Publications
- April 2015
- HarperBusiness
Strategy Rules: Five Timeless Lessons from Bill Gates, Andy Grove, and Steve Jobs
Abstract—The authors of the bestselling Competing on Internet Time (a Business Week top 10 book) analyze the strategies, principles, and skills of three of the most successful and influential figures in business-Bill Gates, Andy Grove, and Steve Jobs-offering lessons for all managers and entrepreneurs on leadership, strategy, and execution. In less than a decade, Bill Gates, Steve Jobs, and Andy Grove founded three companies that would define the world of technology and transform our lives. At their peaks, Microsoft, Apple, and Intel were collectively worth some $1.5 trillion. Strategy Rules examines these three individuals collectively for the first time-their successes and failures, commonalities, and differences-revealing the business strategies and practices they pioneered while building their firms. David B. Yoffie and Michael A. Cusumano have studied these three leaders and their companies for more than 30 years, while teaching business strategy, innovation, and entrepreneurship at Harvard and MIT. In this enlightening guide, they show how Gates, Grove, and Jobs approached strategy and execution in remarkably similar ways-yet markedly differently from their erstwhile competitors-keeping their focus on five strategic rules. Strategy Rules brings together the best practices in strategic management and high-tech entrepreneurship from three path-breaking entrepreneurs who emerged as CEOs of huge global companies. Their approaches to formulating strategy and building organizations offer unique insights for start-up executives as well as the heads of modern multinationals.
Publisher's link: http://www.amazon.com/Strategy-Rules-Timeless-Lessons-Gates/dp/0062373951/ref=tmm_hrd_title_0?ie=UTF8&qid=1427236936&sr=8-1
- April 2015
- Harvard Business Review
Leaders as Decision Architects: Structure Your Organization's Work to Encourage Wise Choices
Abstract—Everyone from CEOs to frontline workers commits preventable mistakes-for example, underestimating how long it will take to finish a project or focusing too much on information that supports their current view. It is extraordinarily difficult to rewire the human brain to undo the patterns that lead to such mistakes. But there is another approach: alter the environment in ways that encourage people to make decisions that lead to good outcomes.
Publisher's link: https://hbr.org/2015/05/leaders-as-decision-architects
- April 2015
- American Economic Review: Papers and Proceedings
Formal Measures in Informal Management: Can a Balanced Scorecard Change a Culture?
Abstract—Agency theorists, historically, have analyzed what kinds of performance measures should be used in formal incentive contracts. For example, after Kaplan-Norton proposed a balanced scorecard of both financial and nonfinancial measures, some envisioned its role only in formulaic compensation contracts. We describe an alternative view, in which the scorecard's formal measures are created and used for informal management, with executives using discretion and judgment rather than managing solely "by the numbers." We discuss relational incentive contracts that use informal weights on formal performance measures. More importantly, we suggest how formal measures can be used in new models of informal management. We also propose that imposing ostensibly perfect measures on an organization from outside can work less well than having managers develop their own, potentially inferior, performance measures. In this sense, it is the creation of a balanced scorecard, more than actual use, that can change an organization's culture.
- April 2015
- Current Opinion in Behavioral Sciences
Understanding Ordinary Unethical Behavior: Why People Who Value Morality Act Immorally
Abstract—Cheating, deception, organizational misconduct, and many other forms of unethical behavior are among the greatest challenges in today's society. As regularly highlighted by the media, extreme cases and costly scams are common. Yet, even more frequent and pervasive are cases of "ordinary" unethical behavior-unethical actions committed by people who value and care about morality but behave unethically when faced with an opportunity to cheat. In this article, I review the recent literature in behavioral ethics and moral psychology on ordinary unethical behavior.
