| Last visit was: 25 Apr 2024, 20:25 |
It is currently 25 Apr 2024, 20:25 |
Customized
for You
Track
Your Progress
Practice
Pays
24 Oct 2022, 00:00
| FROM Insead Admissions Blog: The Power of Networking in the New Economy |
|
It’s not what you know, it’s who you know, or so the saying goes. Few would refute this or the fact that networking can boost our careers. In fact, networking can take us to places we can hardly imagine. However, in the age of the fast-paced, non-standard gig economy that relies heavily on temporary positions, we need a new frame to understand networking. Even before the Covid-19 pandemic disrupted work as we know it and accelerated the rise of the gig economy, work had been transforming towards shorter-term, non-standard arrangements like independent contracting and freelancing. In the creative industries, where the value of the practitioner’s work is not easily defined and consumer demand is typically uncertain, jobs are frequently on a contractual and precarious per-project basis. Fashion models, film directors, musicians, editors, graphic designers and the like have been taking on gigs even before the term was popularised. Today, independent contracting is common in both white and pink-collar industries, and even in high-status fields like entertainment and information technology. Changing tides, changing ties In the sociology of work and markets, social capital is an influential concept. Studies have confirmed the role of social ties in shaping, constraining, and enabling labour market opportunities. Traditionally, the value of a tie is determined primarily by its strength – defined by the duration of the relationship, its emotional intensity, intimacy and potential for reciprocity. However, prevalent conceptions of social capital have not kept pace with transformations in the workplace. Most studies are based on standard employment within formal organisations and long tenure. Social network analysis of the creative industries can produce interesting insights about networks today. A creative practitioner’s network can bolster reputation and name recognition, just like how theatre actors benefit from sharing the stage with a celebrity. In addition to status signalling, networks are a source of camaraderie and communal support to professionals in more precarious employment. Indeed, anthropologists found sharing to be a common social response to precarious conditions. Fashion models exemplify independent contractors in a fast-paced market that is marked by stiff competition, global mobility and high turnover. In the course of their work, models travel to fashion markets around the globe for short-term employment. Before the pandemic, for example, some 3,000 to 5,000 models converged at the annual New York Fashion Week annually. These models come together at fashion shows, form ties and depart in quick succession. Are stronger ties better? Through the world of fashion modelling, our study, forthcoming in Social Networks, explored the practical implications of quickly formed and fleeting social ties established through recurrent projects. We assessed whether such ties can boost careers. We introduced the concept of “transitory ties” to capture the recurrent, brief, and valuable social ties that exist between arm’s length and strong ties – akin to the relationships forged in public spaces or between cab drivers and passengers. Transitory ties, although not a new phenomenon, play a salient role in today’s informal workers. We studied networks among fashion models through ethnographic accounts of fashion shows and castings in New York and London and tested the effects of transitory ties using a unique longitudinal dataset of fashion models’ career profiles spanning a decade. We examined contextual factors leading to the formation of transitory ties and considered broader network effects that may influence the models’ careers. With these, we mapped the career consequences of transitory ties in fashion modelling. In this study, we questioned the significance of time in defining ties, and specifically, if duration, emotional intensity, intimacy and reciprocity line up linearly. Looking beyond a tie’s strength, we considered how brief and fleeting connections can yield meaningful outcomes – a shift that mirrors the transformation in the labour market from organisation-based to project-based work. Ties that matter Results showed that transitory ties have huge practical relevance to fashion models, from information sharing to learning by role modelling, attracting gatekeepers’ attention and even status signalling. Regardless of the model’s status, media coverage or affiliation with fashion houses, transitory networks exert considerable influence on the success of a model’s career (measured as the number of catwalk shows a model has done). Further, we outlined how the network ecology of transitory ties shaped career outcomes. For instance, the chances of success of an aspiring model increased in a linear fashion as she moved from the periphery towards the core (insider) group, but the effects diminished when she was very close to the core of the network. For workers in the gig economy to continue to thrive, we should foster more opportunities for networking and sharing information amongst each other. Understanding the value of transitory ties and the nature of these networks could encourage those in the labour market to help one another densify their networks and achieve mutually beneficial outcomes. |
25 Oct 2022, 01:00
| FROM Insead Admissions Blog: How to Get More Value from Less Food |
|
The first bite of something delicious, say a chocolate mousse, is always the most pleasurable. The next mouthfuls are slightly less enjoyable and, if the portion is large, the last bites are often bland or make us feel queasy. What most people fail to realise, however, is that the total enjoyment from eating is not the sum of the pleasure experienced with each bite, but its average. The last bites tend to bring the average enjoyment down, which is why we often regret them. Drawing on this insight, Yann Cornil* and I have demonstrated in a series of studies that training people in a lab or children in schools to focus on the sensory experience of eating can increase the appeal of smaller portions. This can lead them to choose and consume less than usual. Sensory training has proven to be effective in contexts where participants are given explicit instructions. But how can it be practically implemented using labels on food products or descriptive language on restaurant menus? And how will this influence how much customers are willing to pay? In our most recent paper, published in Appetite, we show how food marketers can leverage these insights to make their customers willing to spend more on smaller food portions. This can result in a triple win for health, business and overall eating enjoyment. Our recommendation is to emphasise the aesthetic, multisensory properties when describing food. We call this epicurean labelling because it is consistent with the teaching of the Greek philosopher Epicurus who wrote in a letter to Menoeceus that the wise person does not choose the largest portion of food but the most pleasing. Finding the sweet spot In our first study, we offered participants a fixed three-course lunch for €15 at a French culinary school cafeteria. While the food was identical, we manipulated the menu given to customers. For the control group, the menu succinctly described the meal: “Gnocchi, spinach salad, vinaigrette” as a starter, “Beef shepherd’s pie, tomato and pesto sauce” as a main dish, and “Lemon tartlets, red berry coulis” as a dessert. The epicurean-labelled menu included descriptions with a multisensory focus, such as: “Lemon tartlets with red berry coulis: Crunchy pie crust pastry topped with an elegant slightly sour lemon cream, signed with a dark chocolate comma. Smooth seasonal red berry coulis”. As a benchmark, we also included a nutrition-labelled menu with the same descriptions as the control menu, but with additional information about calorie and fat content. Paying customers could choose as many portions as they wanted and estimated a fair price for the meal they had chosen. We found that customers in the control condition had an average calorie intake of 984 kilocalories and estimated that the meal was worth €17. In contrast, the calorie intake of those exposed to the epicurean menu was 817 kilocalories, 17 percent less than those who ordered off the control menu. Despite eating less, customers in the epicurean condition valued the experience at €20, a 16 percent increase over those with the control menu. Ultimately, these customers were happier and willing to pay more for less food. They also anticipated a more pleasurable experience after reading the sensory-based menu and ate at a slower pace, indicating that they savoured their food. Customers exposed to the nutrition-labelled menu consumed just 680 kcal, 31 percent less than the control condition. However, the decrease was so drastic that we suspect some of them stopped somewhere on the way home to get dessert! The biggest issue from a business standpoint is that they were also unsatisfied with the experience, valuing it at an estimated €15. In essence we found that epicurean labelling had three clear advantages. First, it was better for people’s health as it encouraged people to eat moderate portions. Second, it was better for business because people ate less food for the same price. Third, it increased overall pleasure since people enjoyed the meal more. Will it play in Peoria? While epicurean labelling proved effective in our French cafeteria study, we didn’t know if we would see the same effect among American customers. France and the United States are at the opposite ends of a hedonic-utilitarian food attitude spectrum – the French associate eating with pleasure, while Americans focus on aspects such as nutrition and value for money. Moreover, portion sizes tend to be smaller in French restaurants. To determine if epicurean labelling would make French, but not American, participants choose smaller portions, we replicated the cafeteria study online with hypothetical food choices. Participants were randomly assigned to see either the control or epicurean menu from the previous study. After looking at photos of the sample plates, they indicated the number of portions they would order for each dish and estimated the value of their meal. As predicted, French respondents “ordered” smaller meals overall, while Americans chose a similar amount irrespective of the menu they read. Although Americans did not choose a smaller meal, they were willing to pay more for a meal off the epicurean menu, much like their French counterparts. From restaurants to supermarkets Next, we examined the effect of epicurean labels on food products in French and American supermarkets. Using data collected by market research company Mintel Corporation, we compared information on the price, size and product descriptions on food packaging. We found that France had a larger proportion of products with at least one sensory descriptor. In contrasting the average size and price of these products, we noted that products with sensory labels tended to be packaged in smaller quantities in France but were not commensurately cheaper in price. In other words, the price per kilogram was higher because they were considered premium products. In the US, however, there was hardly any difference in product size, but sensory-labelled products were markedly more expensive. These results infer that food marketers in these two countries use different rules when setting the price and package size of products with sensory labels. It seems that French consumers associate pleasure in food with smaller quantity, and are willing to pay more for it, whereas Americans are willing to pay more for higher quality but don’t want less food as a result. From ‘food as fuel’ to ‘food as pleasure’ In the fight against obesity, public health authorities have tried to promote moderate eating and healthy diets by adding nutrition labels to food products and menus. Here, we argue that emphasising the aesthetic, multisensory properties of food is a promising alternative. More generally, food companies need to change their business model. Rather than selling more calories to more people for more money — the “food as fuel” model — they need to grow their business by selling fewer calories but more enjoyment, the “food as pleasure” model. Our findings also challenge the widely held belief that pleasure is the enemy of healthy eating – an attitude that is more pervasive in the US. We prove that underscoring the aesthetic, multisensory dimensions of pleasure through epicurean labelling can promote portion control (a win for health), encourage savouring (a win for pleasure) and increase the monetary valuation of smaller portions (a win for business). *Yann Cornil is an Associate Professor of Marketing & Behavioural Sciences at the University of British Columbia Sauder School of Business. |
25 Oct 2022, 21:00
| FROM Insead Admissions Blog: China’s Economy: Dragon in Turbulence |
|
China’s President Xi Jinping has been confirmed for an unprecedented third five-year term as the leader of both the Chinese Communist Party (CCP) and the country’s military. While the appointment of Xi and his new leadership team went relatively smoothly during a week-long meeting of 2,300 CCP delegates in Beijing, the same could hardly be said for China’s economy: The once high-flying dragon is entering a period of turbulence. And, when the dust has settled, the global trade and political order may look very different. A rash of flashing-red economic indicators reflect the depth of China’s woes. The economy grew by 0.4 percent in the second quarter of 2022, the slowest pace since its rapid ascent in the early 1990s save for Q1 2020, when Covid-19 first emerged. The third quarter saw more robust growth of 3.9 percent, but it took average growth for the year to date to a mere 3.0 percent, far below the 5.5 percent targeted by Xi’s administration and the 3.2 percent forecast by the International Monetary Fund. The medium-term outlook is similarly bleak. The IMF expects China’s economy to grow by 4.4 percent in 2023, well off the >5 percent rate needed to meet Xi’s goal of doubling GDP by 2035. Forecasts by the World Bank are even more gloomy. Three forces are to blame for bringing the dragon down to earth: the zero-Covid policy that is hobbling the economy, a meltdown in the property sector, which accounts for 30 percent of China’s GDP and a sweeping crackdown on Big Tech. Remarkably, all are self-inflicted wounds. If advanced economies enter a recession, China will see additional drag on growth. For now, Beijing has something else to grapple with: Washington’s new sweeping export controls on advanced semiconductors, the “brains” of electronic devices used in everything from healthcare to military systems. Bargaining chip In October, US President Joe Biden’s administration announced a ban on the sale of high-end chips to China by both American firms and foreign ones that use American machines or knowhow. The control also prohibits US citizens and green card holders from working in China’s semiconductor industry. Hundreds of executives and engineers, among them employees at the elite Dutch manufacturer ASML, resigned within days, paralysing semiconductor operations. A single shot fired by Biden has done more damage to China than four years of performative “decoupling” under Trump. The chip industry depends on a highly complex and interconnected global supply chain that draws expertise from different regions: design in the US, manufacturing in Taiwan and South Korea, equipment from the Netherlands and assembly, packaging and testing in China. Today, China remains limited to the low value-added parts of the ecosystem. Biden’s ban will motivate Beijing to accelerate its push towards self-sufficiency, not just in semiconductors but advanced manufacturing as a whole, as it did in nuclear and hydrogen bombs and satellite technology under the “Two Bombs, One Satellite” project in the 1960s. But many believe it would take the Chinese 30 years to achieve chip self-sufficiency. Even in this difficult race, the Chinese government may be shooting itself in the foot. It has opened corruption investigations against senior executives of a state-run investment fund that is the central plank in its efforts to achieve "semiconductor independence". The probes, of which the authorities have provided scant detail, sent chills through the sector and put the brakes on China’s progress in chip development. Tit for tat Biden’s economic war on China will have seismic consequences for the international trade order. In the near term, expect China to retaliate with their own controls on critical exports like rare earth to the US. For certain imports it may switch from the US to other countries, like Brazil for corn. Beijing may even go after American multinationals like Apple and Tesla with significant operations in China. In the longer term, the two countries will pursue self-serving trade arrangements outside of the World Trade Organization system, using a mix of carrots and sticks. The global order will also be reshaped as both Beijing and Washington will intensify their tussle for allies, especially in South-east Asia, and lock horns over Taiwan. Unfortunately, pragmatism and economic interests will take a back seat while ideology and antagonistic nationalism move to the forefront. Even without external threats, China will have its work cut out managing internal challenges. The population of 1.4 billion is on the brink of shrinking for the first time in 60 years. On the current trajectory nearly half of them will disappear by the year 2100. Fewer working-age people means fewer workers and fewer consumers, posing a drag on GDP growth. Already the demographic dividend that has enabled China to become an economic powerhouse on the back of cheap labour is nearly spent, with productivity growth slowing to an average of 5.7 percent from 2014 to 2018, compared to 15.5 percent from 1995 to 2013. But the bigger worry may be the CCP itself. The party’s heavy-handed – if well-intentioned – attempts to eradicate the pandemic, achieve “common prosperity” (including by reining in the previously freewheeling and lucrative tech sector) and start-stop policies in taming the housing bubble have had disastrous consequences, with ripple effects on the world economy. What China needs, for a start, is more moderate governance and a refocus on economic policies that work. Even Xi, whose authority will remain unchallenged for years, needs a team that is competent and unafraid to give independent advice. Otherwise, brace for more turbulence ahead. |
