September–October 2024

When It Comes to Influencers, Smaller Can Be Better

Though celebrity influencers get lots of attention, they often don’t produce sales. When Bocconi University’s Maximilian Beichert and colleagues looked at the data on close to 2 million purchases and hundreds of paid influencer endorsements, they discovered that influencers with fewer than 10,000 followers delivered far better returns. In this article Beichert shares his findings along with tips on getting the best results from influencer campaigns.

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There Really Is a “Sales Gene”

MIT Sloan School of Management’s Juanjuan Zhang and three coresearchers explored the relationship between genetics and sales performance. They studied 117 salespeople at an Asian telemarketing company over the course of 13 months. They cross-referenced employee DNA with performance metrics, such as revenue produced, the ability to identify selling opportunities, and effort. The conclusion: The employees with superior sales performance were genetically different from the rest of the group.

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The CEO of Abbott on Revamping Its Breakthrough Diabetes Device

In 2008 Abbott introduced a revolutionary new device, FreeStyle Navigator, designed to improve the lives of the world’s more than 500 million diabetes patients by offering continuous glucose monitoring with technology that could translate an electrochemical signal from the body into precise, real-time data. Doctors and patients who tried the device appreciated it—but it was bulky, hard to manufacture, and expensive. And without widespread adoption, it wouldn’t have the hoped-for impact.

Abbott’s leaders soon realized that they needed to go back to the drawing board. Four years later they launched FreeStyle Libre, a reimagined continuous glucose monitoring (CGM) system in which an even smaller sensor applied to a patient’s arm sends data directly to a smartphone app every minute. It is now used by millions globally, and by the end of 2024 it will have generated more than $6 billion in revenue, making it one of the most successful medical devices—as measured by usage and sales—in history. The pivot from the Navigator to the Libre was a deeply consequential decision for Abbott, and others can learn from the principles the company’s leaders followed to arrive at and then execute on that choice.

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New Rules for Teamwork

Not that long ago, teams were typically composed of people with similar skills working in the same place. Their efforts were based on the idea that by working together in a well-managed process, they could deliver replicable results.

Today, companies of all types are called on to demonstrate integrated, cross-functional, project-based teamwork in their operations.

New ideas about teamwork are emerging, some based on experience, some guided by new practices, some made up on the fly. But none of this has yet cohered into a systematic approach to improving how teams work.

In this article, the authors set out new principles of teamwork that focus on continuous, real-time testing, learning, analysis, adaptation, and improvement.

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Why Leadership Teams Fail

In pursuit of strong performance, CEOs often overlook a critical factor in organizational success: the health of their leadership team. That’s a big problem, because a dysfunctional team can be a serious drag on strategy execution.

To learn more about the problems that affect leadership teams, the authors interviewed more than 100 CEOs and senior executives in a multiyear research program. They identified three main patterns of dysfunction: the shark tank, characterized by infighting and political maneuvering; the petting zoo, characterized by conflict avoidance and an overemphasis on collaboration; and the mediocracy, characterized by complacency, a lack of competence, and an unhealthy focus on past success.

This article helps leadership teams diagnose their dynamic and find ways to improve it.

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Teamwork at the Top

Teamwork is difficult at any level, but for top teams, the challenges expand exponentially. They are responsible for addressing their organization’s weightiest and most complex problems, so their struggles are almost existential.

Highly effective top teams share key five behaviors: direction, discipline, drive, dynamism, and collaboration. These traits are collective: They characterize the behaviors of the team as a whole, not those of its individual members.

In this article, the authors lay out a four-step process to help you promote those behaviors to boost the effectiveness of your own team.

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Tom Brady on the Art of Leading Teammates

When our society talks about leaders, we focus on formal roles, such as the CEO. This view undervalues the role of informal leaders—team members who influence outcomes by the tone they set, how they conduct themselves, and how they interact with their peers. Their job title doesn’t include the word “manager,” but they play an outsize role in how teams perform.

In this article, NFL great Tom Brady and Nitin Nohria, of Harvard Business School, present a set of principles that people in any realm can apply to help teams successfully work together toward common goals.

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AI Won’t Give You a New Sustainable Advantage

Generative artificial intelligence (gen AI) has the potential to radically alter how business is conducted, and there’s no doubt that it will create a lot of value. Companies have used it to identify entirely new product opportunities and business models; to automate routine decisions, freeing humans to focus on decisions that involve ethical trade-offs, empathy, or imagination; to deliver customized professional services formerly available only to the wealthy; and to develop and communicate product and other recommendations to customers faster, more cheaply, and more informatively than was possible with human-driven processes.

