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Rotman School of Management

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Challenges and A Guide Reimagining
Opportunities to Reopening the Future WHAT IT TAKES TO
Post- COVID the Workplace PAGE 30 LEAD NOW PAGES 18, 62, 82
PAGE 6 PAGE 24

MANAGEMENT
The Magazine of the Rotman School of Management
UNIVERSITY OF TORONTO
FALL 2020

A Toolkit
for Leaders
 MANAGEMENT
FALL 2020: A TOOLKIT FOR LEADERS

When it comes to safely reopening

the workplace, face masks are just
the beginning. On page 24, the leaders
of the Creative Destruction Lab argue
that solutions fall into two categories:
information-based solutions and
‘always on’ solutions. They also
introduce a new program called CDL
Recovery, which is designed to gener-
ate information-based solutions.
Read all about it in A Leader’s Guide
to Safely Reopening the Workplace.

Features

6 18 24
No Going Back: Challenges and The Future Is Not What A Leader’s Guide to Safely
Opportunities After COVID-19 It Used To Be Reopening the Workplace
by Anita M. McGahan and Jason Sukhram by Kevin Sneader and Shubham Singhal by A. Agrawal, J. Gans,
Moving forward will depend on Leaders must consider seven A. Goldfarb and M. Lederman
the recognition that there is no going elements as they plan for the next Until there is a vaccine for COVID-19,
back to old ways of doing things. normal, including increased public health will depend upon
scrutiny for business. business leaders’ decisions.
 30 36 44
Leadership Forum: How Diversity Cross-Silo Leadership:
Reimagining the Future Defeats Groupthink A Powerful Path to Innovation
compiled by Karen Christensen by Khalil Smith by Tiziana Casciaro, Amy C. Edmondson
Some of the world’s foremost Human beings enjoy cohesion and Sujin Jang
management thinkers share so much that we are often afraid to The most promising innovation
their thoughts on leading in times do or say anything to disturb it. opportunities require collaboration
of unprecedented uncertainty. Diversity can help. between functions, offices, and
organizations.

50 56 62
Rallying Innovation Unearthing the Roots of A Leadership Mindset
in the Age of COVID-19 Corporate Social Irresponsibility for Uncertain Times
by Joshua Gans by Maria Rotundo by Scott D. Anthony and David S. Duncan
One key lesson from the global Unrealistic performance expectations, History clearly shows there are
pandemic is that the funding a pressure-cooker culture and stress always opportunities to innovate
for medical research is woefully are just some of the factors and grow, no matter how stark
inadequate. We must do better. that can lead to irresponsible the crisis.
workplace behaviour.

68 76 82
How Task Division Can Build Four Critical Skills For An Agenda for
a Stronger Health System Tomorrow’s Innovation Workforce Business Leaders
by Will Mitchell and Kevin Schulman by Tucker J. Marion, Sebastian K. Fixson, by Roger L. Martin
Healthcare organizations must and Greg Brown The outsized success of a few outlier
split up the burden of response The young digerati who will lead companies points to four steps
in order to effectively deal with innovation need to develop business that every business can take
immediate needs — as well as awareness, an entrepreneurial to contribute positively to the future
those lurking around the corner. attitude, bottom-line focus, and of democratic capitalism.
ethical intelligence.
 Rotman Management
Fall 2020
Published in January, May and September
by the Rotman School of Management
at the University of Toronto, Rotman
Management explores themes of interest
to leaders, innovators and entrepreneurs,
featuring thought-provoking insights and
In Every Issue problem-solving tools from leading global
researchers and management practitioners.
The magazine reflects Rotman’s role as
a catalyst for transformative thinking that
creates value for business and society.
5
From the Editor
ISSN 2293-7684 (Print)
12 ISSN 2293-7722 (Digital)
Thought Leader Interview: Editor-in-Chief
Karen Christensen
Rosabeth Moss Kanter
Contributors
by Karen Christensen
Ajay Agrawal, Steve Arenburg, Brendan
Calder, Tiziana Casciaro, Joshua Gans, Avi
Goldfarb, Sarah Kaplan, Mara Lederman,
Roger L. Martin, Julie McCarthy, Anita M.
McGahan, Will Mitchell, Jennifer Riel, Maria
Rotundo, Chris Stamper, Jason Sukhram

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FROM THE EDITOR Karen Christensen

A Toolkit for
Leaders

AS THIS ISSUE HITS THE PRESS, leaders are confronting some of the In our Idea Exchange, Microsoft CEO Satya Nadella ar-
most challenging questions of their careers: How can we keep gues for empathetic leadership on page 93; best-selling author
our employees and customers safe? How is COVID-19 shifting Dan Heath describes how to sense problems before they begi-
consumer and commercial behaviour? And what will the new non page 121; Edelman Canada CEO Lisa Kimmel discusses
normal look like? the trust landscape on page 124; and Rotman professors Sarah
No one has a crystal ball offering easy answers. Only one Kaplan, Julie McCarthy and Brendan Calder share their latest
thing is clear: What leaders need right now are tools for problem- insights.
solving, adapting and innovating in wildly unpredictable circum- As our friends at IDEO wrote in the midst of the shutdown,
stances. In this issue of Rotman Management we will look at the the biggest challenge for leaders right now is ambiguity — a con-
mindsets, strategies and tools that will be particularly valuable dition in which the future is unclear, the past is no help, and we
as we adjust to the economic and societal fallout from the first don’t even know what we don’t know.
global pandemic of the century. While the way forward is far from clear, in the famous words
According to Rotman Professor Anita M. McGahan and of Winston Churchill, we must never let a good crisis go to
alumnus Jason Sukhram, moving forward requires a recogni- waste. As economies around the world restart and people begin
tion that value creation will never be the same. They explain to return to the workplace, this is an opportunity to question and
on page 6 in No Going Back: Challenges and Opportunities reform virtually every aspect of our lives, our work and our com-
After COVID-19. munities. For all you innovative thinkers out there, this is a call to
The coronavirus crisis has been a world-changing event action. It is our hope that the toolkit provided herein will assist
in countless ways. On page 18, McKinsey’s Managing Director you in your quest to shape your organization — and our world —
Kevin Sneader and Shubham Singhal explain why, in The for the better.
Future is Not What It Used to Be.
As we navigate the new normal, innovative thinking has per-
haps never been as critical, particularly in the realm of medical
research. On page 50, the Chief Economist of the Creative De-
struction Lab, Rotman Professor Joshua Gans, looks at Rally-
ing Innovation in the Age of COVID-19.
Elsewhere in this issue, we feature Thinkers50 Lifetime
Achievement Award recipient Rosabeth Moss Kanter in our
Thought Leader Interview on page 12; Rotman Professor
Tiziana Casciaro and her co-authors look at the benefits of
cross-silo leadership on page 44; and Scott Anthony and David Karen Christensen, Editor-in-Chief
Duncan describe four ‘lenses’ that can help leaders deal with [email protected]
massive uncertainty on page 62. Twitter: @RotmanMgmtMag

rotmanmagazine.ca / 5
 No Going Back:
Challenges and Opportunities
After COVID -19

Moving forward will depend on the recognition that

there is no going back to old ways of doing things.
by Anita M. McGahan and Jason Sukhram

AS BUSINESSES CONTEMPLATE the reopening of the economy, the We must also go to the mat to produce products and ser-
only thing that seems certain is that a lot will be different. Many vices to stop COVID. Inspiring companies around the world have
executives have expressed a desire to ‘do the right thing’. But stepped up in recent months by converting activities and chanel-
what is the right thing? How do you plan without knowing even ling resources on the COVID-critical agenda. Distilleries and
broad parameters on what will occur, such as when a vaccine breweries, including Anheuser-Busch and Diageo, are produc-
will be available, and what the timetable looks like for the lifting ing hand sanitizer. Canada Goose, Nike, New Balance, Gap
of all restrictions? and a countless number of small and medium-sized clothing
In this article, we take on these questions and try to offer companies are making PPE for healthcare workers. General Mo-
the best answers that we can, given what we know now. A critical tors, Ford and Dyson are making ventilators. The New England
facet of our approach is to use the United Nation’s Sustainable Patriots’ plane travelled to China to transport N95 respirators to
Development Goals as a north star for where value can be cre- Massachusetts. Sports franchises around the world continue to
ated during and post COVID. provide financial support to non-working event staff. Restaurants
are donating food, shoes, PPE and other supplies to front-line
A Shared Priority workers in grocery, transportation, distribution and healthcare.
As the economy reopens, the first priority for every organization Each of these acts of solidarity will long be remembered.
must be to preserve health and safety unambiguously and with Prioritizing health and safety also carries other responsi-
full commitment of resources and capabilities. A wide range of bilities for companies that may be less obvious. Governments
interventions are required to make workspaces safe. Physical may ask organizations to implement testing and to send work-
distancing floor markers, plexiglass dividers and hand sanitiz- ers home if they appear to be contagious. Employers will have
ing stations are now standard business needs. Companies must to be ready to adapt quickly to departures from the workplace
ensure that workers have appropriate PPE, while also adapting by critical workers who test positive on-site. The potential for
to deliver any services virtually so that face-to-face interac- prior contagion will have to be addressed based on what those
tion with customers is as limited as possible until a vaccine is workers were doing in the days prior to detection. Some organi-
available. These and other immediate approaches to physical zations are developing A, B and C teams for work rotations to
distancing are clearly imperative and will need to be thought create defensive capacity, but the duplication of responsi-
through by every employer. bility is expensive and inefficient. Companies will have to take

rotmanmagazine.ca / 7
 Permanent changes in consumer
behaviour are likely.

steps commensurate with the risk of onsite contagion to others. ing Group report suggests that now is not the time for precise
As many employees without immunity continue to work from budgeting and forecasting, but rather a time for scenario plan-
home, replacing the sent-home worker will be complicated and ning. McKinsey authors emphasize that the future for business
sometimes impossible. All of this will delay a business’s ability to will require resilience and the ability to withstand intense gov-
re-establish a sense of normalcy and rebuild towards continuity. ernment scrutiny, demand shocks, privacy concerns and sec-
Companies like Twitter and Shopify have responded by institut- toral disruption.
ing permanent work-from-home policies, while others have em- Figuring out the right approach for your organization will
braced a phased approach while contemplating, planning for and depend on discerning which stakeholders to serve, how to serve
intensively managing these issues, and other issues like them. them, and where to draw boundaries as to what is possible. Some
analysts are suggesting that the economic landscape is ending a
The Implications of Changes in Stakeholder Behaviour 75-year cycle that began during the Great Depression, and that
In the months ahead, companies both large and small will also we should expect a whole new economic system to emerge —
confront other types of disruptions in demand, supply chains, one that reflects the values of humanism, collaboration, equity,
financial burdens, governmental intervention and employee and a different kind of globalization.
needs. The simple experience of spending less during lockdown Dealing with all of this is daunting. How do you even begin
has left many of us wondering why we wasted so much money — especially while facing resource constraints, a fragile work-
on things that no longer seem important. For many, the loss of force and reluctant customers? Research in the fields of strategic
a job or of a family member’s job has created intense budgetary management and organizational behaviour points unambigu-
pressure. Permanent changes in consumer behaviour are likely. ously to the best place to begin: All business leaders looking for
The financial burdens arising from the shutdown are likely a way forward for their organizations must reconsider their mis-
to be extensive, and will include the renegotiation of contracts sions, purposes and goals over a time horizon aligned with the
and a restructuring of obligations that will have an impact on process of re-emergence.
consumer demand through other routes. Supply chains — infa- For many companies, this will mean looking ahead several
mously fragile in producing PPE at the height of the pandemic years. Critically, effective goal-setting requires imagining how
— must now also contend with new kinds of restrictions on in- the organization will adapt to what we’re now thinking of as a
ternational trading behaviour that will affect costs and prices. ‘new normal’ that involves much more than persistent social
Governmental intervention is not only likely to intensify, but distancing. COVID-19 has pulled the plug on the accumulating
conflicts, tensions, and issues may arise in the demands of lo- pressure of climate change, de-globalization, rampant insecu-
cal, provincial, federal, and international authorities. As a result, rity, structural inequality and unsustainable consumerism. As
shortages may arise and persist. the economy reopens, the companies that prosper will be those
Changes in employee needs will also arise from the pan- that assess their resources and envision effectively how to meet
demic’s enormous psychological and social toll, including from the needs of stakeholders relentlessly during the forthcoming
loss of loved ones, jobs, savings, stability, and interaction with period of turbulence in most industries.
others. The mental health of those working from home or simply One place to look for answers on how to accomplish this is
remaining inside has worsened. Workers in essential industries in the United Nation’s Sustainable Development Goals (SDGs).
are, of course, exhausted with consequences from COVID that These are 17 major goals (see sidebar) developed over a period
will be revealed only after periods of months and years. With- of study that involved extensive consultation with stakehold-
out question, COVID has put an intense spotlight on systemic ers from around the world, supported by expert analysis. They
income and racial inequalities. focus on addressing social development issues (via goals 1, 2, 3,
As the economy reopens and these demands intensify, 4 and 8), and they provide a roadmap for combating inequal-
leaders will look for a way forward. A recent Boston Consult- ity (via goals 5 and 10). They address the major environmental

8 / Rotman Management Fall 2020

 The United Nations’ Sustainable Development
Goals (SDGs) To Transform Our World

GOAL 1: No Poverty

GOAL 2: Zero Hunger

GOAL 3: Good Health and Well-Being

GOAL 4: Quality Education

GOAL 5: Gender Equality

GOAL 6: Clean Water and Sanitation

challenges of our time (goals 6, 7, 13, 14 and 15), and they include
GOAL 7: Affordable and Clean Energy
targets for the growth of sustainable and inclusive economic de-
velopment (goals 9, 11, 12, 16 and 17). GOAL 8: Decent Work and Economic Growth
To be sure, these 17 goals are broad, but each is accompa-
GOAL 9: Industry, Innovation and Infrastructure
nied by sub-goals that are strikingly specific. For example, the
targets for 2030 under SDG3 include “3.1: By 2030, reduce the GOAL 10: Reduced Inequality
global maternal mortality ratio to less than 70 per 100,000 live
GOAL 11: Sustainable Cities and Communities
births” measured by maternal mortality ratio and proportion of
births attended by skilled health personnel. GOAL 12: Responsible Consumption and Production
Because each SDG was developed through careful and ex-
GOAL 13: Climate Action
tensive consultation across a spectrum of sectors, countries and
constituencies, each is supported by a robust logic designed to GOAL 14: Life Below Water
withstand the kind of scrutiny from stakeholders of all types that
GOAL 15: Life on Land
will accompany the post-COVID reopening. Before COVID po-
tentially erased much of the progress made in the last decade, GOAL 16: Peace and Justice, Strong Institutions
the UN estimated that an annual funding gap of $2.5 trillion
GOAL 17: Partnerships to Achieve the Goals
would need to be filled to achieve the SDGs. With COVID as a
catalyst for fundamentally rethinking how resources are allocat-
ed and how our institutions govern the economy, we are on the
precipice of a great reset, and the opportunity for businesses to
make an impact is as large as the need.
Even though society’s goals are well articulated in the organizations’ resources are allocated. The most successful post-
SDGs, there are paradoxes within them that organizations COVID organizations will break the trade-offs.
must confront to rely on them effectively. Even a brief review This is already beginning to happen. Consider, for example,
shows that these trade-offs are extensive. For example, how Danone’s ongoing efforts to reorient their business activities
do you achieve both climate action and economic growth? In around achieving social and environmental impact. In 2006,
2018, French President Emmanuel Macron faced a national Danone embraced a proposal from Mohammed Yunus, the
emergency after raising the tax on diesel fuel by 23 per cent in Nobel Prize winning economist and founder of Grameen Bank,
an effort to combat climate change. The ensuing Yellow Vests to produce a product that would specifically improve nutritional
movement protested that the tax disproportionately affected outcomes for poor children in Bangladesh. From that joint ven-
low-income workers with jobs in transportation and distribu- ture, Grameen Danone demonstrated how market-based ap-
tion. For many organizations, the imperative for economic proaches can be leveraged to simultaneously achieve business
growth under SDG 8 may seem at odds with other goals, such objectives and make progress towards the SDGs. This provided a
as for SDG 12 on responsible consumption, and SDG 11 on sus- platform for Danone to evolve its approach and continuously
tainable cities and communities. embed the goal of improving health and environmental sustain-
For companies, the tensions and trade-offs between the ability into its products, services and corporate initiatives, while
goals constitute the innovation agenda for the post-COVID re- establishing social-investment funds to reinvest its capital into
covery and, indeed, for the first half of this century. Aligning the doing the same. In 2020, Danone announced a €2 billion initiative
missions of organizations to these goals and measuring how it to transition to a “climate powered business model” focused on
will contribute to their achievement will be a powerful tool for regenerative agriculture, plastic use reduction and a transition to
responding to emerging stakeholder demands questioning how clean energy.

rotmanmagazine.ca / 9
 Changes in employee needs will arise from the pandemic’s
enormous psychological and social toll.

What Lies Ahead The field of marketing is about to change. COVID is leaving
Where are the greatest opportunities for breakthroughs? While many consumers without the savings and cash flow to spend ex-
the options are extensive, following are five that jump out at us as cessively. Luxuries for many are no longer viable. The imperative
being particularly relevant for corporations. for many companies from this change in the structure of demand
is clear: Their portfolio of products and services must be recon-
OPPORTUNITY 1: ALIGN WITH SDG 3, GOOD HEALTH AND WELL BEING. structed to be deemed more essential — more integral to what
Organizations in the healthcare sector — and any sector that customers will respond to as truly valuable. And the implications
relates directly to health, including public infrastructure, for the supply chain are equally important.
food, housing, and education — will be rewarded for deep- Restructuring production to be more resilient and efficient is
ening capacity, prevention, resilience, and collaboration. the mandate. Companies will be rewarded for investing to lower
Post COVID, there can be no question that investments in sys- costs, become more resilient, and simplify their value propo-
tems to preserve health and life are urgently required. Innova- sitions — all while lowering prices. Prior to COVID, consumers
tion to accomplish this effectively, resiliently, and efficiently will were increasingly prioritizing a company’s social responsibility
be heralded for years to come, even if they are initially costly and environmental impact when making a purchasing decision,
and even if they challenge the viability of long-profitable health giving rise to the importance of customer signals like the BCorp
industry structures that have resisted innovation. The old argu- certification, ESG reporting and other forms of impact measure-
ments about how change threatens the quality of healthcare de- ment and management.
livery will no longer carry the day. While some companies continue to build upon their social
Governments, large insurers and investors are ready now responsibility commitments to maintain customer engagement,
for improvements to health systems. For example, Singapore’s COVID has also forced a number of companies to immediately
TraceTogether technology that enables effective contact trac- respond to changing customer profiles. Telecom companies
ing, and which was quickly replicated in Australia, inspired sto- around the world have waived fees for roaming and long-dis-
ried rivals Apple and Google to collaborate on a similar solu- tance while increasing data use allowances. Energy producers
tion. GlaxoSmithKline and Sanofi have also collaborated to are passing cost savings from decreased demand onto consum-
combine their innovative technologies to develop an adjuvanted ers, albeit sometimes with the nudge of local governments.
COVID-19 vaccine. To create one of the first rapid COVID test- Consumer goods giants like Unilever and L’Oréal are extend-
ing tools approved for public access, Canadian-based Spartan ing credit and payment relief to help some retail customers and
Bioscience repurposed its proprietary portable on-demand DNA SMEs manage and protect jobs, while shifting production from
analyzers having previously been successful in testing for infec- typical consumer products to hand sanitizer.
tious disease, precision medicine, and food and water safety.
And in recognizing the need for mental health services among OPPORTUNITY 3: ALIGN WITH SDG 7, AFFORDABLE & CLEAN ENERGY, AND
its members, U.S. healthcare provider Kaiser Permanente es- SDG 13, CLIMATE ACTION. Climate change and affordable clean
tablished a partnership with digital health specialist Livongo to energy will continue to be absolute priorities. While COVID
provide access to critical services. has contributed to a dramatic drop in price for non-renewable
forms of energy, it has also demonstrated just how accessible
OPPORTUNITY 2: ALIGN WITH SDG 12, RESPONSIBLE CONSUMPTION & PRO- climate improvement is. Demand for renewable forms of en-
DUCTION. Companies will be rewarded for advancing respon- ergy is increasing, as costs continue to decrease. Organizations
sible consumption and production without raising prices that innovate in reshaping systems of all sorts to reduce climate
that amplify economic inequality and intensify poverty. The impact will be recognized and supported. Old claims that cli-
details of sub-goals tell the story: What is needed first is a change mate improvement is too difficult will be resoundingly rejected,
in our culture of consumption, which has been shaped much as will claims that massive behavioural change is impossible,
more by marketing than we might want to admit. or that sustaining core systems comes inevitably with adverse

10 / Rotman Management Fall 2020

climate effects. through economies of scale in mostly urbanized centres that left
The floodgate is now open. Many more businesses than Mi- behind the poor and disenfranchised have been challenged at the
crosoft and IKEA will need to follow through on multi-billion- core. COVID has made it vividly clear that we are all inextricably
dollar commitments to become carbon neutral or positive, as the interconnected. Behaviour in parts of the world that appear re-
consequences of climate inaction — or of not also flattening the mote is directly relevant to human experience anywhere else in
‘climate curve’ — remain likely to be magnitudes more severe the world.
than what we’ve seen so far from COVID. Companies that use new technologies, especially commu-
nication and computing advances, to overcome industrial-era
OPPORTUNITY 4: ALIGN WITH SDG 8, DECENT WORK & ECONOMIC GROWTH conceptualizations of scale and of sustainability will win. When
AND SDG 11, SUSTAINABLE CITIES & COMMUNITIES. Companies that the world urgently needed a tool to remain interconnected as
directly engage in their communities will win. It has always we began to self-isolate, Zoom demonstrated how its technol-
been true that companies depend on the communities in which ogy, its business model and its resilience to challenges was more
they operate, but now, the strength of any company will be more relevant than ever. Recognizing the global humanitarian risk of
deeply connected to the welfare of those in the geographic areas a lack of respirators in other parts of the world, 3M struck a deal
in which it operates. Companies must stand ready to collaborate with the U.S. government to continue exporting its highly cov-
with public-sector actors, non-governmental organizations and eted N95 masks. And LEGO and the LEGO Foundation quickly
organizations of any type that are co-located to protect the wel- sprung into action to support children with the resources and
fare of everyone in their communities. Intense ‘local-ness’ is an digital tools they require to continue learning, whether they were
essential mandate that will emerge from the experience of CO- in a refugee camp in a war-torn country, or waiting out the quar-
VID. Within this framework, organizations must demonstrate a antine from their homes.
commitment to breaking down inequality. Public-facing state-
ments, while important, will not be enough. Diversity, equity and In closing
inclusion all the way up to the C-suite will be a critical component Leading a company after COVID will require dealing thought-
of success. fully and sensitively with the pain, suffering, loss and financial
Consider, for example, the sports franchises that have do- consequences of the pandemic for stakeholders across the board:
nated to local communities, and UnitedHealth’s $10 million employees, customers, distributors and communities.
COVID response fund for non-profits in hard hit states as part of Moving forward will also depend on the recognition that
a $60 million commitment to support heavily impacted popu- there is no going back to old ways of doing things. The United Na-
lations. Scandanavian Airlines, headquartered in Stockholm, tions’ SDGs provide a roadmap for what the new reality should
developed a program with a local university to provide laid-off look like. Going forward, what will distinguish the winners from
workers with the opportunity to fast-track their training to be- the losers will be a reorientation of the entire organization to cre-
come much needed healthcare support workers. A long list of ate value in a new era in which a business’s contributions to posi-
early responses from companies shows how inspired engage- tive social outcomes and environmental sustainability are critical
ment is making a profound difference in communities. to its financial success, and therefore just as important.

OPPORTUNITY 5: ALIGN WITH SDG 9, INDUSTRY, INNOVATION AND INFRA-

STRUCTURE AND SDG 10, REDUCED INEQUALITIES. Companies will be
Anita M. McGahan is a University Professor
rewarded for great global citizenship by assuring that they and the George E. Connell Professor of
leave nobody behind from access to their products and ser- Organizations and Society at the Rotman
School of Management and Munk School
vices. In addition to the mandate for local citizenship, companies
of Global Affairs & Public Policy. Jason
will win by assuring that their capabilities, goods, and services Sukhram (Rotman MBA/BASc ‘14) is a Senior Manager with the MaRS
are globally accessible. Post-war systems designed for efficiency Discovery District’s Centre for Impact Investing.

rotmanmagazine.ca / 11
 One of the most influential management thinkers of
our time shares key insights from her latest book.