Publisher's link: http://www.sciencedirect.com/science/article/pii/S2352154615000443
- April 2015
- Academy of Management Journal
Unearned Status Gain: Evidence from a Global Language Mandate
Abstract—Theories of status rarely address unearned status gain-an unexpected and unsolicited increase in relative standing, prestige, or worth, attained not through individual effort or achievement, but from a shift in organizationally valued characteristics. We build theory about unearned status gain drawing from a qualitative study of 90 U.S.-based employees of a Japanese organization following a company-wide English language mandate. These native English-speaking employees believed that the mandate elevated their worth in the organization, a status gain they attributed to chance, hence deeming it unearned. They also reported a heightened sense of belonging, optimism about career advancement, and access to expanded networks. Yet among those who interacted regularly with Japanese counterparts, narratives also revealed discomfort, which manifested in at least two ways. These informants engaged in "status rationalization," emphasizing the benefits Japanese employees might obtain by learning English, and prevaricated on whether the change was temporary or durable, a process we call "status stability appraisal." The fact that these narratives were present only among those working closely with Japanese employees highlights intergroup contact as a factor in shaping the unearned status gain experience. Supplemental analysis of data gathered from 66 Japanese employees provided the broader organizational context and the nonnative speakers' perspective of the language shift. These findings expand our overall understanding of status dynamics in organizations and show how status gains can yield both positive and negative outcomes.
Publisher's link: http://amj.aom.org/content/early/recent#content-block/
- April 2015
- The Oxford Handbook of Creativity, Innovation, and Entrepreneurship
Institutional Innovation: Novel, Useful, and Legitimate
Abstract—This chapter advances the theoretical construct of institutional innovation, which we define as novel, useful, and legitimate change that disrupts, to varying degrees, the cognitive, normative, or regulative mainstays of an organizational field. Institutional innovation, like all innovation, is both novel and useful but differs in that it is also legitimate, credible, and appropriate. Legitimacy is hinged to four characteristics such that institutional innovation is theorized to be 1) normative or value-laden, 2) progressing in bursts of change over time, 3) socially constructed and culturally embedded, and 4) associated with logics that shape practices. We develop a framework, outlining the definition, composition, and processual nature of institutional innovation, as well as its generative potency. Finally, implications for theory, practice, and future research are offered.
- April 2015
- Institutions and Ideals: Philip Selznick's Legacy for Organizational Studies
What's So Institutional about Leadership? Leadership Mechanisms of Value Infusion
Abstract—Leaders are important social actors in organizations, centrally involved in establishing and maintaining institutional values, a view that was articulated by Philip Selznick (1957) nearly a half-century ago but often overlooked in institutionalists' accounts. Our objective is to build on Selznick's seminal work to investigate the value proposition of leadership consistent with institutional theory. We examine public interview transcripts from 52 senior executives and discover that leaders' conceptualizations of their entities align with the archetypes of organization (i.e., economic, hierarchical, and power oriented) and institution (i.e., ideological, creative, and collectivist) and cohere around a set of relevant values. Extrapolating from this, we advance a theoretical framework of the process whereby leaders' claims function as transformational mechanisms of value infusion in the institutionalization of organizations.
Publisher's link: http://www.emeraldinsight.com/doi/abs/10.1108/S0733-558X20150000044011
- April 2015
- Harvard Business Review
The Type of Socially Responsible Investments That Make Firms More Profitable
Abstract—No abstract available.
Publisher's link: https://hbr.org/2015/04/the-type-of-socially-responsible-investments-that-make-firms-more-profitable
- April 2015
- Current Opinion in Psychology
Ethical Blind Spots: Explaining Unintentional Unethical Behavior
Abstract—People view themselves as more ethical, fair, and objective than others, yet often act against their moral compass. This paper reviews recent research on unintentional unethical behavior and provides an overview of the conditions under which ethical blind spots lead good people to cross ethical boundaries. First, we present the psychological processes that cause individuals to behave unethically without their own awareness. Next, we examine the conditions that lead people to fail to accurately assess others' unethical behavior. We argue that future research needs to move beyond a descriptive framework and focus on finding empirically testable strategies to mitigate unethical behavior.