But, the authors ask, will companies be able to leverage gen AI to build a competitive advantage? The answer, they argue in this article, is no—unless you already have a competitive advantage that rivals cannot replicate using AI. Then the technology may serve to amplify the value you derive from that advantage.

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Where Data-Driven Decision-Making Can Go Wrong

When considering internal data or the results of a study, often business leaders either take the evidence presented as gospel or dismiss it altogether. Both approaches are misguided. What leaders need to do instead is conduct rigorous discussions that assess any findings and whether they apply to the situation in question.

Such conversations should explore the internal validity of any analysis (whether it accurately answers the question) as well as its external validity (the extent to which results can be generalized from one context to another). To avoid missteps, you need to separate causation from correlation and control for confounding factors. You should examine the sample size and setting of the research and the period over which it was conducted. You must ensure that you’re measuring an outcome that really matters instead of one that is simply easy to measure. And you need to look for—or undertake—other research that might confirm or contradict the evidence.

By employing a systematic approach to the collection and interpretation of information, you can more effectively reap the benefits of the ever-increasing mountain of external and internal data and make better decisions.

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The Legacy Company’s Guide to Innovation

Many experts are urging established companies to radically innovate—and disrupt themselves before someone else does. The trouble is, large firms aren’t designed for moon shots. Their owners don’t like the risks and won’t kill the goose that lays the golden egg. As a result, all too often they end up defaulting to incremental innovation.

But there is a solution: Incumbents can partner with entrepreneurial start-ups or with intrapreneurs that have ideas for breakthrough products. By doing that, they can leverage their significant resources while increasing the odds that those ideas will take off. This approach does require careful management, however.

Drawing on the experiences of more than a dozen large multinationals, including Atlas Copco, Enel, and Epiroc, this article outlines a three-stage innovation process for incumbents to follow: First, set up numerous projects with multiple partners, nurturing them until their chances of success become clear. Next, once a venture has a breakthrough, gradually increase your commitment and help it remove roadblocks. Finally, when its business model is viable and it has a critical mass of customers, rapidly mobilize the resources it needs to scale up quickly.

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Moving Beyond ESG

It’s been a rough few years for ESG—the popular shorthand for measuring and managing a company’s environmental, social, and governance performance. Critics on the political left believe ESG is insufficient for addressing major societal issues such as climate change; critics on the right say ESG pushes a liberal agenda. The barrage of criticism has caused ESG to lose its luster among many executives. Yet the need for a transparent way to connect a company’s financial performance with its ESG performance remains.

It’s time, says Oxford professor Robert G. Eccles, to take stock of ESG and chart a path forward. He acknowledges the complex challenges that still need to be resolved. Chief among them is whether to use single materiality (which focuses on shareholder value) or double materiality (which includes societal impact).

In this article Eccles recommends a pragmatic approach for corporate leaders: clearly define corporate purpose, improve transparency in ESG reporting, and engage stakeholders constructively. These strategies will help companies manage ESG pressures by focusing on material issues that affect shareholder value while also acknowledging and addressing broader societal impacts.

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How AI Can Power Brand Management

Marketers have begun experimenting with AI to improve their brand-management efforts. But unlike other marketing tasks, brand management involves more than just repeatedly executing one specialized function. Long considered the exclusive domain of creative talent, it encompasses multiple activities designed to build the reputation and image of a business—such as crafting and communicating the brand story, ensuring that the product or service and its price reflect the brand’s competitive positioning, and managing customer relationships to forge loyalty to the brand.

A brand is a promise to customers about the quality, style, reliability, and aspiration of a purchase. AI can’t fulfill that promise on its own (at least not anytime soon). But it can shape customers’ impressions of a brand at every interaction. And it can automate expensive creative tasks—including product design. To succeed with it, you must understand how it is perceived by stakeholders and what can be done not only to mitigate their concerns but to make them avid supporters. Using examples from Intuit, Caterpillar, and LOOP, along with in-depth scholarly research, the authors propose a framework for thinking about the key roles that AI plays when it comes to managing brands effectively.

