First Look

Abstract—The president of RSA Ground, the subsidiary of Rising Sun Airlines responsible for servicing its planes at airports across Japan, goes undercover as a service crew member to discover how and whether his employees can speed up cleaning, checking, restocking, and refueling. Expert commentary comes from Atilla Korkmazoglu, president of ground handling and cargo operations at Celebi Aviation Holding, and Vikram Oberoi, managing director and CEO of EIH Ltd.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50897

Abstract—In this paper we investigate whether sellers treat consumers differently on the basis of how well informed consumers appear to be. We implement a large-scale field experiment in which callers request price quotes from automotive repair shops. We show that sellers alter their initial price quotes depending on whether consumers appear to be correctly informed, uninformed, or misinformed about market prices. We find that repair shops quote higher prices to callers who cite a higher benchmark price. We find that women are quoted higher prices than men when callers signal that they are uninformed about market prices. However, gender differences disappear when callers mention a benchmark price for the repair. Finally, we find that repair shops are more likely to offer a price concession if asked to do so by a woman than a man.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50925

Abstract—Many successful platform businesses—think Airbnb, Uber, and YouTube—ignore laws and regulations that appear to preclude their approach. The rule-flouting phenomenon is something we call "spontaneous private deregulation," and it is not new. Benign or otherwise, spontaneous deregulation is happening increasingly rapidly and in ever more industries. This article surveys incumbents' vulnerabilities and identifies possible responses.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50914

Abstract—In many ways, online marketplaces are the perfect business model. Since they facilitate transactions between independent suppliers and customers rather than take possession of and responsibility for the products or services in question, they have inherently low cost structures and fat gross margins. They are highly defensible once established, owing to network effects. Yet online marketplaces remain extremely difficult to build, say Andrei Hagiu of Harvard Business School and venture capitalist Simon Rothman of Greylock Partners. Most entrepreneurs and investors attribute this to the challenge of quickly attracting a critical mass of buyers and suppliers. But it is wrong to assume that once a marketplace has overcome this hurdle, the sailing will be smooth. Several other important pitfalls can threaten marketplaces: growing too fast too early; failing to foster sufficient trust and safety; resorting to sticks, rather than carrots, to deter user disintermediation; and ignoring the risks of regulation. This article draws on company examples such as eBay, Lending Club, and Airbnb to offer practical advice for avoiding those hazards.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50940

Abstract—When organizations get into big trouble, fixing the culture is usually the prescription. That's what most everyone said GM needed to do after its recall crisis in 2014—and ever since, CEO Mary Barra has been focusing on creating "the right environment" to promote accountability and head off future disasters. The corporate leaders we have interviewed say that culture isn't something you "fix." Rather cultural change is what you get after you've put new processes or structures in place to tackle tough business challenges like reworking an outdated strategy or business model. The culture evolves as you do that important work.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50894

Abstract—In the knowledge economy, skilled employees are the assets that drive organizational success. Thus companies must learn from them—why they stay, why they leave, and how the organization needs to change. A thoughtful exit interview—whether it be a face-to-face conversation, a questionnaire, a survey, or a combination—can catalyze leaders' listening skills, reveal what does or doesn't work inside the organization, highlight hidden challenges and opportunities, and generate essential competitive intelligence. It can promote engagement and enhance retention by signaling to employees that their views matter. And it can turn departing employees into corporate ambassadors for years to come. Unfortunately, too few leaders pay attention to this tool; their programs fail to either improve retention or produce useful information. The authors believe this is owing to poor data quality and a lack of consensus on best practices. They suggest six overall goals for a strategic exit interview process and describe tactics and techniques to make it successful. Among their recommendations: Have interviews conducted by second- or third-line managers. Make exit interviews mandatory for at least some employees. And, because standard interviews enable you to spot trends but unstructured ones elicit unexpected insights, consider combining the two approaches in semi-structured interviews.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50941

Abstract—Following the path of companies such as Apple and Amazon, more and more firms are trying to become not just product purveyors but also platform providers, facilitating direct connections between customers and other groups. Although launching a platform can generate new revenue, success is not automatic. After studying more than 20 companies that have tried to move from products to platforms, the authors point to four practices that can separate winners from losers: 1. Start with a defensible product and a critical mass of users. A strong product and a loyal customer base will attract third parties to your platform. 2. Apply a hybrid business model. Instead of operating with a "product mindset" or a "platform mindset" alone, combine the two in order to discover new opportunities for creating value. 3. Drive rapid conversion to the platform. Existing customers are likely to flock to a platform if it provides enough new value, if the additional products and services offered are consistent with your brand, and if users have opportunities to improve both the products and the platform. 4. Deter competitive imitation. Make it tough for rivals to copy your product-to-platform strategy: consider creating proprietary standards, using exclusivity contracts and erecting other barriers to competition.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=50933

Abstract—Traditional innovation models assume that new ideas are developed up to the point where the benefit of the marginal project is just equal to the cost. Because labor is a key input to innovation, when the opportunity cost of time is lower, such as during school breaks or time off from work, then such models predict that the number of ideas developed will be greater, but the average quality will be lower due to the lower expected value of marginal ideas. However, we posit that slack time such as school breaks may be qualitatively different than work time because contiguous blocks may be particularly beneficial for working on complex projects. We present a model incorporating this idea that predicts that although more ideas will be produced during slack time, they will have higher average complexity and perhaps even higher average value. Using data on 165,410 projects posted on Kickstarter (2009–2015), we report findings consistent with the model's predictions.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50821

