R & D
Lessons in Leadership: HBS professor Nancy F. Koehn
Selling Digital Privacy: HBS professor John Deighton
Nonprofits: Choosing a Path for Growth: HBS assistant professor Jane Wei-Skillern
Studying Japan from the Inside: Masako Egawa (MBA ’86)
HBS professor Nancy F. Koehn found the leadership lessons in the ill-fated voyage of Sir Ernest Shackleton’s Endurance so valuable that she wrote a case study on it. HBS Working Knowledge senior editor Martha Lagace recently asked Koehn what prompted her to author “Leadership in Crisis: Ernest Shackleton and the Epic Voyage of the Endurance.” Koehn’s response follows.
First, there are many important lessons for business leaders to be found in areas outside business. When we look at enduring works of literature, for example, we find interesting questions about living a good life and important insights into how to motivate people, allocate resources, and act with great integrity in moments of crisis.
Second, we are now living in a turbulent time. There are new questions about where we are going as a people, as business leaders, and as good citizens. Leaders have to be able to manage in stable, prosperous times and also in very uncertain, dangerous times.
Third, the Shackleton story is compelling. Case-method learning is partly about choosing stories that we can learn from, that we can make our own, that we don’t forget as we go out in the world and begin to be responsible for other people’s lives, jobs, money, energy, and commitment. This was a great story of integrity and humanity — and one that no one ever could have predicted, not in what happened, how it unfolded, or how it ended. Ernest Shackleton, like all of us, was as flawed as he was brilliant. Business leaders have to be able to discern both of these aspects of people and of organizations.
One thing Shackleton did very well was to revise, and reset, his objectives as the context changed. As soon as his ship was trapped in ice, he figured out that the goal of the enterprise was no longer to walk across the continent of Antarctica. The new goal was to survive. He was able to see that and keep that clearly in focus. It’s frequently very hard for people to do this, to give up on a long-sought-after goal. And yet sometimes the stakes can be as high as one’s life and other people’s lives.
One of the great challenges of managing or leading in turbulence is being able to play to your stronger suit as a leader and also play to others’ stronger suits. Lincoln did it, Shackleton did it, Gandhi, Frederick Douglass, and many others have done it. We need to be able to help our students understand how they can do it — both in small and in big leadership contexts.
To read the full Q&A with Koehn, visit http://hbsworkingknowledge.hbs.edu/item.jhtml?id=3612&t=strategy.
If regulation won’t stop privacy invasion, what will? HBS professor John Deighton has an answer that involves convincing companies to pay us consumers to use our private information. Instead of relying on regulators to protect our privacy against telemarketers, data miners, and consumer research companies, we should capitalize on the value of our personal information and get something of value in return.
Deighton’s recent working paper, “Market Solutions to Privacy Problems?,” suggests that consumers would gain the advantage if they sold their personal information instead of allowing marketing companies to sell it. Consumers, he asserts, have much to gain — be it money, price discounts, better customer service, or products tailored specifically to their needs.
In the current system, information that is gathered about individuals by stores, researchers, and credit agencies belongs to those companies, not to the individuals. The companies in turn resell that information to others, leaving the source of the information — the individual — out of the loop. Today, consumers face a stark choice between blanket do-not-call regulation and indiscriminate direct marketing intrusion. There is a middle ground, says Deighton, but it will take a new kind of institution, a personal data clearinghouse, to give consumers back their marketplace identities.
In proposing a market-based solution to the consumer-privacy problem, Deighton says, “Markets have an advantage over rigid regulation in that they set cunning against cunning and self-adjust to technological innovation.” Although he admits that selling personal information is a difficult idea to embrace, Deighton believes it is one whose time has come. “The challenge is to give people a claim on their identities while protecting them from mistreatment. The solution is to create institutions that allow consumers to build and claim the value of their marketplace identities and that give producers the incentive to respect them. Privacy and identity then become opposing economic goods, and consumers can choose how much of each they would like to consume.”
Excerpted from HBS Working Knowledge. For the full article, visit http://hbsworkingknowledge.hbs.edu/item.jhtml?id=3636&t=marketing.