27 Oct 2022, 23:00
| FROM Insead Admissions Blog: Thinkers50: The Road Ahead for Venture Capital |
|
The world of venture capital is weathering a period of global instability. How can we understand the risk and explore the opportunities of this new reality? INSEAD Senior Affiliate Professor of Entrepreneurship and Family Enterprise, Claudia Zeisberger, shared her expert opinion in a recent Thinkers50 webinar. “From about March this year, the amount of venture capital deployed has dropped,” explained Zeisberger. “VCs are taking the foot off the gas compared to the last two years when the speed of venture investing was fast and furious.” Indeed, global venture funding fell by 23 percent to US$108.5 billion in the second quarter of the year – the second-largest drop in a decade. However, Zeisberger pointed out that while venture funds are deploying their money a little slower, they cannot stay on the side lines forever. “I would expect by latest early next year, we will see the VCs come back with a vengeance to deploy the money that they have raised in the last couple of years,” she said. While venture capital originated in Silicon Valley, there are tremendous venture activities in Europe, Asia and Latin America, where venture capital investment topped a record-breaking US$15 billion last year. “Globally, the mindset towards entrepreneurship and building entrepreneurial ecosystems is becoming increasingly important,” said Zeisberger. She advised entrepreneurs to get help from advisers, lawyers or seasoned entrepreneurs to find the best possible investor. “Not every venture capital fund invests in every start-up. Every fund has a certain mandate,” she said. “Depending on what kind of company you are… you need to know who to approach based on their vertical and the stage that you are in.” Trends to keep an eye on Zeisberger outlined some trends including the rise of corporate venture capital, search funds and responsible AI solutions. Corporate venture capital One area that’s booming is corporate venturing. Corporate investors offer funding, access to resources such as experienced business unit leaders, marketing and development support, and the halo-effect of an established brand. “We have seen a tremendous explosion of corporate venture dollars entering the market just in the last couple of years,” said Zeisberger. But entrepreneurs should be aware of the potential drawbacks when deciding whether corporate funding is a good fit for their start-up. “The difficulty is that you're trying to marry the culture of a large corporate with the culture of start-up, and the two couldn't be more different,” said Zeisberger. “The corporates that do it well… and find ways to make the engagement worthwhile for both sides obviously reap tremendous benefits.” VC and family business Zeisberger noted an interesting trend in Asia: the rising interest in venture capital among next-generation family business leaders. “There is potentially an opportunity for those family businesses, if they get it right, to encourage the next generation to get more involved in the early-stage ecosystem,” she said. This could ultimately help the original family business stay relevant. Search funds Search funds, a staple in the US, are beginning to gain traction in Europe and Asia. “It’s a slightly different segue into entrepreneurship,” said Zeisberger. A search fund is an investment vehicle through which investors back an entrepreneur's efforts to identity, acquire and grow a company. We're looking to find a suitable entrepreneur that would take this business from good to great, she explained. While acquiring a business already in existence is a lot less risky than starting your own company, there are still some interesting challenges. A lot of these businesses are under-invested and the owner already has their mind on retirement, explained Zeisberger. However, when a new team and innovation is brought in, things can quickly turn around. “The data from the US shows that they [search funds] offer investors really interesting returns.” Responsible, sustainable start-ups Since early last year there have been real conversations about responsible AI, said Zeisberger. Venture capitalists’ role as funding source and mentor of tech start-ups makes them uniquely placed to help their entrepreneurs build AI solutions that are based on responsible and transparent use of data, she said. “Responsible AI solutions are crucial, and the gatekeepers for these solutions are the VCs.” Zeisberger also stressed the ever-growing importance of sustainability. Start-ups are experimenting in the alternative energy space and having wider conversations around climate change and the energy transition. These conversations are trickling down to venture capital as well, she said. “I think the solutions that the planet needs in the next two decades to settle and to rebalance Planet Earth… will come from early-stage companies.” |
31 Oct 2022, 02:00
| FROM Insead Admissions Blog: The Rising Importance of Soft Skills in Driving Productivity |
|
Soft skills – the behavioural and social traits that enable individuals to work harmoniously with one another – are not just nice to have, they’re essential for the growth of a nation. In France, 60 percent of employers consider soft skills, such as the ability to organise, adapt and work in teams, to be more important than technical competencies. However, France is far behind other developed economies when it comes to its stock of soft skills. In our report for the Conseil d’Analyse Economique, an independent advisory group for the French Prime Minister, we estimated how much France could benefit by closing its soft skill gap. Our findings suggest that investing in soft skills will result in higher individual, firm and aggregate productivity, and enable the expansion of sectors that are projected to see total factor productivity growth in years to come. Measuring the gap To estimate France’s soft skills deficit, we ranked 18 developed countries using data from the OECD Programme for the International Assessment of Adult Competencies (PIAAC). The results indicated that France has the third-lowest average level of soft skills, ranking just above Germany and Japan. The United States, Czech Republic and Denmark took the top three spots. Furthermore, this skill gap was as prevalent among highly educated individuals as those who have not attended university, implying that France’s soft skills deficit is not limited to certain education groups. France’s lack of soft skills is not just an issue among its adult population. Another OECD survey found that French school students are less persevering, less efficient in problem solving and exhibit lower levels of internal locus of control relative to their American, German and Northern European counterparts. Prior research has shown that the French education system fails to develop collectiveness and collaboration amongst students. How soft skills influence productivity In the last 40 years, occupations requiring strong social skills – the traits that enable individuals to interact appropriately in a given social context – have become increasingly important. We measured the evolution of social skills used in the French and American labour force from 1982 to 2020 using employment stock data. In both countries, we observed a rise in occupations that require social skills and a slowdown in the growth of occupations with lower social skill requirement. Occupations that require high social and high math/analytical (HSHM) skills include engineers, finance professionals, doctors, teachers and production and operations managers. In France, the share of those employed in such occupations grew as much as 9 percentage points between 1982 and 2020. However, by 2020, France still had a lower share of occupations that require high social skills than the US. While a lack of high-quality data makes it difficult to establish a causal link between soft skills endowment and productivity, we found evidence suggesting that productivity grew in industries that utilised more soft and analytical skills, and stagnated or declined at the aggregate level. In other words, industries that employ more HSHM workers exhibit higher productivity trends over time. Next, we assessed the returns to soft skills by estimating wage regressions in France. The results showed that a one standard deviation increase in soft skills is associated with a 4.2 percent increase in hourly wages, and a one standard deviation increase in numeracy skills is associated with a 4.4 percent increase. Put simply, the correlation between individual wages and soft skills is as high as the correlation between individual wages and numeracy skills. These results were consistent with previous research that estimated soft skills to be at least as important as numeracy skills. When looking at differences by education level, we found that returns to soft skills were positive for individuals with and without tertiary education, and slightly higher for tertiary-educated individuals. How to close the gap A number of targeted early childhood and school interventions have been proven to enhance soft skills and outcomes later in life. For example, recent research found a causal link between childhood soft skills training and long-term outcomes including higher trust and self-control, better school performance, lower criminality, higher employment, and lower dependence on social transfers as adults. We propose that a greater focus on soft skills development in French schools is necessary to provide children with important tools for the future, as they are currently at a disadvantage relative to their OECD peers. This will, however, require deep changes in the French education system. In addition, we suggest that the French government extends its assessment of soft skills of school age children to all schools. This would allow stakeholders to track the evolution of these crucial skills, facilitate the evaluation of policies and reforms at large scale and signal the France’s commitment to prioritise the soft skills agenda. Finally, it could help position France as a pioneer in taking soft skills seriously at large scale. But soft skills are malleable and can be developed in adulthood too. On-the-job training programmes can play a part in increasing the level of soft skills. For example, a randomised controlled trial in India was conducted to evaluate the returns to social skills training provided to employees of a large garment export firm. The training incorporated topics such as time management, effective communication, problem solving and financial literacy. Consequently, there was a 10 percent increase in garment production, a 12 percent increase in efficiency, and workers were able to perform more complex tasks. There are clear avenues to increase the soft skill capabilities of children and adults. Investing in these skills will have positive impacts in the long run and yield high returns on investment. Ultimately, an investment in soft skills will pay for itself. |
01 Nov 2022, 02:00
| FROM Insead Admissions Blog: Should Companies Allow Returns of Customised Goods? |
|
In the age of mass production, the demand for customisation is increasing. Customers prefer products catered to their individual needs and preferences over standard products – albeit at a cost. Fortunately, recent advances in information technology, advanced manufacturing such as robotics and 3D printing, and logistics have enabled firms to customise products at scale at a lower cost. In the highly competitive sportswear landscape, for instance, Nike and Adidas offer customisable shoes while Puma sells only standard shoes. Even when the two sportswear giants seem to see the value of offering customised products, their approach to returns policy differ. At the time of writing, Adidas only allows returns of standard products while Nike accepts returns of both standard and customised products. Returns of customised products is a tricky problem for businesses in practice. While standard products can be resold, it is usually not the case for customised products. Afterall, what is stylish to one may be outlandish to another. Moreover, who would buy a pair of sneakers embroidered with another’s name? In this case, should firms allow returns of customised products, and if so, under what conditions? A three-dimensional problem |
06 Nov 2022, 20:00
| FROM Insead Admissions Blog: GHG Emissions Reduction: Scientific Rigour and Stakeholder Engagement |
|
The latest report by the International Panel on Climate Change makes it clear: business and government can do more to address climate change. Without intervention, the planet is projected to warm 4.5°C above preindustrial levels between now and 2100. If that happens, climate scientists predict catastrophic consequences. Glaciers will melt, coastal cities will flood, biodiversity will be lost, and businesses and the economy will face dire consequences. As world leaders grapple with this grim scenario at COP27, the path forward requires radical action. Leaders and organisations must take quick and decisive steps to implement policies that reduce greenhouse gas (GHG) emissions and help limit global warming to the recommended 1.5°C threshold. And INSEAD, as the Business School for the World, must lead by example. What does this mean? In line with our school's mission and commitment to “walk the talk” on impact, we have the responsibility to put the bold leadership, innovative thinking and ethical decision making that we teach our students into practice. So, earlier this year, we made a pledge to reduce greenhouse gas emissions across our four campuses by 67% by 2035 and created a measurable action plan featuring concrete steps. The nearly three-year process leading to this pledge was rigorous, difficult and time-intensive. But it offers important lessons for others embarking on a similar journey. These are the four steps we took, which leaders and organisations could use when considering their own GHG emissions reduction planning and execution. Step 1: Measure and account for all GHG emissions First, we documented key activities at INSEAD and measured the emissions released by those activities. We engaged internal departments and a French consultancy specialised in climate actions and emission tracking to help collect and analyse this data across our four campuses in Fontainebleau, Singapore, Abu Dhabi and San Francisco. In line with best practice, our activities were organised into three areas, or scopes, of carbonisation: Scope 1 encompasses everything that we own, operate and perform on our premises or property that leads to GHG emissions, such as the gas boilers we use to heat water on campus. Scope 2 encompasses the emissions from the generation of the energy we purchase to operate our facilities. Some of that energy comes from burning gas. Scope 3 encompasses GHG emissions resulting from activities in our value chain, such as flights taken by our faculty, staff, students and alumni traveling to and across our campuses or emissions embedded in goods and services we use. Through this process, we were reminded of the importance of relying on data – rather than intuition or perception – to discern between high-emission activities and low-emission ones. For instance, it would be easy to assume that our largest campus in Fontainebleau generates the most emissions in INSEAD. In fact, Fontainebleau accounts for only 30 percent of emissions, while Singapore accounts for 60 percent. This is due to differences in climate (higher temperatures require more air conditioning) and differences in energy options (most energy in the Southeast Asian region is gas-based). Applying rigour to stakeholder engagement and decision-making When developing our climate pledge, we didn’t just apply rigour to our climate science. We also took a rigorous approach to our stakeholder engagement and business decision-making. That meant convening