Thought Leader Interview:

Rosabeth
Moss Kanter
Interview by Karen Christensen

As we speak [in April 2020], businesses around the world are For businesses, interdependencies in the supply chain are

PORTRAIT BY SUSAN HINOJOSA ([email protected])

shuttered due to the global pandemic. What are some of the also increasingly clear. There will have to be a lot more attention
key leadership lessons from this unprecedented moment? paid to where supplies come from and some concern for what
First of all, my heart goes out to everyone who has been affected is happening in those countries. For instance, I would hope that
by this unprecedented pandemic. At the very beginning of my North American businesses will think twice about only having
latest book I discuss some of the big unsolved problems we cur- suppliers in China and look at getting some of their supplies
rently face, and I mention the fact that pandemics can travel from from, say, Vietnam. They should also think about the welfare of
place to place at the speed of an airplane. Sadly, that is exactly the people in those countries and how they are living. This is an
what happened. ‘end to end’ world where the fate of business is not simply about
Perhaps the biggest lesson is that we need to recognize and who is right behind you in the supply chain and to whom you’re
learn to deal with the interdependencies between countries, lev- distributing your products or services. There needs to be wide-
els of government and levels of the business ecosystem. We need spread awareness, if not responsibility, for what is happening
to see greater cooperation on all fronts. There is a lot of reliance much further down the supply chain.
right now on global organizations like the World Health Organ- If we don’t solve the problems of the world — or at least take
ization, due to the need for comparative data across countries. steps to contribute to their solution — businesses will continue
Going forward, leaders across sectors need to think long and to be hit hard in times of crises. And unfortunately, the num-
hard about how to deal with our interdependence. ber of crisis appears to be growing. I don’t want to be dire, but

12 / Rotman Management Fall 2020

 No matter what industry you work in, worst-case scenarios
have to be discussed and prepared for.

between climate-related crises like wildfires and drought and The third important thing for leaders to consider carefully
health crises like this pandemic, our interdependency has be- is how and when trust in business will be restored. For years,
come all too clear. business as a social institution has been losing public confidence.
Whether you’re a small business or a large enterprise, your cus-
What are some of the key things business leaders need to be tomers must feel that they can count on you, that you are reliable,
focusing on right now? and that you care about them. Much of that will come from how
Businesses must become more aware that they are dependent companies treat their own people in the midst of this crisis. The
upon the communities in which they operate. To put it simply, the ones that are putting their people first, that are giving people the
local ecosystem matters. It matters because your employees need option to return to work, even if they have to lay them off for a
to be able to get to work safely and they need to have their health while; that are giving people tools and support to work remotely;
concerns taken care of. Businesses need specific connections to and that are concerned about the children of their employees —
those organizations, whether it be hospitals or civic associations these are the businesses that are going to come back even stron-
or their local government, because they are going to make a dif- ger than before. The trust they have exhibited in their people will
ference as to whether or not they can operate in times of crisis. be returned, and customers will sense and react to this.
I would hope that out of all of this comes a greater sense of
why responsibility, innovation and what I call ‘thinking outside Sadly, crises like COVID-19 are likely to happen again. What
the building’ — beyond your narrow silo to the entire context you can leaders do to prepare?
operate in — are so critically important. No one business will be There is a saying that ‘fortune favours the prepared mind’, and
able to solve any of these problems by themselves. Leaders need in such cases, this applies in spades. No matter what industry
to collaborate with partners, suppliers, customers and distribu- you work in, worst-case scenarios have to be discussed and pre-
tors to tackle the issue of interdependence. pared for. In most cases, it won’t come to pass, but something re-
I want to accelerate the idea that we need to rethink insti- sembling it might happen. Discussing what could go wrong and
tutions for the 21st century. Health is not about the hospital. We whether you are prepared to deal with it is very important.
are far too dependent on our hospitals. Health is also dependent I also believe in ‘the optimism of activism’. Businesses and
upon things like the level of air pollution in a neighbourhood, organizations of all kinds that have empowered their people to
and on access to services well beyond hospitals. Right now, in take initiative and action will fare the best. That means creating
the United States, the military is setting up alternative hospitals a setting where people don’t have to wait for a command from
in convention centres and college dormitories because we don’t above to try something. In such organizations, people at all levels
have enough space in our hospitals. Equating health with a par- begin to think like the CEO. They feel responsible for the whole
ticular physical structure is no longer viable. company, they contribute their ideas, they know how to rally
Likewise, as we are seeing, education is not contained to teams and lift people’s spirits and they are willing to take action
physical classrooms. At the moment I am teaching my classes on beyond what is expected of them.
Zoom. It’s not the same, of course, but it works, and it is enabling A while back I wrote about a temporary crisis that affected
us to keep our programs going. We have to reinvent every insti- airlines across North America, when the power grid went down.
tution out there. We simply can’t continue to do things the way Across the continent, airlines were grounded and airports were
they have been done in the past, and this is going to require a lot closed. But the company that was then known as Continental
of creativity. I see it as a tremendous innovation opportunity for Airlines fared far better than the rest. Its people had already
businesses, social enterprises and leaders at top levels — but also been working in teams looking for small innovations, so they had
for many grassroots leaders and bold thinkers. As we speak, there been granted permission to have a creative mindset — a think-
are probably a lot of people working at home remotely who have outside-the-building mindset. They were not bound to simply
ideas for improvements in how we connect to service all of those follow the rules. As long as safety wasn’t jeopardized, they were
critical human functions. allowed to improve upon things.

14 / Rotman Management Fall 2020

 When the crisis hit, Continental was the first airline to have Can you provide an example of some companies that em-
responses in place in their airports, including the use of backup brace thinking outside the building?
generators on planes to get the computer systems in the airports One great corporate example is CVS Health, which began life as
up and running so it could move passengers. It was amazing Consumer Value Stores. It reframed its mission away from be-
to see, and it was all because of local actions taken by internal ing a retail pharmacy to ‘innovating to promote better health’.
innovators. Through a series of acquisitions and some very creative think-
The fact is, your business will be much better prepared if ing, it has been at the vanguard of helping to reinvent access to
your people know how to assume responsibility. We live in a healthcare in the U.S.
world where we need more hustle than hierarchy. Of course, for Under the leadership of CEO Larry Merlo and Chief
that to work, we also need the people in top positions to tell us Medical Officer Troyan Brennan, one of the first things they
the truth — particularly when times get tough. did was to remove tobacco from their stores and start offering
smoking-cessation classes. Then they opened walk-in clinics
You write that another key aspect of thinking-outside-the- within their stores to give people basic non-emergency health-
building is ‘dreaming big and seeing more’. Where should lead- care. And now they’re thinking about other ways to use their
ers be looking in order to ‘see more’? retail space. They recently bought a pharmacy benefits com-
Again, you have to look well beyond the people and groups pany and a health insurance company. They have continuously
that you are normally in contact with. For example, the CEO of redefined the business they’re in by thinking outside the build-
Verizon has tasked his executives with doing one new and dif- ing to improve societal outcomes.
ferent thing every single week. They have to go one place they’ve One of my favourite entrepreneurial examples is Talent
never been or do something they’ve never done before. This is Beyond Boundaries, which was started up by two lawyers from
the CEO’s attempt to shake people out of their complacency. Washington. They are matching skilled people from Syrian refu-
Unless you explore the world on a regular basis, you are limiting gee camps with employers in the West. It’s sort of like an Uber
yourself in terms of how much you can aspire to. for linking skilled talent with employers. One of their biggest
The fact is, many great innovations have come from people advocates is a mid-size manufacturing company in Ontario.
who were exploring well beyond their own industry. I know of The owner was finding that young, skilled workers didn’t want
many mergers that have taken place because the CEOs hap- to move to his remote part of Ontario to work. He now has ac-
pened to be seated next to each other in premium areas of air cess to highly skilled people, and he is advocating for this service
travel and had lots of time to talk, and they discovered they had across Canada.
lots of things in common. I’m not saying that all of life is random Companies like this are able to look at a very serious issue
— because it isn’t. The idea is to think about a wider set of expe- and see that there can also be an economic dimension to it. They
riences to trigger new ideas. have reframed a negative situation as a positive, and in so doing
It’s also about how you frame what you’re doing today. they are going to have an influence on governments, which will
For example, if you’re a manufacturer of light bulbs, instead begin to modify the ways in which people are admitted into coun-
of viewing what you do as ‘making light bulbs’, you could tries for work.
choose to frame what you do as being in the ‘life-enhance-
ment through lighting’ business. When you choose to see your Many people struggle when they try to tackle a discipline-
activities in a different way, you might see gaps that need to spanning institutional challenge. What are some of the com-
be addressed. That’s what innovators who start new ventures mon traps they fall into?
do: They see a gap that no one is currently filling and set out One is a feeling that given their position in life, they already
to address it with their innovation. But you can only see these know it all. In many cases, the higher a person rises in a hier-
gaps if you step back from the current business and open up archy, the more they begin to believe that they possess all the
your mind. necessary knowledge and should be imparting it to others. The

rotmanmagazine.ca / 15
 Innovators who start new ventures see a gap that no one
is filling and set out to address it.

three hardest words for these people to utter are, ‘I don’t know’. young kids, whose attention wanders when they are learning re-
Rather than admitting to not knowing, they make pronounce- motely, and to augment their learning with new remote tools. We
ments. But as I like to say, what people know in the suite might need ways to keep small businesses afloat and we need to find
not translate to the street. better ways to organize their finances. The army of innovators we
Another common trap is ‘bubble wrap’, or insulation from need includes people dedicated to democracy itself, to identify
disagreement. One perk of success is the ability to join a circle better candidates who truly have the public welfare in mind.
of people who never have to talk to anyone who disagrees with Am I optimistic at this particular moment? I do believe
them. This is why diversity is such an important topic in orga- that we are too dependent on big institutions. But just around
nizations right now — the quest to get many different kinds of the corners of those big institutions — just outside all those big
people and, hopefully, many different perspectives around the buildings — are so many innovators who are taking initiative.
table. I’ve worked with companies that are bringing Millenials They make me optimistic because there are so many of them,
in to top executive meetings to challenge them. However useful particularly in the U.S. and Canada — countries that place a high
this is, much of this dissent is still ‘inside the building’. The rest value on innovation.
of life often remains in the bubble wrap, because affluent peo-
ple go home to places that are cut off from the turmoil outside.

What kind of people are most qualified to take on institutional

change challenges?
The people who are most qualified have what I call the three Cs:
capabilities, connections and cash. Unfortunately, these are the
same people who are often the most constrained by their posi-
tions and handicapped by their success. They need a fourth C:
courage. They need courage to break out of the building and
build a new identity as a social innovator.
Sadly, leadership courage is often in short supply. For ev-
ery Paul Polman, who was an environmental activist while he
was CEO of Unilever or Howard Schultz, who tried to educate
his employees and customers about discrimination while at the
helm of Starbucks, there are hundreds more who don’t speak up
about controversial topics.

You have said that what we need right now is “an army for
change”. What would this look like?
Right now, in the midst of the pandemic, the emphasis tends to
be on federal governments and state or provincial governments.
But the fact is, we need innovation everywhere. Rosabeth Moss Kanter holds the Ernest Arbuckle Professorship at Harvard
Think about all of the things we need, just within this crisis Business School. She co-founded the Harvard University-wide Advanced
Leadership Initiative, serving as Founding Chair and Director from 2008 to
itself: We need to speed new drugs to market. We need to develop
2018. She is the author or co-author of 20 books, including her latest, Think
new vaccines. We need to figure out how to feed the hungry in Outside the Building: How Advanced Leaders Can Change the World One Smart
our communities. We need to figure out how to better educate Innovation at a Time (Public Affairs, 2020).

16 / Rotman Management Fall 2020

Now
available
from
MIT Press

The latest eBook

by Rotman Professor
Joshua Gans is now
available at Amazon,
Apple Books and
Google Play.

An expanded print
and eBook edition,
The Pandemic
Information Gap: The
Brutal Economics of
COVID-19, will be
published in November
2020 by MIT Press.
 THE FUTURE
IS
NOT WHAT
IT USED TO BE
The coronavirus crisis is a world-changing event. Leaders must
consider seven elements as they plan for ‘the next normal.’
by Kevin Sneader and Shubham Singhal

DEALING WITH THE CORONAVIRUS CRISIS and its aftermath could be 1. Distance Is Back
the imperative of our times. Indeed, we have argued that it au- In the mid-1990s, the idea of the ‘death of distance’ gained cur-
gurs the imminent restructuring of the global economic order. As rency. The thinking was that new web-based and telecom tech-
Ian Davis, one of our previous managing partners, wrote in 2009 nologies had made it possible to communicate and work in new
in the midst of the global financial crisis: ways that dramatically reduced the value of physical proximity.
As the flow of information became cheap and seamless, global
For some organizations, near-term survival is the only agenda supply chains of bewildering complexity were able to deliver
item. Others are peering through the fog of uncertainty, think- just-in-time products as a matter of routine. Cross-border trade
ing about how to position themselves once the crisis has passed reached new peaks. And the world’s burgeoning middle class
and things return to normal. The question is, ‘What will nor- took to travel and tourism with something like abandon.
mal look like?’ While no one can say how long the crisis will last, Even before COVID-19 hit, there were signs of unease, ex-
what we find on the other side will not look like the normal of pressed in calls for protectionism and more restrictive immigra-
recent years. tion and visa policies. In these ways, people sought, in effect, to
create more distance from those unlike themselves.
It is impossible to know what will happen. But it is possible to Such attitudes were far from universal, of course. But to
consider the lessons of the past, both distant and recent, and on deal with the pandemic, governments around the world have im-
that basis, to think constructively about the future. We believe posed restrictions on people and goods of a severity not seen for
the following seven elements will be important in the shaping of decades. As we write this, more than three billion people live in
the next normal. countries whose borders are now totally closed to non-residents;

rotmanmagazine.ca / 19
 Succession planning has to go much deeper
than your C-suite.

93 per cent live in countries that have imposed new limits on en- stead, companies will want to build backup and safety plans.
try, because of the coronavirus. If a modern-day Hannibal want- Other key elements of business structure will also be revis-
ed to cross the Alps peacefully, his elephants would be turned ited. For example, the Wall Street Journal observed that the crisis
away. Eventually, the tourists will come back and the borders will has revealed weaknesses in succession plans as leaders get sick
reopen, but it is certainly possible that the previous status quo and deputies quickly need to be found across all aspects of opera-
will not return. tions. Companies are learning the hard way that succession plan-
Indeed, for businesses, the prospect of more border restric- ning has to go much deeper than the C-suite, and much broader,
tions; a greater preference for local over global products and responding to possible short-term disruptions as well.
services; the need for resilience across supply chains driving a Investors are likely to take note, and to devise ways to in-
move to bring sourcing closer to end markets ‘(see element 2);’ corporate resiliency more systematically into their valuations.
and perhaps renewed resistance to globalization, are all possible Indeed, in the wake of recent natural disasters, the impact of cli-
second-order consequences of the actions being taken now to mate change was increasingly being recognized by business lead-
cope with the coronavirus. Technology continues to shrink physi- ers and investors, with consequent effects on decision-making
cal distance, but in other ways, it could be set for a return. and valuations. This pressure to include environmental, social,
and governance factors in valuing a business is likely to expand
2. Lead for Resilience and Efficiency to incorporate resilience to outside shocks, such as pandemics.
Even when lockdown restrictions begin to ease, businesses will In sum, many companies will rebalance their priorities, so that
need to figure out how to operate in new ways. In short, resiliency resiliency—in all its manifestations—becomes just as important
— the ability to absorb a shock, and to come out of it better than to their strategic thinking as cost and efficiency.
the competition — will be the key to survival and long-term pros-
perity. 3. The Rise of the Contact-Free Economy
Again, the past can be a prelude. Our research on the 2008 In three areas in particular — digital commerce, telemedicine
financial crisis found that a small group of companies in each sec- and automation — the COVID-19 pandemic could prove to be a
tor outperformed their peers. They did get hurt, with revenues decisive turning point.
falling about the industry average, but they recovered much E-commerce was already meaningfully and visibly eating
faster. By 2009, the earnings of the resilient companies had risen into the sales of brick-and-mortar stores. What the coronavirus
10 per cent, while that of the non-resilients had gone down al- has done is to accelerate a change in shopping habits that was
most 15 per cent. What characterized the resilient companies was already well established. Early indications from China, for ex-
preparation before the crisis — they typically had stronger bal- ample, are that new customers and markets — specifically indi-
ance sheets—and effective action during it — specifically, their viduals aged 36 and over and residents of smaller, less prosper-
ability to cut operating costs. ous cities — have begun to shop online in greater numbers. In
This advice is still sound — but insufficient. COVID-19 could Europe, 13 per cent of consumers said in early April that they
end up dwarfing the financial crisis in economic damage. In that were planning to browse online e-tailers for the first time. In
case, it will not be enough for many companies to tweak their Italy alone, e-commerce transactions have risen 81 per cent
business model; instead, they will need to rethink it. since the end of February.
One implication of this has to do with how supply chains op- The figures for telemedicine and virtual health are just as
erate. Companies are finding themselves vulnerable because they striking. Teladoc Health, the largest U.S. stand-alone telemedi-
cannot get the parts they need. Supply chains built on just-in-time cine service, reported a 50 per cent increase in service in the
inventory and distributed component sourcing may well have to week ending March 20, 2020, and is adding thousands of doctors
be reconsidered, given the way many have been disrupted. In- to its network. The Federal Communications Commission

20 / Rotman Management Fall 2020

is spending $200 million to improve connectivity between pa- 80 per cent) of workers affected by COVID-19; Italy is suspend-
tients and virtual-healthcare providers, and the U.S. Department ing loan and mortgage payments; Brazil is easing labour regula-
of Health and Human Services has increased reimbursements tions on companies. And central banks from Australia to Europe
for telemedicine and enabled cross-state provision of virtual to South Africa to Canada are cutting rates.
care. Sweden’s KRY International, one of Europe’s biggest tele- As governments step up to serve, or save, the private sec-
health providers, reported that registrations were up more than tor, the means they choose will differ. Some countries will out-
200 per cent. France and Korea have both changed regulations to right nationalize, some will take equity stakes, some will provide
ease access to telemedicine. With a vaccine or treatment at least loans, and others will choose to regulate. If non-performing
months away, patients and healthcare providers both have rea- loans require a second bailout, the banking sector could become
son to expand virtual interactions. something like a regulated utility in some markets.
Greater automation was already occurring before COVID- A push to redefine the global public health ecosystem to
19. In late 2017, the McKinsey Global Institute estimated better navigate possible future pandemics and related threats
that 60 per cent of all jobs could see more than 30 per cent of could provide additional impetus for cross-country public-sec-
their key tasks automated, affecting 400 million to 800 mil- tor intervention. In the same way that reform of financial insti-
lion jobs around the world by 2030. According to the Brookings tutions gained momentum in 2009, the same could be true for
Institution, over the three recessions that have occurred over public health in the near future.
the past 30 years, the pace of automation increased during each. As our colleagues wrote in the context of climate change,
In effect, it is becoming possible to imagine a world of “the tremendous costs of being the payor, lender, and insurer
business — from the factory floor to the individual consumer — of last resort may prompt governments to take a much more ac-
in which human contact is minimized. But not eliminated. For tive role in ensuring resiliency.” The implications for the role of
many people, getting back to normal will include popping into the state will materially affect the way business is conducted;
stores again, and the roadside kiosks typical of much of the de- business leaders in many more sectors will have to adjust to the
veloping world are not about to be replaced by cashless hyper- next normal of greater government intervention.
stores. Patients with complex needs will still want to see their At some point, governments may decide to get out of the
doctors in person, and many kinds of jobs are not automatable. business of business; how they do so will be complicated and
But the trends are unmistakable — and probably irreversible. differentiated. How much, how fast and in what ways govern-
ments reduce their economic role will be one of the most impor-
4. More Government Intervention in the Economy tant questions of the next decade.
During times of great crisis, such as World War II, citizens have
proved willing to accept — even embrace — greater government 5. More Scrutiny for Business
control of the economy. Already, there has been economic inter- Rightly or wrongly, there is a perception in many countries that
vention on a scale that hasn’t been seen for decades, if at all. As during the financial crisis, financial institutions were culpable
of April 10, 2020, governments across the globe had announced for the trauma, accepted billions of dollars from taxpayers and
stimulus plans amounting to $10.6 trillion — the equivalent of gave little back. Now citizens all over the world could face higher
eight Marshall Plans. Most spending is directed to three areas taxes and/or fewer services in order to pay for the $10.6 trillion
— supporting citizens’ basic needs, preserving jobs and helping committed so far. The public will expect — indeed, demand —
businesses to survive another day. that their money be used for the benefit of society at large. This
India is making direct cash transfers to needy citizens, and raises complicated questions. What does it mean for business-
Indonesia is expanding social-welfare benefits to ten million es to do right by their employees and customers? If a financial
more households. Britain and France are covering wages (up to institution accepts a bailout, how should it think about calling

rotmanmagazine.ca / 21
 Concern over the possibility of other ‘black swan’ events could
change how consumers approach financial security.

in loans? When, if ever, is it appropriate to resume buybacks and tudes toward physical distance, health and privacy. For example,
pay higher dividends? increased health awareness and a corresponding desire to live
Even before the coronavirus, there was a growing sense more healthily could bring lasting change to where, how, and
that shareholder value should not be the only corporate value. In what people eat. Some consumers and governments — but by no
August 2019, more than 181 U.S. CEOs signed a statement com- means all — may change their attitudes towards the sharing and
mitting themselves to other priorities — investing in employees, use of personal data if it can be demonstrated that the use of such
supporting communities, and dealing ethically with suppliers — data during the crisis helped safeguard lives.
in addition to shareholder value. The idea of the ‘triple bottom For millennials and members of Generation Z — those born
line’ — profit, people and planet — has become mainstream, as between 1980 and 2012 — this crisis represents the biggest disrup-
have socially responsible investment funds. tion they have faced. Their attitudes may be changed profound-
With many businesses likely to be operating to some extent ly and in ways that are hard to predict. The tourism, travel and
with public money, the scrutiny will be intense. There will be real hospitality sectors may see their businesses subject to long-term
effects on the relations between government and business, and changes in business and individual travel preferences. Concern
between business and society. That could show itself in the form over the possibility of other ‘black swan’ events could change
of more regulation, particularly in regard to domestic sourcing how consumers approach financial security — saving more and
and workforce safety. And as the coronavirus reveals or height- spending less. The list of questions about how consumers will be-
ens awareness of social fractures, business will be expected to be have after COVID-19 is long, and uncertainty is high.
part of finding long-term solutions. Given the intensity of these pressures, it is reasonable to
The coronavirus could be the biggest global challenge since question whether existing market positions will be retained with-
World War II. In the wake of that conflict came the question: out significant effort to reposition and respond to changes con-
‘What did you do during the war?’ That question will be asked, fronting industries and sectors as a whole. To this can be added
forcefully, of both government and business, once the COVID-19 the economic impact of stretched balance sheets and valuations
battle has been won. Business leaders need to ask it of them- leading to changes in business ownership.
selves now. In this context, it is possible that institutions may find new
and enduring ways to collaborate, prompted by the regulatory
6. Changing Industry Structures, Consumer Behaviour, and other changes that have enabled corporations to work to-
Market Positions and Sector Attractiveness gether in order to address the current crisis.
One of the key questions facing business leaders is whether their
industry will rebound from the economic shock posed by the vi- 7. Finding the Silver Linings
rus or sustain lasting damage. The answer likely lies in an assess- If necessity is the mother of invention — and it often is — there
ment of the degree to which industries find themselves suscepti- could be some positive outcomes of the coronavirus crisis. These
ble to the elements highlighted in this article. For example, those are unlikely to come anywhere near to compensating for the hu-
that have shown themselves to be less resilient may find it dif- man and economic toll it is wreaking. However, given the gen-
ficult to regain their pre-COVID-19 standing. In the auto sector, eral shortage of optimism at the moment, it may be heartening to
for example, companies have relied on global just-in-time-based consider a few encouraging possibilities.
supply chains. They will be under pressure to change so that con- One has to do with the human imperative to communicate.
tinuity of supply is just as valued as cost and speed to market. In this sense, the death of distance continues to be very real,
In addition, there could be lasting changes to consumer atti- and very positive. Individuals, communities, businesses, and