Nonprofits: Choosing a Path for Growth
Social enterprises are traditionally organized along one of two lines: The affiliation model favors decentralized control, while the branch model concentrates control at a central headquarters. In analyzing some three hundred social enterprises, HBS assistant professor Jane Wei-Skillern and Duke-based colleague Beth Battle Anderson found that many nonprofits that had expanded or were considering doing so preferred the branch model, even though it is characterized by slower growth. To learn more, Baker Library’s Carla Tishler interviewed the pair. An excerpt from Wei-Skillern and Anderson’s remarks follow.
While our survey did not explore the reasons for choosing branching over affiliation, some nonprofits may prefer branching because it allows the nonprofit leader to exert the most control since the new organizational units are established and managed centrally. This level of control is conducive to protecting the organization’s brand and reputation and coordinating overall strategy and operations. A high degree of control might be particularly desirable when the program being implemented is complex or relies heavily on intangibles; when an organization is in the early stages of growth and is interested in testing and refining its model in new locations; or when a nonprofit has less ambitious, less geographically dispersed expansion plans.
We were not surpised that our research suggests that there is no single, optimal structure for nonprofit geographic expansion. Rather, different structures appear to have different strategic implications, and nonprofits must consider how these implications align with their particular organization and expansion goals. In addition to branch organizations being smaller, being less ambitious, and growing more slowly, there were some notable differences across the branch, affiliate, and plural (organizations with both branches and affiliates) structures. For example, although plural organizations reported signifi-cantly greater advantages than pure branch or affiliate models, they also claimed to have faced greater challenges and seem to require stronger, more committed leadership. And branch organizations reported more challenges with human-resource issues, while affiliates asserted greater challenges in governance.
These patterns do not necessarily apply to all nonprofits, but they suggest that nonprofit leaders should anticipate some of the distinct challenges that seem to be associated with particular organizational structures.
For more information, visit http://hbsworkingknowledge.hbs.edu/item.jhtml?id=3697&t=nonprofit.
Studying Japan from the Inside
Masako Egawa (MBA ’86), executive director of Harvard Business School’s Japan Research Office in Tokyo, answers questions about business changes in Japan and the School’s research there.
Q: Tell us about an interesting recent case in Japan that your office worked on.
A: The auto manufacturer Nissan Motor was turned around by Carlos Ghosn. Ghosn was sent from Renault, the French auto company, which acquired management control of the financially distressed Nissan in March 1999. Ghosn motivated Nissan’s middle management and transformed the culture of the company, leading to a dramatic recovery in its performance. The case illustrates the power of a great leader. All of the reforms Ghosn implemented were originally proposed by middle managers who had been working for Nissan for twenty years; they were instrumental in the transformation process. The same group of people who have been working for an underperforming company can produce outstanding results if they have the right leader.
Q: What are some of the challenges that Japanese managers face today?
A: Globalization. When U.S., European, or Latin American companies go abroad, they can find many countries where they share similar cultures and languages. When Japanese companies send their managers overseas, however, they have to face completely different cultures and languages. Other Asian companies may face the same issue, but in Asia, outside Japan, there are only a small number of companies operating globally, while in Japan quite a few companies face this issue.
Another challenge is corporate governance. Historically, banks acted as monitors for Japanese companies, and the boards of Japanese companies were dominated by insiders. Last April, however, the commercial code was revised, and now Japanese companies may choose between two types of governance systems: the traditional Japanese system and one similar to the U.S. system. We are already seeing companies divided into two camps: Toyota, Canon, and Matsushita are saying that the Japanese system is better, while Sony, Hitachi, and Nomura Securities are opting for the U.S. style. Companies adopting the U.S.-style of governance, however, are in the minority.
Q: How do you see business in Japan developing in the years ahead?
A: Major changes are currently taking place in the Japanese economy, politics, and society. The qualities that brought success to Japanese business during the 1970s and 1980s — such as lifetime employment, cross-shareholding, and keiretsu (Japanese corporate groupings) — are going through fundamental changes. There is ongoing debate as to where Japanese companies are headed and whether they will adopt U.S. business practices or will maintain their uniqueness. Those changes present very interesting research opportunities for HBS.
— Cynthia Churchwell
Excerpted from HBS Working Knowledge. For the full article, visit http://hbsworkingknowledge.hbs.edu/item.jhtml?id=3638&t=globalization.