Working Papers
Government Preferences and SEC Enforcement
Abstract—I examine whether political influence by the government as a response to voters' interest in employment conditions is reflected in the enforcement actions of the Securities and Exchange Commission (SEC). I find that large employers are less likely to be subject to an SEC enforcement action, after controlling for firm size, accounting quality, distance to SEC office, and political contributions, among other factors. Next, I show that large employers are less likely to face an SEC enforcement action in presidential election years if they are headquartered in politically important states. I also find that firms that employ a larger proportion of a congressional district's total workforce and are located in districts with high unemployment rates are less likely to be subject to an SEC enforcement action if the incumbent congressman serves on a committee that oversees the SEC. These findings suggest that voters' interests are reflected in SEC enforcement.
Download working paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2542242
Cases & Course Materials
- Harvard Business School Case 215-037
Apple, Einhorn, and iPrefs
In March 2013, Apple Computer has a very large cash balance and is under pressure to return cash to shareholders. Hedge fund manager David Einhorn thinks Apple can "unlock value" by issuing perpetual preferred stock, dubbed iPrefs. Henry Blodget, CEO of The Business Insider, disagrees saying, "You can't just wave your magic wand and make something of nothing." This short case is designed to support a discussion of "perfect" markets and the Modigliani-Miller capital structure irrelevance propositions. The case focuses on two questions: (1) From a shareholder's perspective, how is Apple's cash different from cash in a bank or money market account? (2) Can Apple create significant value for shareholders by splitting each common share into an iPref plus a common share?
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https://cb.hbsp.harvard.edu/cbmp/product/215037-PDF-ENG
- Harvard Business School Case 815-093
Codecademy: Monetizing a Movement?
Codecademy, an open-platform, online community for learning computer programming, launched in 2011. By 2014, the company had raised a total of $12.5 million in funding and was, on many fronts, an overwhelming success. However, there were still no revenues. The founders decided it was time to experiment with different monetization strategies before deciding on a way forward. Although they wanted to avoid being prematurely pressured into decisions that went against their open-platform philosophy, they also knew that in order to fulfill their mission to democratize education, they had to eventually build a revenue-generating business. But what business model should they pursue, and what monetization experiments should they run?
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https://cb.hbsp.harvard.edu/cbmp/product/815093-PDF-ENG
- Harvard Business School Case 315-084
Investor 'Short-Termism': Really a Shackle?
No abstract available.
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https://cb.hbsp.harvard.edu/cbmp/product/315084-PDF-ENG
- Harvard Business School Case 315-067
Responsibilities to Employees
This note provides a framework to conceptualize managers' responsibilities to employees in relation to economic, legal, and ethical considerations. It also frames the central ethical challenge for managers as exercising power in a fair manner. The fair exercise of power involves three components: respect for legitimate expectations, procedural fairness, and distributional fairness.
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https://cb.hbsp.harvard.edu/cbmp/product/315067-PDF-ENG
- Harvard Business School Case 115-023
Hoag Orthopedic Institute
Two groups of orthopedic surgeons form a joint venture with a community hospital to establish Hoag Orthopedic Institute (HOI), a for-profit hospital and two ambulatory service centers. By controlling and integrating all aspects of the patients' medical treatment, the physicians deliver superior outcomes, which they communicate via an annual public outcomes report. They also introduce bundled payment contracts with three insurers for orthopedic surgeries and join a multi-hospital study for applying time-driven activity-based costing to identify process improvement and cost reduction opportunities. The case concludes with HOI leaders examining several options for expansion and growth.