22 / Rotman Management Fall 2020

governments alike are all learning new ways to connect: almost ably more likely to be a mix. The point is that where the world
everyone knows a story of the grandparent who finally learned to lands is a matter of choice — of countless decisions to be made by
Zoom, Skype or FaceTime. individuals, companies, governments and institutions.
For businesses, the consequences have been profound. The early 20th-century British explorer Ernest Shackleton
Many have learned how to operate remotely — at a high level and once noted, “Optimism is true moral courage.” Optimism and
at far greater speed. These practices could well stick, making for courage: these qualities are needed more than ever as leaders
better management and more flexible workforces. Flexible work make the decisions that will shape the next normal.
is often critical to support employees at different life stages such
as parents with young kids, women during parts of their career or
affinity groups such as the disabled.
Business leaders now have a better sense of what can, and
cannot, be done outside their companies’ traditional processes.
Many are beginning to appreciate the speed with which their or-
ganizations can move once they change how they do things. In
short, the coronavirus is forcing both the pace and scale of work-
place innovation. Indeed, as businesses are forced to do more
with less, many are finding better, simpler, less expensive, and
faster ways to operate.
The urgency of addressing COVID-19 has also led to in-
novations in biotech, vaccine development and the regulatory
regimes that govern drug development, so that treatments can
be approved and tried faster. In many countries, health systems
have been hard to reform; this crisis has made the difficult much
easier to achieve. The result should be more resilient, responsive,
and effective health systems.
These silver linings are thin compared with the scale of the
coronavirus catastrophe. Nurturing a next normal that will be
better than what it replaced will be a long-term test of all our
institutions, global and local, public and private. It will be criti-
cal to reconstruct for the future and not solve for the problems
of the past.
One possible next normal is that decisions made during and
after the crisis lead to less prosperity, slower growth, widening
inequality, bloated government bureaucracies and rigid borders. Kevin Sneader is the Global Managing
Or it could be that the decisions made during this crisis lead to Partner at McKinsey & Co., based in Hong
Kong. Shubham Singhal is the Global
a burst of innovation and productivity, more resilient industries,
Leader of McKinsey’s Healthcare Systems
smarter government at all levels and the emergence of a recon- and Services Practice and a Senior Partner
nected world. Neither is inevitable; indeed, the outcome is prob- in the firm’s Detroit office.

rotmanmagazine.ca / 23
A Leader’s Guide to Safely
Reopening the Workplace
Until there is a treatment or vaccine for COVID-19, public health
will depend heavily on decisions by business leaders. Technology
and systematic thinking can help.
by Ajay Agrawal, Joshua Gans, Avi Goldfarb and Mara Lederman
PERHAPS THE SINGLE BIGGEST IMPLICATION of reopening national Two Types of Solutions
economies is that responsibility and thus liability for dealing The current crisis is driven by a health problem: We don’t yet
with the COVID-19 pandemic will shift from the public to the have a treatment or a vaccine for the novel coronavirus. Manag-
private sector. Fortune 500 CEOs and small business owners ers have little control over that, but until the health problem is
alike will soon be making decisions that affect the health not solved, places of work will be opportunities for infected people
only of their business but also their people (employees, contrac- to infect others. This creates a management problem requiring
tors, customers, suppliers) — which in turn will affect the health management solutions — and managers do have control of those.
of their families, friends and neighbours. The management problem at hand is whether and how to
With so much at stake, how should business leaders plan reopen businesses, given that workplace spread of the virus re-
for operating in the post-stay-at-home phase of the recovery? In mains a real threat. This management problem is caused by an
this article we will present a simple but powerful framework for information gap: We don’t know who has the virus (i.e. is infec-
creating a plan. tious), who had it (i.e. is immune) and who has never had it (i.e.

rotmanmagazine.ca / 25
 Lockdown is the most extreme ‘always-on’ solution;
reopening requires more nuanced ones.

is susceptible). If we had that information, there would be no tion; reopening requires more nuanced ones. Let’s take a closer
economic crisis. We would simply require infectious people to look at these two catagories of solutions.
quarantine while the vast majority of us who are healthy go about
life as usual. Not having this information is costing us, by one es- INFORMATION-BASED SOLUTIONS. There are a variety of ways to col-
timate, $375 billion a month globally. In the absence of this infor- lect information on who is likely to be infectious. Most obviously,
mation, beginning an economic recovery requires us to solve the people can be tested for the novel coronavirus (e.g. with nasopha-
management problem. ryngeal swabs). These tests can sometimes be quite unreliable,
There are two types of solutions to this problem. First, infor- they are not always readily available and getting results can take
mation-based solutions involve predicting who is infectious and days. Still, over time, this situation should improve. Eventually,
who is immune and then using this information to decide who we anticipate, organizations will be doing widespread, frequent
gets to enter the workplace. Second — since these predictions will employee testing.
inevitably be imperfect — are ‘always-on’ solutions: technologies Another form of information collection is monitoring
and processes that limit the spread of the virus when infectious symptoms, especially mild ones that the patient may not even
people do enter. Lockdown is the most extreme always-on solu- notice. In some countries people already have their temperature

Introducing CDL Recovery: The Quest For Innovative Solutions Is Underway by Ajay Agrawal

Nobody knows when the COVID -19 crisis will end. Optimists wise do B. For example, if the system detects that someone in
anticipate a rapid V-shaped recovery, while pessimists worry the office has an elevated temperature, then security is notified
this will take a long time and be a painful and protracted process. to direct them to a testing station for further examination.
In a broad sense, there are two extremes: Second, always-on solutions do not utilize information
about who is infected. Instead, these are blunt instruments
• The Good Outcome: In this scenario, we achieve wide-scale that apply across the board to everyone. Personal protective
distribution of a vaccine or treatment or develop herd immu- equipment, higher frequency sanitization-procedures, physical
nity before the end of 2020. barriers like plexiglass screens, redesigned workflows
• The Bad Outcome: In the second scenario, we achieve and redesigned people-management processes all fall in
none of these before the end of 2023. this category. Lockdown is the most extreme always-on
solution, requiring everyone — whether infectious or not —
Like everyone, we desperately hope for the Good Outcome. to stay at home.
Yet we must plan for the worst. CDL Recovery — a new program CDL Recovery will focus on information-based solutions,
recently launched at the Creative Destruction Lab — is de- which might include, for example, managerial decision-making
signed for managing through the Bad Outcome. tools based on: swab-based tests that predict whether the
As indicated in the main article, there are two types of solu- coronavirus is present in an individual; contact tracing; image
tions to this management problem. First, information-based solu- analysis of people density or proximity; symptom monitoring,
tions involve predicting who is infectious and who is immune and and; or workplace monitoring of air or sewage.
then developing tools to leverage this information for contingent The Recovery program is not focused on health solutions
decision-making: if X is predicted to be true, then do A; other- (e.g. treatments, vaccines) or always-on solutions (e.g. PPE,

26 / Rotman Management Fall 2020

checked before they’re allowed to enter an office, restaurant, air- information from other sensors to predict the likelihood that
plane, or subway. This is useful but imperfect: Some people with someone in a building or neighbourhood is infected and order
fevers will not have the coronavirus, while others without fevers individual tests for everyone there. In our 2018 book Prediction
may nevertheless be infected. Combining temperature checks Machines, we described how advances in artificial intelligence
with other diagnostic information such as hospital-based chest enable increasingly complex predictions from a wide variety of
x-rays and blood oxygen levels may improve accuracy. These data sources such as these.
forms of information collection may be less accurate than direct The trouble is, information-based solutions are probabilis-
tests for the virus, but they may be cheaper, faster and easier for tic, and some errors are inevitable. Credit card fraud is a good
employers to implement regularly and at scale. example. Suppose a bank receives a warning that a credit card
There are also ways to monitor different parts of your work- transaction is one per cent likely to be fraudulent. Should the
place for signs of an outbreak, even if you don’t know who is bank deny the transaction or allow it to proceed? How should this
infected. For instance, sensors are being developed that could depend on the profitability of the customer to the bank?
detect the coronavirus in the air. Other tests can pick up traces So it is with coronavirus: Should your business keep oper-
of it in sewage. Machine-learning tools could combine these and ating if there is a one per cent chance an infected person gets

surface-coating materials). Many other excellent initiatives tific research and in applying existing scientific knowl-
are focused on developing these. This program is also not edge to the solution of the technical problems paramount
focused on automation that enables commerce under physical in war. Its work has been conducted in the utmost secrecy
distancing (e.g., robots) or goods and services that will experi- and carried on without public recognition of any kind;
ence an increase in demand due to physical-distancing restric- but its tangible results can be found in the communiques
tions (e.g. home entertainment). Such initiatives are extremely coming in from the battlefronts all over the world. Some-
important and will be included in the core CDL streams that day the full story of its achievements can be told.
resume this fall.
Novel crises such as COVID -19 require novel responses, CDL Recovery is designed to anticipate and address some
and novel responses require innovation, often predicated on of the most pressing needs that will arise over the next six to
insights from science. For example, in November of 1944, Presi- 18 months. Support from Scale AI, a Canadian investment and
dent Roosevelt wrote a letter to Dr. Vannevar Bush reflecting innovation hub, will bolster its capacity to respond nimbly to
the central role played by science-based innovation in World these evolving needs, scaling products and services for market
War II—not just the Manhattan Project, but radar, jet engines, as quickly as possible. All types of innovative teams may apply
penicillin, and many others: to the program: start-ups, corporations, informal collaborations,
sole inventors, social impact ventures and not-for-profit initia-
Dear Dr. Bush: tives. For more information, visit creativedestructionlab.com.
The Office of Scientific Research and Development, of
which you are the Director, represents a unique experi-
ment of teamwork and cooperation in coordinating scien-

rotmanmagazine.ca / 27
 CDL Recovery: A Global Program
with Global Mentors
The COVID -19 crisis is not only urgent and novel, it is also
global. To that end, the Creative Destruction Lab disbanded
its traditional location-based programming and designed the
CDL Recovery program to run globally. See page 26 for a de-
scription of the program. Mentors for CDL Recovery include:
Dawn Bell, Chief Scientific Officer, Novartis (Boston)
through the door? What about a five per cent chance or a 0.1%
Elizabeth Cannon, President Emerita and Professor at the
chance? The answer depends on the benefits relative to the
University of Calgary (Calgary)
costs — on the importance of opening the physical workplace
James Cham, Partner at Bloomberg Beta (Palo Alto) versus the risk of infection. Indeed, this is why supermarkets,
pharmacies, and other essential businesses have remained open
Sir Chris Deverell, former Commander of the UK’s Joint throughout the crisis with effectively no information-based so-
Forces Command (Bath)
lution: because the benefits of remaining open are so obviously
Mark Evans, Partner, LP at Kindred Capital (London) large. On the other hand, many professional services firms can
function quite well remotely, so their physical workplaces re-
Chen Fong, Professor Emeritus of Faculty of Medicine at Uni- main shut.
versity of Calgary and Co-founder of Pureweb Inc. (Calgary) Even if you can’t reduce to zero the likelihood that the virus
will enter the workplace, you can limit its impact should it gain
Brenda Fitzgerald, former Director of the Centers for Disease
Control (Atlanta) entry. Enter always-on solutions.

Nancy Gallini, Professor Emeritus at UBC’s Vancouver School ALWAYS-ON SOLUTIONS. Until the information-management solu-
of Economics (Vancouver) tions we’ve discussed thus far ramp up, always-on solutions will
be the primary approach managers use to reopen their businesses.
Chris Hadfield, former commander of the International Space
Station (Toronto) All sorts of decisions that previously would have been made
on the basis of productivity and efficiency now need to also con-
Irina Haivas, Principal of investment firm Atomico (London) sider the possibility of infection. For example, in the restaurant
industry, the flow of people in and out of the kitchen is now an
James Hardiman, Partner at investment firm DCVC (San
infection-risk management problem. In the retail fashion indus-
Francisco)
try, decisions about whether to open changing rooms or allow
Colin Harris, Cofounder of PMC-Sierra (Vancouver) customers to try items on are now infection-risk management
problems. At the same-time, moving from physical to digital
Eric Hautemont, Cofounder and CEO of Days of Wonder and documents now reduces infection risk as well increasing effi-
Ray Dream (Paris)
ciency and wasting less paper. The risk of transferring the virus
Laura Rosella, Assistant Professor at the Dalla Lana School by exchanging cash increases the relative benefits of digital pay-
of Public Health at the University of Toronto (Toronto) ment systems.
To date, we have seen two broad types of always-on solu-
Tytus Michalski, Managing Partner at investment firm Fresco tions. The first kind do not change the number or nature of inter-
Capital (Hong Kong)
actions but aim to make those interactions less risky. Things like
Amit Mital, former CTO at Symantec (Seattle) masks, hand sanitizer stations, and plexiglass screens at recep-
tion desks and store checkouts all fall into this category.
Vreni Schoenenberger, Global Head of Public Affairs in The second kind are solutions that aim to make people inter-
Neuroscience at Novartis (Basel) act less. These include redesigned physical spaces (to minimize
interactions or high-touch surfaces), redesigned workflows (to
Jane Walerud, Partner at investment firm Walerud Ventures
(Stockholm) enable work to be done in parallel or sequence rather than joint-
ly), and redesigned people-management processes (to minimize
Pam Winsor, former Chief Marketing Officer for Medtronic interactions across groups or teams). Reductions in capacity —
(Halifax) whether of employees (through layoffs and furloughs) or custom-
ers (through limits on occupancy) — fall into this category as well.

28 / Rotman Management Fall 2020

 Sensors are being developed that could detect
the coronavirus in the air.

Always-on solutions impose additional costs on business. In the next phase of the COVID-19 recovery, many CEOs of
There are direct costs for things like protective equipment and large enterprises will begin to behave like presidents and prime
more frequent cleaning. If the always-on solution involves re- ministers. They will report their numbers of infections and
duced capacity, profits will fall. Finally, reengineered spaces, deaths, explain their strategies for keeping their curves flat, de-
workflows, and processes may lead to lower productivity, greater cide how quickly to ease isolation measures and swing into crisis
inefficiency, or unhappier workers. Of course, certain changes management mode when there’s an outbreak. Some will be more
could increase productivity. Some businesses, especially those in like the U.S., others more like Sweden. The outliers, those that
congested cities like New York, report having people that work choose unusual strategies or experience more infections than
from home has made them more productive, mainly because it their peers, will be scrutinized. Their challenge is that every de-
eliminates long commutes. cision involves a trade-off between short-term profit and safety,
Different types of businesses lend themselves differently to and therefore assumes some risk. If tragedy strikes, as it likely
always-on solutions. It’s easier to maintain social distancing in a will for some, the central question will not be who is to blame but
garden centre than in a hair salon. As a result, even if they are al- whether the risk they took was wise.
lowed to some businesses are choosing not to open. Many restau-
rants have elected to keep their dine-in services closed because
with social distancing, they can’t allow in enough customers at a
time to offset the costs of cleaners and wait staff.
Ajay Agrawal is the Geoffrey Taber Chair in
In closing Entrepreneurship and Innovation and Profes-
As a manager, you are responsible for crafting your organization’s sor of Entrepreneurship at the Rotman School
information-based and always-on solutions. It is up to you to de- of Management. He founded the Creative
Destruction Lab (CDL), a non-profit organiza-
cide how much information to collect about who is infectious and tion with eight global locations that delivers
immune; how to collect that information and how often; and how an objectives-based program for massively
to act on it, based on how much risk your organization is willing scalable, seed-stage, science- and technology-
to bear. based companies. Joshua Gans is the Jeffrey
S. Skoll Chair of Technical Innovation and
You must also decide how your day-to-day processes should Entrepreneurship and Professor of Strategic Management at the Rotman
change to limit the spread of disease should an infected person School of Management (with a cross-appointment to the University of
arrive in your workplace, and consider how those changes will Toronto’s Department of Economics). He is also Chief Economist at CDL.
His latest book is Economics in the Age of COVID-19 (MIT Press, 2020). Avi
affect both safety and productivity. Clearly, there is no point in
Goldfarb is the Rotman Chair in Artificial Intelligence and Healthcare,
bringing workers back to the office if always-on solutions prevent Ellison Professor of Marketing at the Rotman School of Management and
them from doing their jobs any better than they would at home. Chief Data Scientist at CDL. Professors Agrawal, Gans and Goldfarb are
Together, these decisions will determine whether your business the co-authors of Prediction Machines: The Simple Economics of Artificial
Intelligence (Harvard Business Review Press, 2018). Mara Lederman is a
can survive and thrive while we wait for a treatment or a vaccine.
Professor of Strategic Management at the Rotman School, Academic Lead,
These decisions involve calculated trade-offs, an understanding CDL Partners Program and CDL Toronto Site Lead. This article originally
of risk and a willingness to innovate. appeared in MIT’s Technology Review.

rotmanmagazine.ca / 29
Leadership Forum:
Reimagining
the Future
In the midst of the global pandemic, the Outthinker Strategy Network
and Thinkers50 assembled some of the world’s foremost management
thinkers (virtually) to share their thoughts on leading in times
of unprecedented uncertainty. Following are some highlights.
compiled by Karen Christensen

Martin Lindstrom
Author of seven New York Times
best-selling books, advisor to Fortune 500
brands; ranked #20 most influential
management thinker by Thinkers50

WHAT WE ARE EXPERIENCING WITH COVID-19 can be seen as the first

global 9/11. That event from 2001 has been studied extensively
in terms of its impact on people’s brains. We now know that it was
a very powerful ‘somatic marker’ — USC Neuroscientist Anto-
nio Domasio’s term for positive or negative ‘bookmarks’ in our
brains that affect our behaviour and decisions for years to come.
When we have such a negative emotional bookmark, it has
a profound impact on how we behave, how we interact with
other people — and even how we shop, and we are seeing all of
this with the pandemic. This is one of the most prominent global
negative somatic markers most of us will ever face in our lives,
PORTRAITS BY DELPHINE LEE

and it is causing a significant amount of fear. The ‘fear centre’ of

our brain is called the amygdala, and when it is activated it can
lead us to be highly irrational.
Fear is behind a lot of what is going on these days. As hu-
mans we are very attached to our tribes, and the pandemic
has caused us to be separated from those tribes. When we are
around other people, we may find ourselves afraid to sneeze or

30 / Rotman Management Fall 2020

show any symptom that could be construed as COVID-19. That’s mulation of fear in our brains that has built up over many years,
because the amygdala is activated and we are terrified of being thanks in part to movies like Contagion and Outbreak. As a re-
excluded from the tribe. sult, when we hear the word ‘pandemic’ we are almost precon-
In 2009, the World Health Organization announced to ditioned to have an extreme reaction to it. The second causal
the media that two billion people were at risk of being infected factor is social media. Facebook, Twitter and other social
by the H1N1 virus. And yet, I do not recall any particular frenzy channels actually amplify people’s fear to an extreme degree.
around this announcement at all. To be clear, I am not disput- As a result of these two things, consumers have been primed
ing what is going on right now. It is indisputibly horrible. But my into a certain way of thinking and behaving — which is why
question, as an analyst of consumer and human behaviour is, we saw people hoarding toilet paper and other products, even
why is the reaction so much more extreme this time around? though it made absolutely no sense. Collectively, our amygda-
I believe there are two reasons for this. The first is an accu- las have been running in overdrive.

hierarchy. Not surprisingly, a lack of psychological safety inhibits

innovation.
On the other hand, the widespread fear related to COV-
ID-19 is obvious and explicit. We have no real hesitancy in talk-
ing about it. It’s a shared experience — albeit with many differ-
ent flavours in terms of what it means for people. The primary
concern with this fear is around what we can do — to alleviate
suffering, to find new ways to operate safely, to discover vaccines
and treatments and so forth. This is the kind of fear that actually
promotes innovation.
We all feel a sense of urgency right now, and there is a very
interesting relationship between urgency and psychological safe-
ty. If your psychological safety is high and there is no urgency in
your environment, that is what I call a comfort zone. The zone I
worry much more about is what I call the interpersonal anxiety
zone. This is where you feel a sense of urgency, but you don’t
have any psychological safety on your team. In these scenarios,
people know what is at stake, but they are unable to ask for help
or to report something that is not working. This is a very risky
zone for people to be in. There is a third zone where both urgency
and psychological safety are high, and I call it the problem-solving
zone. This is where we need to be if we’re going to make progress
through these challenging times.
Amy Edmondson Amidst all the uncertainty, one thing is clear: Reimagining
the future calls for cross-sector teaming. One of my favourite
Novartis Professor of Leadership and
quotes comes from Paul Polman, the former CEO of Unilever,
Management, Harvard Business School; who once said that the issues we are facing today are so chal-
ranked #3 most influential management lenging that none of us can go it alone — by which he means any
thinker by Thinkers50 single company, industry, or sector. There is a certain humility
to this mindset that I love, and a recognition that we need to in-
MANY PEOPLE HAVE REACHED OUT to me recently to say, ‘Wow, psy- vite others in.
chological safety must be at an all-time low right now because of Many people would say this pandemic is the biggest wicked
the pandemic’. My response is, not so fast; it’s actually not that problem we have faced in our lifetimes. But I would argue that it
straightforward. A lack of psychological safety in a workplace is simply the most urgent wicked problem right now, in terms of
is subtle and hidden, because moments of silence are invisible. capturing our attention and activity. Climate change is actually a
You never know for sure whether someone just held back on much bigger, more chronic and overwhelming challenge. As we
something that could have been mission critical. The holding all begin to reimagine the future, my hope is that we will use this
back is experienced alone, and the primary concern is usually pandemic as a trigger to step back and think about our responsi-
about what others will think — especially those higher up in the bilities more generally and more long-term.

rotmanmagazine.ca / 31
 At the firm level, there is an unmasking going on around the
future of democratic capitalism. It was already showing its cracks
all over the world, through the Brexit issue and the rise of nation-
alism in the U.S. There is a growing recognition of something
Roger Martin has been saying for years now: that shareholder
value is not the be all and end all.
The pandemic has unmasked questions like, What obliga-
tions do companies owe to individuals? And what obligations do
individuals owe to companies? We knew about inequality before,
but we largely thought about it in terms of income. What we’re
seeing right now is even more profound: There are people who,
like me, are fortunate in that they can do their jobs from their
home office; but there are lots of other people who have to go out
Daniel Pink there to do their jobs in person — and they are at much greater
risk. Lastly, at an individual level, there is an unmasking around
Best-selling author; ranked #6
what really matters in our lives. What’s important, and how do
most influential management we want our life to go? The more we have conversations about all
thinker by Thinkers50 of these things, the healthier we will be going forward.
The leaders who are doing a great job during the pandemic
THE MOST GENUINE THING for any leader to say right now is, ‘I don’t share a few common characteristics. Take the Prime Minister of
know’. We are in the midst of a very complicated set of circum- New Zealand, Jacinda Ardern. First, she has had a real sense
stances, and the truth is, there is a lot we don’t know. And that’s of urgency, which in my country we didn’t have. She was also
okay. One of the most important things we can do is try to figure extraordinarily transparent about what she knew and what she
out the right questions to ask. Then, we must be humble as we go didn’t know, and extraordinarily empathetic. Those three quali-
forward and try to answer those questions. ties — transparency, empathy and urgency — are extremely valu-
I think there are a couple things going on right now at a high able right now.
level. One is what I think of — and I use the term intentionally Six months ago, if I had said to you, ‘Here’s what’s about to
— as a great ‘unmasking’ of what is going on in our world. When happen: There is going to be a pandemic and we’re going to ask
all is said and done, the mask is going to be the metaphor that everyone to stay home. We’ll ask people to close their restaurants
defines this moment. Part of this is an unmasking of things that and shops, and big companies to tell people to work from home.
were hidden in plain sight but that we are now actually forced to Schools and universities will be shut down and kids will come
reckon with. back to their parents’ houses. People will only be able to go to the
This pertains to a number of things — and I say a lot of this grocery store and when you go out you will have to wear a mask.
as an American. My country was not ready for this. One of the We’re going to ask people to do all this stuff and people are going
things being unmasked is that we have built an apparatus to re- to go along with it. You would have said, ‘That’s crazy’.
spond to certain kinds of threats, but they were largely conven- Today, as I look out on the streets of Washington, DC., there
tional military threats. What brought the U.S. to its knees over the are no police officers out there enforcing this shutdown. People
last 20 years were eight guys on a plane and a virus that we can’t are complying because it’s the right thing to do. It’s easy to talk
see. We didn’t have the infrastructure or the mindsets to deal about all the terrible things happening right now, but I think this
with these threats. tells us something very positive about human nature.