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Safety Should Be a Performance Driver

Safety is regarded as an indispensable right for customers and employees. Government agencies exist to enforce standards, and firms spend millions testing their products and creating safe workplace environments. And yet products are frequently recalled, and workplace accidents continue to happen. Why aren’t companies doing better on safety?

Most executives frame safety as a compliance issue. They see it as a cost and, consequently, they underinvest in it. They tend to treat safety as an abstract value rather than as a driver of performance. And when a safety crisis hits, they often react with unsustainable measures, generally aimed at managing their public image.

To help companies get out of this rut, the authors present evidence that safety can be a key driver of performance. Then they offer a five-step process for leaders: align on the definition of safety, agree on which metrics to use, anticipate and prevent problems, customize safety training, and incentivize employees to adopt preventive behaviors. By reimagining safety not as a defensive necessity but as an offensive opportunity, companies can elevate safety from a siloed function to a shared mindset, and from a cost center to a value accelerator.

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Boards Need a New Approach to Technology

The boards of too many publicly traded companies are downright timid when considering matters involving science and technology. More often than not, they focus on security and digitization—a defensive posture that fails to consider the bigger opportunities emerging from new materials, space science, and a better understanding of the genome—to name just a few areas of opportunity. It’s easy to be lulled into thinking that science does not matter to a nontech company. But that distinction isn’t quite so meaningful when it comes to capitalizing on the opportunities from technological change that is now ubiquitous, rapid, turbulent, and often emanating from increasingly unlikely corners.

The authors have observed firsthand an effective way to address this gap: the board technology committee. Drawing on the achievements of tech committees at AES, Johnson & Johnson, and Altria (companies for which the authors are or have been directors), they describe how these entities can advance the interests of organizations and offer advice on how to set one up.

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Why Multibusiness Strategies Fail and How to Make Them Succeed

Enterprises that own multiple businesses often have a flawed approach to strategy: They focus too much on the makeup of their portfolios and too little on enhancing the businesses in them.

Strategies for adding value to a corporation’s businesses fall on a continuum. On one end the businesses in the portfolio are completely unrelated; at the other they have many similarities. Each place on the continuum requires a different kind of organizational structure and specific management processes to support it. To succeed at execution, you need to determine where on the spectrum your business falls and then align your portfolio selection, structure, and processes with your vision of how to add value.

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Embracing Gen AI at Work

Today artificial intelligence can be harnessed by nearly anyone, using commands in everyday language instead of code. Soon it will transform more than 40% of all work activity, according to the authors’ research. In this new era of collaboration between humans and machines, the ability to leverage AI effectively will be critical to your professional success.

This article describes the three kinds of “fusion skills” you need to get the best results from gen AI. Intelligent interrogation involves instructing large language models to perform in ways that generate better outcomes—by, say, breaking processes down into steps or visualizing multiple potential paths to a solution. Judgment integration is about incorporating expert and ethical human discernment to make AI’s output more trustworthy, reliable, and accurate. It entails augmenting a model’s training sources with authoritative knowledge bases when necessary, keeping biases out of prompts, ensuring the privacy of any data used by the models, and scrutinizing suspect output. With reciprocal apprenticing, you tailor gen AI to your company’s specific business context by including rich organizational data and know-how into the commands you give it. As you become better at doing that, you yourself learn how to train the AI to tackle more-sophisticated challenges.

The AI revolution is already here. Learning these three skills will prepare you to thrive in it.

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Case Study: Should a Family Business Accept a Returning Daughter’s Radical Proposal?

Two brothers who founded a successful company in Côte d’Ivoire must make a decision about how to bring their daughter and niece—educated in Paris and currently working there—into the family business, a company founded in 1988 and now one of West Africa’s most successful conglomerates. She has surprised them with an ultimatum: She will come back, but only as COO, in charge of some grand expansion plans.

Two experts—both with deep expertise in African family businesses—offer their advice in accompanying commentaries.

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Will Psychedelics Propel Your Career?

Four new books and a podcast discuss the use of perception-altering drugs: Psychedelic Outlaws, by Joanna Kempner; Have a Good Trip, by Eugenia Bone; Trippy, by Ernesto Londoño; More! The Microdose Diet, by Peggy Van de Plassche; and Luminous, from Wisconsin Public Radio.

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Life’s Work: An Interview with Connie Chung

Soft-spoken as a child, Chung found her voice as a journalist and in 1993 was named coanchor of the CBS Evening News. In this interview she talks about her determination to climb the ladder, how she navigated sexism in the workplace, and more.

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