faculty, staff and experts from within and outside INSEAD to form two committees: a Steering Committee and a Faculty Advisory Committee. Our goal was to avoid internal or external pressures that might inadvertently lead to undesirable outcomes. Steering Committee (2020-2022) Objective: Perform calculations and undertake scenario planning. Members: Three staff members from the office of INSEAD’s Chief Operating Officer Two staff members from the Hoffmann Global Institute for Business and Society Two staff members from the INSEAD Facilities Office Three INSEAD faculty members Team of external consultants Faculty Advisory Committee (2021-2022) Objective: Check and verify data prepared by the Steering Committee, narrow options for INSEAD and finalise language in INSEAD’s climate pledge. Members: Six INSEAD faculty members Step 2: Identify and quantify options for reducing emissions Once we understood where our carbon emissions were coming from, we started exploring which levers we could pull to reduce them. We brainstormed internally, as well as approached several engineering companies and consultancies to get a comprehensive list of options. We then analysed the feasibility and potential benefit of those options, which spanned from automation systems to energy management systems, solar installations and more. For instance, while evaluating the feasibility of covering the entire Fontainebleau campus in solar panels, we found that it would only generate about 10 percent of our total energy needs. We also wanted to avoid contributing to the future wave of solar trash when we dispose the solar panels at the end of their 15 to 20-year life cycle. However, we determined that solar energy is an important option for the Singapore campus, which has less access to clean energy. As a result, we signed a three-year contract with Flo Energy, which operates a solar energy farm in Malaysia, to deliver 100 percent zero- carbon energy to the Singapore campus. At the time of signing the contract, the cost of solar energy was about 15 percent higher than carbon-based or gas-based energy. However, due to the current geopolitical situation, it is now only half the price. This unexpected outcome, while positive in this case, demonstrates the challenges of making forecasts. The transition to lower carbon operations will have a tangible impact on GHG emissions, but requires a number of behavioural changes. For example, if everyone on the Fontainebleau campus does not use warm water to wash their hands in the restroom, it would reduce total energy consumption of the campus by 1.3 percent. Similarly, optimising the scheduling of amphitheatres used for lectures can reduce the number of rooms used per day, lower energy needs for cooling and the corresponding emissions." Step 3 Determine how much it would cost After identifying the most feasible solutions, we determined how much it would cost to implement them to arrive at the most impactful and economically viable levers. To that end, we worked with economists at INSEAD to assess the costs and benefits of our options. This revealed that, on the Fontainebleau campus, investing in geothermal energy is a no-brainer. Spread over 15 years, drilling geothermal wells has a negative cost and the largest potential for emissions reduction. This option is especially viable because we found an existing study about the location of geothermal wells in Fontainebleau. We are now running tests to determine where we can locate the volume of water flow needed to run most of our heating and cooling in Fontainebleau using geothermal energy. Step 4: Engage key stakeholders for buy-in In the crucial final step, we shared and discussed our findings with a broader group of faculty and staff members. We explored the school’s future carbon reduction strategy, impact of potential solutions on our business model, implications for our brand and reputation and other issues such as the economic impact. In the end, we presented two plans for consideration: Option 1 was based on compliance with France’s statutory requirements, new energy regulations in Abu Dhabi and expected legislation in Singapore. It necessitated a reduction of our energy consumption in France by 40 percent by 2030. Option 2 was to exceed that baseline and align more closely with our mission of serving as a “Force for Good”. For this, we need additional capital outlays to tap on geothermal energy, which would reduce our GHG emissions by 67 percent – and potentially up to 82 percent – on each of our campuses by 2035. Option 2 received unanimous support from the various stakeholders and was approved by the Dean and the Board of INSEAD. Achieving this alignment and buy-in from different stakeholders across INSEAD was crucial to our process. Our next step: Addressing emissions in Scope 3 While Option 2 addresses emissions resulting from our assets and the energy we purchase (scope 1 and scope 2), it doesn’t impact emissions from our operations (scope 3), which account for the majority of INSEAD’s total emissions. So, what shall we do about this? INSEAD is now following the same process outlined for scope 1 and 2 emissions to tackle scope 3 emissions, using a scientific approach that engages all of INSEAD’s stakeholders. Our experience from scope 1 and 2 taught us the importance of every constituent at INSEAD agreeing to the course of action, as it will have implications on what we do, who we are and why we exist. We know, for instance, that if we decide to restrict air travel for everyone in our community, we must consider what that means for our core mission of bringing people and cultures together. If we decide to move our courses online, we must consider whether that detracts from our value proposition or dilutes the learning experience. In short, INSEAD needs to address the broader GHG emission trade-offs around the reality of our context as a global business school. INSEAD is not alone in facing these kinds of dilemma. Every leader and organisation must consider trade-offs when balancing the needs of society or their economy with the needs of the environment. We hope that the process we went through could provide other organisations with a framework to approach this pressing challenge. For a start, a rigorous analytical approach and broad stakeholder engagement is crucial to reaching a good solution. |
08 Nov 2022, 23:00
| FROM Insead Admissions Blog: The Really Simple Steps to Creating an Innovation Engine |
|
Think “innovation” and what comes to mind? For many, it invariably evokes big names like Apple and Tesla, their epoch-defining products ranging from the smartphone to electric vehicles and genius leaders like Elon Musk and Steve Jobs. But is innovation only for the select few? Not at all, according to Ben M. Bensaou, INSEAD Professor of Technology Management and of Asian Business and Comparative Management. At a recent Thinkers50 webinar, Bensaou stressed that innovation is not just about radical creativity or breakthrough products. It can be a systematic habit. It can be applied to a company’s internal processes and functions. It has the potential to bring joy to both customers and non-customers, i.e., suppliers, retailers, regulators, and other players in a company’s business ecosystem. In short, said Bensaou, anyone can innovate, and they can innovate in everything. “Many people have this idea that you need to have a genius leader or to be a startup to innovate. It’s not true,” said Bensaou, whose book Built to Innovate demystifies innovation and shows organisations how they can develop an innovation engine. Even traditional or centuries-old companies are able to innovate, he said. “This is innovation driven by everyone in the organisation, not just the genius leader or R&D capability.” The tools of innovation To get there, companies should first recognise that every employee has the potential to generate ideas and, importantly, give them the permission to do so. Bensaou said he tells senior leaders or middle managers, “if you want your people to innovate, just give them permission and get out of the way”. The innovative potential of each employee stems from the fact that everyone has a customer, Bensaou noted, whether it’s an external customer or internal one in the form of other departments or business units. Innovation – or innovating, as Bensaou prefers to call it, to stress the behaviour rather than its result – then boils down to how the company can create value for the customer. Employees don’t just need permission to innovate, but the tools to do so as well. Bensaou has a simple recommendation: Learn to listen to three things. The first is what he calls the voice of the customer. Listening to the voice of the customer means seeking to understand, with empathy, the customer’s likes and dislikes, pain points and wishes. The second one is the silence of the customer. Bensaou explained: “This is the need or the problem the customer doesn't tell you… either because they're not aware of it or because they don't think it is your problem to solve.” Take Kordsa, a Turkish manufacture of tyre-reinforcing fabric. The company would send cross-disciplinary teams to customers’ plants for days at a time, said Bensaou, during which team members interviewed and observed employees to better understand their lives and their “jobs to be done”. On one such mission a Kordsa team noticed that the plant’s workers were unloading huge rolls of fabric with much difficulty. “The customer never told them about that problem, ” observed Bensaou. But through listening to the “silence” of the customer, the Kordsa team developed a small routine that enabled the client company to perform the same unloading chore with one worker instead of three, and in just 12 minutes instead of 90. Kordsa’s experience also highlights how innovation need not be radical, said Bensaou. “This is not changing the structure of the industry. The innovation can be in the process.” Finally, frontline employees need to learn from non-customers, a term Bensaou uses to refer to suppliers, retailers, logistics companies, regulators, influencers, subscribers and other stakeholders of the company. “Look for weak signals – discover whether there's somebody within your ecosystem who could benefit from innovation,” he said. He cited the example of Ecocem, a Dublin-based cement manufacturer. Spurred by founder and managing director Donal O’Riain, the small company developed a cement substitute that was just as strong as traditional cement products but with a much smaller carbon footprint. O’Riain understood that for Ecocem’s product to stand out from the competition, the company needed to win over the industry regulators, who are powerful market influencers. “This is creating value for the regulators, not the customers,” said Bensaou. O’Riain took more than four years to do this, including roping in scientists as part of efforts to convince French regulators to certify Ecocem’s product as high-quality cement. The effort paid off: Regulatory approval paved the way for the product to be accepted around the world. The company is now firmly positioned as an environmentally conscious organisation whose range of innovations are helping customers meet their key sustainability targets. Middle managers are the spark While the success of Ecocem and Kordsa seem to be driven by top leaders, middle managers are really the spark of any organisation’s innovation engine, observed Bensaou. All they need to do is to ignite the desire to innovate among their reports by giving them permission to innovate and, when they come up with ideas, nudge them in the right direction. A Japanese manager who trained under Bensaou did just that with his team. He kickstarted a culture of innovation with a simple behavioural change: Whenever one of them raised an idea, he would acknowledge it and support it by saying: “Thank you for giving me the idea.” Before long, more and more members were speaking up and approaching him with ideas. So he took it a step further by asking them to ponder why a customer would like their idea, and why the company should invest in it. “A middle manager can, with micro behaviours, small things… change the culture in the team,” Bensaou concluded. He suggested that managers integrate innovating into frontline workers’ regular routines. For example, make it a requirement that they spend two hours with a customer every month to listen to their needs, spoken or unspoken. The rewards will come soon enough. |
09 Nov 2022, 19:00
| FROM Insead Admissions Blog: Why it pays to be sceptical about behaviour tests |
|
Recent years have seen a sharp rise in interest in the field of behavioural economics, which studies how psychological, cultural and social factors can potentially influence people’s actions and behaviour. This line of thinking has entered the mainstream through popular books like 2011’s bestselling Thinking Fast and Slow by Daniel Kahneman, which explains how cognitive systems shape how we think and guide our everyday decision-making. Academia has also seen a growing body of research, much of it promoting behavioural economics assessment tools as a means of objectively measuring a range of different traits. These tools claim to assess everything from levels of risk aversion to trustworthiness, or even the ability to demonstrate sound rational thought – all based on an individual’s response to a specific test. In 2014, researchers conducted a large-scale study among the Dutch population, which examined how closely people acted according to the most objective economic choices. They then related these results to demographic variables (from age to education and wealth) to determine if the choices made differed among different segments of society. The findings revealed that people of lower socio-economic status seemed to perform worse in objective decision making. Clearly both policymakers and industry have a keen interest in understanding which individuals make rational decisions, be it to design effective policies or improve talent selection processes. But while there has been much attention devoted to the potential of behavioural economic tools, there has been a lot less research into the veracity of the results derived from using such tools. Testing the tests My recent research, conducted with colleagues Luca M. Lüpken, Nils Lüschow, and Tobias Kalenscher from the Institute of Experimental Psychology at Heinrich-Heine-University, suggests that such bold claims might actually overstate the case. We ran three experiments to test the ability of individuals to think rationally and in addition, re-analysed data from other studies ranging from risky monetary choices to dietary decisions. Overall, our analysis revealed that the ability of such tests to accurately distinguish between different individuals could only be described as moderate to poor. The aim was to test their levels of economic rationality, based on the accepted premise that decision makers consistently choose the best option according to their preferences as their budget allows. Indeed, the results showed that most participants (nearly 80%), across all datasets behaved with high consistency. Majority outcomes The outcomes were consistent independent of the choice type (social choice, food choice, choice under risk, or choice under ambiguity), the complexity of the choices offered, as well as variables such as study population, sample size, task structure and the duration of the study. The fact that these results also remained consistent regardless of the length of time between measurements was particularly telling. It wasn’t that the results were not accurate, it was simply that they showed that people, with the exception of a few outliers, all acted in very similar ways. All the experiments really helped to confirm were that most people are pretty rational and make consistently rational decisions. They weren’t able to help us decide if one person is smarter or more capable than the other. This was because the individual differences in rationality were so insignificant, even in large, representative samples, that they couldn’t be distinguished from small random variations. Consequently, even with current measurement techniques, it is still difficult to identify individual characteristics linked to rationality. In fact, taking the population average essentially offers a better prediction of individual performance than an individual measurement taken only 30 minutes before. While our research was specifically focused on economic games that addressed rational thinking, additional research analysing other behavioural tests for other traits such as risk attitudes, or loss aversion appeared to have similar outcomes: the results of the majority of people were close. These studies affirmed that most people behave in very similar ways and scored very similar results in these tests. Of course, that’s not to discount them as having no value at all. Our research was able to show that such economic tests can certainly be used to help identify patterns of behaviour. It’s just that our research suggests that claiming that they can help draw conclusions about specific individual’s behaviour is overstating things. Consequences of low reliability What do our results mean in practice, for example, in selecting candidates for a role? The impact of using low reliability tools can be illustrated by three qualitatively different consequences. First, organisations hire candidates based on less informative data, potentially leading to suboptimal hires. Second, candidate rankings are not reproducible. Third, HR professionals’ awareness of their own biases might be wrongfully pacified by the supposed objectivity of the test, which in turn can increase unconscious biases in the selection processes. The magnitude of these consequences depends on the importance or weighting given to these results in the final selection decision. The awareness of potential shortcomings in any personnel selection tool marks the first step towards their mature use in practice. Unfortunately, these tests are no silver bullet. Behavioural economic tools, like many other methods out there, can certainly help identify patterns of behaviour. But they should not be used in isolation to make major decisions such a government deciding on an education policy or to determine which person gets a top job. Instead, they should be used in conjunction with multiple forms of assessment, so that decision makers can compare and contrast the different outcomes and see whether they align. Ultimately, they should be used with caution, with the understanding that it can be tricky to make detailed conclusions about how specific people will behave. |