32 / Rotman Management Fall 2020

Hal Gregersen
Executive Director, MIT Leadership Centre
and Senior Lecturer in Leadership and
Innovation, MIT Sloan School of Management;
ranked #16 most influential management
thinker by Thinkers50

WHEREVER YOU ARE IN THE WORLD, you are going through a massive
cross-cultural adjustment in your own home country. So many
of us have been isolated or quarantined in our homes, which has
been a culture shock. And as some of us start to go back to work,
a reverse culture shock will take place. We are potentially going
to be in for even more anxiety when we start moving out of the
safety of our home spaces.
These days, we are asking ourselves all sorts of new ques-
tions, like ‘When should I wear a mask?’ and ‘Is it safe to go to
the hospital anymore?’ We have lost the sense that we know what So, what do we need to do? Reflective quiet is very power-
we’re doing, and with that loss comes grief. That is the core of ful. Some may meditate, others may walk on the beach. It’s
all the anxiety we’re feeling, and collectively, it causes us to feel about taking a moment to be reflective and creating some space
fragile and vulnerable. for that. This allows you to examine what is going on inside of
When we’re in that fragile, vulnerable state, it’s easy to get you, so you can pay attention to it instead of running from it. A
emotionally flooded. A few weeks ago I found myself lying in bed good friend of mine who has climbed Everest five times and led
thinking, Are we going to have a run on the banks and lose our scientific expeditions around the world once said to me, ‘When
home? I was catastrophizing, which can happen when we experi- you’re in an uncertain moment, stop. And breathe’. And I would
ence a deep level of emotional flooding. We have all heard the add to that, observe. Only then can you start asking emotionally
phrase, ‘Don’t just stand there, do something!’ The instinctual grounded questions and reach out to others. We sign up for lead-
human response in such moments is to act to avoid the fear and ership roles to get great things done through other people. But
just start moving. But I would argue that we need to reverse this that requires us to understand what is going on inside of us, first.
logic to ‘Don’t just do something, stand there!’
There is a phenomenon called complicated grief. My first
wife passed away almost 17 years ago, and between her diagnosis
and her passing was 13 days. I had three children, and I did not
know how to deal with the grief, so I just got up and started do-
ing things — and I’m still dealing with complicated grief to this
day because of it. If we don’t deal with the emotions we feel from
going through a major transition such as this, we will pay for it
sooner or later.

rotmanmagazine.ca / 33
 patriots and globalists are at two opposite ends of the spectrum.
Geopolitically, the great power rivalry will likely intensify. U.S.
international relations had hit the lowest point before the pan-
demic crisis, and COVID-19 could make them even more toxic.
The irony is that a global disaster like COVID-19 demands
global solutions — but right now there is a vacuum of global lead-
ership for international cooperation. The U.S. is not willing and
Haiyan Wang China is not yet welcomed to play such a role. We see more fin-
Vice President, Bank of America, Adjunct ger-pointing, more suspicion of foreigners and immigrants, less
Professor of Strategy, INSEAD and Co- trust and more conspiracy theories. As soon as the COVID-19
founder, China India Institute; ranked #25 curve flattens, we’re likely to see trade wars resume.
most influential management thinker by Hyper-globalization in terms of merchandise trade is be-
coming yesterday’s story. According to the World Trade Orga-
Thinkers50
nization the volume of global merchandise trade could fall be-
tween 13 and 32 per cent this year alone. Looking beyond trade
GLOBALIZATION HAS BEEN UNDER ATTACK since before the pandemic tensions, there are other long-term forces at play that began well
hit. In recent years, we have seen a rapid rise of nationalism and before we entered the crisis. One is the end of the commod-
isolationism in all continents. Why? Hasn’t globalization brought ity boom, because China has slowed down and shifted to a less
enormous benefits? It has. Life expectancy has risen across rich commodity-intensive model. Second, rising wages and other
and poor countries, and worldwide, more than a billion people costs have reduced the cost advantages of producing in emerging
have been lifted out of poverty. Emerging markets that were pre- markets. Third, faster responses to market trends and the need
viously poor and isolated have become growth engines. for ever-faster shipping speed also drive shorter supply chains.
At the same time, inequality within society has deepened COVID-19 accelerates each of these factors.
and is particularly stark in the United States, where nearly 40 per Another key dimension for measuring globalization is in
cent of all personal net wealth is in the hands of the top one per terms of foreign direct investment (FDI). In contrast to mer-
cent. And for the poor, COVID-19 has only added ice to the frost. chandise trade, total FDI stock has continued to rise. Companies
Over 30 million Americans filed initial unemployment claims are not returning to home turf for several reasons. One, faster
in the six-week period beginning in mid-March. COVID-19 will growth and a bigger pie in emerging markets are still very attrac-
widen several divides: the digital divide, the income divide, the tive and they want to take a bite. Second, rising trade barriers
wealth divide and the social divide. And we already know that have prompted a shift from ‘local for global’ to ‘local for local’.
such divides feed nationalism. And third, more companies are shifting their allocation supply
If Trump wins a second term, we will see the U.S. become chains from a China-centric strategy to a ‘China-plus-two’ strat-
more inward looking. In the mind of Trump and his advisors, egy, in order to buffer the shock from relying on one country.

34 / Rotman Management Fall 2020

Scott Anthony
Senior Partner, Innosight and author;
ranked #9 most influential management
thinker by Thinkers50

UNDERSTANDABLY, people everywhere are asking, ‘How is this go-

ing to affect my organization and my industry?’ The way I try to
answer that is to go back to one of Innosight’s core tools, cre-
ated by the late Clayton Christensen: the ‘jobs-to-be-done’
framework. A job to be done is the fundamental problem that a
customer is trying to solve in a particular circumstance. One of
our beliefs is that the things we’re trying to get done in our lives
actually change relatively slowly. However, jobs to be done can
change quickly in the midst of a big disruptive event like the glob-
al pandemic. To figure out how, you can look at four specific ‘job
specs’ to see whether temporary changes will stick.
The first is the circumstance. How do the new circumstanc-
es affect available solutions? For example, being in a situation
where we’re all working from home has led to mass scale com-
munication over virtual platforms like Zoom. As people experi-
ment with this, they are seeing that it actually works pretty well.
As a result, this behaviour is very likely to persist and it will have to provide online education for three-to eight-year-olds. This is
knock-on effects for meetings and conferences that last for years, the innovator’s opportunity in the midst of a moment like this.
if not decades. Companies that embrace the new normal with their offer-
The next thing to look at are the barriers that stand in the ings will win. When oil prices rose to new heights in the 1970s,
way of getting the job done. Maybe people don’t have skills, may- Toyota prospered because its small car was perfectly positioned
be they don’t have access, maybe certain things are too expen- for the new environment of people worrying about something
sive. As new barriers get imposed after a big event, how does that they never worried about before. The Walt Disney Company
change the way people make decisions? How does it change their was formed after World War I and the Spanish flu, as a way to
priorities? In our view, the pandemic will be a big boon to tele- divert, distract and entertain the world. If you go back to the
medicine. If healthcare does get reformed and hospitals move global financial crisis, there were almost 100 unicorns born dur-
from being places where contagion can spread to places that are ing that period — including sharing platforms like Airbnb and
more focused and potentially more isolated, telemedicine is very Uber, which echoed off the financial crisis. The same opportuni-
well positioned to grow dramatically. ties clearly exist today.
The third thing to look at is, how are customers re-framing In the midst of a crisis it’s also a great time for innovators to
how they define quality? How do some of the things they are ex- ‘love the low end’. The McDonald’s speedy service system which
perimenting with change the way they determine what a ‘good created the fast food world we know and love today came in the
solution’ looks like? For instance, the pandemic will be a con- middle of a downturn, providing good quality and low prices.
tinued boon to contactless payments around the globe, as peo- Finally, for companies knocking on the door of disruption
ple will have persistent nagging concerns about physicality and who haven’t yet crossed US$1 billion in sales, this can be their
about touching anything. This is likely to persist well after CO- moment. Back in 2009, we named some companies that you
VID-19 recedes into the rearview mirror. might have heard of: Alibaba, Facebook and LinkedIn. You
Finally, what new solutions can get the job done in a sustain- might say those are obvious, but that’s in hindsight. In 2009
ably better way? This is the big unknown in many circumstances there were legitimate questions about all of these companies. If
right now. I have four children, and in my view there is a golden you had invested in the portfolio we named back then, you would
opportunity for anyone who comes up with a truly fantastic way have gotten 3.2x times the returns in the marketplace.

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 How Diversity
Defeats
Groupthink
Human beings enjoy cohesion so much that we are often
afraid to say anything to disturb it. Diversity can help.
by Khalil Smith

THE TERM ‘GROUPTHINK’ was first coined in 1971 by the psycholo- What happened instead was that resources that were meant
gist Irving Janis. Writing in the pages of Psychology Today, Janis to be made available were pulled at the last moment, and a mis-
set out to identify a psychological mechanism that could explain sion that was meant to hide America’s involvement was revealed
the disastrous decision by John F. Kennedy and his advisers to as 1,400 exiles encountered a superior Cuban force of 20,000
authorize the Bay of Pigs Invasion of 1961 — the bungled Ameri- soldiers, who easily captured or killed the smaller fighting force.
can assault on Cuba that ultimately came to be seen as one of the The whole thing was over in three days, Castro became a hero to
most embarrassing foreign policy decisions of all time. his people, and Kennedy was humiliated on the world stage as
The attack plan Kennedy signed off on — along with Rob- the Bay of Pigs paved the way for Cuban and Russian partnership
ert McNamara, Robert Kennedy, Arthur Schlesinger Jr., and and a deepening of the Cold War.
about 40 other advisers from a team Janis described as “one “There were 50 or so of us, presumably the most experi-
of the greatest arrays of intellectual talent in the history of the enced and smartest people we could get,” Kennedy would later
American Government” — went something like this: Around recall. “But five minutes after it began to fall in, we all looked at
1,400 Cuban exiles, trained by the CIA and armed with Ameri- each other and asked, ‘How could we have been so stupid?’”
can artillery, would storm the beachhead at Bahía de cochi- To answer that question — the question of how a team of
nos and march on Havana. Inspired by American heroism, the self-evidently brilliant people can pool their intellectual powers
Cuban people would rise up against Fidel Castro, the encroach- and still somehow arrive at such an unquestioningly catastrophic
ing tide of communism would be turned, and Kennedy would decision — Janis proposed the existence of a previously undiag-
glory in a righteous victory against a despicable enemy. Sounds nosed, unnamed, and unknown problem afflicting groups tasked
like a masterful plan, right? with making decisions: a phenomenon he termed groupthink.

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 Diverse teams consistently outperform homogeneous ones,
especially on tasks that are creative, non-linear, or complex.

When groups work together to make a decision, Janis posited, What allowed them to survive, Janis concluded, was cohesion —
they suffer from a process problem that, although unnoticed by the sticking together of the group.
the members of the group, nevertheless distorts their perception But if group cohesion was so unambiguously good and uni-
of reality and leads to reckless, outrageous decisions like the Bay versally desirable, Janis wondered, then what explained policy
of Pigs Invasion. fiascoes like the Bay of Pigs Invasion? Up until that point, it had
A half-century later, it’s hard to read the headlines and not always been assumed that group cohesion was just as important
surmise that whatever happened to JFK and his advisers might in the boardroom as it was in the trenches — that promoting a
still be happening — not just in foreign policy but in the corpo- congenial, task-oriented atmosphere among colleagues could
rate world as well. Groupthink has been blamed for many of the only serve to facilitate group discussion. How could that be a
most visible collapses in the history of business, from Lehman bad thing?
Brothers to Enron to Worldcom, and even national travesties This was the conventional wisdom of the day against which
like the subprime mortgage bubble leading up to the global fi- Janis ultimately took his stand. Surviving combat was different
nancial crisis. from making a sound decision, he argued — where group cohe-
sion could actually be unproductive and possibly dangerous.
Why Bad Decisions Happen to Smart People When people come together in a group like a war cabinet
Decades earlier, during World War II, Irving Janis himself had or an executive board, Janis suggested, they all want to belong.
been drafted, and he spent his tour carrying out studies of mili- They’re so delighted to be ‘part of the club’ that on an uncon-
tary morale. After the war, when he joined the psychology fac- scious level, they begin to prize their membership in the group
ulty at Yale, he remained fascinated by the bonds people form more highly than they do the rigour and accuracy of their deci-
during times of unthinkable stress. sions.
During the combat he’d seen, soldiers came together as In this happy, clubby atmosphere, everyone wants to agree
brothers, and Janis believed it was their loyalty to their tiny com- with one another. The unstated goal of any group discussion, he
bat unit that kept them going through the onslaught of enemy argued, is to get to quick and painless unanimity as quickly as
tanks, bombs raining down from the air, and unending Ger- possible. In an effort to minimize conflict and reach consensus,
man propaganda. The observation seemed to apply not just to individuals stifle their inner doubts, silence dissenters and try
soldiers in combat, but to villagers preparing for air raids and their best to reflect the leader’s opinion.
miners who were trapped in underground caves for days on end. It all may sound subtle and harmless, but the consequences

Want to Thrive in Times of Crisis? Focus on Diversity and Inclusion By Paulette Gerkovich

As the NeuroLeadership Institute’s research on organization- In this stressed state, it may seem sensible to relieve the
al behaviour demonstrates, during disruption and crisis, we enter organization of efforts typically viewed as ‘nice to have,’ or per-
a state of threat. Humans have survived for millennia because haps a drain on resources. Privileging the short term may seem
our brains are wired to detect threat. In fact, we are so finely far less risky than relying on long-term gains.
tuned for survival, our brains are far more likely to detect threat For instance, diversity and inclusion (D&I) efforts are often
than reward or pleasure. And when we are in a threat state, we scaled back because they live on the ‘support’ side of the house.
tend to make decisions strongly geared towards survival. Those functions that don’t directly bring in revenue are usually
That means, at least some of the time, the parts of our the first to experience cutbacks. And yet, the more quickly we
brains responsible for logical and deliberate thinking take a move (and we must move quickly), the less likely we are to make
back seat to the parts responsible for keeping us alive. In these deliberate, evidence-based decisions.
moments we tend to make unconsciously biased decisions more Further, the rules and processes that determine who gets
often. We rely on specific biases related to safety, experience, laid off often result in more pink slips for women and people of
and expedience. We err on the side of caution and go back to colour. When organizations use formal rules, including ‘last in,
what has worked in the past. first out’ policies, diverse employees are impacted to a much

38 / Rotman Management Fall 2020

can be devastating. The group races to consensus without prop- versity. Whether it’s bringing new people into the room or in-
erly vetting ideas, and the results can include unrealistic opti- ducing people to consider things in new ways, more views help.
mism, biased analysis, and a disregard for ethics. In the last 20 years, a wide body of research has accumulated
showing that diverse teams consistently outperform homoge-
Groupthink in the Business World neous teams, especially on tasks that are creative, non-linear,
Today, groupthink is widely blamed not just for foreign policy or complex.
fiascoes, but for bad decisions throughout the corporate world, McKinsey & Co. conducted a survey of 366 public compa-
from everyday decision-making on teams and executive boards nies and found that those with more ethnic and racial diversity
to global financial bubbles and large-scale corporate fraud. among managers produced superior financial returns. In fact,
When the post-mortem analysis gets done in the aftermath of the top 25 per cent most diverse companies generated 53 per cent
corporate disasters, it often emerges that the leaders behind the more return on equity than the least diverse companies. Another
decisions have fallen prey to groupthink, says Princeton econo- study found that racial and gender diversity correlate with great-
mist Roland Bénabou. er sales revenue, more customers, and higher profit.
As Bénabou explains, the pattern is always the same: The Research shows that diverse teams also make superior deci-
pressures of group conformity result in levels of collective denial sions. It’s not just that demographic diversity means cognitive
and willful ignorance so high that they distort individuals’ per- diversity, though that’s part of it — hiring employees with dif-
ception of reality. This denial is contagious, and as the group is ferent backgrounds does mean an influx of new ideas and fresh
lulled into a state of “mutually assured delusion,” decision-mak- perspectives, which means the group is more inclined to consid-
ers become “colour-blind in a sea of red flags.” Dissent halts, er alternative options. But there’s also a benefit to decision-mak-
subordinates draw cues from the leader, and mounting warning ing that’s inherent to demographic diversity. As it turns out, the
signs are cast aside, until finally the bubble bursts and people are mere presence of someone perceived as an outsider changes the
left to wonder how it happened. behaviour of the group, improving the thinking of those in the
Any group of people that makes decisions is potentially vul- majority even when divergent viewpoints aren’t even expressed.
nerable to groupthink. So how can businesses inoculate them- In a study published in The Journal of Personality and So-
selves? What can companies and organizations do to safeguard cial Psychology, researchers examined how the ethnicity of jury
their decision-making processes? members affected the way they evaluated evidence in a mock
Today, one solution has become increasingly obvious: di- trial about a Black man charged with sexual assault. The study

greater degree. Organizations that have made recent gains in They outperformed their less inclusive peers by four times.
diversity see that progress wiped out. Additionally, staff (vs. line) As we continue to adjust to the effects of the global pan-
roles, which are held by higher proportions of diverse employ- demic, unfortunately, another crisis is undoubtedly upon us.
ees, are often among the first to be eliminated. Every day brings uncertainty as we watch swings in the stock
When it comes to D&I, research remarkably upends conven- market and organizations across the globe get in position to
tional wisdom. The reality is that companies who do not let up make tough decisions. Perhaps it’s time to replace instinct and
on their D&I efforts bounce back from recessions best. A 2019 conventional wisdom with the scientific insight that will allow us
study looked at publicly-traded companies before, during and to steer through difficult economic times more strategically.
after the 2009 Great Recession. It found that the financials of
companies that maintained a diverse and inclusive environment
flourished while those that didn’t saw precipitous declines.
The S&P 500 saw a 35.5 per cent decline in stock perfor-
mance between 2007 and 2009. On the other hand, companies Paulette Gerkovich is a a Senior Consultant in the NeuroLeadership
that remained highly inclusive experienced a 14.4 per cent gain. Institute’s Diversity and Inclusion practice.

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 With similarity comes comfort, camaraderie,
and the illusion of progress.

found that compared to homogeneous juries, ethnically diverse

How to Ensure All Perspectives Are Heard juries considered a broader range of information and reasoned
more accurately than same-race teams.
1. Encourage Dissenting Opinions. The problem with It wasn’t just that Black jurors contributed a different per-
group decisions is that even when team members have spective to the discussion. It was that when they were present,
doubts, they often soft-pedal their objections or even
white jurors actually processed information more carefully —
silence themselves entirely for fear of being seen as an
annoying buzzkill or a non-team player. The solution is to deliberating longer, referencing more case facts, making fewer
change the group’s social norms, creating a social context factual errors, and discussing a wider range of personal perspec-
in which opposing viewpoints are welcomed and rewarded. tives. In fact, when Black jurors were in the room, white jurors
To do that, leaders need to demonstrate that they truly were twice as likely to notice missing pieces of evidence: Why
want to hear opinions different from their own and empha-
was there no evidence from fingerprints? Why hadn’t an impor-
size that the goal of discussion is not group harmony, but
sound decisions. tant child witness testified? The presence of diversity seemed to
trigger a motivation to avoid prejudice, prompting white jurors to
2. Gather Opinions Anonomously. The Delphi Method, consider more information, remember more accurately and ulti-
originally developed for military and diplomatic analysis mately arrive at a sounder conclusion.
of cold war scenarios, is a decision-making process in
In another series of experiments, researchers set up faux fi-
which team members submit their thoughts anonymously.
This confers two critical benefits. First, since members’ nancial markets in Texas and Singapore and asked participants
submissions are private and anonymous, it removes social to buy and sell stocks in either a same-race group or an ethnically
pressure to conform. Second, submissions are read out by diverse group. The studies found that same-race groups, with
a facilitator, ensuring that equal weight is given to all voices their implicit sense of shared identity, trusted each other more.
— not just the loudest or most vocal.
But that trust led them to put too much faith in each other’s judg-
3. Assign a Devil’s Advocate. Another way to combat ment, fuelling a cycle of blind conformity in which people copied
groupthink is to assign a devil’s advocate, a team member each other’s mistakes and ultimately created a price bubble. Eth-
whose job is to question assumptions, demand evidence, nically diverse groups were more skeptical of each other and en-
cross-examine, and poke holes in arguments. Since the countered more friction and conflict. But since they scrutinized
devil’s advocate is actually rewarded for rejecting the
each other’s decisions more closely, they wound up being far
group’s dominant position, it’s a good way to combat social
pressure to conform. A variation on the devil’s advocate is more accurate in how they priced stocks. As the researchers put
the Red Team — a subgroup whose mission is to criticize it in a New York Times op-ed, diversity increased critical thinking,
the primary team’s plan. Red Teams can sometimes work contributed to error detection, and produced “cognitive friction
better than lone devil’s advocates, since having multiple that enhanced deliberation.”
people on the contrarian team provides social proof of the
The business benefits of diversity are also present with re-
validity of opposing viewpoints. Red Teams are used exten-
sively in the military before combat missions, as well as in gard to gender. In a 2013 study published in Management Science,
law firms, which often run internal mock trials in which one researchers partnered with an entrepreneurship program to as-
team of attorneys is tasked with helping the primary team sess how gender diversity would affect business performance. As
prepare for trial by presenting opposing counsel’s case as part of their degree, graduate students were assigned to go out
devastatingly as possible.
in teams of 10 to 12 and start a business. To assess the impact of
gender diversity on the teams’ success, the researchers varied
the gender composition of the teams. Some teams had just one
woman, others were all women and the rest were somewhere
in between.
The study found that gender-diverse teams had more
sales, higher profits, and higher earnings per share than male-
dominated teams. But gender-mixed teams also outperformed
female-dominated teams. It wasn’t that men or women were

40 / Rotman Management Fall 2020

better at business. Rather, performance peaked when the propor- ments were correct. They were wrong: Their discussions were
tion of women hovered around 55 per cent. Analysis of the data more likely to lead to the right answer, even though they didn’t
found that diverse teams performed better not because men and feel as good about their interactions.
women had skills and knowledge that complemented each other, That’s the insight Janis anticipated in his original analysis:
but because gender-balanced teams monitored each other more that as dangerous as it is, consensus actually feels pleasurable.
closely and because the amount of learning in the group was Human beings are wired to prefer information that comes to us
more evenly distributed among team members. easily, and we judge it to be more true. When you collaborate with
people who are similar to you, the group forms a strong sense of
Diversity’s Paradoxical Power shared social identity. With similarity comes comfort, camarade-
When one considers the sweeping devastation wrought by rie, and the illusion of progress.
groupthink over the last 100 years, and the clear benefits diversi-
ty has for decision-making, it may seem surprising that corporate In closing
America didn’t rush to embrace diversity decades ago. There are As my colleague Valerie Purdie Greenaway puts it, “fluency
countless reasons why businesses have failed in their attempts to is fun.” The problem is that the pleasure of group cohesion puts
achieve true diversity — overt discrimination, unconscious bias, pressure on individuals to just get along — to not rock the boat.
the tendency to hire for culture fit, the temptation to value ‘align- People enjoy cohesion so much that they’re afraid to say any-
ment’ over dissent, and of course the fact that the main symptom thing to disturb it. When you’re in a group of similar people and
of groupthink is that you’re not aware you’re doing it. spirits are high, you’re not motivated to turn to the person next
But there’s another subtler, frequently overlooked reason to you and tell them their reasoning is flawed. Motivated to pre-
why diversity is not yet a universal standard throughout the serve consensus, you don’t criticize the ideas of others or chal-
business world. In 2009, researchers ran a study in which they lenge the opinions of the majority. Instead you often go with the
asked members of fraternities and sororities at Northwestern flow. Perspectives get overlooked, your ability to think critically is
University to assemble in groups and play a murder mystery crippled and mistakes get made — sometimes catastrophic ones.
game. Each group began with three members, all drawn from the Rather than being guided by what is right, you’re guided by what
same fraternity or sorority. After five minutes, they were joined feels right — preserving group cohesion.
by a fourth person — either another member of the same Greek That’s why diversity is so important in business. When you
house or an interloper from a rival house. Each team then read add an outsider to a homogeneous group, it upsets the balance,
police transcripts drawn from interviews of a detective investi- causing friction and tension. Paradoxically, this feels counter-
gating a fictional murder. After weighing the evidence and dis- productive. People don’t understand each other as immediately.
cussing the clues, each team voted on which suspect they thought There’s more conflict, the work feels harder. But that discomfort
was the culprit. To win the game, the team had to correctly guess is the precise reason why the group doesn’t lapse into mindless
the identity of the killer — in other words, a problem-solving task conformity. Instead, the group assesses information more care-
with one right answer. fully. The result is superior performance on complex tasks, and
Unsurprisingly, the study found that adding an outsider to smarter, more balanced decisions. In the end, diversity often
the group increased its odds of arriving at the correct solution—in feels worse — and that’s precisely why it defeats groupthink.
line with the earlier research on how out-group members prompt
careful thinking. What was more surprising was that the team
members assumed the opposite to be true. After submitting their
verdict to the researchers, participants answered survey ques-
tions about their impressions of the group discussion. The study
found that the more diverse groups — the teams that included the Khalil Smith is Vice President, Research, Practices
and Consulting at the NeuroLeadership Institute, where
outsider — judged their interactions and discussions to be less he heads up the Diversity and Inclusion Practice.
effective than did homogeneous groups. Mixed teams also felt
less confident than did the homogeneous teams that their judg-

