Researchers at Harvard Business School publish hundreds of studies around business management each year, often in collaboration with peers from other institutions. Here are insights collected from papers and journal articles published over the last few months.
Overcome collaboration-killing time zones
As companies expand operations across the globe, they must grapple with time gaps during which employees cannot collaborate (i.e., lost productivity). To study this phenomenon, a research team studied communication patterns among 250 offices of a multinational firm located in 48 countries. Here’s one thing they learned: “Office pairs that lose one or two shared business hours due to [Daylight Savings Time] reduce their total communication volumes by 9.2 percent on average from baseline levels, an effect driven by decreases in scheduled calls and meetings (-10.7 percent) and in instant-message chat volumes (-8.7 percent).”
Companies may want to consider locating their knowledge-worker team members strategically. “Our results suggest that employees engaged in knowledge co-production place a strong premium on synchronous communication, and benefit from being located in such a way as to minimize temporal distance—that is, largely on a North-South axis,” the paper says.
Read the paper: The Effects of Temporal Distance on Intra-Firm Communication: Evidence from Daylight Savings Time. Jasmina Chauvin, Prithwiraj Choudhury, and Tommy Fan Pang.
Immigrant ban cost companies $100B in stock valuation
President Trump’s executive order in June suspending new work visas barred nearly 200,000 foreign workers from entering the United States and prevents American companies from hiring skilled immigrants using H-1B or L1 visas. Did the action negatively affect companies? Investors seem to think so. In this study, researchers looked at how the policy announcement affected the stock valuations of 471 Fortune 500 firms. “We find that the June 22 shock eroded the market valuation of the 471 companies in our sample by an estimated 100 billion of US dollars,” the researchers report. The president said the action was necessary to protect jobs for American workers. A US District Court later suspended the ban, which was set to end at the end of the year.
Read the paper: An Executive Order Worth $100 Billion: The Impact of an Immigration Ban’s Announcement on Fortune 500 Firms’ Valuation. Dany Bahar, Prithwiraj Choudhury, and Britta Glennon.
Drugs approved in December are associated with more adverse effects
New research reveals that drug approvals surge in the US in December, at month-ends, and before respective major national holidays. The bad news: “Drugs approved before these informal deadlines are associated with significantly more adverse effects, including more hospitalizations, life-threatening incidents, and deaths—particularly, drugs most rushed through the approval process." What's going on here? The patterns are "consistent with a model in which regulators rush to meet internal production benchmarks associated with salient calendar periods...,” according to the researchers. Salespeople who scramble to meet end-of-term quotas are familiar with the phenomenon.
Read the paper: Internal Deadlines, Drug Approvals, and Safety Problems. Lauren Cohen, Umit Gurun, and Danielle Li. American Economic Review: Insights (forthcoming).
Selling your pivot story
Young companies often shift gears to a new business strategy—pivoting—once the results of the original strategy have come home to roost. The question is how to sell the pivot to investors, employees, and other stakeholders. Here is some expert advice.
“Early on, entrepreneurs should avoid a focus on overly specific solutions and instead present the big picture,” write Rory McDonald and Robert Bremner in Harvard Business Review. “When changing course, they can then signal continuity by explaining how the new plan fits with the original vision. Once the reboot has happened, it’s critical to be conciliatory and empathetic to stakeholders who may feel abandoned.”
Read the paper: When It's Time to Pivot, What's Your Story?: How to Sell Stakeholders on a New Strategy. Rory McDonald and Robert Bremner. Harvard Business Review 98, no. 5 (September–October 2020): 98–105.
Weaknesses in supply chain strategy exposed
As anyone who went grocery shopping in the early days of the pandemic can tell you, empty shelves revealed how COVID-19 did a number on global supply chains. Now, corporate leaders must rethink fundamentally how and with whom they partner with suppliers. Writes Willy C. Shih: “They need to analyze their risk exposures, and then think about how to improve their resilience. They should look beyond just relocating supply, towards harnessing process innovations and revisiting some of the trade-offs between product variety and flexibility.”
Read the paper: Global Supply Chains in a Post-Pandemic World: Companies Need to Make Their Networks More Resilient. Here's How. Willy C. Shih. Harvard Business Review 98, no. 5 (September–October 2020): 82–89.
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