09 Nov 2022, 20:00
| FROM Insead Admissions Blog: Why It Pays to Be Sceptical About Behaviour Tests |
|
Recent years have seen a sharp rise in interest in the field of behavioural economics, which studies how psychological, cultural and social factors can potentially influence people’s actions and behaviour. This line of thinking has entered the mainstream through popular books like 2011’s bestselling Thinking Fast and Slow by Daniel Kahneman, which explains how cognitive systems shape how we think and guide our everyday decision-making. Academia has also seen a growing body of research, much of it promoting behavioural economics assessment tools as a means of objectively measuring a range of different traits. These tools claim to assess everything from levels of risk aversion to trustworthiness, or even the ability to demonstrate sound rational thought – all based on an individual’s response to a specific test. In 2014, researchers conducted a large-scale study among the Dutch population, which examined how closely people acted according to the most objective economic choices. They then related these results to demographic variables (from age to education and wealth) to determine if the choices made differed among different segments of society. The findings revealed that people of lower socio-economic status seemed to perform worse in objective decision making. Clearly both policymakers and industry have a keen interest in understanding which individuals make rational decisions, be it to design effective policies or improve talent selection processes. But while there has been much attention devoted to the potential of behavioural economic tools, there has been a lot less research into the veracity of the results derived from using such tools. Testing the tests My recent research, conducted with colleagues Luca M. Lüpken, Nils Lüschow, and Tobias Kalenscher from the Institute of Experimental Psychology at Heinrich-Heine-University, suggests that such bold claims might actually overstate the case. We ran three experiments to test the ability of individuals to think rationally and in addition, re-analysed data from other studies ranging from risky monetary choices to dietary decisions. Overall, our analysis revealed that the ability of such tests to accurately distinguish between different individuals could only be described as moderate to poor. The aim was to test their levels of economic rationality, based on the accepted premise that decision makers consistently choose the best option according to their preferences as their budget allows. Indeed, the results showed that most participants (nearly 80%), across all datasets behaved with high consistency. Majority outcomes The outcomes were consistent independent of the choice type (social choice, food choice, choice under risk, or choice under ambiguity), the complexity of the choices offered, as well as variables such as study population, sample size, task structure and the duration of the study. The fact that these results also remained consistent regardless of the length of time between measurements was particularly telling. It wasn’t that the results were not accurate, it was simply that they showed that people, with the exception of a few outliers, all acted in very similar ways. All the experiments really helped to confirm were that most people are pretty rational and make consistently rational decisions. They weren’t able to help us decide if one person is smarter or more capable than the other. This was because the individual differences in rationality were so insignificant, even in large, representative samples, that they couldn’t be distinguished from small random variations. Consequently, even with current measurement techniques, it is still difficult to identify individual characteristics linked to rationality. In fact, taking the population average essentially offers a better prediction of individual performance than an individual measurement taken only 30 minutes before. While our research was specifically focused on economic games that addressed rational thinking, additional research analysing other behavioural tests for other traits such as risk attitudes, or loss aversion appeared to have similar outcomes: the results of the majority of people were close. These studies affirmed that most people behave in very similar ways and scored very similar results in these tests. Of course, that’s not to discount them as having no value at all. Our research was able to show that such economic tests can certainly be used to help identify patterns of behaviour. It’s just that our research suggests that claiming that they can help draw conclusions about specific individual’s behaviour is overstating things. Consequences of low reliability What do our results mean in practice, for example, in selecting candidates for a role? The impact of using low reliability tools can be illustrated by three qualitatively different consequences. First, organisations hire candidates based on less informative data, potentially leading to suboptimal hires. Second, candidate rankings are not reproducible. Third, HR professionals’ awareness of their own biases might be wrongfully pacified by the supposed objectivity of the test, which in turn can increase unconscious biases in the selection processes. The magnitude of these consequences depends on the importance or weighting given to these results in the final selection decision. The awareness of potential shortcomings in any personnel selection tool marks the first step towards their mature use in practice. Unfortunately, these tests are no silver bullet. Behavioural economic tools, like many other methods out there, can certainly help identify patterns of behaviour. But they should not be used in isolation to make major decisions such a government deciding on an education policy or to determine which person gets a top job. Instead, they should be used in conjunction with multiple forms of assessment, so that decision makers can compare and contrast the different outcomes and see whether they align. Ultimately, they should be used with caution, with the understanding that it can be tricky to make detailed conclusions about how specific people will behave. |
10 Nov 2022, 21:00
| FROM Insead Admissions Blog: How to Change Someone’s Mind |
|
Once upon a time, the Persian king of all kings, Shahryār, beheaded his wife after discovering she was unfaithful. Overcome with rage, the monarch resolved to exact revenge on womankind by taking a new wife each night and beheading her the next morning. After most of the eligible women in the kingdom had either fled or been killed, Scheherazade, the daughter of the king’s advisor, devised a scheme to save herself and future victims. Scheherazade insisted on marrying the monarch, and on their first night together she told him a story, without revealing the ending. The king permitted her to live another day to finish her tale, and so she continued with her cliffhangers for 1,001 nights. Eventually, Scheherazade’s stories caused the king to have a change of heart, realise the injustices he had wrought and cease his vengeful rampage. Scheherazade, the narrator of the tales of One Thousand and One Nights, earned her place as one of the shrewdest heroines in world literature. While this story was set in the Islamic Golden Age, Scheherazade could be considered a highly effective coach or psychotherapist today. Through storytelling techniques, she awakened the king’s curiosity, challenged his behaviour and managed to change his outlook on life. Scheherazade’s form of psychological intervention can be applied to different situations. Many of us find ourselves in difficult circumstances that require influencing people and encouraging them to change. But altering the behaviour – or even the mind – of others can be extremely difficult. Through employing the Scheherazade method, we can help people identify the roadblocks and obstacles that stop them from living a fulfilling life. The Scheherazade method: Seven steps to change a person’s mind 1. Don’t impose your point of view Resist the temptation to directly tell the person the path they need to take. Direct advice might backfire, causing the person to back off or resist. Scheherazade realised that the king had deep and powerful defences – namely the conviction that his acts of vengeance were justified given the behaviour of his disloyal wife. To confront these beliefs head-on would only have reinforced them, making it much harder for him to be open to change. 2. Show empathy and help disentangle ambivalent feelings Carefully listen to what the person says and try to see things from their point of view. By understanding the source of their worries and insecurities, you can help the person confront and overcome them. Scheherazade broke down the king’s defences by showing genuine compassion and demonstrating that she understood why he was acting in this particular manner, even if she didn’t agree with it. She approached him without judgement and used her stories to redirect his hostile energy and consider different perspectives. 3. Sow a seed of doubt Find relevant examples to get the person to doubt and reconsider their existing values and behaviour. Through her stories, Scheherazade exposed the king to basic emotions such as happiness, sadness, fear, disgust, anger, contempt, surprise, shame and guilt. She skilfully guided him to these revelations, camouflaging the central theme of forgiveness within her stories. In doing so, she introduced doubt into the king’s mind about his motivations and his actions. 4. Spell out the consequences Observe the behavior of the person you’re dealing with and demonstrate a clear link between actions and consequences. Scheherazade was astute enough not to confront the king directly with his evil deeds. She sympathised with him, but, through the morality of each tale, she illustrated the disastrous outcomes for characters who behaved in a similarly cruel manner. Her stories helped him understand the link between immediate gratification and longer-term adverse consequences. 5. Harness the power of psychological judo Avoid being argumentative. Instead, deal with the person in a gentle, seemingly inconspicuous manner. Scheherazade was an expert in psychological judo, which is to move with, and not against, whatever needs dealing with in order to break down the other person’s defences and influence the outcome. When a judoka gets their opponent off-balance, they have the chance to influence the next move. Psychological judo can be a highly effective way to gently nudge people – whether you want them to share their opinion, see another perspective or follow a different path. 6. Empower and support their transformation Encourage the person to explore their own ideas and help them identify alternative behaviours or outlooks. Once they’ve identified how they want to change, support them in creating an action plan. To facilitate the transformation process, Scheherazade emphasised self-efficacy – a person’s belief in their ability to complete a task or achieve a goal. This helped increase the king’s confidence in his ability to change. 7. Guide, but don’t enforce, the change In a very respectful way, help the person weigh up the various options, and trust their ability to enact and manage any changes themselves. Scheherazade did not tell the king directly what to do but steered him to self-awareness. She helped him take responsibility for his actions and ownership over finding a solution. Even if you don’t intend to change someone, you can encourage them to deeply examine their values, priorities, interests, feelings, moods, wishes, dreams, fears and apprehensions. Words and stories hold more power than we realise. After all, if Scheherazade could change the heart of a mass murderer, it shouldn’t be that difficult to change someone’s mind! |
14 Nov 2022, 23:00
| FROM Insead Admissions Blog: Crypto 3.0 Will Be More Human: Causes for Optimism in Tumultuous Times |
|
Despite the current crypto winter and general uncertainty surrounding the sector, blockchain technology still attracts plenty of interest in its capabilities – be it facilitating a more decentralised financial system or powering Web3 applications. At a Tech Talk X organised by Ethereum Singapore and INSEAD’s Savvy Salamander Study Club, I introduced Ethereum co-founder Vitalik Buterin to a full house at INSEAD’s Asia Campus. Besides touching on recent developments in the Ethereum ecosystem – such as the long-awaited network switch from proof-of-work to proof-of-stake – he unpacked tools that can help us tackle some of the most pressing problems in today’s digital space, such as identity and trust issues, privacy concerns and the ethical deployment of AI. The evolution of crypto Crypto is moving into a third stage in its evolution, which I dub Crypto 3.0. In its initial form, Crypto 1.0 was focused on conducting simple peer-to-peer transactions over a distributed ledger in the Bitcoin blockchain. In Crypto 2.0, we saw the explosion of decentralised applications including DeFi and NFTs through smart contract blockchains such as Ethereum, which created a bona fide decentralised computer usable by anyone. Crypto 3.0 will build on these innovations and equip people with the tools to control their identities on crypto networks, making it much more user-friendly and easier to address prevailing privacy concerns. Under the mechanisms set out in the first two stages, crypto wallets and transactions are still fully public and transparent, despite being anonymous. This is usually considered a good thing, as it allows participants to be fully aware of counterparties’ balances and perform risk-mitigation activities, or for authorities to trace criminal activity conducted over the blockchain. Ironically, both of these features were lacking in the most recent blow-ups of crypto hedge funds, centralised exchanges and quantitative trading firms that have been consuming the news. However, there are many valid reasons why regular users would want greater privacy when using these networks, including better protection from hackers or an intrusive government, or to keep identities secure. Crypto 3.0 really speaks to the broader idea of identity on the internet, and how much control we have over it. Technologies have already been created to address this problem. Ethereum Name Service (ENS), for example, allows people to generate human-friendly and readable usernames on the Ethereum blockchain that they can use to conduct secure decentralised transactions. Another crucial development that will play a major role in the coming years is expanding the use and applications of zero-knowledge proofs. Unlocking zero-knowledge proofs Buterin addressed the growing importance of zk-SNARKs, or “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge”. Put simply, these are a form of cryptographic proof that allows a user, creator or owner to confirm the validity of certain data without revealing everything about the data itself. It enables individuals to be selective about what they reveal and when they reveal it (while proving its validity), even to the extreme level of having “zero knowledge” of what is inside the data stream. This differs from the current predominant system of transacting over maximally transparent blockchains. Besides its scalability applications, zk-SNARKs have huge privacy ramifications. By allowing people to only reveal certain aspects of the data in question, they can establish validity while attaining greater control over their privacy. For instance, zk-SNARKs can be used to prove that you made a specific crypto transaction without revealing your identity, pointing back to your wallet or disclosing information about other transactions made from that wallet. There are plenty of privacy applications for this technology, particularly when you want to achieve cryptographic-level assurance without revealing lots of data. These range from smart contracts and voting systems to account moderation and reputation protection. Furthermore, it can be used to prove