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 CROSS-SILO
LEADERSHIP:
A Powerful Path
to Innovation
To achieve the innovation the world sorely needs, organizations
need to get people working together across boundaries.
by Tiziana Casciaro, Amy C. Edmondson and Sujin Jang

THOUGH MOST EXECUTIVES RECOGNIZE the importance of breaking The value of horizontal teamwork is widely recognized.
down silos to help people collaborate across boundaries, they Employees who can reach outside their silos to find colleagues
struggle to make it happen. That’s understandable: It is devil- with complementary expertise learn more, sell more, and gain
ishly difficult. Think about your own relationships at work — the skills faster. Harvard’s Heidi Gardner found that firms with
people you report to and those who report to you, for starters. more cross-boundary collaboration achieve greater customer
Now consider the people in other functions, units or geographies loyalty and higher margins. As innovation hinges more and
whose work touches yours in some way. Which relationships get more on interdisciplinary cooperation, digitalization transforms
prioritized in your day-to-day job? business at a breakneck pace, and globalization increasingly re-
We’ve posed that question to managers, engineers, sales- quires people to work across national borders, the demand for
people, and consultants in companies around the world. The re- executives who can lead projects at interfaces keeps rising.
sponse we get is almost always the same: vertical relationships. Our research and consulting work with hundreds of execu-
But when we ask, “Which relationships are most important tives and managers in dozens of organizations confirms both the
for creating value for customers?” the answers flip. Today, the need for and the challenge of horizontal collaboration. “There’s
vast majority of innovation and business-development opportu- no doubt. We should focus on big projects that call for integra-
nities lie in the interfaces between functions, offices or organiza- tion across practices,” a partner in a global accounting firm told
tions. In short, the integrated solutions that most customers want us. “That’s where our greatest distinctive value is developed.
— but companies wrestle with developing — require horizontal But most of us confine ourselves to the smaller projects that we
collaboration. can handle within our practice areas. It’s frustrating.” A senior

rotmanmagazine.ca / 43
 The vast majority of innovation opportunities
lie in the interfaces between functions.

partner in a leading consulting firm put it slightly differently: had a history of miscommunication and conflict. The enologists
“You know you should swim farther to catch a bigger fish, but it could relate to both groups equally: They could speak to market-
is a lot easier to swim in your own pond and catch a bunch of ers about the emotional content (the ephemeral ‘bouquet’) of
small fish.” brands, while also providing pragmatic salespeople with details
One way to break down silos is to redesign the formal or- on the distinctive features of products they needed to win over
ganizational structure. But that approach has limits: It’s costly, retailers.
confusing and slow. Worse, every new structure solves some Understanding both worlds, the enologists were able to
problems but creates others. That’s why we’ve focused on iden- communicate the rationale for each group’s modus operandi
tifying activities that facilitate boundary crossing. We’ve found to the other, allowing marketing and sales to work more syn-
that people can be trained to see and connect with pools of ex- ergistically even without directly interacting. This kind of cul-
pertise throughout their organizations and to work better with tural brokerage is efficient because it lets disparate parties work
colleagues who think very differently from them. The core chal- around differences without investing in learning the other side’s
lenges of operating effectively at interfaces are simple: learning perspective or changing how they work. It’s especially valuable
about people on the other side and relating to them. But simple for one-off collaborations or when the company is under intense
does not mean easy; human beings have always struggled to un- time pressure to deliver results.
derstand and relate to those who are different. ‘Adhesives’, in contrast, bring people together and help
Leaders need to help people develop the capacity to over- build mutual understanding and lasting relationships. Take one
come these challenges on both individual and organizational lev- manager we spoke with at National Instruments, a global pro-
els. That means providing training in and support for four prac- ducer of automated test equipment who frequently connects
tices that enable effective interface work. colleagues from different regions and functions. “I think of it
as building up the relationships between them,” he told us. “If a
1. Develop and Deploy Cultural Brokers colleague needs to work with someone in another office or func-
Fortunately, in most companies there are people who already ex- tion, I would tell them, ‘OK, here’s the person to call.’ Then I’d
cel at interface collaboration. They usually have experiences and take the time to sit down and say, ‘Well, let me tell you a little bit
relationships that span multiple sectors, functions or domains about how these guys work.’” Adhesives facilitate collaboration
and informally serve as links between them. We call these people by vouching for people and helping them decipher one another’s
cultural brokers. In studies involving more than 2,000 global language. Unlike bridges, adhesives develop others’ capacity to
teams, one of us (Sujin) found that diverse teams containing a work across a boundary in the future without their assistance.
cultural broker significantly outperformed diverse teams without Company leaders can build both bridging and adhesive
one. Companies should identify these individuals and help them capabilities in their organizations by hiring people with multi-
increase their impact. functional or multicultural backgrounds who have the strong in-
Cultural brokers promote cross-boundary work in one of terpersonal skills needed to build rapport with multiple parties.
two ways: by acting as a bridge or as an adhesive. A bridge offers Because it takes resilience to work with people across cultural
themself as a go-between, allowing people in different functions divides, firms should also look for a ‘growth mindset’ — Stanford
or geographies to collaborate with minimal disruption to their Professor Carol Dweck’s term for the desire to learn and to take
day-to-day routine. Bridges are most effective when they have on challenges and stretch opportunities. In addition, leaders can
considerable knowledge of both sides and can figure out what develop more brokers by giving people at all levels the chance to
each one needs. move into roles that expose them to multiple parts of the com-
This is why the champagne and spirits distributor Moët pany. This, by the way, is good training for general managers and
Hennessy España hired two enologists, or wine experts, to help is what many rotational leadership-development programs aim
coordinate the work of its marketing and sales groups, which to accomplish.

44 / Rotman Management Fall 2020

 Claudine Wolfe, the head of talent and development at the want to offer a solution. That’s what they’re trained to do.”
global insurer Chubb, maintains that the company’s capacity to Leaders can encourage inquiry in two important ways — and
serve customers around the world rests on giving top perform- in the process help create an organization where it’s psychologi-
ers opportunities to work in different geographies and cultivate cally safe to ask questions.
an international mindset. “We give people their critical devel-
opment experiences steeped in the job, in the region,” she says. BE A ROLE MODEL. When leaders show interest in what others are
“They get coaching in the cultural norms and the language, but seeing and thinking by asking questions, it has a stunning effect:
then they live it and internalize it. They go to the local bodega, It prompts people in their organizations to do the same.
take notice of the products on the shelves, have conversations Asking questions also conveys the humility that more and
with the merchant, and learn what it really means to live in that more business leaders and researchers are pointing to as vital
environment.” to success. According to Laszlo Bock, Google’s former senior
Matrix organizational structures, in which people report to vice president of people operations, humble people are better
two (or more) groups, can also help develop cultural brokers. De- at bringing others together to solve tough problems. In a fast-
spite their inherent challenges (they can be infuriatingly hard to changing business environment, humility — not to be confused
navigate without strong leadership and accountability), matrices with false modesty — is simply a strength. Its power comes from
get people used to operating at interfaces. realism (as in It really is a complex, challenging world out there;
We’re not saying that everyone in your organization needs to if we don’t work together, we don’t stand a chance).
be a full-fledged cultural broker. But consciously expanding the Gino says one way a leader can make employees feel com-
ranks of brokers and deploying them to grease the wheels of col- fortable asking questions is by openly acknowledging when he
laboration can go a long way. or she doesn’t know the answer. Another, she says, is by having
days in which employees are explicitly encouraged to ask ‘Why?’
2. Encourage People to Ask the Right Questions ‘What if…?’ and ‘How might we…?’
It’s nearly impossible to work across boundaries without asking a
lot of questions. Inquiry is critical because what we see and take TEACH EMPLOYEES THE ART OF INQUIRY. Training can help expand the
for granted on one side of an interface is not the same as what range and frequency of questions employees ask and, according
people experience on the other side. to Hal Gregersen of the MIT Leadership Centre, can reinvigo-
Indeed, a study of more than 1,000 middle managers at a rate their sense of curiosity. But some questions are better than
large bank that Tiziana conducted with Bill McEvily and Evelyn others. And if you simply tell people to raise more questions, you
Zhang of the University of Toronto and Francesca Gino of Har- might unleash interrogation tactics that inhibit rather than en-
vard Business School highlights the value of inquisitiveness in courage the development of new perspectives. As MIT’s Edgar
boundary-crossing work. It showed that managers with high lev- Schein explains in his book Humble Inquiry, questions are the
els of curiosity were more likely to build networks that spanned secret to productive work relationships — but they must be driv-
disconnected parts of the company. en by genuine interest in understanding another’s view.
But all of us are vulnerable to forgetting the crucial practice It’s also important to learn how to request information in
of asking questions as we move up the ladder. High-achieving the least biased way possible. This means asking open-ended
people in particular frequently fail to wonder what others are see- questions that minimize preconceptions, rather than yes-or-no
ing. Worse, when we do recognize that we don’t know something, questions. For instance, ‘What do you see as the key opportunity
we may avoid asking a question out of (misguided) fear that it will in this space?’ will generate a richer dialogue than ‘Do you think
make us look incompetent or weak. “Not asking questions is a big this is the right opportunity to pursue?’
mistake many professionals make,” Norma Kraay, the managing As collaborations move forward, it’s helpful for team lead-
partner of talent for Deloitte Canada, told us. “Expert advisers ers or project managers to raise queries that encourage others

rotmanmagazine.ca / 45
to dive more deeply into specific issues and express related ideas has 30,000 residents, 33,000 jobs, and emissions that are 70 per
or experiences. ‘What do you know about x?’ and ‘Can you ex- cent lower than those of other developments its size.
plain how that works?’ are two examples. These questions are In a study of jazz bands and Broadway productions, Brian
focused but neither limit responses nor invite long discourses Uzzi of Northwestern University found that leaders of success-
that stray too far from the issue at hand. ful teams had an unusual ability to assume other people’s view-
How you process the answers also matters. It’s natural, points. These leaders could speak the multiple ‘languages’ of
as conversations unfold, to assume you understand what’s be- their teammates. Other research has shown that when members
ing said. But what people hear is biased by their expertise and of a diverse team proactively take the perspectives of others, it
experiences. So it’s important to train people to check whether enhances the positive effect of information sharing and increas-
they’re truly getting their colleagues’ meaning, by using lan- es the team’s creativity.
guage like ‘This is what I’m hearing — did I miss anything?’ or Creating a culture that fosters this kind of behaviour is a se-
‘Can you help me fill in the gaps?’ or ‘I think what you said means nior leadership responsibility. Psychological research suggests
the project is on track. Is that correct?’ that while most people are capable of taking others’ perspectives,
Finally, periodic temperature taking is needed to examine they are rarely motivated to do so. Leaders can provide some
the collaborative process itself. The only way to find out how motivation by emphasizing to their teams how much the inte-
others are experiencing a project or relationship is by asking gration of diverse expertise enhances new value creation. But a
questions such as ‘How do you think the project is going?’ and couple of other tactics will help:
‘What could we do to work together more effectively?’
ORGANIZE CROSS-SILO DIALOGUES. Instead of holding one-way in-
3. Get People to See the World Through Others’ Eyes formation sessions, leaders should set up cross-silo discussions
Leaders shouldn’t just encourage employees to be curious that help employees see the world through the eyes of custom-
about different groups and ask questions about their thinking ers or colleagues in other parts of the company. The goal is to
and practices; they should also urge their people to actively get everyone to share knowledge and work on synthesizing that
consider others’ points of view. People from different organi- diverse input into new solutions. This happens best in face-to-
zational groups don’t see things the same way. Studies (includ- face meetings that are carefully structured to allow people time
ing research on barriers to successful product innovation that to listen to one another’s thinking.
Professor Deborah Dougherty conducted at Wharton) consis- Sometimes the process includes customers; one consulting
tently reveal that this leads to misunderstandings in interface firm we know started to replace traditional meetings, at which
work. It’s vital, therefore, to help people learn how to take the the firm conveyed information to clients, with a workshop for-
perspectives of others. mat designed to explore questions and develop solutions in col-
One of us (Amy) has done research showing that ambi- laboration with them. The new format gives both the clients and
tious cross-industry innovation projects succeed when diverse the consultants a chance to learn from each other.
participants discover how to do this. New Songdo, a project to One of the more thoughtful uses of cross-silo dialogue is the
build a city from scratch in South Korea that launched a decade ‘focused event analysis’ (FEA) at Children’s Minnesota. In an
ago, provides an instructive example. Early in the effort, project FEA people from the health system’s different clinical and op-
leaders brought together architects, engineers, planners and en- erational groups come together after a failure, such as the ad-
vironmental experts and helped them integrate their expertise ministration of the wrong medication to a patient. One at a time,
in a carefully crafted learning process designed to break down participants offer their take on what happened. The goal is to
barriers between disciplines. Today, in striking contrast to other carefully document multiple perspectives before trying to iden-
‘smart’ city projects, New Songdo is 50 per cent complete and tify a cause. Often participants are surprised to learn how people

46 / Rotman Management Fall 2020

from other groups saw the incident. The assumption underlying provide a more integrated look at the firm’s healthcare innova-
the FEA is that most failures have not one root cause but many. tion expertise.
Once the folks involved have a multifunctional picture of the Those meetings allowed the consultants to discover the con-
contributing factors, they can alter procedures and systems to nections among the practices in the health-care division, identify
prevent similar failures. the people best positioned to bridge the different practices, and
see novel ways to combine the firm’s various kinds of expertise
HIRE FOR CURIOSITY AND EMPATHY. You can boost your company’s to meet clients’ needs. That helped the consultants spot value-
capacity to see the world from different perspectives by bringing generating opportunities for services at the interfaces between
on board people who relate to and sympathize with the feelings, the practices. The new approach was so effective that, in short
thoughts, and attitudes of others. Southwest Airlines, which order, the leader was asked to head up a new practice that served
hires fewer than two per cent of all applicants, selects people as an interface across all the practices in the IT division so that
with empathy and enthusiasm for customer service, evaluat- she could replicate her success in other parts of the firm.
ing them through behavioural interviews (‘Tell me about a time
when…’) and team interviews in which candidates are observed URGE EMPLOYEES TO EXPLORE DISTANT NETWORKS. Employees also
interacting. need to be pushed to tap into expertise outside the company and
even outside the industry. The domains of human knowledge
4. Broaden Your Employees’ Vision span science, technology, business, geography, politics, history,
You can’t lead at the interfaces if you don’t know where they are. the arts, the humanities and beyond, and any interface between
Yet many organizations unwittingly encourage employees to them could hold new business opportunities. Consider the work
never look beyond their own immediate environment, such as of the innovation consultancy IDEO. By bringing design tech-
their function or business unit, and as a result miss out on poten- niques from technology, science, and the arts to business, it has
tial insights employees could get if they scanned more-distant been able to create revolutionary products, like the first Apple
networks. Here are some ways that leaders can create oppor- mouse (which it developed from a Xerox PARC prototype into
tunities for employees to widen their horizons, both within the a commercial offering), and help companies in many industries
company and beyond it: embrace design thinking as an innovation strategy.
The tricky part is finding the domains most relevant to key
BRING EMPLOYEES FROM DIVERSE GROUPS TOGETHER ON INITIATIVES. business goals. Although many innovations have stemmed from
As a rule, cross-functional teams give people across silos a what Abraham Flexner, the founding director of the Institute
chance to identify various kinds of expertise within their orga- for Advanced Study, called “the usefulness of useless knowl-
nization, map how they’re connected or disconnected and see edge,” businesses can ill afford to rely on open-ended explor-
how the internal knowledge network can be linked to enable atory search alone. To avoid this fate, leaders can take one of
valuable collaboration. two approaches:
At one global consulting firm, the leader of the digital A top-down approach works when the knowledge domains
health-care practice used to have its consultants speak just to with high potential for value creation have already been iden-
clients’ CIOs and CTOs. But she realized that that “unnecessar- tified. For example, a partner in an accounting firm who sees
ily limited the practice’s ability to identify opportunities to serve machine learning as key to the profession’s future might have
clients beyond IT,” she says. So she began to set up sessions with an interested consultant or analyst in their practice take online
the entire C-suite at clients and brought in consultants from courses or attend industry conferences about the technology
across all her firm’s healthcare practices — including systems and ask that person to come back with ideas about its implica-
redesign, operations excellence, strategy, and financing — to tions. The partner might organize workshops in which the junior

rotmanmagazine.ca / 47
 How to Ask Better Questions

COMMON PITFALLS EFFECTIVE INQUIRY

Start with yes-or-no questions. Start with open-ended questions that minimize preconceptions. (‘How are things going
on your end?’ ‘What does your group see as the key opportunity in this space?’)

Continue asking overly general questions As collaborations develop, ask questions that focus on specific issues but allow people
(‘What’s on your mind?’) that may invite plenty of room to elaborate. (‘What do you know about x?’ ‘Can you explain how that
long off-point responses. works?’)

Assume that you’ve grasped what Check your understanding by summarizing what you’re hearing and asking explicitly
speakers intended. for corrections or missing elements. (‘Does that sound right—am I missing anything?’
‘Can you help me fill in the gaps?’)

Assume the collaboration process Periodically take time to inquire into others’ experiences of the process or relationship.
will take care of itself. (‘How do you think the project is going?’ ‘What could we do to work together more
effectively?’)

employee shares takeaways from the learning experiences and others’ perspectives and challenges. Seeing things from someone
brainstorms, with experienced colleagues, potential applications else’s perspective — walking in their moccasins — in turn makes
in the firm. it easier to detect more pockets of knowledge. And network scan-
A bottom-up approach is better when leaders have trouble ning illuminates interfaces where cultural brokers might be able
determining which outside domains the organization should to help groups collaborate effectively.
connect with — a growing challenge given the speed at which Over time these practices — none of which require ad-
new knowledge is being created. Increasingly, leaders must rely vanced degrees or deep technical smarts — dissolve the barriers
on employees to identify and forge connections with far-flung that make boundary-crossing work so difficult. When leaders
domains. One approach is to crowdsource ideas for promising create conditions that encourage and support these practices,
interfaces — for example, by inviting employees to propose con- collaboration across the interface will ultimately become sec-
ferences in other industries they’d like to attend, courses on new ond nature.
skill sets they’d like to take or domain experts they’d like to bring
in for workshops. It’s also critical to give employees the time and
resources to scan external domains and build connections to
them.

In closing
In today’s economy everyone knows that finding new ways
to combine an organization’s diverse knowledge is a winning
strategy for creating lasting value. But it doesn’t happen unless
employees have the opportunities and tools to work together
productively across silos. To unleash the potential of horizontal
collaboration, leaders must equip people to learn and to relate to Tiziana Casciaro is a Professor of Organiza-
one another across cultural and logistical divides. The four prac- tional Behaviour and holds the Professorship
tices we’ve just described can help. in Leadership Development at the Rotman
School of Management. Amy C. Edmondson
Not only is each one useful on its own in tackling the distinct
is the Novartis Professor of Leadership and
challenges of interface work, but together these practices are mu- Management at Harvard Business School. She is the author
tually enhancing: Engaging in one promotes competency in an- of The Fearless Organization: Creating Psychological Safety in
other. Deploying cultural brokers who build connections across the Workplace for Learning, Innovation, and Growth (Wiley,
2019). Sujin Jang is an Assistant Professor of Organizational
groups gets people to ask questions and learn what employees
Behaviour at INSEAD. This article was a finalist for the 2020
in other groups are thinking. When people start asking better HBR McKinsey Award, which recognizes the best Harvard Business Review
questions, they’re immediately better positioned to understand article of the previous year.

48 / Rotman Management Fall 2020

 THE
BIGGEST
IDEAS IN
BUSINESS
FOR MORE VISIT
store.hbr.org
 Rallying Innovation
in the
Age of COVID-19
One key lesson from the global pandemic crisis is that
funding for medical research is woefully inadequate.
We must do better.
by Joshua Gans

IN THE EARLY DAYS OF THE GLOBAL PANDEMIC LOCKDOWN that saw so But herein lies the problem: the patent is granted by those
many of us working from home, my thoughts turned to how we governments. Surely in this situation, they would just invalidate
can innovate our way out of this and future crises. The movie the patent and take the cure? The point is that when it comes to
Mission Impossible 2 soon came to mind. Released in 2000, the innovations in the face of global pandemics, business as usual
antagonist is an Australian-based biotech company (Biocyte for our innovation system is unlikely to apply. The reason is that
Pharmaceuticals, if you must know) with a rather unique com- once an innovation has been created, there are strong pressures
mercialization plan. It has developed a virus, Chimera, that could to make it freely available, and in the process, push down the
start a very bad pandemic. It lies dormant for 20 hours before de- return to any R&D that has been conducted. Anticipating this,
stroying the carrier’s red blood cells. One plan might have been businesses may not invest in R&D in the first place.
threatening to release the virus and be paid not to do so. But the This is not a hypothetical situation. As economists Michael
folks at Biocyte go one step further. They plan to release the virus Kremer and Heidi Williams, professors at Harvard and Stan-
itself because they have also developed the cure. And, get this, ford, respectively, write in their 2010 article “Incentivizing Inno-
they hold the patent on it. vation” (published in Innovation Policy and the Economy):
Suffice it to say, I suspect some venture capitalists would Such concerns are likely very salient to firms. For example,
call this one ‘fundable’. The movie’s plot involves the chase to after Senator Paula Hawkins (R-FL) asked a major vac-
stop the virus from being released but also to secure the cure in cine manufacturer how it could justify charging nearly three
case it is. But I wonder, did they have to do that? The plan was to times as much to the U.S. government for vaccines as to for-
release the virus and then charge for the cure. Drugs normally, eign countries, U.S. manufacturers stopped submitting bids
once made available, are easy to copy and so have patents. The to UNICEF to supply vaccines...When President Bill Clin-
plan here was to use the patent to extort world governments to ton announced his plan to immunize all children against a
pay up much of their global wealth. standard list of diseases in 1993, he said, “I cannot believe

rotmanmagazine.ca / 51
 Will governments likely pay a princely sum
for a vaccine for COVID-19? Yes.

that anyone seriously believes that America should manu- tradiction: In order for the innovator to receive profits, we have to
facture vaccines for the world, sell them cheaper in foreign allow the innovator to price in such a way that many will be un-
countries, and immunize fewer kids as a percentage of the able to use the innovation. As our goal was widespread use, this
population than any nation in this hemisphere but Bolivia contradiction is prohibitive.
and Haiti”... In the face of such statements, potential risks The difficulty for a vaccine maker is that a low price on the
facing firms seem real. vaccine reduces their profits but generates much more value
for other firms as the economy recovers. There are clever ideas,
It is very unlikely that governments around the world are go- however, to help the vaccine maker recover some of this value.
ing to accept monopoly pricing for a vaccine developed for Consider this, as told by columnist Matt Levine in a Bloomberg
COVID-19 that potentially will benefit seven billion people. article in March 2020:
For life-saving drugs, it is not uncommon for those prices to be [I]f I ran one of the big index-fund companies, and a phar-
in the hundreds of thousands per person. Suffice it to say, for maceutical company in my portfolio developed a patented
a vaccine intended to be given to a population such as the U.S., fully effective cure for COVID-19 that it could manufac-
even $10,000 a dose would set the government back $3 trillion. ture cheaply and planned to sell to any-one who could pay
That ain’t gonna happen. $50,000 a dose, I would call that company right up and say
Will governments likely pay a princely sum for a vaccine for “no, you give that pill away for free, because the value to me
COVID-19? Yes. Will they cover the costs and the risks associated of COVID-19 going away quickly and the economy recover-
with developing and trialing that vaccine? Hopefully. But given ing — the value to me as an owner of airlines and hotels and
the uncertainty amid the crisis, there is a concern that pharma- chain restaurants and retailers and every other company —
ceutical companies and their researchers do not need to add fur- is vastly, vastly greater than the value to me of your profits
ther uncertainty. Moreover, this isn’t just about the current crisis. on that pill.”
Like SARS and H1N1, coronaviruses are probably with us for the
foreseeable future and may require annual vaccine development. This is pretty ingenious. If you know you have a COVID-19 vac-
There are other innovations that we might finally demand cine then you know that, when it is released, there will be an
having felt the costs of a global pandemic in the modern era. All economic boom and so you can invest in the stock market on the
of those will be of a public nature with the idea of using them basis of that information. That should generate a healthy return.
widely. That means that the price for these innovations will be Unfortunately, it also requires a very large amount of capital to
set in negotiation with governments which, we can imagine, are make the return that would incentivize the innovator. Suffice it to
unlikely to be less stingy with public funds going forward. Given say, relying on stock market processes to fund important innova-
this, how should we think about an innovation system for what tive endeavours is risky at best.
are essentially ideas that will enhance the global public good? Given the value on the table, the other option is to ignore
the market altogether and have the government offer grants
Traditional Innovation Incentives Won’t Cut It and subsidies to defray the costs of conducting research and
The usual way we try to encourage innovation in a market econ- development. This has certainly been a hallmark of the system
omy is to reward the innovator with intellectual property protec- of scientific research conducting in most countries following
tion. If you have a new drug, you can secure a patent that gives World War II.
you the exclusive right to sell it. In other words, your reward is The challenge is that it is very difficult to evaluate whether
to make whatever profits you can for a time unimpeded by close grants are being spent in an efficient manner. Consequently,
competition. That system works pretty well. grants tend to be favoured where no other sources of funding
However, the main problem with regard to innovations that are available — for instance, for basic research that has no com-
will help avoid or stem the effects of a global pandemic is a con- mercial payoff and a high degree of uncertainty — or where

