First Look

Publications

Pricing to Create Shared Value

Abstract

Many companies are in competition with their customers to extract as much value as possible from every transaction. Pricing is their weapon of choice, and consumers fight back by rooting out and disseminating pricing policies that seem unfair. The problem is that companies generally think of value as a pie that is rightfully theirs. But value is not fixed, and it neither originates with nor belongs solely to the firm. Without a willing customer, there is no value. Instead of using pricing in a way that turns customers into adversaries, companies can use it to enlarge the pie. That means viewing customers as partners in value creation-a collaboration that increases customers' engagement and taps their insights about the value they seek and how firms could deliver it. The result can be new revenue, increased customer satisfaction and loyalty, positive word of mouth, and cost savings. The multiyear process to price the 8 million tickets to the upcoming London 2012 Olympic Games suggests five principles for using pricing to create shared value: focus on relationships, not on transactions, by using pricing to communicate that you value customers as people; set prices proactively to discourage detrimental behavior and to encourage behavior that is beneficial to both your firm and your customers; allow prices to change in response to shifting customer needs; promote transparency by providing the rationale for your pricing; and make sure that prices and the processes by which they are set meet consumers' expectations about what is fair.

Read the article: http://hbr.org/2012/06/pricing-to-create-shared-value/ar/1

Self-Knowledge, Unconscious Thought, and Decision Making

Abstract

An abstract is unavailable at this time.

Publisher's Link: http://www.guilford.com/cgi-bin/cartscript.cgi?page=pr/vazire.htm&dir=pp/sapp&cart_id=525067.3094

Short-Termism: Don't Blame Investors

Abstract

The article presents research on executives and corporation investor relations. A study is conducted of the language used by executives in conference calls discussing earnings with investors and financial analysts. A correlation was found between the use of language indicating a short-term focus by those executives and both their company's financial management practices and the company's stockholders, who were more likely to hold stock for short periods of time compared to other stocks.

Read the article: http://hbr.org/2012/06/short-termism-dont-blame-investors/ar/1

Leadership Is a Conversation

Abstract

Globalization and new technologies have sharply reduced the efficacy of command-and-control management and its accompanying forms of corporate communication. In the course of a recent research project, the authors concluded that by talking with employees, rather than simply issuing orders, leaders can promote operational flexibility, employee engagement, and tight strategic alignment. Groysberg and Slind have identified four elements of organizational conversation that reflect the essential attributes of interpersonal conversation: intimacy, interactivity, inclusion, and intentionality. Intimacy shifts the focus from a top-down distribution of information to a bottom-up exchange of ideas. Organizational conversation is less corporate in tone and more casual. And it's less about issuing and taking orders than about asking and answering questions. Interactivity entails shunning the simplicity of monologue and embracing the unpredictable vitality of dialogue. Traditional one-way media-print and broadcast, in particular-give way to social media buttressed by social thinking. Inclusion turns employees into full-fledged conversation partners, entitling them to provide their own ideas, often on company channels. They can create content and act as brand ambassadors, thought leaders, and storytellers. Intentionality enables leaders and employees to derive strategically relevant action from the push and pull of discussion and debate.

Read the article: http://hbr.org/2012/06/leadership-is-a-conversation/ar/1

Meta-Organization Design: Rethinking Design in Interorganizational and Community Contexts

Abstract

This article provides conceptual foundations for analyzing organizations comprising multiple legally autonomous entities, which we call meta-organizations. We assess the antecedents of the emergence of such collectives and the design choices they entail. The article identifies key parameters on which such meta-organizations' designs differ from each other. It also presents a taxonomy that elucidates how such forms of collective action vary and the constraints they must address to be successful. We conclude with implications for research on meta-organizational design.

Managing Risks: A New Framework

Abstract

Risk management is too often treated as a compliance issue that can be solved by drawing up lots of rules and making sure that all employees follow them. Many such rules, of course, are sensible and do reduce some risks that could severely damage a company. But rules-based risk management will not diminish either the likelihood or the impact of a disaster, such as Deepwater Horizon, just as it did not prevent the failure of many financial institutions during the 2007-2008 credit crisis. In this article, Robert S. Kaplan and Anette Mikes present a categorization of risk that allows executives to understand the qualitative distinctions between the types of risks that organizations face. Preventable risks, arising from within the organization, are controllable and ought to be eliminated or avoided. Examples are the risks from employees' and managers' unauthorized, unethical, or inappropriate actions and the risks from breakdowns in routine operational processes. Strategy risks are those a company voluntarily assumes in order to generate superior returns from its strategy. External risks arise from events outside the company and are beyond its influence or control. Sources of these risks include natural and political disasters and major macroeconomic shifts. Risk events from any category can be fatal to a company's strategy and even to its survival. Companies should tailor their risk management processes to these different risk categories. A rules-based approach is effective for managing preventable risks, whereas strategy risks require a fundamentally different approach based on open and explicit risk discussions. To anticipate and mitigate the impact of major external risks, companies can call on tools such as war gaming and scenario analysis.

Read the article: http://hbr.org/2012/06/managing-risks-a-new-framework/ar/1