that you are a unique human, a member of a particular community or trusted by other accounts. Another key application of zk-SNARKs is in remixing services, where users can send in their coins – which are mixed with coins from other sources – and withdraw random coins in return. These are accessed by people who want to achieve greater privacy and anonymity when using a public wallet, as the mixing of coins makes it virtually impossible to trace them back to their original source. However, remixing services are facing greater scrutiny and regulation due to their potential connection with criminal activity. The United States government recently imposed harsh sanctions on Tornado Cash for its alleged laundering of virtual currency. As a result, many exchanges such as Coinbase and Binance have been hesitant to go anywhere near remixing services. But with zk-SNARKs, users could provide specific information that proves they’re not using the platform to carry out illegal affairs, without disclosing anything that would reveal their identity. This could limit the ability of hackers and fraudsters to benefit from these services, which would make them safer and help alleviate the concerns of exchanges and regulators. How’d you solve a problem like AI? On the flip side, there are instances when we want to prove our identities or the “humanness” of things on the internet. Given the launch of generative AI models that rely on Large Language Models (LLMs) such as GPT-3, DALL-E and stable diffusion, we’re seeing a huge increase in the amount of realistic AI content that could easily pass off as being created by a human. The probability that we’ll soon be flooded with such content is a real concern in the AI community, and many are hoping that crypto can help solve the problem. In response to my question about the problem of generative AI, Buterin noted that it used to be relatively easy to identify deepfakes, bots and AI-generated content. But it will become increasingly difficult to discern this as the content becomes more sophisticated. The consequences could include spending our time interacting with bots that we think are real people, or the proliferation of more believable deepfakes that can be used for malicious purposes. We may also begin placing more of a premium on human-generated content. However, if almost all the content on the internet is produced by AI, we could simply be unable to find these human-generated works. Buterin suggested using a cryptographic version of digital signatures (which are used to identify websites) or zk-SNARKs to confirm human identities or tag content as being produced by humans. Indeed, zk-SNARKs would allow for human-generated content to be labelled as such without revealing which human produced it, thereby preserving privacy. He added that the timestamping feature of blockchains could help differentiate original content from reproductions or fakes. Towards a more decentralised future Many people have the perception that crypto is purely about decentralised finance and anonymous transactions – in short, all about the financial applications and less about the human side. But Crypto 3.0 looks to be a world where we will have access to tools that are much more focused on the social elements of the internet, whether these are our desires to establish digital identity, build reputation or ensure privacy. As the landscape evolves and we see greater efficiency, innovation and adoption, I believe there will be even more ways to manage our online identity, reputation and privacy, while protecting ourselves against bad actors. This could eventually lead to the creation of a decentralised social network and social media with new capabilities to facilitate this. The evolution of the crypto space into one that’s more focused on the human aspect could have huge – and hopefully positive – repercussions for all internet users, and is certainly something to keep an eye on. |
17 Nov 2022, 20:00
| FROM Insead Admissions Blog: Careers and Chance: How Much Control Do You Really Have? |
|
Career success isn’t just about how hard you work or how smart you are. Professional trajectories are influenced by many factors: from people’s lifelong skills and experiences to structural elements such as demographic backgrounds and macroeconomic conditions (e.g. the life-cycle phase of an industry or company). Prior research has examined the effects of these broad and relatively stable factors on career progression. Research has even been done on “career shocks”, that is major upheavals in a company or industry such as unexpected financial crises and tragic accidents. However, careers today rely on a number of key local resources and/or events for people to progress and develop their identities and confidence. Do these proximate factors have the power to substantially alter career paths – for better or worse? Roxana Barbulescu, Claudia Jonczyk Sédès, Ben Bensaou and I set out to investigate how proximate chance events influence people’s outlook regarding their professions. Careers are shaped not only by major transitions, but also incrementally over the course of regular work. Therefore, knowing when and how proximate chance events matter can advance our understanding of career sensemaking and the extent to which luck plays a role in it. A focus on professional services firms Given the emphasis in previous research on major career shocks, we know far less about the effects of smaller, more proximate chance events on career development. These are gradual, incremental developments over time, rather than sudden breaks in the flow of circumstances. They tend to be more localised, comparatively minor and less obviously disruptive or extraordinary. For our study, we zoned in on workers in professional services firms (PSFs). Here, careers follow an orderly “up-or-out” model of progression, where those who don’t continue ascending the ranks towards partnership are expected to leave the organisation altogether. If the role of everyday unexpected events in career construction has been downplayed in general, it is more so for PSFs. Predictable, agentic careers are the hallmark of this industry, where a meritocratic view of progression contradicts the role of happenstance. Here, the predominant career logic links success to individual effort – self-directed, continuous steps taken by professionals to “make it” in their chosen field. This makes PSFs an especially useful context to examine the impact of proximate chance events. We carried out in-depth interviews with 68 mid-career professionals from three large, international partnership firms spanning consulting, law and accounting. All participants had successfully passed the first promotion barrier in their respective organisations – effectively weeding out those who weren’t a good fit or were simply not up to the task – and were at the midpoint towards partnership. This is important to remember: The people we studied were recently promoted and passed a major hurdle in their early careers – thus earning the stamp of approval from their companies – and were moving into bigger and more complex roles. The interviews, conducted within two years of their promotion, were designed to uncover how chance occurrences unfolded into their career projections and decisions, as well as how they responded to unexpected events. Questions touched on topics such as their relationships with partners and experiences with clients, the changes in their working life following the promotion and how they felt their career was progressing. We wanted to know how they saw their future based on the accumulation of recent experiences and were surprised by what we found. What’s chance got to do with it? Across our respondents, we found a distinct awareness of the role of chance events – particularly those that were proximate or incremental in nature – and a parallel sensemaking process that affected how they approached their careers. This was commonly expressed in the recognition that developments beyond their control could occur at any moment and with repercussions for their career prospects. The most consequential chance events were those that affected participants’ access to partners and clients. This is often seen as the most critical element for career success, as forming connections with good partners provides strong mentorship and support within the firm and affects project assignments. However, creating these bonds and developing them in the right direction could hinge on happenstance, rather than purposeful actions alone. Participants also attributed project structures and allocation – be it staffing, project size or the pecking order at the client – as playing a major role in their career paths. These are generally determined by partners and clients and are largely beyond their control. Fortuitous events related to wider growth opportunities affecting the firm overall and their specific department were also highlighted to a lesser degree. Based on the results, we devised four sensemaking categories that encapsulated how these professionals thought about their career paths: “Partner Track”, “Client Track”, “Wait & See” and “Running Out the Clock”. Individuals in the different groups reported a range of chance events they encountered and their responses to them, leading to substantial variation in how they viewed their careers. Those in the Partner Track category reported experiencing mostly positive chance events, which kept them firmly on the path towards traditional partner-oriented careers. Such favourable circumstances were coupled with a strong sense of agency in shaping their success within the organisation. Respondents in the Client Track cluster were similarly clear in their goals but had set their sights on departing the firm for a client-based role. They experienced negative chance events when it came to forging relationships with partners and strong connections with clients. This led them to pivot away from their initial career ambitions and instead, construct an alternate path away from the partner-track model. Two separate sets of interviewees were more ambiguously situated. Those in the Wait & See group reported a mix of positive and negative chance events. Participants described themselves as being at a crossroads and seemed to be in a holding pattern, although their confidence in the traditional partner-track path had been shaken. Meanwhile, those in the Running Out the Clock group experienced multiple negative chance events and didn’t see a future for themselves with their current employer or on the client side. A little luck can go a long way To be clear, we are not suggesting that people don’t “make their own luck”, nor that ability or skill differences among the participants didn’t matter (although they were all recently promoted). Nonetheless, our results suggest that an accumulation of proximate chance events can play a substantial role in shaping the possibilities that professionals envision for their careers and the actions they take in response. While one would think that the majority of participants would identify strongly with staying in their firm and aspiring to take on a leadership role, more than half did not see themselves as partner-track material and were either hedging their bets or ready to leave the organisation altogether. Even in seemingly predictable sectors, career profiles are dynamic over time. Being attuned to fortuitous turns of events informs how people take steps in advancing their careers and identities. This contributes to a better understanding of the interdependence between context and agency: it’s not all skill, and it’s not all luck. But because humans have a tendency or bias to attribute outcomes to people instead of circumstances, we may ignore the role of chance events in pushing (good) people away from their once-chosen careers. The costs to firms may not be trivial. Recommendations for firms and employees It is important to emphasise that as humans, we tend to attribute triumphs and defeats purely to individual prowess without taking situational factors into account. In a professional setting, this can manifest as firms not discerning the impact of luck on careers, resulting in an inaccurate picture of which individuals are achieving success in their roles. What could this mean in practice? Star employees with a string of fortuitous chance events – such as getting connected with supportive partners or being attached to an industry or project that was just taking off – may not be as superior as they appear. They may thus be thrust into positions of power and authority for which they have not necessarily been properly assessed. The reverse is true. Underperforming employees could have had experienced a few rounds of bad luck and made to look “ho-hum” or worse, denting their reputations and prospects of future allocation of resources. The positive feedback effect then kicks in: Early standouts would receive more resources, while those who seem to be underperforming do not. The latter group may gradually move away from the organisation, representing a potential loss of human resources. We suggest that this could be mitigated if leaders and HR professionals pay more attention to the effects of chance on career progression. Efforts could be made to assess “resource allocation fairness” by measuring the “quality level of key resources or inputs” that budding professionals have access to. This assessment could take the form of a simple, reliable scorecard tracked over appropriate time periods. Raising such awareness won’t be easy – there will always be an uneasy tug of war between “this reflects the abilities of the person” versus “this reflects the circumstances”. But given our bias for the former explanation, being attuned to the impact of fortuitous events could help guarantee a fair shake, so that any concerns about not receiving sufficient resources or not having access to good partners and projects can be flagged early on. It can also remove “excuses” and contribute to the transparency and fairness of a company. In summary, we urge managers to recognise how chance occurrences could affect the professional development of their talent, so as to ensure that these often-overlooked events do not derail the careers of otherwise good people. Roxana Barbulescu is an Associate Professor of Management and Human Resources at HEC Paris. Claudia Jonczyk Sédès is Chair of Strategic Management at the Faculty of Economics and Director of the Institute of Management at Université de Neuchâtel. Ben Bensaou is a Professor of Technology Management and Asian Business and Comparative Management at INSEAD. |
20 Nov 2022, 20:00
| FROM Insead Admissions Blog: Live Abroad to Excel in the Language of Leadership |
|
Legendary French soccer manager Arsène Wenger once said, “Being on time isn’t the same for a Japanese man as it is for a Frenchman – when a Frenchman arrives five minutes late, he still thinks he is on time. In Japan, when it’s five minutes before the set time, he thinks he is too late.” Wenger, who coached in France, Japan and England during his 34-year managerial career, understands that people from different countries may differ in their attitudes, values and practices. The time he spent working abroad likely taught him to adapt his communication style to varied situations and interlocutors, and may have contributed to his success in leading multinational teams to glory. In his 22 years at Arsenal until his departure in 2018, Wenger led the club to three English Premier League (EPL) titles and seven FA Cups. In an analysis of a 25-year archival panel of EPL managers, Arsenal always ranked in the top five in the two decades that Wenger was in charge. The analysis by Jackson Lu at MIT Sloan School of Management, INSEAD’s Roderick Swaab, and Adam Galinsky of Columbia Business School covered the 1992/1993 to 2016/2017 seasons and used a team performance measure – under which each team’s total points in each season were tallied – of leadership effectiveness. It was one of four studies that the researchers conducted to test their theory that multicultural experiences can help individuals become better communicators and more effective leaders. The other studies were: a field study of 120 managers in an Australian company specialised in construction and engineering. Managers with broader multicultural experiences were rated as more effective leaders by randomly selected colleagues; a digital-health hackathon at a Chinese university involving 410 students from 40 countries. Teams that were assigned leaders with broader multicultural experiences were more likely to proceed to the competition’s final stage; and a Covid-19 policy hackathon with 754 participants from 57 countries. Leaders with broader international experience were rated as more effective by team members, and their teams’ proposals also received higher scores. Global leaders for global teams The research, published in Organisation Science, suggests that broad multicultural experiences foster individuals’ leadership effectiveness by developing their communication skills. This is especially true when they lead more multinational teams. The researchers found that global teams perform better under global leaders, whose overseas exposure can help them to leverage the benefits and mitigate the drawbacks of nationally diverse groups of workers. Notably, the studies