52 / Rotman Management Fall 2020

there is expertise to evaluate the efficacy of the research pro- viders but, in return, providers agree to cap the price they charge
gram and required expenditures. This task, however, is itself for the vaccine. Their overall earnings are greater, the more doses
not amenable to a quick disbursement of funds. Thus, when are actually sold. Obviously, if there are no candidates that pass
there is any urgency, such as lives possibly being lost while re- certain quality standards, the contract is never paid out.
search is being conducted, grants are unlikely to be an efficient A key feature of AMCs is that they are not compulsory.
means of generating innovations. Recall that why we need AMCs that ‘stick’ for innovations that
potentially have high social value is that, in their absence, gov-
Advanced Market Commitments ernments and other donors may claw back on promised returns.
This has caused economists to consider ways of encouraging Thus, it is important that AMCs are a strong commitment. If
innovations that combine the elements of grants with market AMCs are non-compulsory, this means that any innovator could
signals. One approach contemplated was the use of prizes. For choose to sell their product at whatever price they choose if they
centuries, benefactors have announced prizes that would be paid do not accept the AMC. This guarantees that AMCs will only en-
in the event certain inventions were generated. The most famous hance rather than reduce the returns to any R&D investments.
was the prize for a clock that worked at sea so as to provide a dra- The commitment increases the price above what the market
matic improvement in navigation by measuring longitude at sea. would pay and, thus, the AMC contains a prize-like element, but
Prizes have the advantage that they are clearly solutions to prob- only if the vaccine is used by lots of people.
lems someone believes it would be valuable to solve. Thus, they How could AMCs be deployed for pandemic-related inno-
have a market signal embedded in their makeup. vations? It depends on some features of the innovation — spe-
The difficulty is that the problems that are usually specified cifically, how close current efforts are to a viable product. For
are to achieve some scientific milestone. These are not neces- innovations that are more ‘technologically distant’ the goal is to
sarily of the class that would require widespread adoption for encourage more R&D effort and resources. This might be the
the global public good. For pandemics and pandemic control we case for a vaccine that could handle most potential coronavi-
are talking about inventions whose adoption will impact on bil- ruses as opposed to the specific virus that is currently spread-
lions of people. Thus, quality and workability really matter. They ing. The challenge in designing the AMC is setting a price that
cannot simply be scientific advances. The innovations need to will induce that R&D effort. This will be an easier task if that
be able to work for their intended functions. That is a tougher price encourages multiple simultaneous attempts to pursue the
challenge that any one prize for a significant milestone is likely to innovation.
bring. To solve these problems and enhance the market test as- At the same time, however, AMC designers will want to en-
sociated with prize-like mechanisms, Michael Kremer proposed sure that innovators’ payoffs are sensitive to how well their prod-
the use of advanced market commitments (AMCs). ucts work so they push to innovation towards products that are
Suppose you are trying to encourage the development and likely to be more effective. Thus, even though the price might be
then manufacture of a vaccine. An AMC is a contract without a set ex ante, to encourage that effort and align incentives, AMCs
specific counterparty that a donor/sponsor offers to deliver the for technologically distant innovations will likely remove the
intended vaccine. The contract specifies that the provider (as floor (in terms of sales guarantees) to give innovators more ‘skin
yet unknown) will be guaranteed a certain payment per dose of in the game’.
the vaccine up to a specified quantity. This serves to set a floor Writing this, as I am, in the midst of a pandemic, it is reason-
on what the provider might earn because the contract specifies able to expect that much of the innovative effort will be focused
a subsidy for every dose actually purchased. on products that are much closer to market. An example of this
So a country, for instance, may pay a low price (such as $1) might be vaccines to deal with the current strains of coronavirus
per dose but the provider would receive an additional subsidy or innovations to dramatically improve and reduce the costs as-
(say $15) per dose. Thus, there is a guaranteed pay-off for pro- sociated with testing and treatment. In that situation, there are

rotmanmagazine.ca / 53
 When there is any urgency involved, grants are unlikely
to be an efficient means of generating innovation.

likely to be a number of candidate prospects in the pipeline and is important for a technologically close innovation, that the price
so the chief constraint is not more risky R&D but instead under- actually be set rather than a per-dose subsidy. Michael Kremer,
taking trials and then building capacity to bring these products Jonathan Levin, and Christopher Snyder show that this latter
to market. case may actually cause too little capacity to be built as that will
An AMC designer faces a challenge as they would not have be sufficient for an innovator to appropriate what might be avail-
accurate information regarding the costs of those activities even able to fund the product (the total need was 200 million).
if they know they are potentially substantial. The good news is Interestingly, while the AMC was successful in generating
that they have better information regarding precisely what the the required doses, the price was pushed down over the course
potential prospects can achieve. In setting the per unit price for of the decade. By 2018, half of the population that was targeted
the AMC for a technologically-close product, the designer has was covered. One reason for the delay was that India (a large po-
to refrain from setting a very low price — even though that may tential recipient) did not adopt until 2017. This appears broad-
save on overall costs to those using the innovation — and err on ly successful although we can never be completely sure what
the side of a higher price so that the necessary capacity invest- would have happened in the AMC’s absence. Experience tells us
ments actually are made. that it would have likely been very little.
As there is likely urgency in getting products to market
quickly, you would not want to skimp on payments and risk in- More Failure, Please!
sufficient capacity. Again, this highlights the importance of the Thus far, the discussion has focused on why business as usual,
AMC’s role as a commitment because, having built capacity, in terms of market and private rewards for innovation, is un-
there will be pressures to reduce price. The AMC needs to guard likely to be suitable for pandemic-related innovations. However,
against those pressures. there is also a sense in which governments, in particular, need
One thing that can take the pressure off prices in this situ- to abandon business as usual that often accompanies their own
ation is if the AMC can guarantee a certain level of sales for the funding on research and development — an adversity to failure.
product. After all, the innovator will be making investments de- The innovation challenge is so potentially large that it is very
pending on the overall return. Thus, they will be happy to trade- important that we pursue as many different paths as possible. In
off price with quantity so long as the total revenue (that is, price a sense, there may be very important scientific and innovation
times quantity) does not change. This is a luxury AMC design- directions out there which each have very unclear and hard-to-
ers have when setting terms of a technologically close product understand potential payoffs. Given that the payoffs can poten-
as they have a much better sense of the overall level of demand tially be very high, this suggests that we should be more com-
for that product. fortable pursuing riskier and potentially unconventional scien-
A relatively technologically close AMC has recently been tific approaches.
undertaken to produce a pneumococcal conjugate vaccine spe- In other words, there is a broad need for a portfolio approach
cifically targeting developing countries where 700,000 children to innovation — spreading our options widely — so as to better
are estimated to die from the disease each year. Five countries understand which paths might prove to be feasible. The take-
and the Gates Foundation put up $1.5 billion for an AMC in away here is that governments and donors should not be afraid
2007 and it was launched in 2009. Businesses would compete of casting their net very widely and not just funding moon-shots
for a contract to supply the vaccine over a ten-year period with but also loon-shots.
a price capped at $3.50 per dose (much lower than prices paid in In the midst of World War II, Franklin D. Roosevelt au-
developed countries). thorized the creation of a highly funded project to build the first
In 2010, pharmaceutical companies GSK and Pfizer com- nuclear bomb. The Manhattan Project was a stunning success.
mitted to each supplying 30 million doses annually. Note that it It brought together a workforce of 129,000, including a large

54 / Rotman Management Fall 2020

concentration of scientists (three of whom had won and three a patented HIV therapy, Kaletra, was potentially promising as a
of whom would later win Nobel Prizes) at a cost of what today treatment for COVID-19. The patent holder, Abbie, announced
would be $23 billion to the New Mexico desert and, in three it would not defend its patent rights. Suffice it to say, a more
years, had built a working weapon. formalized agreement before the fact regarding licensing would
To be sure, that weapon would create a decades-long exis- remove frictions even further.
tential crisis for the whole of humanity causing fear and sowing
mistrust that continues to this very day, but right now we can • EXPERT REVIEW BOARDS: The research involved will likely be
marvel at the fact that the project met all of its KPIs and ended pursued along many promising paths. This happened with the
World War II in relatively short order. It is not a stretch to suggest Manhattan Project where two different bomb designs were pur-
that both managing the current COVID-19 pandemic (with tests, sued in parallel. To organize these competing streams, expert
anti-virals and a vaccine) along with coming up with innovations review boards will likely need to be constituted on an ongoing
to more effectively manage future pandemics, a project well in basis. This could assist in the allocation of funds, the highlight-
excess of the scale of the Manhattan Project is warranted. ing of impediments, the evaluation of project quality and the
Based on the potential future economic cost alone, there is design of AMCs.
an easy rate of return justification. What is more, unlike the Man-
hattan Project, this would not have to be conducted with secrecy In closing
and, indeed, there would be considerable merit to precisely the One thing a crisis of this magnitude should tell us is that there
opposite in terms of openness. is room to do better. The funding for innovation for medical re-
This is not the place to scope out what that potentially mas- search is a fraction of that devoted to other threats — notably na-
sive endeavour would look like. However, I can list here some key tional security. Our experience in 2020 suggests that our atten-
features that should be considered as part of it: tion has been misfocussed.

• INTERNATIONAL COOPERATION: All of these efforts are in terms of

contributing to a global public good. The challenge will be to find
mechanisms that distribute the costs of achieving these goals in
a workable and sustained manner.

• REGULATORY AUDIT: Each country should pursue a major regula-

tory au-dit to ensure that there are no unnecessary impediments
to being able to innovate and then to adopt new promising tech-
nologies. The COVID-19 crisis has already led to a relaxing of
some regulatory rules specifically regarding approvals for public
drug release.
Joshua Gans is a Professor of Strategic Management and
• PATENT POOLS: There is merit to pooling together patents associ- holds the Jeffrey S. Skoll Chair of Technical Innovation and
ated with COVID-19 and other future pandemic threats. A patent Entrepreneurship at the Rotman School of Management
pool is an agreement between patent holders to licensing terms (with a cross-appointment in the University of Toronto’s
Department of Economics). He is also Chief Economist of
for patents between them. By agreeing to these, it is easier to
the Creative Destruction Lab. His latest book, an ebook, is Economics in the
combine innovations together to build products and services. Age of COVID-19 (MIT Press, 2020), from which this is an adapted excerpt.
An example of this emerged during the COVID-19 crisis when In November, an updated version of the ebook will be published in hard copy.

rotmanmagazine.ca / 55
 THE ROOTS OF
CORPORATE
SOCIAL
IRRESPONSIBILITY
Unrealistic performance expectations, a pressure-cooker
culture and stress are just some of the factors that lead
to irresponsible workplace behaviour.
by Maria Rotundo

IN RECENT YEARS, the debate around corporate social responsibil- In this article I will take a look at the roots of CSiR and what
ity (CSR) has evolved from whether firms should be responsible for leaders can do to eradicate it in their organization.
more than just profits to how firms can be profitable while respect-
ing people and communities and preserving the environment. While Enablers of Irresponsible Behaviour
CSR has been widely embraced, corporate social irresponsibil- Individuals function within systems that are either enablers of
ity (CSiR) continues to be widespread. Examples range from oil CSiR or deterrents of it. Following are five common enablers of
spills to misrepresenting the environmental benefits of products CSiR that leaders can take steps to proactively influence.
to unsafe working conditions, sexual harassment, unethical
sales practices and accounting scandals. PRESSURE. Pressure — or a lack thereof—has been shown to be
Some of the organizations involved in these activities an antecedent of fraud, greenwashing and other forms of CSiR.
have even had reputations for CSR achievements. Indeed, re- Pressure can come in many forms and from different people or
search shows that some may be motivated to engage in CSR as institutions. Scholars have studied how pressure from different
a proactive way to camouflage, offset or compensate for prior or stakeholder groups in relation to CSR initiatives influences the
future CSiR. adoption of environmental practices. This research considers

rotmanmagazine.ca / 57
 A strong diversity climate has been associated with increased
loyalty, customer satisfaction, and lower turnover.

different degrees of adoption, from superficial or symbolic adop- INCENTIVE SYSTEMS. The design of incentive systems can encour-
tion at one end of the spectrum to substantial adoption and the age the type of risky decision-making that, if left unmanaged,
internalization of environmental practices at the other end. can result in unethical behaviour. One high-profile case is En-
Evidence suggests that pressure from customers and in- ron, where practices contributed to a culture that rewarded risky
dustry groups often relates to superficial or symbolic adoption, behaviour and a focus on the short term. A ‘rank-and-yank‘ per-
whereas pressure from shareholders, banks, financial institu- formance review system, heavy reliance on stock options, and
tions, or suppliers relates to substantial adoption or ‘corporate potential for large bonuses put pressure on individuals to close
greening’. One study showed that firms that achieve performance deals even if they created little or no value for Enron. The com-
above social expectations are more likely to engage subsequently pany was able to mask the downside of deals gone wrong due to
in illegal behaviours. The authors reason that the pressure orga- the low transparency that permeated the enterprise more gen-
nizations face to surpass their own performance achievements erally and to the low transparency that was afforded by some of
might explain their subsequent illegality. Thus, it appears that these practices. Elsewhere, a study of CEO pay structure and
the source of the pressure does matter, and it can facilitate or de- CSR found that a structure that rewards short-term performance
ter CSR progress and even facilitate CSiR. relates to less CSR compared to a structure that focuses on long-
One common form of pressure is time pressure. Organiza- term performance.
tions are under constant pressure to move quickly in response
to increased competition, especially in industries where innova- The Role of Organizational Climate
tion is critical. In a study of organizational speed in two beverage ‘Climate’ is the collective perceptions individuals develop from
producers over a ten-year period, researchers considered the fre- their cumulative experiences in a workplace. Individuals’ inter-
quency of activity related to CSiR (e.g. product recall, pollution). actions with policies, practices, procedures, and the work con-
Findings showed a greater number of organizational mishaps in text more broadly comprise climate perceptions. The experienc-
the beverage producer that scored higher on organization speed. es of each employee are referred to as ‘psychological climate’,
Elsewhere, a study of CSR managers reported that they experi- where as the aggregated composite of the experiences and per-
ence intense pressure to improve in the various CSR rankings and ceptions of several individuals at work comprises the ‘organiza-
face what can be unrealistic performance expectations, which tional climate’.
can give rise to CSiR. Climate has been shown to impact work outcomes at the in-
Much has been written about the 2010 Deepwater Horizon dividual, group, and organization level of analysis. Two types of
oil spill in the Gulf of Mexico. In a Federal ruling, BP was found climates are of particular interest in terms of CSiR:
to be primarily responsible (although not solely responsible) for
the disaster. Interpretations of the ruling make note of the role ETHICAL CLIMATE. Aspects of the work context that are of an
that the decision to continue drilling in an effort to save time and ethical or moral nature shape what has been referred to as the
money played in the disaster despite evidence from testing that ‘ethical work climate’. Research shows that the perceptions em-
suggested the drilling should stop. ployees have of the organization’s CSR initiatives relate to their

58 / Rotman Management Fall 2020

understanding of the ethical climate. individuals also report high collective empathy and high ethical
Researchers have identified five types of ethical climates: efficacy.
‘Instrumental climates’ are believed to motivate decision-mak- Other research found support for the interaction between
ing that serves the interests of the organization (or individual); service and ethical climates, showing that a strong service
‘caring climates’ emphasize decision-making that takes into con- climate (i.e. employee perceptions of the importance of and
sideration its impact on others (including society); ‘independent support provided for delivering superior customer service) has a
climates emphasize the role of individuals’ idiosyncratic moral more favourable relationship with business outcomes when the
principles and beliefs rather than those of other individuals or in- ethical climate (i.e. employee perceptions of organization’s ethi-
stitutions; ‘rules climates’ put emphasis on organizational codes cal treatment of customers) is also strong.
of conduct; and ‘law/code climates’ defer to the rule of law (or
external codes of conduct). DIVERSITY CLIMATE. A diversity climate refers to shared perceptions
Each ethical climate type has been shown to relate to less that employees have with respect to the organization’s practices
dysfunctional behaviour — except the instrumental climate, surrounding tolerance for racial, gender, LGBTQ, age, and eth-
which relates to more dysfunctional behaviour. Another study nic diversity. A strong diversity climate has been associated with
showed that climates that focus on protecting self-interest relate increased loyalty, work group performance, retail sales growth,
to unethical behaviour, whereas climates that focus on follow- customer satisfaction, and lower turnover.
ing rules and procedures or that focus on concern for the public/ Research has also shown some of the individual and organi-
customers relate to less unethical behaviour. zational costs that follow from the antithesis of diversity, such as
Recent research has focused on understanding some of discrimination and sexual harassment, including various forms
the mechanisms that explain how climate works, as well as the of fraud and white-collar crime.
conditions that moderate how it works. A study of corporate ac-
countants showed that most ethical climate types have a positive ORGANIZATIONAL CULTURE AND LEADERSHIP. ‘Organizational cul-
relationship with the importance organizations attach to ethics/ ture’ refers to the set of assumptions and values that guide the
social responsibility — except for the instrumental climate, which behaviour and decisions of a firm’s members. Once values are
has a negative relationship. The importance accountants place encoded, they are disseminated through rituals, artifacts, sym-
on corporate ethics/social responsibility in turn relates to their bols, and stories as a way to emphasize what is important. Norms
judgments of various ethical actions. are then established for what constitutes appropriate conduct.
Another study found support for the role that moral emo- As indicated, climate and culture are distinct, and some
tion (e.g. empathy or feelings of sympathy and compassion) scholars suggest that they represent the higher-order social-
plays in the relationship between ethical climate types and ethi- psychological fabric of the organization. Different organiza-
cal behaviour. Researchers showed that both the other-focused tional culture types have been shown to relate positively to em-
ethical climate and a self-focused ethical climate relate to higher ployee attitudes and operational or financial effectiveness. In a
ratings of ethical behaviour as provided by a supervisor when review of organizational misconduct, researchers explain that

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 Leaders set the tone for whether the espoused values of
their organization are consistent with the enacted values.

organizational cultures can endorse, permit, or facilitate certain overreport, which is known as ‘brownwashing’. This underre-
forms of misconduct while at the same time condemning others. porting can occur not just for sustainability efforts bot for every-
This perspective lends support to findings that organizations can thing from charitable donations to employee benefits spending
engage in one form of CSR while simultaneously engaging in an- to the diversity of board members.
other form of CSiR.
Leadership also matters. Leaders are the most important The Role of Boards and Regulation
figures for shaping the culture of the organization through their Boards of directors have great influence over organizational
day-to-day behaviours, including communication. They set the activities and play an important role in deciding on the degree
tone for whether the espoused values of the organization are to which an organization invests resources in CSR. Researchers
consistent with the enacted values. Commitment to values that who have studied the relationship between board characteristics
support CSR and endorsement of these values matters and can and CSR or CSiR have found a positive relationship for the inde-
help employees make sense of competing demands that pit prof- pendence of directors, board size and board diversity, including
its against social goals. more CSR outcomes and less fraud.
As noted earlier, some organizations create positions such One study reported a positive relationship between a firm’s
as CSR/sustainability managers or executives to facilitate CSR carbon disclosure score and both board size and board national-
initiatives, including the mitigation of CSiR. Volkswagen hired ity (i.e. percentage of foreign directors). Another found similar
an anticorruption executive to its top management team follow- support for the independence of board members, board mem-
ing its emissions test scandal. Research has shown some support ber diversity and CSR performance.
for the positive influence that such positions can have on a firm’s Research has also shown some support for the role that
environmental performance particularly when their boards also environmental experience among board members plays in
have environmental committees. achieving CSR progress. In an analysis of 294 U.S. firms drawn
However, as indicated, the alignment of rhetoric to action from the KLD database for 2000 to 2008, firms whose board
can fail. Top management’s espoused commitment to CSR does members had accumulated more environmental experience
not always match what is implemented, which has been referred achieved environmental strengths scores that were above the
to as ‘decoupling’. For example, the demand for reduced car- industry average.
bon footprints and for healthier products and services does not Organizations in which boards establish specialized com-
always coincide with shareholders’ focus on net present value mittees to oversee environmental strategies have been shown to
creation. These competing demands drive some firms to de- report stronger environmental performance. As indicated ear-
couple CSR rhetoric from action or to misrepresent sustainability lier, this effect was found to be stronger for firms employing a
information. sustainability manager. The results from this preliminary set of
In response to the fear of a drop in share price associated studies suggests that board composition and expertise matters
with investments in their environmental initiatives, some firms for CSR and CSiR.
even underreport environmental achievements rather than Unethical firm behaviour, greenwashing, and CSiR more

60 / Rotman Management Fall 2020

generally have led to calls for further regulation in an attempt to an effort to help organizations strengthen their commitment to
standardize reporting guidelines. There are advocates for more social performance. Further, the United Nations Global Com-
regulation as well as opponents, yielding a rich debate around pact offers principles and guidelines to support organizations in
whether or not regulation is a solution or even part of the solu- the alignment of strategy and systems to achieve their CSR goals.
tion to advancing CSR or minimizing CSiR. Investments in skills training and leadership development
Regulation has been viewed as a form of pressure that can facilitate CSR progress. Reviews of the research on training
should motivate organizations to take important steps towards and development support the potential for benefits to individu-
ethical behaviour or meaningful progress on environmental ini- als, teams, and organizations through improved performance,
tiatives. However, regulation can be poorly designed, resulting profit growth, better service, and other outcomes. It is my hope
in resistance and diminished effectiveness. The context in which that this review of the research findings to date is a start in the
it is adopted can also impede its effectiveness. right direction for leaders who are determined to put an end to
It has been argued that regulation has done little in the past corporate social irresponsibility.
to eliminate other forms of wrongdoing or to spur CSR initiatives.
For instance, some have argued that the Sarbanes Oxley Act of
2002 has not had the intended effect of mitigating organizational
wrongdoing.It has also been argued that deregulated environ-
ments are ripe for organizational wrongdoing and that voluntary
CSR efforts can be met with resistance, depending on the source
of pressure, and can secure limited beneficial outcomes absent
sanctions.
In contrast, voluntary initiatives have been shown to have
the potential to achieve more than mere compliance with regu-
lation, since they are internally motivated. Although the debate
typically focuses on whether or not to regulate, perhaps the de-
bate should also consider a combination of regulation and volun-
tary initiatives that is informed by the context.
Maria Rotundo is a Professor of Organizational Behaviour
In closing and HR Management at the Rotman School of Management.
As indicated herein, leaders play a fundamental role in advanc- This article summarizes her chapter, “Corporate Social
ing CSR goals while mitigating CSiR. This is an opportune time Irresponsibility in Spite of Efforts to Act Responsibly:
The Nature, Measurement, and Contextual Antecedents of
for them to affect positive change and to partner with institutions
CSR and CSiR by Organizations”, which was published (with full citations)
and stakeholders in their efforts. Social Accountability Inter- in The Oxford Handbook of Corporate Social Responsibility: Psychological and
national has established the SA8000® Certification Standard in Organizational Perspectives (2nd Edition, Oxford University Press).

