether employees feel comfortable reporting misconduct.

Top Takeaways: New research finds that reporting on unethical conduct in the workplace is linked to employees’ degree of psychological safety. Employees who reported lower scores on a measure of psychological safety were less likely to report unethical behavior through effective channels — but were also more likely to observe more instances of unethical behavior. The authors argue that a healthy organizational culture is one in which speaking up and listening go hand in hand and thereby reinforce ethical standards.

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AI on the Front Lines

Katherine C. Kellogg, Mark Sendak, and Suresh Balu

Key Insight: To keep AI progress from stalling at the adoption stage, developers must ensure that end users’ workflow concerns are addressed.

Top Takeaways: Successful AI adoption requires developers to think beyond a project’s business goals and to specifically address the concerns of end users. How will the new features and process affect their day-to-day work? One ER doctor’s comment that “we don’t need a tool to tell us how to do our job” is typical of many front-line employees’ reactions. In a study of AI-based decision support tools, the authors observed frequent misalignment between project sponsors’ needs and users’ priorities and preferences. They found that AI developers can decrease conflicting stakeholder interests and increase the likelihood of tool adoption by identifying tactics to increase a tool’s benefits to end users, reduce their labor, and protect their autonomy.

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Set Up to Fail

Kimberly A. Whitler, Ed Tazzia, and Stephen Mann

Key Insight: C-level executives are more likely to succeed when organizations align expectations, responsibility, and experience when designing their roles.

Top Takeaways: At just over five years, the average tenure for C-suite jobs is no better than that of the workforce at large, despite the expense and effort invested in hiring for these positions. An analysis of C-suite job specifications used in recruiting CFO, CIO, and CMO functions points to a cause: misalignment between expectations, responsibilities assigned, and skills required. The authors suggest that incomplete and vague job specs can keep new hires from doing well, leaving conflict, friction, and frustration in their wake. The authors provide a framework for designing well-aligned jobs, including specifying role expectations with detail and clarity, and clearly identifying the measures against which role success will be judged.

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IPO Disclosures Are Ripe for Reform

Aswath Damodaran, Daniel M. McCarthy, and Maxime C. Cohen

Key Insight: More focused financial disclosure rules would force pre-IPO companies to give investors a more accurate and realistic view of their prospects.

Top Takeaways: Pre-IPO disclosures have grown increasingly bloated and typically shape a rosy narrative about a company’s prospects while omitting information relevant to new business models. The authors propose “triggered” disclosures tailored to a company’s value drivers. In these disclosures, claims about customer value and potential market size would require objective supporting data. Such disclosures would provide investors with a better basis for valuing and pricing today’s companies and could force founders and managers to tell more realistic stories about their businesses.

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Manage the Risks of Software Reuse

Gregory Vial

Key Insight: Reusing software code is common. Leaders must be aware of potential vulnerabilities to mitigate exposure to risk.

Top Takeaways: Software developers rely heavily on preexisting components, typically sourced from public repositories, to add functionality. But software reuse has cybersecurity implications. The recent discovery of a critical vulnerability in a commonly used component called Log4j affected millions of devices and highlights this danger. Risk lurks in both homegrown and packaged software, where there could be vulnerabilities buried deep within the code. The authors provide four key insights for leaders to ensure that their technology function is managing these risks.

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Mastering Innovation’s Toughest Trade-Offs

Christopher B. Bingham and Rory M. McDonald

Key Insight: Innovation in dynamic environments is rife with critical tensions that can sink teams if left unaddressed or mishandled.

Top Takeaways: More than 90% of high-potential ventures fail to meet projected targets, while roughly 75% of the products released each year bomb. Innovation failures in dynamic environments usually track back to one or more tensions that are embedded in eight questions that leaders often struggle to answer. Leaders who get the answers right can transform the tensions from reductive to productive and not only tackle some of innovation’s toughest trade-offs but also significantly improve the odds of innovation success for their organizations.

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Break the Link Between Pay and Motivation

Jonas Solbach, Klaus Möller, and Franz Wirnsperger

Key Insight: An experiment shows that target-independent fixed compensation can improve sales force performance, retention, and engagement.

Top Takeaways: Decades of research show that pay-for-performance compensation systems are not well suited to knowledge work. The authors tested a fixed-compensation system across a national sales force at Hilti Group, which sells its products and services directly to contractors on construction sites. The new approach bolstered sales results, retention, and engagement. It makes a strong case for leaders considering whether to finally leave behind the pay-for-performance model.

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Why Some CFOs Make Better M&A Deals

Ayse Karaevli and Serden Özcan

Key Insight: When companies bolster their chief financial officer’s informal power, they can mitigate the risk of overpaying for an acquisition target.

Top Takeaways: Many companies pay an excessively large premium to close an acquisition. The authors analyzed nearly 2,000 acquisitions by U.S. companies over more than 20 years and found that companies are less likely to overpay if their CFO has one or more of the following characteristics: They possess generalist skills, they demonstrate independence from the CEO, and they enjoy high status in the organization. These characteristics confer greater influence in strategic decision-making. Companies might improve corporate governance by hiring such CFOs.

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The Neuroscience of Customer Experience

Paul J. Zak

Key Insight: By applying neural insights to innovation, businesses can create memorable experiences — that customers will want to repeat.

Top Takeaways: Thanks to brands like American Girl, Bass Pro Shops, Disney, and Sephora, consumers have come to expect extraordinary interactions — and companies are under increasing pressure to create them. New research shows that by augmenting design thinking with neuroscience, they can determine with greater accuracy what customers value, what brings them joy, and what reduces their frustration. Researchers have identified a set of brain signals that make experiences feel valuable and emotionally charged and thus more memorable. Their work shows that together, these signals boost customer loyalty and profitability — and produce a desire to buy again.

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