consistently showed that the breadth of multicultural experiences (the number of foreign countries in which someone has lived or worked), but not the depth (the duration of time spent abroad), predicted leadership effectiveness via communication competence. The EPL study, for instance, found that for every additional foreign country a manager had worked in, the team scored 3.42 points more, or an extra 1.14 games. This could be game-changing since in some seasons, only one point separated the winner and runner-up. The language of leadership An American who has lived in East Asia is more likely to understand that “yes” can sometimes mean “no” when expressed by an East Asian. This is because time spent abroad allows individuals to learn about other cultures by interacting with people with different beliefs, customs, norms, values and habits. Such learnings translate into a skill set that can help individuals build relationships and strengthen teams. It can make them more effective leaders because the more they are able to listen to others and express themselves competently (communication competence), the more they can influence and guide others towards shared goals (leadership effectiveness). Leaders can tap on the knowledge gained during overseas stints to get their message across to mixed groups of workers, as well as facilitate teamwork in multinational teams, manage communication challenges and resolve cross-cultural disputes more effectively. Leaders with broader multicultural experiences are more likely to speak and behave in a way that a contact can understand, and use language and gestures that are more appropriate to a particular situation. They also tend to be more mindful of cultural differences that can make people think, act and work differently. For example, they may repeat a strategy several times for the benefit of non-native speakers, ensure that team members take turns to speak, or adjust their communication style when dealing with people of dissimilar backgrounds. Practical takeaways To nurture more effective and successful leaders, organisations can provide employees with developmental challenges and varied multicultural experiences to enhance their communication competence. Since people with a broader international exposure tend to communicate more competently and lead more effectively, employees should be given the chance to work in more countries. For example, they could be offered a range of foreign postings through global rotation programmes, rather than one lengthy overseas assignment. This will allow them to navigate different terrains and learn from diverse experiences, so that they are more able to adapt to a greater variety of situations. Companies should beware of assigning a person who lacks multicultural experiences to lead a multinational team, as that may have negative ramifications. Take the example of Walter Mazzarri, an Italian soccer manager who was hired in 2016 to manage Watford, a highly multinational EPL team. Mazzarri had led only Italian teams and reportedly had poor communication and English skills. Watford was almost relegated and Mazzarri was sacked after less than a year. Individuals can themselves work to chalk up useful multicultural experiences. One way is to pursue educational programmes such as a global MBA that offer opportunities to engage with different peoples and cultures. Those who do not have the resources to go abroad can still try to meet foreigners and immerse themselves in multicultural programmes such as language exchanges. |
25 Nov 2022, 03:00
| FROM Insead Admissions Blog: Do Unconventional Workspaces Promote Creativity? |
|
Google and Facebook are famous for their unique workspaces, with design features including open floorplans, themed breakout pods and meeting rooms, playgrounds, games rooms and even sleeping pods. But the tech giants are not the only companies to have ditched traditional desks and cubicles for unusual workspaces. The unconventional office trend is rising, driven by the belief that alternative working areas stimulate creativity. Such workspaces are also thought to attract certain employees, especially those who are inherently more creative. But can these alternative spaces inspire creative thinking, or do they just attract divergent thinkers? While research has shown that distractions facilitate creative problem solving and mood states influence creativity, there is no empirical evidence on the direct effect of unconventional workspaces on creativity. To investigate how workspaces affect performance in creative tasks, we conducted controlled experiments in physical and online settings. Contrary to our initial expectation, we found that unconventional spaces did not always facilitate creative thinking, and even inhibited creativity under certain circumstances. What makes a workspace unconventional? In our study we made use of the Creative Garage, a space designed to channel innovation on INSEAD’s Singapore campus. Much like modern technology firms with unconventional workspaces, this room features high worktables and metal stools, whiteboard walls covered in colourful scribbles, bright floor cushions and unfinished ceilings. Unconventional workspaces can come in many different shapes and sizes — there is no fixed formula. The most important feature, however, is its perceived unconventionality by its occupants, i.e., the individuals that carry out creative tasks in the space. The Creative Garage was unconventional to the participants in all three of our experiments – on average they reported that the physical environments that they normally work in was significantly different from this space. As a result, we initially expected this non-typical work environment to stimulate higher divergent thinking performance, that is, the process of generating many and distinct ideas to solve a task at hand. In our first study, participants completed an idea generation task in either the Creative Garage or a conventional business workspace with mono-coloured walls and standard office furniture and equipment. Participants were given a sheet with 40 circles and asked to draw as many real-world objects as possible, using the circles as an integral part of the objects. Unexpectedly, participants in the Creative Garage drew fewer objects and their drawings were less unique than those in the conventional space. In other words, individuals had higher divergent thinking performance in the conventional space. Clues, cognitive fixation and creativity In investigating the results, we found that individuals in the unconventional space searched for circular objects in their immediate environment – such as a Mickey Mouse drawing on the wall – and became fixated on these ideas. This cognitive fixation limiting their ability to come up with unique solutions. To explore this further, we replicated the study in a virtual setting using participants recruited from Amazon Mechanical Turk. Individuals watched a short video tour of either the Creative Garage or a conventional space and were asked to complete the same circle task. Participants had an image of their assigned room in the background while they completed the task. There were circular objects on the whiteboard in the unconventional space, while the control room offered no direct clues. Much like in the physical setting, individuals in the virtual unconventional room had significantly lower divergent thinking performance in terms of the total number and originality of solutions. These results suggested that cognitive fixation also occurred in a virtual setting, meaning participants focused on salient features in the background and were less able to come up with their own ideas. Next, we wanted to test what happened when individuals didn’t have direct clues in their environment when solving a creative task. We used the same virtual settings and asked participants what they would do if they needed to enter a store to buy an essential product but didn’t have a surgical mask (as mandated in many places during the Covid-19 situation). Respondents were asked to list as many ideas as possible to deal with such a scenario. For this brainstorming task, participants in the unconventional virtual space came up with more solutions and a higher number of unique solutions than those in the conventional space. Unconventional isn’t a silver bullet for creativity Our results demonstrate that the effect of unconventional workspaces on creativity is much more nuanced than widely believed. Atypical workspace designs are not silver bullets for fostering creativity and can have dual effects on individuals’ idea generation. For example, working in an unconventional space can have a negative effect on creative thinking when solutions to any given creative task can be inspired by salient features of the space. On the contrary, such spaces can have a positive effect when ideas cannot be drawn from the immediate environment. Therefore, companies should not blindly copy the alternative workspaces of other organisations because a particular design could be a source of creative inspiration for one firm, but a source of cognitive fixation for another. Managers need to imagine the kinds of workspace designs that would be perceived as unconventional by employees and are not directly related to the tasks that employees carry out. Such designs would be good starting points for creating unconventional workspaces that inspire creative thinking. Again, it is worth noting that an unconventional space is relative to what an individual is used to. Someone from Google or Facebook, for example, might not find the workspace we used in our experiments to be unconventional if their normal work environment is designed in a similar way. Importantly, it is possible that the unconventionality of the space can wear off over time as individuals adjust to their environments. An alternative solution to redesigning an entire office could be to have an unconventional space that is accessible on a temporary basis when teams need to brainstorm or solve a problem. This could be a manager’s office or even an external location. As collaborative problem solving increasingly moves online, our results indicate that it is possible to replicate unconventional spaces in virtual settings. This has important implications for fostering creativity online. In a situation where a manager needs to host an online problem-solving session with remote participants, doing it from an unusual and inspiring space may trigger the right mindset to engage in creative thinking. This can be reinforced by providing a short virtual tour of the space to the remote participants (as we did in our experiments) so that they can experience the unconventionality of the space. Hosting a session from an unconventional space or experimenting with immersive backgrounds could be a simple, but effective way to push people from staring at a box on a screen to thinking outside of the box. |
28 Nov 2022, 02:00
| FROM Insead Admissions Blog: Can AI Help You Strategise Better? |
|
Corporate decisions on M&A, alliances, divestiture and diversification are typically made under significant uncertainty and daunting complexity. It is therefore important to have a good strategy when contemplating such decisions so as to overcome that complexity and learn as much as possible from the signals that result from implementing the strategy. Without good strategy, as many now recognise, decisions more often than not lead to disappointing or even downright disastrous consequences. We think artificial intelligence can play a useful role here. But let’s dissect the problem first. To begin with, strategies (and even business models) are really theories, or coherent stories about how the world works. Put simply, a business strategy is a theory about how to make money. Second, all theories are ultimately inductive; they arise from attempts to explain patterns in data. Putting these two ideas together gives us a third: Use machine learning – the latest and most successful form of artificial intelligence – to detect patterns in data and determine the ones that can help formulate more informed strategies. Managers may well be justified in believing their firms to be unique, but this does not make organisations immune to broader patterns and forces in the industry. Machine-learning-based analysis of large samples of aggregate industry data could offer a bird's eye view of broader patterns that individual managers may never discern if they relied only on their direct experiences alone. Fortunately, large amounts of data of relevance to strategists – related to the likes of M&A and alliance transactions, patenting and employee reviews – are available today. We show how this could work in a recent paper published in the Strategic Management Journal. Specifically, we offer a template for how strategists can uncover new theories in traditional strategy domains such as corporate alliances by way of big data and algorithms, using an approach known as algorithm-supported induction. Business model innovation in the private equity industry Multi-partner corporate alliances, or deal syndicates, are central to the private equity (PE) industry. A deal syndicate comprising a PE firm, institutional investors (e.g. insurance companies and pension funds), banks and corporate firms jointly purchase companies, investing capital and expertise. Several deal syndicates constitute the alliance portfolio of a PE firm. Something interesting happened about a decade ago in this industry: A relatively novel business practice of “add-on deals” began to take off. In these deals, a PE firm acquires a company and merges it with a related firm in its portfolio of companies. Contrast this with the more established model of leveraged buyouts, in which a PE firm borrows money to acquire a standalone company. The question we investigated was a simple one: Would adopting the new practice of add-on deals require changing the kind of alliance portfolios that PE firms used? We studied around 60,000 global PE deals transacted by over 4,500 PE firms from 1990 to 2016. We split the sample into two parts. Our machine learning algorithms detected in the first sample two robust patterns about add-on deal adoption: First, add-on deals very often feature the participation of a new type of co-investor, namely corporate firms with expertise in add-on deals; second, these co-investors do not belong to the pool of existing corporate firms that participate in leveraged buyouts. These are only correlations, but they are robust and extremely unlikely to have been due to just random errors. What might account for these patterns? This is where human creativity comes in. We believed that since deal syndicates needed new corporate partners to pursue add-on deals, PE firms that already had lots of partners, or already worked with firms that could potentially compete with the desired new corporate partners, would be slow to adopt add-on deals. We tested these conjectures in the second half of our data and found strong support for them. In short, we learnt that a firm’s existing alliance portfolios can impede the adoption of new business practices that are themselves alliance-intensive. This suggests a dark side to partnerships. Strategise like a theorist Strategists could draw valuable insights about partner selection from our study. Firms need a new kind of partner for new kinds of practices in alliance-intensive industries, and strategists should think carefully about their firm’s capacity limits and managing rivalries among its existing partners. Recruiting expertise could perhaps be an alternative to syndication. These are theories that still need to be validated, through pilot projects for instance. But they are based on robust patterns in aggregate data, and therefore more likely to be correct than something based on an individual manager’s limited and idiosyncratic experiences. Our approach has other possible applications even within the PE industry. For instance, given the extensive data we have on syndicated partnerships, we can use algorithmic induction to explain why certain syndicate partnerships are more prevalent than others. This is no different from asking why certain acquisitions materialise and others do not. The patterns found by machine learning are only correlational. But with careful thinking about cause and effect, a strategist should be able to draw useful conclusions about possible explanations – i.e. build a theory – which in turn can lead to a robust strategy. As the psychologist Kurt Lewin famously said: “There is nothing more practical than a good theory”. |
29 Nov 2022, 20:00
| FROM Insead Admissions Blog: How to Create Your Blue Ocean Through Noncustomer Analysis |
|