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https://cb.hbsp.harvard.edu/cbmp/product/115023-PDF-ENG
- Harvard Business School Case 315-053
Curriculum Associates: Turning the Page from Tradition to Innovation
Set in fall 2014, the traditional textbook publishing industry is being transformed by technological innovations and new student achievement standards. This case chronicles how CEO Rob Waldron and his team bring Curriculum Associates (CA), a traditional supplemental publishing company, up to date amidst the changing publishing landscape. Founded in 1969, CA established a reputation as a pioneering workbook company specializing in helping teachers deliver targeted intervention for students in the classroom. As Waldron stepped into his role as CEO in 2008, he set about leveraging CA's existing educational expertise and relationships with school districts to take it from a traditional supplemental publishing company to a competitive player in the educational technology space. Waldron and the CA team-through innovations in curricular design, investments in technology, and a rigorous understanding of the Common Core State Standards-landed on a hit modular digital assessment and print-based workbook series called Ready®, Ready® Common Core, and i-Ready® Diagnostic and Instruction. In 2014, as sales are booming, Waldron and his team wonder how CA can stay competitive in the rapidly evolving publishing and education technology landscape while growing sustainably and building on its existing competitive advantage. The case gives students the opportunity to explore how a small- or medium-sized privately owned company can leverage its strengths and innovate while grappling with the challenges of providing software-as-a-service in the education sector, a leap for a company used to selling directly to schools and school districts.
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https://cb.hbsp.harvard.edu/cbmp/product/315053-PDF-ENG
- Harvard Business School Case 315-052
Zeal: Launching Personalized and Social Learning
Set in 2014, this case follows John Danner and his team at Zeal as they consider their product development strategy. In February 2013, serial entrepreneurs John Danner and Sanjay Noronha cofounded Zeal, an education technology start-up providing a web-based, mobile learning platform that helps students from Kindergarten to 8th grade build math and literacy skills based on Common Core State Standards through personalized learning plans. Having been a teacher and founder of a successful network of charter schools, Danner believes learning does not have to be limited to the classroom and wants to create a product that can connect students, parents, and teachers to facilitate individual student learning. Furthermore, he believes that offering a social, personalized learning tool can offer a fun way for students to learn and can also save time for teachers who want to provide differentiated instruction. Based out of the offices of the NewSchools Venture Fund in Palo Alto, Danner and Noronha work to rapidly develop the product with their founding team and their teacher partners at Rocketship Education, a K-5 charter school organization providing blended instruction combining technology and traditional methods. After several iterations, the Zeal team launches the latest version of Zeal in fall 2014. While reflecting on their process to find product-market fit, Danner and his team wonder where to pivot next and seek an appropriate business model that considers their customer and user base. The case describes the student, parent, and teacher features offered by the evolving Zeal product, and how the team begins with a focus on personalized, peer-to-peer learning and, based on feedback, refines the product to add in-class features and create a teacher product. Students will have the opportunity to explore how an early SaaS start-up in the educational technology space can approach early product development, pilot in classrooms, and connect with different stakeholders.
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https://cb.hbsp.harvard.edu/cbmp/product/315052-PDF-ENG
- Harvard Business School Case 115-027
Aura Light: From a Light Bulb Manufacturer to an Energy Savings Solutions Provider
A Swedish light bulb manufacturer reviews its strategy to better compete against large global multinationals.
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https://cb.hbsp.harvard.edu/cbmp/product/115027-PDF-ENG
- Harvard Business School Case 315-078
MELF and Business Culture in the Twin Cities (A)
Leaders of the many Fortune 500 firms headquartered in Minneapolis-St. Paul have a long history of engaging collectively, and with educational, political and social leaders, to deal with important community issues. Focusing on the participation of leading CEOs in the 2008-2011 Minnesota Early Learning Foundation's efforts to promote early childhood education for low-income children, this case series explores the nature of their engagement and source of their sustained commitment.
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https://cb.hbsp.harvard.edu/cbmp/product/315078-PDF-ENG
- Harvard Business School Case 714-032
The Estate Tax Debate
Per dollar of revenue, no tax policy generates more sound and fury than the taxation of estates. To supporters, the tax is a break on the concentration of wealth and power and an easy way to fund redistribution. To opponents, the tax is an unjust punishment of the frugal that sacrifices economic growth for short-term interests.
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https://cb.hbsp.harvard.edu/cbmp/product/714032-PDF-ENG