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 A Leadership
Mindset for
Uncertain Times
Leaders are facing unprecedented uncertainty. But history
clearly shows that no matter how stark the crisis, there are always
opportunities to innovate and grow.
by Scott D. Anthony and David S. Duncan

PEOPLE OFTEN asked Innosight co-founder and Harvard Busi- LENS 1: FUTURE-BACK STRATEGY
ness School Professor Clayton Christensen to give his opinion While you have no choice but to live life ‘present-forward’, in the
about various industry developments. No matter what industry, face of uncertainty you should develop strategy ‘future-back’.
no matter what context, he would always start by saying, “I don’t Otherwise, you can end up unintentionally defaulting to your
have an opinion. Theories have opinions.” past playbook even if you know that competing in tomorrow’s
The word theory, used in this general sense, can be consid- world requires doing something materially different.
ered a catch-all term that covers frameworks, models and tools. Future-back strategy starts by picking a point of time in
Christensen’s point was that just like putting on the right lenses the future beyond your traditional planning horizon. In normal
can help you to see clearly, the right mental model can simplify times, for most organizations, that might be five to ten years; in
and bring clarity to often confusing situations. abnormal times, where planning horizons shorten, it might be
When confronted with the vast, chaotic maelstrom of only 12 months. You then look at underlying trends and come to a
change caused by the COVID-19 pandemic, we have found our- consensus about what the world is going to look like at that future
selves returning to first principles, looking to the core frame- date. While your picture of the future won’t be perfectly precise,
works, models and tools on which we base our fieldwork helping you can paint a kind of impressionist painting based on explicit
forward-thinking organizations to navigate disruptive change. In assumptions that allows your leadership team to strategize with-
this article we will present four lenses and the ten questions they in a shared frame of reference.
suggest executives consider as they work through today’s uncer- Next, you set an aspiration for the company you want to be
tainty. Consider this a crib sheet that will help you and your lead- in that future environment, including financial targets as well as
ership team to both zoom-out to big-picture implications and broad strategic choices about where to play, where not to play
zoom-in to near-term threats and opportunities. and how to compete and win. Finally, you work backwards from

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 You can paint a kind of impressionist painting
based on explicit assumptions.

that future vision to determine what, specifically, needs to be QUESTION 2: What underlying trends have been catalyzed by
done today to begin closing the gap between your future aspira- the crisis and will have deeper and faster impact? For ex-
tions and present realities. ample, every university head knew that online learning would be
In the COVID-19 crisis, the future-back strategy lens sug- mainstream by 2030. That timeline has been accelerated signifi-
gests asking two questions: cantly.

QUESTION 1: Which assumptions will have the biggest impact LENS 2: JOBS TO BE DONE
on how the future will unfold? This isn’t a sensitivity analysis, During a crisis, it is natural to think about which temporary be-
but an exercise to identify outcome-determining assumptions haviour shifts will stick beyond the crisis. The jobs-to-be-done
that define tipping points between different potential scenari- lens, which is a broadly useful way to identify opportunities for
os. These assumptions should be as precise as possible by hav- innovation and new growth, informs analysis of this issue.
ing time frames and numbers around them. For example, ‘gov- The theory holds that people don’t buy products and ser-
ernments will loosen stay-at-home restrictions’ is not precise vices; they ‘hire’ them to get jobs done in their lives. This is
enough; ‘by September, 40 per cent of the world’s population will consistent with management guru Peter Drucker’s famous
be freely moving’ is precise enough to track and monitor. quote, “The customer rarely buys what the company thinks it is

The Path to Organizational Agility by Daniel Markovitz

The first personal computer was introduced by MITS in 1975. the top becoming a faint whisper by the time it reaches the front
Bell Labs brought out the first colour TV in 1929. 3M had the lines of the organization.” At this level, managers are consumed
first copy machine in 1950. Good luck finding any of those prod- with the chaos of daily operations, and seldom have any under-
ucts today. Peter Golder and Gerard Tellis’s seminal study standing—or bandwidth—to execute on the lofty strategic goals
of 500 brands in 50 product categories reveals that almost half pronounced in the C-Suite.
of market pioneers fail. In fact, the greatest long-term success
belongs to companies that enter a market and become leaders SOLUTION: Hoshin kanri (often called strategy deploy-
about 13 years after these first movers. ment, or policy deployment) is often misunderstood as a
In follow-up work, Tellis found little evidence to support the form of strategic planning. It’s not. It’s a powerful way of translat-
idea of first mover advantage: MySpace and Friendster were ing strategic objectives into concrete plans at each level of an
ahead of Facebook; Books.com was online before Amazon; organization. Perhaps more importantly, hoshin creates both
AltaVista (among others) beat Google in search; and Sony, horizontal alignment among functional silos, and an interlock-
BlackBerry and others hit the shelves before Apple in mobile ing cascade of goals, projects and tasks vertically within each
music, smartphones, and tablets. That’s quite a collection of silo. In my consulting work, I’ve seen business unit managers
corporate carcasses. unable to achieve the market share goals mandated by the CEO
Rather than focusing on being first, leaders should instead because they couldn’t get the IT support for new product devel-
focus on becoming faster and more nimble, so that they can get opment software; Finance and HR support to hire the necessary
to the head of the market quickly, when the timing is right. That material scientists; and Operations support to rapidly qualify
means eliminating the bureaucratic barnacles that encrust so new suppliers. Hoshin clarifies those needs at the beginning of
many organizations. Following are three areas that can create the year and ensures that those internal resources are aligned.
lethal operational drag on the corporate ship.
PROBLEM: Right people, wrong seat. Leaving aside the
PROBLEM: Lack of clarity around strategy. Jim Wom- problem of underperformers, there is the very real problem of
ack, author and founder of the Lean Enterprise Institute, putting talented, motivated people in the wrong job. The star
describes this classic problem as “the loud voice of the CEO at saleswoman lacking organizational traits gets promoted to VP

64 / Rotman Management Fall 2020

selling him. Nobody pays for a product. What is paid for is satis- parents looking to connect with their children in the afternoon.
faction.” We define a ‘job to be done’ as the problem a customer The offering had to be completely different to get each of those
is trying to solve in a particular circumstance. It puts the custom- jobs done, so a one-size-fits-all milkshake ended up being a one-
er at the centre of the innovation equation, allowing the would- size-fits-none solution.
be innovator to precisely characterize the customer’s important, While the jobs-to-be-done theory holds that jobs are stable,
unsolved problems and to define quality in the same way the events like COVID-19 can dislocate them by changing a custom-
customer defines it. er’s circumstances, available solutions and measures of quality.
One of Christensen’s most famous parables describes how Executives should ask three questions to look for jobs-to-be-
a fast food company used the jobs lens to rethink the milkshake done dislocations:
category. When the company asked customers what they wanted
in a milkshake, it heard a lot about desired features (flavours, QUESTION 3: Where will temporary changes lead customers
thickness and so on) but was unable to use these insights to in- to discover a new solution that gets the job done better than
crease sales. When it shifted to studying why customers bought existing solutions? For example, it is very possible that the use
milkshakes, it found two segments with distinct jobs: commuters of video-conferencing solutions for meetings will persist past
looking for a ‘companion’ during a long, boring drive to work and the current crisis, as people learn that technology is now good

of Sales; the gifted but painfully introverted machinist who be- from his role in product development — decided that he person-
comes the plant manager; the talented financial planner without ally didn’t like a particular style his product team had made. He
leadership skills who is put at the head of the new client service diverted a container that was en route to the U.S. with $400,000
division. All-too-often, supremely wonderful employees are mis- worth of shoes to Africa, where he unloaded everything at a loss.
placed and put in a position to fail.
SOLUTION: Shifting decision rights downward, to the
SOLUTION: Carefully assessing the skills and traits appropriate level of responsibility. WL Gore is an excel-
required for each key position in a company, rather than lent example of an organization that does this. The $3 billion
simply promoting based on résumé, tenure or prior career path. company has what it calls a ‘lattice’ organizational structure,
This assessment goes far beyond a simple Myers-Briggs (or which broadly distributes leadership responsibility throughout
similar) test, and requires close attention and cooperation with the company. This structure allows employees to make ‘above
the HR department. It also requires a willingness to continually the waterline’ (i.e., low-risk) decisions on their own. Approvals
reassess the needs of the company at each specific position, are only needed for ‘below the waterline’ (high-risk) decisions.
and remove people whose skills don’t match those needs. As Although it would be nearly impossible for another company to
Patty McCord, former head of HR at Netflix once explained, copy Gore’s management structure, it is very much within the
“We are a pro sports team, not a kids recreational team.” When capacity of a leadership team to create clear guidelines for the
someone is not the best at that position anymore, or the com- kinds of decisions people at each level of a company can make.
pany no longer needs the employee to contribute in that role, it’s These three problems — lack of clarity, people in the wrong
time to move on. seat and misaligned decision rights — create significant organi-
zational drag that slow you down. The good news is that they’re
PROBLEM: Misaligned decision rights. As organizations entirely within your control to eliminate. By embracing the three
grow in size and complexity, the CEO often becomes a bottle- solutions you will be able to focus on being faster and nimbler
neck for decisions—or worse, gets involved in decisions that than any of your competitors — and take advantage of new
she shouldn’t be making at all. At a $500 million footwear com- markets when the timing is right.
pany I once worked with, the founder and CEO — long removed

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 A prime enemy of innovation is the institutionalized inertia that
can be reinforced by underlying systems and structures.

enough to provide a good experience and that they save the ‘long-tail’ content and the lack of late fees. As it got into stream-
hassle and headache of travel. ing, it combined these new benefits with better immediacy
than physical stores and drove incumbents like Blockbuster
QUESTION 4: Where will new habits lead to lasting changes in into bankruptcy. Other examples of disruptive innovation
how customers define quality? When making decisions to hire throughout history include the transistor, discount retailers, the
a product or service to do a job, customers (often implicitly) con- personal computer, Apple’s iPod and asset-sharing platforms
sider functional, emotional and social dimensions. If customers like Airbnb.
spend enough time following different behaviours, it can rear- The disruptive innovation theory highlights two critical
range which of those criteria are most important. For example, questions for executives:
even when social distancing protocols are relaxed, customers
may continue to place premiums on safety and look for finan- QUESTION 6: Are key job-to-be-done dislocations being tar-
cial solutions that minimize face-to-face interaction or physical geted by disruptors on the brink of breaking through and
transfer of cards or cash. therefore should be considered clear-and-present near-
term threats? Our research shows that companies that are
QUESTION 5: Where will post-event system-wide changes im- following the pattern of disruptive innovation but haven’t yet
pose new barriers and therefore change the way customers crossed $1 billion in revenue are a good bet in the midst of
prioritize solutions? It would not be surprising, for example, downturns. Financial services by players like Grab and GoJek
to see significant healthcare reform after COVID-19. Perhaps in Southeast Asia, cloud computing tools such as Box and en-
telemedicine, which has been a fringe solution, could become a tertainment platforms like Amazon’s Twitch seem to be exam-
mainstream solution as efforts seek to keep hospitals free from ples of disruptors ready to take the next step in their evolution.
being contagion hotspots.
QUESTION 7: What ‘reverb’ opportunities to drive disruptive
LENS 3: DISRUPTIVE INNOVATION growth have opened up? History clearly shows that innova-
Christensen introduced his theory of disruptive innovation tors have an opportunity to drive growth by filling a gap that a
in 1995 as a powerful way to understand innovation-driven ‘big-event disruption’ exposes. Consider how the oil crisis in
growth. Disruptive innovations create new markets and trans- the 1970s, for example, hyper-charged the growth of small cars
form existing ones by making the complicated simple or the ex- from Japan.
pensive affordable. Disruptive innovations typically start with
lower performance along dimensions that historically mattered LENS 4: ENCOURAGING INNOVATION HABITS
to mainstream customers. Those limitations mean they have Over the past two decades, innovation has moved from a fringe
to start in market segments that are unattractive or ignored by to a mainstream concept. Organizations have poured billions
established incumbents focused on more profitable segments. into enabling structures, employee training and investments
However, as the entrant’s solution gets better, it steadily moves in start-ups, yet most executives still report that innovation is
up-market until it delivers the performance that mainstream a struggle. Why? The fundamental challenge is the behaviours
customers of the incumbents expect — all while keeping intact that drive innovation success, like curiosity, customer obses-
the unique advantages that drove its early success. sion and being adept in ambiguity, run counter to the estab-
Consider Netflix. Its DVD-by-mail service had limitations lished habits inside most organizations. In other words, the en-
compared to physical rental shops in terms of immediacy, but emy of innovation is institutionalized inertia that is reinforced
it offered new benefits related to customization, access to in underlying systems and structures.

66 / Rotman Management Fall 2020

 The answer is to rip a page out of the habit-change literature focusing even more intensly on day-to-day operations. But his-
and launch a well-constructed ‘BEAN’ that combines a Behav- tory clearly shows there are always opportunities to innovate
iour Enabler (i.e., a checklist) that details the desired new behav- and grow, no matter how stark the crisis. Remember, Sony
iour, an Artifact (i.e., a trophy or desktop object) that reinforces launched the transistor radio in the midst of a global pandemic
the new behaviour and a Nudge (i.e., a leaderboard) that invisibly in 1957; Microsoft was launched in a downturn in 1975; Apple
encourages behaviour change. launched the iPod after the dot-com crash of 2001; and Adobe
Detecting disruptive threats and seizing disruptive opportu- built the foundation of its remarkable transformation in 2008-
nities requires companies to innovate at an unfamiliar pace and 09, right in the middle of the Great Recession.
scale. While COVID-19 is leading to mass experimentation with To spot and seize opportunities in a crisis, it is important
new ways of working, companies still need significant work to to avoid battles of beliefs where statements start with ‘I think
become more agile and responsive. To accelerate and maximize this...’ or ‘I believe that...’ Such battles often lead to emotional-
the impact of this work, leaders should ask three questions: ly-charged stalemates. If, on the other hand, two parties agree
to look at the situation through the lens of an applicable theo-
QUESTION 8: What, specifically, are the new behaviours that ry, and have an aligned view of the mechanics of the theory’s
need to be encouraged to compete in an increasingly dy- model and the inputs going into it, there is often one and only one
namic environment? It’s all fine to say that organizations need conclusion.
to be more agile, but what does that actually mean? As Chip and Of course, there can still be debate over the model and its
Dan Heath noted in the book Switch, what looks like resistance inputs, but that kind of conversation both lowers emotions and
to change is often just a lack of clarity. leads to more productive discussions about what to explore or
where to experiment. Ultimately, using the right lenses in the
QUESTION 9: What, specifically, are the existing habits and sys- midst of a crisis helps to bring clarity by cutting through the fog
tems that are blocking those behaviours? It is easy to say ‘We of massive uncertainty.
don’t have time’ or ‘We don’t have proper training’. These kinds
of superficial blockers seem easy to fix, but the reality is often
more subtle. Ask questions like ‘What do we do instead?’ or ‘why
are we doing what we are doing?’

QUESTION 10: What BEANs can break the blockers and encour-
age the behaviours? For example, employees are often afraid
to take risks and run experiments because of the perceived stig-
ma of failure. Tata Sons, India’s largest conglomerate, offers a
prize called ‘Dare to Try’ that celebrates noble failure. Austra-
lian software company Atlassian regularly runs pre-mortems,
Scott D. Anthony is a Senior Partner at
where teams discuss what would happen that would lead their Innosight and former Managing Partner
projects to fail, helping to anticipate issues before they happen. of the firm, based in Singapore. He is
the author of EAT, SLEEP, INNOVATE:
How to Make Creativity an Everyday Habit
In closing
Inside Your Organization (Harvard Business Review Press, October 2020).
Executives are facing what feels like unprecedented uncer- David S. Duncan is a Senior Partner at Innosight and leads its Financial
tainty. In the face of such a challenge it is natural to respond by Services and Innovation Capabilities practices.

rotmanmagazine.ca / 67
 How Task Division
Can Build a Stronger
Health System
Organizations throughout the health system must systematically
split up the burden of response in order to deal effectively with
immediate needs — as well as those lurking around the corner.
by Will Mitchell and Kevin Schulman

FORTUNATELY, DURING OUR CAREERS, most health system leaders TEAM 1: THE IMMEDIATE CHALLENGE TEAM(S). The role of these teams
have not faced a crisis like the current COVID-19 pandemic. is straightforward: addressing the hourly, daily and weekly tasks
However, this also means that healthcare leaders around the at hand. A typical but not exhaustive list of tasks might include
world are now learning — in real time — about significant gaps in determining the care needs and staffing implications of COVID
their planning processes and their ability to react. patients; developing and communicating situational information
While the initial reaction to COVID-19 in many organiza- internally and externally; addressing staff training and personal
tions has been an ‘all-hands-on-deck’ response, in this article protection; and dealing with supply chain and operational chal-
we will argue that it is critical that we divide management tasks lenges that result.
across four distinct teams to allow us to focus not just on immedi- One of us is a professor at Stanford, where COVID cases
ate needs, but also on issues lurking around the corner. have been on a rapid rise. The hospital has set up a cross-func-
Each of the four teams we recommend must report directly tional team that meets daily to address situational needs. After
to senior leadership. Where appropriate, it will be useful to have sending out individual e-mails about this rapidly evolving situ-
overlapping membership across teams, to help coordinate their ation to faculty and staff, the hospital began to publish a single
activities. In turn, the senior leadership team should act as a con- daily e-mail with essential information for providers, vetted
ductor, shaping and orchestrating the overall activities. by the cross-functional challenge team. This notice includes
Following is a detailed look at the four teams we recommend information on evolving hospital policies; changes to services
healthcare organizations create. in response to the outbreak, such as the establishment of an

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 Healthcare leaders around the world are learning—in real time—
about significant gaps in their planning processes.

outdoor drive-through virus testing service; and other informa- cies and other actors in healthcare systems commonly have
tion that needs to be communicated to faculty, fellows and resi- access to telehealth services. Hence, there is a robust base of
dent physicians. This notice is also linked to the local intranet, telehealth services.
which may contain more detailed information on specific topics Historically, though, most organizations have under-uti-
and links to resources such as the Centers for Disease Control lized the potential of telehealth. While some of the challenges
website. have been technical in nature, organizational and political bar-
riers have been the major constraints. In the short term, the
TEAM 2: THE REMOTE SERVICES TEAM. The fact is, many of the COVID crisis has reduced many of these barriers — and we now
services that are now offered to patients in hospitals could be have opportunities to turn the crisis-driven acceptance into
accomplished externally, whether at patients’ homes or out- long-term wins.
patient facilities. Continuing to ask those patients to come to a This crisis creates an opportunity to ramp up and extend our
hospital for services raises obvious risks of congestion and in- use of telehealth to new in-home and out-patient services. Many
fection. While some elective services can be delayed until the of these services can continue to be offered after the COVID cri-
crisis subsides, others need to be dealt with to ensure patient sis subsides, as a way of shifting appropriate care out of expen-
health during the crisis. sive and sometimes risky in-patient venues to more effective out-
There are clear opportunities to increase our use of tele- patient settings. The need to extend nascent telehealth services
health across the board. All modern hospitals now have access during the crisis can help overcome organizational barriers that
to telemedicine in one form or another, whether as internal have slowed their current expansion.
practices or via external partners. Similarly, public health agen- Multiple vendors have scaled up telehealth services that

Leading for Resilience by Michelle A. Barton, Marlys Christianson, Christopher Myers and Kathleen Sutcliffe

Given the ongoing COVID -19 crisis, the need for resilience in Enacting resilience is more complicated than just ‘digging
the healthcare system—and everywhere else—has never been deep’ or ‘buckling down’, and requires actions that can some-
greater. Resilience can be defined as ‘the ability to absorb strain times seem counterintuitive. Following are three important
and preserve (or improve) functioning despite the presence of action steps leaders can take to build the resilience-in-action of
adversity.’ However, in the midst of chaos, fear, uncertainty and their employees, teams and organizations:
often completely insufficient resources, the call to ‘be resil-
ient’ may feel like an impossible demand, especially if you view Create productive disruptions. With chaos unfolding around
resilience as something one either has or does not have — a you, it is tempting to meet urgency with speed, to jump in at the
character trait like ‘grit’ or ‘fortitude’. beginning of a shift and not look up until it is over. Our research
Our own work, however, suggests something different. suggests, however, that this kind of head-down action can
As we have looked at resilience in emergency rooms, firefighting lead to dysfunctional momentum. This is the tendency to keep
teams, military units and sports teams, we have come to see it engaging in a set of behaviours without pausing to recalibrate
not as something you have, but instead as something you do. or to re-examine the processes or the changing context. When
Nor is it limited to recovery and picking up the pieces after a situations are volatile, unpredictable and complex, we can get
crisis has occurred. Rather, resilience is an approach to leading so engrossed in the action that we do not notice small indica-
and organizing that helps teams manage well during adverse tors that new problems are emerging or that the situation has
conditions. Recognizing this is especially important during changed so that our assumptions no longer hold.
a drawn-out and constantly changing crisis like the one we For instance, wildland firefighters can get into trouble if
currently face. It means that there are steps you can take right they focus entirely on fighting fires—getting the right people and
now to help your organization and your teams keep functioning equipment to the right location, coordinating within and between
in the midst of adversity. teams and working to put the fire out—and miss cues that the

70 / Rotman Management Fall 2020

are available to organizations that do not want to manage the phisticated care that is beyond their normal practice. This same
services internally. In the U.S., these include established gen- hospital now has an opportunity to provide the same services
eralist health companies such as Cigna, telecommunications to referring clinicians in its local community – explaining the
specialists such as Cisco, and specialized telehealth firms such criteria for COVID screening as testing becomes available and
as Teledoc and Zocdoc. In Canada, private companies such explaining treatment and referral options as those issues arise.
as Maple and public agencies such as Telehealth Ontario are At this hospital, beyond COVID treatments, the telehealth
scaling up services. applications can be used for other patient services. Bringing
As important as the technology backbone is the staffing telehealth local will avoid burdening the hospital with patients
model for the telehealth service, whether developed internally who do not really need to be there and also risk becoming in-
or contracted with a vendor. A switch from in-person to a tele- fected at the hospital. As it ramps up to address the immediate
health service includes developing standard operating proce- COVID needs, the hospital is working with its referring clini-
dures, training staff and building provider schedules to staff cians and with relevant payers to adjust the financial structure
the service. While this is a challenge, the COVID-19 pressure of their services.
creates an opportunity to overcome traditional barriers to deal- The changes in volume can be striking. One major east
ing with these issues. coast U.S. hospital, for instance, moved from only about 100
One hospital that we are familiar with offers services in monthly telehealth appointments before COVID-19 to over
which specialists employed by a private telehealth vendor pro- 2,000 daily video and telephone consultations in May 2020.
vide consulting services to remote communities in its region. The hospital has worked with state and federal regulatory au-
The telehealth clinicians guide local clinicians to provide so- thorities to allow clinicians to provide the services and with

wind or weather is shifting, which can radically worsen the situa- Reconfigure, redeploy and repurpose resources. When
tion they face. turmoil replaces our normal daily routine, a tension arises be-
The solution for dysfunctional momentum is to actually tween fighting to maintain normalcy and throwing the rulebook
create interruptions. Especially when situations are evolving out the window. The most resilient teams, however, do neither.
quickly, it is critical to disrupt the momentum and to create op- Rather, they take stock of what they have to work with—their
portunities to check in with one another about what is actually routines, roles and resources — and then reconfigure, redeploy
happening as opposed to what we assume is happening. One and repurpose. The goal is still to create order from chaos, but to
of the best ways to do this is through huddles, which are short do so by leveraging what you — or others around you — already
debriefings that provide opportunities for front-line staff and know and do. We have already seen this on an organizational
caregivers to stay informed about current events. However, level as distilleries use their resources and manufacturing ca-
huddles are more than an information exchange. They also help pabilities to produce hand sanitizer, athletic apparel companies
staff make sense of work as it is unfolding as people can report make medical masks and gowns, and hospitals turn emergency
concerns and anomalies as they look back on unexpected rooms and other spaces into COVID -19 intensive care units.
events and surprises. Yet this approach is not limited to physical resources; the
Moreover, caregivers can also look forward and report daily routines and patterns of interaction among people are also
leemers, a term used by naval aviators to describe a gut feeling critical resources that can be reconfigured in the face of unprec-
that something is wrong even though there is no definitive proof. edented demands. Our routines and operating procedures are
Huddles might be enacted differently during this crisis (i.e., they not static rulebooks, but in fact are living habits and patterns of
may be virtual instead of face to face), but they still can improve interdependent action that can be recreated and revised. This
collective awareness, thereby potentially increasing response means we do not have to throw out the old routines when facing
time and reducing the potential for failures. a new challenge, because it is still valuable to have some plan
CONTINUED ON PAGE 72

rotmanmagazine.ca / 71
 Many of the services that are now offered to patients
in hospitals could be accomplished externally.

major insurers to cover telehealth treatments. homes, gaining insights about the full context of services that
Where telehealth had limited flow before the pandemic, they need.
barriers arising from regulatory roadblocks to reimbursement In China, meanwhile, telemedicine services such as Ali-
and credentialing have now been removed. Removing these baba’s Ali Health, JD.com’s JD Health and Tencent’s We-
regulatory dams — together with a reduction in opposition from Doctor quickly created online coronavirus clinics to treat pa-
stakeholders within the hospital who have previously felt threat- tients across the country. These private sector vendors are now
ened by the changes — has led to the more than 600-fold in- maintaining and scaling up the systems to provide ongoing clin-
crease in monthly telehealth usage at the hospital. ical services as the viral pandemic subsides in China.
The key point is that expanding telehealth services — in In parallel to the creation of telehealth services, payers in
addition to being critically important parts of the response to the U.S. and elsewhere are beginning to adapt their policies to
the COVID-19 challenge — also lays down a pathway for lon- provide coverage for the services. Again, the revisions are being
ger-term remote service innovations. Providers in countries driven by the immediate COVID-19 pandemic. But, in the lon-
throughout the world are actively scaling up telehealth services ger term, the efficiency of telehealth and the gains in individual
with the goal of long-term implementation. welfare are creating incentives for the payment innovations to
Multiple oncology services, for instance, are expanding continue post-COVID.
their use of telehealth applications to support treatment and By moving now to expand telehealth services, hospitals,
post-treatment surveillance. These services are substantially public health agencies and other organizations in the health
more convenient for patients than forcing them to deal with system can position themselves to provide more efficient and
transit, parking, maneuvering through a hospital and relying on effective services once the pandemic passes. Therefore, in addi-
family members to help deal with clinical visits. Moreover, clini- tion to being part of immediate COVID responses, remote ser-
cians using telehealth systems can observe their patients in their vices teams are a key element of future-looking strategy.