For the past three decades, the business mantra has been “customer first”. Yet focusing on retaining and expanding an existing customer base often results in finer segmentation and the greater tailoring of offerings to better meet customer preferences, which will likely lead companies into too-small target markets of an existing industry. The blue ocean strategist’s mantra is “noncustomers first”. By looking to noncustomers and building on powerful commonalities in what they value, companies can reach beyond existing demand to unlock a new mass of buyers. However, few organisations have a sound grasp of who their noncustomers are or why they remain just that – noncustomers. When we asked managers about noncustomers, some of them thought these were simply customers of their direct competitors. Others assumed that they had no noncustomers as they were supplying all immediate downstream players in their business field. Although these managers were indeed talking about noncustomers, their mindsets continued to be confined to the narrow frame of their existing industry. By our definition, noncustomers are buyers who don’t buy into your industry, and they normally represent a much bigger population than your existing industry’s customers. Understanding the three tiers of noncustomers Consider the customer relationship management (CRM) software industry. For years, CRM software vendors had focused on selling software licenses to business clients. The software was then installed, configured and customised on the premises. This required significant internal expertise and external professional support and involved a long purchase and implementation process that could last for 18 to 24 months, as well as high start-up costs and maintenance expenses. The total cost of ownership of CRM software for 200 users over a five-year period could amount to more than US$4 million. All the vendors in the industry focused on a limited number of large business clients that traditionally used the software and had the financial resources to pay for the licenses and services. But a noncustomer analysis shows that they were ignoring the huge latent demand in the industry. There are three tiers of noncustomers. First-tier noncustomers are all the soon-to-be noncustomers of your industry. They patronise your industry not because they want to but because they have to. They use current market offerings minimally to get by, while searching for or simply waiting for something better. In the case of the CRM software industry, these were a portion of the existing customers. This group consisted mainly of large companies and some medium-sized companies who were disgruntled about the lengthy and difficult purchase and deployment process, complex-to-use applications and low price-performance ratio. In the absence of alternative offerings, they had to put up with the existing products. Second-tier noncustomers are refusing noncustomers. They are people or organisations that have consciously thought about using your industry’s offering but then reject it, either because another industry’s offering better meets their needs or because yours is beyond their means, in which case their needs are dealt with by another industry or ignored. In the CRM software industry case, most medium-sized businesses found the cost of purchasing and implementing CRM solutions prohibitive despite their need to manage customer relations and sales prospects. CRM systems’ reputation for being complex, difficult to implement, having high system requirements and poor usability further drove these companies away, making them the refusing noncustomers of the industry. Third-tier noncustomers are the furthest away from an industry’s existing customers. Commonly, these unexplored noncustomers have never been thought of as potential customers, nor targeted by any of the industry’s players, because their needs and the business opportunities associated with them have always been assumed to belong to other industries. In the CRM software industry, these were small businesses and entrepreneurs. They normally used other means to manage their customers and sales, such as manually recording and tracking account activities and contact information using Excel spreadsheets or other database applications. Existing players in the CRM industry never thought of them as potential customers. By looking to these noncustomers and exploring their “pain points”, Salesforce, Inc., a San Francisco-based high-tech company, created a cloud-based CRM offering. Upon subscription, customers could access and use CRM applications anywhere from any device that had an internet connection. There was no need to purchase a software license or to deploy and maintain the software on the client side. The applications were simple and easy to use, providing only core features that met the needs of businesses of any size. The cost for accessing the CRM applications online and securely managing, sharing and using sales information was just US$65 per month per user. Salesforce’s CRM offering was not only appealing to small and medium-sized companies that had been denied access to advanced CRM solutions due to a lack of resources and infrastructure. They also proved attractive to large companies as the solution lowered their cost structure and minimised their time spent on lower-value activities, thus allowing them to concentrate their resources on activities with a greater impact on their business. Within four years, Salesforce grew from a start-up with just 10 employees and a modest investment of US$2 million into the world’s largest-hosted CRM service provider. The CRM market has been growing at a double-digit rate, the fastest growth among all software markets. Businesses that use cloud-based CRM solutions have swelled from 12 percent to over 87 percent in 10 years. Now, over 91 percent of organisations with more than 10 employees in their workforce use a customer relationship management system. With its blue ocean move, Salesforce tapped into the latent demand of noncustomers and created a new and fast-growing market space of on-demand CRM solutions. In doing so, it expanded the CRM industry, where it has sustained market leadership by a big margin. Why Tata Nano failed to create a blue ocean despite its stunning debut Similarly, the Indian automobile industry in the 2000s also presented a huge blue ocean opportunity. While the passenger car market was crowded with automakers from around the world, it was a tiny market considering India’s huge population. The two-wheeler (scooter) market was five times as big. And 90 percent of Indian families did not even own a scooter and relied on public transport for their daily mobility needs. Despite their aspiration for better social image and status, buying a passenger car was just not an option for most Indian families given the prohibitive price; an entry-level car could cost five times as much as a scooter. Moreover, car dealerships and repair shops were only really available in big cities, making it difficult for people living in smaller cities and towns to access them. Automakers, while competing fiercely in the passenger car market, missed the potential mass market of Indian buyers seeking a decent means of personal transportation. Here, the first-tier noncustomers were those who purchased existing passenger cars but remained dissatisfied and waited for something better. In contrast, the second-tier and third-tier noncustomers were two-wheeler buyers and the 90 percent of Indian families who did not even own a scooter, respectively. By observing what these noncustomers valued, the Indian auto manufacturer Tata Motors identified a path for blue ocean creation: The Tata Nano, unveiled in 2008, presented a safe, fuel-efficient, low-pollution and all-weather form of transport at the price of a scooter for the mass population of India. What’s more, the company had a plan to distribute the Nano through the Tata Group’s retail networks, partner banks and post offices instead of through dealerships in big cities, thereby easily reaching two-wheeler riders in smaller cities and towns. These individuals longed for an upgrade of their socioeconomic status but were reluctant to walk into the daunting and luxurious car showrooms. The Nano received rock-star greetings at its commercial launch event in 2009. As there were only 1,000 cars on display across India, most people had to place an order without having even seen, let alone test driven, the Nano. Within two weeks, the Tata Nano official website received 20 million hits. Order applications reached 200,000 – the biggest sales uptake in the history of the global automobile industry. However, after the stunning launch event, the company – which was busy dealing with logistical and political challenges surrounding the Nano’s production plant – abandoned the plan of creating the new distribution and repair networks it had promised to noncustomers and decided to use the existing networks to save time and resources. As a result, the Nano mostly reached existing car owners in big cities who were looking to buy the Tata Nano as a second car for its cheap price. As the Tata Nano’s reputation downgraded from the “people’s car” to the “cheapest car” to the “poor man’s car”, two-wheeler owners were turned off as the Nano was no longer a symbol of upward social mobility. Lessons for business leaders While the Tata Nano, initially guided by noncustomer insights, was heading towards a blue ocean, it ended up regressing into the red ocean of the existing passenger car market as a cost leader fighting over limited demand with other car makers. In contrast, it was through understanding noncustomers and delivering what they valued that Salesforce unlocked huge latent demand and created a market of previously inconceivable scale. Do you know who your noncustomers are and what it takes to deliver what they value? Or have you been so focused on your industry’s existing customers that you cannot see beyond this narrow frame? How will you go about reframing such a mindset to create and capture expanding growth opportunities? It is time to delineate your three tiers of noncustomers and build on the powerful commonalities in what they value. |
30 Nov 2022, 22:00
| FROM Insead Admissions Blog: Stakeholder Perspectives on Right-to-Repair Laws |
|
A wave of grassroots consumer movement is unfolding. At the centre of the right-to-repair (RTR) movement are farmers who use John Deere tractors. Indignant at being “forced” to take their broken tractors to authorised dealers for repair, they revolted – turning instead to old tractors from the 70s that they could easily fix themselves. In the mass consumer market, consumer advocacy groups contend that some producers are limiting the rights of users to repair their own products – ranging from iPhones and Mac computers to Nikon cameras. Some argue that companies are preventing independent repairs by restricting access to spare parts, using software updates to quietly render products repaired outside the network obsolete and even suing independent repairers. For years, consumer advocates have been pushing for RTR protection that makes it easier and more affordable to restore broken products. They challenge that upon purchasing a product, the consumer should be able to decide on its use and repair. By this argument, a producer who sells a product also sells the authority to make repair decisions and must therefore supply the necessary information and parts for repairs. Moreover, environmental groups have been arguing that RTR laws would also help to reduce the environmental impact associated with production by reducing consumption, prolonging product lifetimes, increasing second-hand use and reducing waste. Some companies, like Dell and Fairphone, have responded voluntarily in favour of RTR demands from advocacy groups. Many others, like Apple, have long lobbied against RTR, citing concerns like safety, brand image, intellectual property and incentives to innovate. In our recent research, we found that things take a different turn when companies are mandated to extend RTR to consumers by law. Legislators respond with right to repair laws RTR regulations, meant to protect consumers and the environment, require producers to design easy-to-repair products and supply information and parts for consumers to independently undertake repairs. In the United States, 34 states have introduced RTR legislations for digital electronic equipment, though only the Fair Repair Act in New York state – the first in the US – has passed to date, and will be enacted in 2023. At the federal level, President Biden has issued an order directing the Federal Trade Commission to draft regulations limiting manufacturers’ ability to restrict independent repairs. In the European Union, RTR laws have applied to household appliances since 2021 and are expected to be extended to mobile phones and laptop computers. In RTR debates, intellectual property rights (IPR) is arguably the most contentious topic. In fact, some countries bypass producers’ rights to intellectual property in favour of consumers’ rights to repair. In Germany, the proposed law allows third parties to produce any car part used for repair without being subject to intellectual property limitations. Similarly, the Promoting Automotive Repair, Trade and Sales Act was introduced in the US Congress in 2017. In France, if a spare part is unavailable but can be produced with 3D printing, the producer must make the design available to third parties by law. Producers who oppose the RTR movement argue that these laws would eventually hurt producers, consumers and the environment. To understand the spectrum of consequences of RTR laws, we need to take a multi-stakeholder perspective, including how producers may react. In our research, we study the economic and environmental consequences of RTR regulations by considering producers’ potential strategic response in the form of business model change. Business response to intellectual property risks RTR legislations can pose an existential threat to businesses. Supplying spare parts and repair information could reveal a product’s proprietary architecture or trade secrets and inadvertently invite cloning by third parties. Producers argue that RTR laws compromise their legal protection and conflict with patent exclusivity, and could potentially lead to a surge of counterfeits. From the producer’s perspective, RTR regulations may call for a re-examination of business models. This is especially the case since proponents of the circular economy have been advocating a fundamental change in the transaction between producer and consumer to lower the overall environmental impact. Instead of the traditional selling model, they promote non-ownership models in which the producer retains ownership and the consumer leases, rents or pays for the usage of the product, which the producer would repair, refurbish and recycle to extend its product life. Indeed, some companies have been experimenting with a shift from a product-oriented business model to a service-oriented model, known as servicising, or changed their business model from ownership to non-ownership models such as leasing. Limited research on the response of producers to this change in business model meant that legislators and consumers often did not understand the unexpected consequences. In our study, we sought to understand under what conditions RTR regulations would incentivise a producer to sell or lease products. We examined the impact of RTR on a producer’s choice between leasing and selling, and the environmental and economic implications. To this end, we studied the interactions between a producer of a durable product, a (low-end) competitor and consumers. Our study questions assumptions on the positive environmental and economic consequences of RTR laws and highlight the importance of understanding the potential strategic response of producers to RTR regulations. Mind the unintended effects of RTR Overall, RTR regulations mainly affect the market in two ways: prolonging the life of products and making proprietary product information and spare parts available. When product life is extended, the increase in used products in the second-hand market can cannibalise new product sales. In addition, the availability of proprietary information and spare parts allows competitors to use them to improve their products – or even produce a counterfeit. Our research findings show that producers may change their business models and opt to retain product ownership (e.g. by leasing) instead of selling in order to avoid the risk of cannibalisation and imitation. This is especially true for producers operating in markets with relatively low production costs, such as the mobile phone market. However, this potential switch in business model is not necessarily good news for the environment or consumers. Why? Retaining ownership allows producers to take a product off the market at will – even well before the end of its useful life. Due to the relatively low production costs, we may also find new products of shorter lifetimes flooding the market. These outcomes are contrary to the environmental goals of RTR laws. That said, RTR laws can benefit producers of consumer durables with high production costs, such as washing machines. RTR laws allow firms to charge higher prices, since consumers would be willing to pay more for products that they can use for a longer time through independent repairs. However, if there is a high risk of imitation by competitors, the producer may switch to a non-ownership model instead. RTR laws would lower the environmental impact in situations where the second-hand market was negligible prior to the enactment, such that the laws bring a positive net effect through product life extension. Otherwise, pushing producers towards retaining ownership and control of product lifecycle can backfire should producers prematurely retire perfectly functional used products. Other than poor environmental outcomes, consumers may be faced with lower product availability and higher prices. Moreover, our analyses suggest that RTR can undermine innovation especially if, as producers argue, RTR accelerates imitation, allowing competitors to imitate a new product shortly after its release. Consequently, this might reduce the individual company’s – or even the industry’s – incentive to innovate. Who wins when? RTR regulations can indeed benefit consumers, the environment and even producers – but not all at the same time. Consumers of Deere tractors would certainly be pleased to be able to extend the useful life of their tractors if they were able to repair them themselves. Our results suggest that producers might be able to mitigate the loss in profits due to RTR laws by considering new business models. But for the case of mobile phones, the switch to non-ownership business models can be good for the environment only if the availability of second-hand mobile phones was low before RTR laws were enacted. However, this comes at a cost to consumers who would likely have to pay higher prices. For products such as washing machines, producers can benefit from the increase in consumer willingness to pay for machines that can be used for a longer period. However, a longer lifetime is not necessarily good for the environment, since the environmental impact of washing machines is mostly attributed to usage, as opposed to production and disposal. Outcomes for each stakeholder ultimately depend on the product type, costs associated with production and ownership, availability of products in the secondary market and the risks of imitation due to compromised intellectual property rights. On the legislative front, we caution against blanket regulations for all products, as is the current model in the US, and instead recommend a case-by-case analysis. At the end of the day, there are economic and environmental implications of circular business models and environmental regulations that may not always be apparent. But they are too costly – to the producers, consumers and the environment – to ignore. |