Abstract—The economics of partnerships have been of enduring interest to economists, but many issues regarding intergenerational conflicts and their impact on the continuity of these organizations remain unclear. We examine 717 private equity partnerships and show that (a) the allocation of fund economics to individual partners is divorced from past success as an investor, being instead critically driven by status as a founder; (b) that the underprovision of carried interest and ownership—and inequality in fund economics more generally—leads to the departures of senior partners; and (c) the departures of senior partners have negative effects on the ability of funds to raise additional capital.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50943

Abstract—Homo sapiens has mastered its environment so thoroughly that, for the first time in history, a small minority of the population is capable of creating enough food and fuels to support not only itself, but also a growing majority of the 6 billion people now living on earth. This unparalleled abundance is allowing our species to develop, distribute, and profit from innovation in nearly every corner of civilization. Now key elements of the modern world such as the speed and connectedness of digital communication, the dynamic movement of capital, and the changing nature of political boundaries are propelling capitalism into a new form that can be characterized as "virtual capitalism." And global corporations in their size and global influence are leading the embodiment of virtual capitalism into the modern world.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=50918

This case illustrates how Chilli Beans became the most popular sunglasses retailer in Brazil and the issues it faced when expanding into the United States.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/516020-PDF-ENG

Mattermark, a software-as-a-service company that sold software allowing companies to access financial information about privately-held companies and startups, was at a turning point. CEO Danielle Morrill had to allocate investment funding from a Series A round. She needed to build up sales and marketing; she also wanted to invest in her product, which was already popular in the VC market but was increasingly gaining traction in other markets. Sales and marketing had struggled, meanwhile, after a failed hire of a head of sales from another company. Morrill had to clearly prioritize her financial and strategic decisions.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/816073-PDF-ENG

In May 2013, senior managers of GSO Capital Partners, an $80 billion credit-oriented investment firm owned by The Blackstone Group, are considering what to do next with their investment in the senior secured debt of Eastman Kodak Company. Once a great company and an icon of American business, Kodak had fallen on desperately hard economic times as its traditional business of manufacturing cameras and photographic film had all but disappeared with the rise of digital photography, causing its annual revenues to plummet from $13 billion to $6 billion, and its stock price to fall by 95%, between 2003 and 2011. Having taken various positions in Kodak's debt during the previous four years, GSO is now faced with a major decision. Under the company's recently proposed plan of reorganization, secured creditors were to be given 85% of the company's common stock, but unsecured creditors objected to the plan. Now, six months later, GSO has brought an amended plan to the table under which it would commit to backstop a $406 million equity rights offering that would be made directly to all the unsecured creditors. This offer might bring the objecting creditors on board but could also require an additional large capital commitment by GSO, which was already heavily invested in a highly troubled business that many viewed as a "melting ice cube."

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/216006-PDF-ENG

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/416031-PDF-ENG

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/416032-PDF-ENG

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/416034-PDF-ENG

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/416033-PDF-ENG

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/416035-PDF-ENG

The Rawlinsons, a young, ambitious, career-minded couple, are considering their life and career goals. They are both successful, have aspirations to serve in public office, and are negotiating important career choices as a couple.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/414002-PDF-ENG

Founded in 1999 in the Boston area, Sentient Jet had become a leading private aviation company in the United States. Its success was built on the introduction of a groundbreaking membership program that offered business travelers the flexibility and convenience of flying private aircraft for their personal and business needs at an outstanding and unparalleled value. Sentient functioned differently and more efficiently than traditional charter companies: it used an open fleet model, renting jets from a pool of certified charter companies. Thanks to its innovative business model and proprietary technology platform, the firm was providing its clients with all the benefits of owning a fleet of aircraft with none of the associated costs and commitments. Its fares were typically 20% to 30% lower than those of its competitors. In a nutshell, Sentient Jet had invented the Uber of private jets before Uber even existed. With over 15 years of experience, the company was serving more than 5,000 cardholders, and Andrew Collins, president of Sentient Jet, was considering various strategies to double the company’s size in the next few years.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/516066-PDF-ENG

Four teams across the world are furiously designing, building, testing, and learning to sail a boat that would be one-of-a-kind in order to win the 2013 America's Cup. Choosing the best development path was a challenge as the teams had less than three years to prepare, and each decision would affect the performance of the boat as well as the duration of the sailors' training. The case traces the dilemma faced by the favorite, Oracle Team USA (OTUSA), as rumors grew that the challenger was pursuing a revolutionary technology that would enable its six-ton boat to literally fly above waves. With only a year left before the Cup, should OTUSA keep refining its current technology, called "skimming," or should it pivot towards "foiling" (flying)? At this stage foiling could be a red herring, and even if it was not, the limits of the performance of a foiling boat would remain a mystery for some time. The case explores the dilemma of managing innovation in an uncertain environment, where the decision would be sanctioned a year later by a win or a loss.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/616045-PDF-ENG

The local government in Delhi has ordered a ban on Nestlé's flagship product in India—Maggi Noodles—citing excessive lead content per government lab tests. Nestlé disputes the government tests, noting that internal and third-party tests show the product to be safe. There is considerable confusion in the media and among Nestlé's customers, and Maggi sales begin to plummet. Other local governments and India's federal food-safety regulator also consider bans. Nestlé must decide how to respond. Options include suing the regulators and withdrawing the product, which could impact up to 25% of Nestlé's India sales.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/116013-PDF-ENG

Supplements the (A) case.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/116014-PDF-ENG

Supplements the (A) case.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/116038-PDF-ENG

A leading Chinese energy firm, active in coal mining and electric power generation, analyzes coal-to-liquids technology in light of energy security and environmental concerns.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/715026-PDF-ENG