05 Dec 2022, 01:00
| FROM Insead Admissions Blog: Collaborations That Are Bad for Business but Benefit Employees |
|
Firms working on new ideas often collaborate with partners to access complementary resources. Such alliances are commonplace, for example between entrepreneurial firms and venture capital investors, or film studios and movie publishers. However, research shows interfirm partnerships can negatively affect firm performance. This is because partners often simultaneously collaborate with a firm’s competitors. These alliances drive peer competition as companies have to compete for the resources of the shared partner. But if partnerships hurt firm performance, why do such collaborations exist in the first place? We found there is a hidden upside to these collaborations. Sharing a partner with peer firms benefits an organisation’s employees by allowing them to build social capital, which they use to find better job opportunities. Our recent research, published in Strategic Management Journal, examines the divergent outcomes of collaborations between developers and publishers in the video game industry. Our findings uncover a potential agency conflict in interfirm collaboration: employees may favour alliances that benefit themselves but hurt their employer. While we are not the first to point out that firms often pick the wrong partner, our findings demonstrate that the “wrong” partner for the firm may be the “right” partner for its employees. Bad for business The negative effect of peer competition on firm performance has previously been documented in the biopharmaceutical industry and the medical device industry. We replicated these findings in a different context by building a comprehensive data set with information on video games, the employees involved in their development, the developers the employees work for and the publishers who finance and market the games. Using data obtained from MobyGames (which catalogues information on video games and the people and companies behind them), we were able to track employees' entire careers in both public and private firms around the globe. We matched this with revenue data collected by The NPD Group, a company that has tracked the sales of video games in the United States since 1995. We measured firm performance at the individual project (video game) level and across all projects at the year level. To measure peer competition, we determined the number of peers a firm has by counting the other developers releasing games with the publisher in the same year as the focal developer. We ranked the superiority of peers by dividing the average review score of games by developers working with the publisher in the focal year by the review score of the focal developer's game. In line with prior research, we found a negative effect at the project level and at the year level. At the project level, a one-standard-deviation (one-SD) increase in a firm’s number of peers was associated with approximately US$583k less revenue. This is an economically significant amount given that the average game revenue in our sample was $2.07 million. At the year level, a one-SD increase in number of peers was associated with approximately $1,192k less revenue. Moreover, our analysis found a one-SD increase in superiority of peers resulted in roughly $267k less revenue at the project level and reduced firm performance at the year level by approximately $581k. Overall, this corroborated the finding that peer competition negatively affects firm performance. Good for employees’ careers While an increase in the number of peers had a negative effect on firm success, we found it had a positive effect on employees’ personal success. Specifically, we found employees exposed to competing firms became affiliated with more successful projects. A one-SD increase in number of peers increased the revenue of the games with which the employee was affiliated by roughly $824k. Furthermore, a one-SD increase in superiority of peers was associated with an increase in the revenue of the games with which the employee was affiliated in the next year of roughly $696k. Further analyses found the positive effect of peer competition on an employee's personal success was mainly driven by a job opportunities mechanism. In other words, employees' relationships with their employer's competitors helped them get job opportunities at peer companies. Specifically, we found the number of peers and superiority of peers positively influenced an employee’s likelihood of joining a peer firm, as well as joining a superior peer firm. Conversely, our results indicated that employees exposed to peer competition were less likely to find a job at a non-peer firm. This suggests that the job opportunities are indeed due to the social capital employees formed with employees at peer firms. Next, we explored the idea that peer competition may be detrimental to the firm in the short run, but beneficial in the long run, as employees may develop their skills by interacting with employees from peer firms and be promoted. However, we found no significant effect of peer competition on employee promotion. Overall, the results did not provide compelling evidence that employees benefited from peer competition by developing their skills. Finally, we investigated whether interorganisational ties provided better matches between employees and employers. If so, employees who joined a firm via peer competition should stay longer than those who joined by ordinary routes. Indeed, we found that employees joining peer firms stayed on average more than 4 years, while those who joined by ordinary routes stayed only 1.74 years. A double-edged sword Our findings reveal an additional downside of collaborations: a potential exodus of employees. While organisations usually take action to reduce interfirm mobility, our results indicate that organisations can unwittingly facilitate their own employees’ departure through interorganisational ties. For employees, our findings illustrate that it is in their interest to be connected to their employer's competitors, as the same features that render a peer firm a competitor also make it an alternative employer. This creates the potential for agency conflict if employees pursue their own rather than their firm's interests. Company owners, on the other hand, should be aware that managers may be motivated to enter collaborations that help their careers, but don’t necessarily maximise firm performance. However, there is an interesting argument to be made for firms to continue entering partnerships. McKinsey & Company is a famous example of a company that attracts top candidates by guaranteeing a better job down the line. In the same way, a firm could use its alliances as a powerful recruiting tool. Our results underscore prior research on why it is critical to move from asking if something is effective to questioning what it is effective at, or for whom. By taking a broader perspective, we can move from simply labelling collaborations that lead to peer competition as ineffective, to realising that they are in fact highly effective for employees. How a firm responds to these dual outcomes is entirely up to them. |
07 Dec 2022, 20:00
| FROM Insead Admissions Blog: How Biotech Firms Can Improve Cross-Functional Collaboration |
|
While many sectors were dealt a punishing blow during the pandemic, Covid-19 ushered in a boom in the biotech industry. Biotech start-ups raised US$34 billion globally in 2021, double the figure in 2020, and the worldwide market size is expected to grow nearly 14 percent per year from 2022 to 2030. But though the industry is flourishing, many smaller firms could remain one-trick ponies that only produce a single product, while others may never bring an asset to market. Indeed, around 90 percent of drug candidates fail to make it to the commercialisation stage. For early-stage biotech firms with aspirations of growing into larger enterprises, bringing a promising asset to market is crucial. Why, then, is the overall success rate so low? Scientific factors, safety issues, regulatory restrictions and insufficient funding are widely acknowledged as the primary reasons. However, our research suggests there is a critical human element at play. The human side We set out to investigate the human factors that impact the period when a biotech asset moves from the research and development stage into the commercial phase. Is there a strong emotional attachment from R&D staff that can be more appreciated by the commercial department? Are the roles of the two teams clearly defined, and can each team be more understanding of the other to facilitate better cross-functional collaboration? To explore this, we conducted surveys and interviews with executives in the biotech industry spanning R&D, commercial and HR disciplines who have experience working in early-stage biotech firms. Besides straightforward questions, the semi-structured interviews included free-association exercises where participants selected metaphors, images and songs to represent their responses to particular questions. Two ends of the spectrum Our results show that the asset transfer is far from a smooth process. Over 80 percent of participants believed that the collaboration between the R&D and commercial departments was not “seamless” at this stage. Delving deeper, we discovered that teams had certain perceptions of each other – which we deem as fault lines – that could compromise the product handover. For instance, one of the responses from the commercial department when asked about how they perceived the R&D team was: “R&D people know very little about commercial and how a product can be launched. Most of the R&D folks in early-stage biotech companies have never launched a product in their career.” Meanwhile, one of the R&D executives said: “Commercial want to create a financially viable business and are not really interested in great science.” We also asked some respondents to choose a picture that best represented their view of the relationship between the different teams. Generally, the images selected by the R&D team were static with little dynamism and seemed to suggest incompatibility or misalignment – such as pictures of water and oil and individuals speaking different languages and failing to communicate with one another. The commercial team’s picks included images of people working together and tended to place a greater emphasis on team dynamics and collaboration. While it wasn’t entirely surprising that there was somewhat of an “us” and “them” mentality between the R&D and commercial teams, the number of people that held this view – over two-thirds of participants – is notable. This can lead to the development of a silo mentality and fault lines, in which each team sees the other as the enemy or an invader, rather than as a partner working towards a common goal. We discovered that for the R&D team, creating a promising asset can be similar to raising a baby. As they spend an immense amount of time and energy with the product, they can become emotionally invested and feel personally injured if “the baby” isn’t appreciated or taken care of by commercial department colleagues. A few executives we interviewed said there were moments when the R&D team seemed reluctant to pass “the baby” to the commercial team. This can be viewed through the lens of anti-task behaviour, as they allowed the performance of their primary task (successfully bringing a product to market) to be delayed or overshadowed by feelings of ambivalence. This could be because passing the asset to the commercial department makes R&D executives feel less important. They may fear that they will be relegated simply to technicians who play an inconsequential role in the firm. As a result, they construct social defences – often subconsciously – to protect the group from feelings of anxiety. The untapped potential of HR Another finding was that over 55 percent of participants believed the human resources department did not play an active bridge-building role during an asset transfer. HR was often perceived as too passive, perhaps due to other responsibilities taking up their attention or them believing that they did not have the authority to actively mediate the process. In an ideal scenario, they would be empowered to work on more than purely administrative tasks and become a strategic partner. We would therefore strongly encourage management to invest in specific training focused on the bridge-building role that HR can and must play in such situations. As a point for further study, many participants envisaged the medical affairs team as having the potential to be a strong bridge builder during a product transfer. Future research could determine what is required to make them more involved and effective. Bridging the gap Improving the asset transfer in early-stage biotech firms requires a multi-pronged approach, and we recommend the following steps: Create a welcoming onboarding environment Many early-stage biotech companies lack a solid onboarding programme, which is most obvious when a product is moved from R&D to the commercial stage and more people are hired to prepare for the launch. New joiners would benefit from an onboarding programme that speedily builds interdepartmental relationships and accelerates their understanding of a firm’s ecosystem. Additional actions could include commercial members spending time in the lab, while R&D executives attend sales and marketing events. Having regular mandatory get-togethers that bring new joiners and long-serving colleagues together could also be explored, and HR could take a more proactive role in these initiatives. Empower more cross-functional teamwork Participants emphasised that cross-functional collaboration needed to be enhanced, especially during a product handover. We suggest the creation of cross-functionally empowered teams by providing the relevant sectors with a dialogue platform. Both departments could also assume joint leadership responsibility of the project during an asset exchange. Use workshops to create a more reflective and open environment To remedy any tensions between the R&D and commercial teams, companies should create a reflective environment where employees can express their fears and concerns with the help of images, similar to what was done in this study. Doing so could facilitate regular and more open communication. The findings may be conveyed to management, but certain aspects of the process must remain confidential to ensure a healthy debating culture between the teams. Our findings provide a better understanding of the psychodynamic factors that affect cross-functional players and often emerge when moving a product from R&D to commercialisation. We hope that these recommendations can help early-stage biotech firms create a better work environment and ensure good communication and collaboration between internal teams – both during an asset transfer and beyond. |
|
|
||
Hi Generic [Bot],
Here are updates for you:
ANNOUNCEMENTS
 Wednesday, Apr 24, 2024 11:30am NY / 3:30pm London / 9pm Mumbai Watch earlier episodes of DI series below EP1: 6 Hardest Two-Part Analysis Questions EP2: 5 Hardest Graphical Interpretation Questions
Tuck at Dartmouth
AGSM at UNIVERSITY OF CALIFORNIA RIVERSIDE
 |
close