Leading for Resilience (continued from p.71)

(even if it needs to be changed or revised as we go). Instead, we ignore or deny them. The problem is, emotions do not disappear
can pull pieces of old routines — either our own or others’ — simply because we do not acknowledge them. In fact, the oppo-
and adapt them to face new task demands as we engage in the site is true, and there is an even bigger problem here than feeling
‘bricolage’ needed to pull together response routines in the face overwhelmed: Negative emotions like grief, fear and anxiety tend
of never-before-seen challenges. to trigger defence mechanisms that undermine our ability to
Reconfiguration, redeployment and repurposing are part of work well with other people.
the best practices of teams that operate in other adverse condi- For example, we may look for someone to blame or find
tions. In a study of adventure racing — a team-based endurance ways to withdraw from the situation, becoming more isolated and
sport that involves equal parts physicality and problem-solving less involved. As we disconnect from one another and the situ-
— we found that the best teams viewed attention and task ation, it becomes nearly impossible to do the work of resilience:
engagement as limited resources. They recognized no one could communication breaks down; problem-solving and coordination
be ‘on’ at all times and so used role-switching to make sure the are undermined; and the end result is usually more, not less,
team could keep going, even when individual members needed adversity.
to ‘check out’. They had preassigned backups for key roles and, The work of resilience, therefore, involves directly address-
because they knew they could not always predict when some- ing the emotional implications of adversity. This does not require
one might suddenly need a break, they maintained a flexible hours of therapy. Rather, teams can use ‘relational pauses’, a kind
attitude about changing roles regardless of whose turn (or shift) of huddle in which the focus shifts from what a team is doing to
it was. how they are feeling and interrelating. Members are encouraged
to share their recent experiences and emotional impact, while
Attend to emotions. In the face of crisis, it is easy to feel that others actively listen, demonstrate compassion and acknowl-
the only way to avoid becoming overwhelmed by emotions is to edge the validity of their feelings, recognizing that each person

72 / Rotman Management Fall 2020

 TEAM 3: THE EXTERNAL COORDINATION TEAM. The idea that nizations. Reassuringly, each individual had a compelling mes-
‘all healthcare is local’ is an old adage. COVID is again bring- sage of how their own organization was responding. Much less
ing this issue to the fore, while highlighting the organizational comforting, though, was the fact that each person’s organization
complexity of local healthcare environments. The external faced real struggles in coordinating their activities with others.
coordination team needs to work with external stakeholders Unfortunately, the lack of coordination in that region be-
to link their hospital’s activities with those of other organiza- came painfully clear as the pandemic spread. Despite heroic ef-
tions in the health system that are engaged with the COVID forts on the part of individual people and organizations within
challenge. the region, coordination gaps led to shortage of testing, gaps in
Relevant external organizations include hospitals, out-pa- services for high-risk populations such as people in long-term
tient facilities, local and national public health agencies, politi- care facilities, limited contact tracing and other major issues.
cal bodies and many others. Joint responses can include desig- External coordination teams can address this lack of integration.
nating specific COVID care sites or, as importantly, non-COVID Let us be clear: The presence of organization-by-organiza-
care settings; shared efforts to support population health; ensur- tion external coordination teams is only one part of the solution
ing the availability of post-acute care services; and developing to the integration challenge. Any health system — whether re-
regional telemedicine programs. The external coordination gional, national or global — also needs strong central leaders
team will need to gauge where it makes sense to be the leader who work with experts to establish relevant goals, communicate
in facilitating system-based activities and where it makes more clearly and honestly, and hold themselves and others account-
sense to follow the lead of other actors. able for meeting standards. But even the most effective central
Early in the pandemic, one of us was involved with a panel leaders need robust touchpoints with each relevant actor in the
discussion of initial steps towards addressing the COVID-19 cri- system. External coordination teams within individual organiza-
sis, involving experienced leaders from multiple relevant orga- tions can provide this touchpoint with health system leadership.

may have a different reaction to traumatic conditions. ing lessons of past experience (by reconfiguring existing routines,
This last point is critical because it is easy for teams to roles and resources), and by building the relational capacity for
ignore or sideline one person who is struggling more than others. sharing knowledge and ideas (by attending to emotions).
Yet the very process of ignoring someone else’s pain can cause There is much within any crisis that we cannot control.
fractures in a team that undermine its ability to function (indeed, However, reminding ourselves that resilience is about doing more
in adventure racing, we found that the more resilient teams than having is one way to take back some agency and to be the
were those that viewed adversity as belonging to the team as a authors of our own stories of how we responded in the face of
whole, even when only one person was struggling). As members unprecedented situations.
share their experiences, emotional strain is diffused across the
group. In addition, a relational pause creates the opportunity to
Michelle A. Barton is an Associate Professor of Management at Bentley Uni-
acknowledge and repair any anxiety-triggered dysfunctional in-
versity. Marlys Christianson, MD, is a Professor of Organizational Behaviour
terpersonal patterns. Teams that make a habit of taking relational
and HR Management at the Rotman School of Management. Christopher G.
pauses are more likely not only to weather the storm of current Myers is an Assistant Professor of Management and Organizational Health
crisis but also to build critical relational resilience for the future. at Johns Hopkins’ Carey Business School. Kathleen Sutcliffe is a Bloomberg
If there is a common thread across these recommendations, it Distinguished Professor with appointments in Johns Hopkins’ Carey Business
is this: ‘doing’ resilience involves a great deal of rapid learning. It is School, the School of Medicine, the School of Nursing, the Bloomberg School
about quickly making sense of what is happening — operationally of Public Health, and the Armstrong Institute for Patient Safety and Quality.
and relationally — and developing an effective response, and then
doing that again and again as situations change. Resilient teams A longer version of this article was published in June by BMJ Leader, an
learn quickly by taking frequent opportunities to update their international, peer-reviewed, online-only journal focusing on leadership
understanding (by creating interruptions), by adopting and adapt- in health and care.

rotmanmagazine.ca / 73
 TEAM 4: THE SCENARIO PLANNING TEAM. Our current challeng- could have been another child in the water. Disney’s training de-
ing state of affairs will be part of a marathon as well as an im- veloped a procedure to address immediate needs and also deal
mediate sprint. The epidemiology underlying this infection is un- with contingencies that might arise. It’s a lesson that can help
clear, with tremendously uncertainty about its impact over time. those on the front lines of this uncertain crisis.
Given this set of challenges, a separate team should be estab- In another example, we are familiar with a pharmaceutical
lished to begin the difficult scenario planning that will support company that has long used scenario planning as part of its stra-
further decision-making at the organization level. tegic activities. The intriguing point about the scenarios is that
These scenario exercises need to consider contingency plan- none ever comes exactly true. Instead, the biggest value of this
ning for alternative cases including staff shortages due to illness planning is that it highlights major building blocks of possible fu-
or the lack of child care; financial implications of cancelling prof- tures and identifies resources within the firm and its partners that
itable elective services to care for critically important but less can be brought to bear as needed. In the face of the COVID crisis,
financially valuable COVID patients; operational issues such a this company was able to respond quickly in bringing key people
co-location of infected patients; and availability of local nursing together for internal efforts in developing multiple potential new
home beds for patient transfers. treatments. Moreover, it was able to rapidly identify staff mem-
Many other uncertainties highlight the need for scenario- bers that it could release to help provide external clinical servic-
based attention. As regions begin to open up in search of eco- es. Hence, the scenario planning exercises helped build a shared
nomic recovery — with different ability to test, track, and main- understanding of how to respond to a major unexpected event.
tain discipline in social distancing — we need to consider how to
address different levels of possible resurgence of COVID cases. In closing
We need to consider how the return to international travel might Individuals in health systems around the world are unambigu-
affect diffusion, particularly if recovery efforts are less effective ously committed to meeting the challenges of COVID-19. An
in some countries or regions. uncountable number of people are working tirelessly, often at
In addition, we need to assess how other infectious diseases risk of their own health and lives. But success requires far more
such as influenza might mask ongoing COVID infections, ideally than individual effort.
assessing how vaccination programs for influenza can facilitate Organizations throughout the health system must system-
ongoing COVID programs. And, unfortunately, we need scenari- atically split up the burden of response, while working internally
os for how anti-vaccination resistance by parts of the population and externally to coordinate the activities that we require for
might affect recovery. a robust response to this challenge. If we do so effectively in
In light of the tremendous uncertainty, these scenarios need response to COVID-19, our actions will also lay down a base for
to consider a broad range of outcomes, ranging from a rapid de- longer- term gains, both in healthcare and in health itself.
cline in cases to an evolving pandemic with new incident cases
over an extended period of multiple months or even years until
reliable treatments and vaccines are available. Central public
health agencies and political authorities have part of the respon-
sibility for the scenario planning. In addition, though, scenario
planning by individual organizations within the health system Will Mitchell is the Anthony S. Fell Chair in
can contribute to their own sustainability and to the strength of New Technologies and Commercialization,
the overall system. Professor of Strategic Management and
Co-Director, Global Executive MBA for
A simple example from outside healthcare provides relevant
Healthcare and the Life Sciences at the
insights about the benefits of scenario planning: A few years Rotman School of Management. Kevin Schulman is a Professor of Medicine,
ago, one of us brought their children to Disney. When a toddler Associate Chair of Business Development and Strategy in the Department
jumped into the pool before their parent, the lifeguard blew their of Medicine, Director of Industry Partnerships and Education for the Clinical
Excellence Research Center at the Stanford University School of Medicine,
whistle and jumped in. But the amazing thing was that this did and, by courtesy, Professor of Economics at Stanford’s Graduate School of
not leave a coverage gap at the pool. Instead, the whistle signaled Business. A shorter version of this article was published in Health Manage-
other guards to shift and cover the vacant chair because there ment, Policy, and Innovation’s special issue on COVID-19 (HMPI.org).

74 / Rotman Management Fall 2020

Tomorrow the world.
2 respected schools.
7 dynamic cities.
Highly personal focus.
Truly global outlook.
Transformative impact.
wwww.rotman.utoronto.ca/GEMBA
 Four Critical Skills
For Tomorrow’s
Innovation Workforce
The young digerati who will lead innovation going
forward need to develop business awareness, an entrepreneurial
attitude, bottom-line focus and ethical intelligence.
by Tucker J. Marion, Sebastian K. Fixson and Greg Brown

THROUGHOUT HISTORY, new technologies have demanded step development tools on organizations, their people and their
shifts in the skills that companies need. Like the First Indus- projects. We’ve found that the competencies companies need
trial Revolution’s steam-powered factories, the Second Indus- most are business-oriented rather than technical. That’s true
trial Revolution’s mass-production tools and techniques and the even for brick-and-mortar companies that are trying to become
Third Industrial Revolution’s internet-based technologies, the more digital.
Fourth Industrial Revolution — currently being driven by the And most companies are beginning to realize that they can’t
convergence of digital, biological and physical technologies — is just hire all-new workforces; there aren’t enough qualified re-
changing the nature of work as we know it. Now the challenge cruits, and the expense would be enormous. Instead, they need
is to hire and develop the next generation of workers who will to retrain and redeploy existing employees and other members
use artificial intelligence, robotics, quantum computing, genetic of their communities, in addition to hiring and contracting new
engineering, 3D printing, virtual reality and the like in their jobs. ones to fill their needs. However, rapid technological change has
The problem, strangely enough, appears to be two-sided. rendered skill cycles shorter than ever; key competencies of even
People at all levels complain bitterly about being either under- a decade ago are passé today, and most of tomorrow’s jobs re-
qualified or overqualified for the jobs that companies advertise. main unknown.
In addition, local and regional imbalances among the kinds of Waiting for the fog to clear isn’t an option. Companies must
people companies want and the skills available in labour pools identify and develop the core skills their employees will need
are resulting in unfilled vacancies, slowing down the adoption of going forward. Our interviews, surveys and case studies have
new technologies. revealed that most companies focus on refining the skills their
Before organizations can rethink how to design jobs, orga- people already possess, which doesn’t prepare existing employ-
nize work, and compete for talent in a digital age, they must sys- ees or new hires for the business challenges they’ll face when
tematically identify the capabilities they need now and over the using emerging technologies in their jobs. We’ve also found that
next decade, to innovate and survive. For more than 10 years, young digerati, many of whom come into the workforce from
we’ve been studying the impact of digital design and product narrow academic streams, are typically more captivated by

rotmanmagazine.ca / 77
 Orchestrating data will require knowledge
across myriad disciplines.

digital technologies than they are by business problems. And tools to help surgeons define the optimal surgical paths. That
yet, given the sweeping changes that the new technologies are reduces exploration of the implant site, which helps reduce re-
likely to bring about, companies would do well to cultivate the covery time and lowers the risk of infection. To innovate at each
following four broad business-oriented competencies in to- step, Dental Wings’ employees need to understand how the new
morrow’s innovators. processes and systems connect and work together.
The need to know more holds true for people in every func-
1. Omniscience tion, but especially so in R&D and product design. In the not-too-
Tomorrow’s talent must aspire to understand everything — or distant future, product designers who are designing new earth-
at least much more than they currently do — about their busi- moving equipment will have to use AI and Internet of Things
nesses. Employees must grasp key connections: links between (IoT) sensor data to model, analyze, develop, and modify fea-
physical machines and digital systems, between each step of the tures in near real time. Once in the field, each prototype and its
value chain, between the company’s current and future business digital twin will operate simultaneously so that the designers will
models. And they must know their customers’ businesses — how have access to data 24-7. They must be trained to use it to develop
and when their customers’ products and services are used, how improvements for the current model on the fly as well as to better
their organizational processes work, and the related challenges design the next generation of equipment.
and opportunities. That’s the only way companies will be able to In almost every brick-and-mortar company, dozens of digi-
evolve from selling products and services to delivering outcomes tal platforms will have to be coordinated, the data mined and the
— a process that will likely change the very businesses they’re in. insights used in a harmonized effort between the human team
For instance, a major medical device manufacturer we and AI systems. Orchestrating all that data, whether from design
studied has moved from developing R&D-driven solutions to outcomes or field performance, will require people who under-
delivering patient outcomes, which has become possible be- stand the value of each data point and how all the pieces fit to-
cause of new technologies and big data. The company needed gether. It will also require knowledge across myriad disciplines,
to quickly employ more people with a systemic understanding of such as mechanical and electrical engineering, computer scienc-
everything it does, including patient care and rehabilitation and es and product development, because the variables in a complex
treatment efficacy. To move the needle on patient outcomes, it’s system interact in many ways. For instance, the location of a sen-
critical to understand all those aspects of the system and the as- sor on a suspension lever (a mechanical issue) will affect the data
sociated variables. Thus, the business will demand that existing that the sensor electrically measures, which will in turn affect the
and new employees have a broader understanding about the un- mathematical algorithms that determine the lever’s accuracy.
derlying science, the delivery technologies and the industry than Companies whose employees can manage and navigate complex
almost all of them, other than top management, currently pos- data-based systems will be best equipped to improve the perfor-
sess. Breadth of knowledge cannot substitute for depth, either; mance of their products, reduce maintenance costs, and attract
employees must also be able to make deep dives into the vertical and retain customers.
aspects of the business when necessary.
Let’s consider another example: The Canadian company 2. Entrepreneurial Mindset
Dental Wings is using recent advancements in digital design, Although it may sound obvious, innovation teams will need
digital imaging and additive manufacturing, as well as a collabo- to become more enterprising to succeed. They must become
ration platform, to rethink its dental implant business. From the boundary pushers in terms of not just the products they wish
dentist’s initial assessment to patient recovery, the company has to develop but also the processes they use. The two are closely
started adopting new technologies to improve its processes and linked.
provide better care. For instance, all-new imaging capabilities In large businesses, R&D and product development teams
provide more accurate pictures of the dental site that can be used are organized like most other functions. They must follow the
not only to create digital models for implants, but also to develop company’s guidelines about sourcing hardware, materials and

78 / Rotman Management Fall 2020

technologies to do their work and can use only IT-approved There’s a reason entrepreneurs in high-tech startups are
tools. R&D must adhere to time-tested procedures and rules for risk-tolerant, and it’s time that intrapreneurs, or innovators in es-
sharing information about or testing prototypes and product de- tablished companies, followed in their footsteps. Look at Proto
signs. And traditional R&D teams usually work in a centralized Labs, which manufactures injection moulds and machined parts
way, relatively insulated from the outside. and offers additive manufacturing services. To accelerate the
All that works well when business is as usual, but these are time it takes to develop the first tooling cuts for its clients, the
extraordinary times. R&D is meant to push technical boundar- R&D group quickly developed some software on its own. The
ies, so R&D teams must learn to redraw organizational bound- program could identify possible manufacturing problems in the
aries to keep pace with technological change. Essentially, they digital-parts files sent by clients.
must become digital intrapreneurs, using the latest tools or, if Through its automated platform, Proto Labs R&D communi-
necessary, creating them. That involves experimenting with cates any possible glitches it detects directly to clients so that they
new software and systems outside those recommended by IT, can rectify those well before production starts. If such revisions
and even developing some solutions in-house. were made after test production had begun (as they were in the
For incumbents, that can be a shock to the system — most old days, before the homegrown software existed), the process
people are used to working on proprietary systems and tools, would have been deemed client-unfriendly and would have cost
getting things ‘right’ before launch and offering better products both the client and the company time and money. Proto Labs has
over time. Moving towards open systems, beta versions and con- also added downloadable tools and other materials to help clients
stant iteration can feel like a clash of civilizations in established design better parts, ensuring that everyone in the ecosystem ben-
companies, but they need to do so to innovate for today, as well efits from the process improvements. These offers are the out-
as tomorrow. come of entrepreneurial actions of Proto Labs’ employees.
Collaboration is central to this effort. One study of 152 man-
agers found that companies that used digital tools for collabo- 3. Bottom-Line Focus
ration improved performance — as measured by the number of In a data-driven world, employees need to be just as skilled at
concepts and prototypes developed — during the early stages of thinking about business models as they are at designing and
innovation. And another study of 400 companies showed that implementing systems. Thanks to IoT and other technologies,
more-innovative organizations, measured by similar yardsticks, companies’ value-capture strategies can be shaped not just by
used such tools more frequently than less-innovative ones. Since the marketing, sales and business development functions, but
better collaboration leads to more innovation, the collaborative also by R&D and product development. IDEO’s Tom Kelley de-
tools and processes that organizations use are critical. Figuring scribes people who look for business opportunities, beyond the
those out requires an entrepreneurial mindset as well. current challenges, as ‘cross-pollinators’. Fostering that capabil-
For example, at a large company outside Boston, a new ity will be key.
digital group is working on completely changing the way the Product engineers, for instance, must consider what kinds
organization designs products. This small team has asked for, of sensors should be used, their placement and the data types
and been given, the freedom to use any tools it wants, wherever captured in light of possible revenue streams and cost savings.
they may originate. So the team has created a new system from After all, big data poses as many challenges as opportunities. All
scratch that allows it to test design structures in real time. The hands must be on deck. The number of IoT-connected devices,
group also uses several digital platforms, most developed by un- estimated at around two billion in 2006, soared to 11 billion
known startups, to communicate and collaborate both internally by 2019, and is projected to hit 75 billion by 2025. Companies
and externally. It’s unlikely that IT approves or is even aware of are capturing an enormous amount of data: IoT-generated data,
what’s happening, but top management realizes that the com- estimated in 2016 at around 22 zettabytes (1 zettabyte equals
pany’s digital transformation will never occur if teams like this 1 trillion gigabytes), reached 52 zettabytes by 2019 and is project-
one are confined by rigid boundaries. ed to hit 85 zettabytes by 2021.

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 Companies will have to consider how their design decisions
and digital systems affect each stakeholder.

While a company’s digital people may appear to be on the and that will have consequences for companies, consumers and
front lines of the data explosion, they also need to be able to fig- society. Doing the right thing will become only more challenging
ure out what all that data means for the business and how it can as digital systems become increasingly complex.
be monetized. They must go beyond checking where the data People must examine machines’ choices through an ethical
originated, how dependable it is, where it is stored and whether lens — and weigh in. Companies will have to consider how their
it has a coherent sequence. All that is useful but has become design decisions and digital systems affect each stakeholder and
mere hygiene. factor in the likely unintended consequences. In industries such
In focusing on business relevance, data technicians should as aerospace, automotive, and medical device development, tra-
be trained to ask some key questions: Can the data be used to ditional engineering processes like risk analysis and failure mode
monitor our products’ performance and be offered as a service? and effects analysis (FMEA) should also be deployed during the
Can that be done in real time? How else can the data be ana- development of digital platforms and products. For instance,
lyzed to generate insights about customers and their needs? For when Twitter’s founders created the platform, they didn’t imag-
instance, can it be used to change the way customers schedule ine it could be used to influence elections with the use of fake ac-
preventive maintenance for our products? counts and bots. However, a coder putting the platform through
The need to be business-focused throughout the organiza- a design FMEA would have identified the possibility well before
tion can lead to dramatically different customer-facing roles. people caught a glimpse of the platform’s dark side.
One fast-growing company we studied develops sensor-based Given AI’s potential, every company needs to consciously
modules for the aerospace, automotive and medical industries. decide what good judgment looks like. Take the case of Boeing’s
It recently combined the roles of the product development 737 Max 8, where, according to recent reports, pilots complained
manager and the product manager in all its lines of business — about an issue with the aircraft software while testing it years
a radical step that immediately helped speed up cycle times. before 346 people died in two crashes. However, those concerns
To have a product position that is both inward- and cus- never made it to the Federal Aviation Administration — a tragic
tomer-facing is unusual even today. Traditionally, the product failure of ethics at all levels of the company. The countermea-
manager would assess market trends and customer needs while sures lie beyond the scope of this article but must include new
developing working relationships with the company’s clients. codes of conduct, fresh corporate responsibility norms, KPIs that
He or she would then feed the R&D team — led by a product reinforce personal accountability, and specialized training.
development manager — the information to develop new prod- To embed a watchdog mentality in the culture, companies
ucts, systems, and solutions, or improve old ones. Once the should provide ethics training — and clearly define what ethi-
company combined the two roles, the speed with which new cal means in their specific context. Moreover, agility may be
technical solutions were matched with prospects, and vice ver- the norm, but companies still need to be disciplined in terms of
sa, rose dramatically. process. That means a heightened emphasis on developing tools
Combing the two roles also created avenues for the cocre- that improve quality and stop bad design from hurting people.
ation of non-traditional solutions. For instance, by drawing on Making processes more digital must not take away from the in-
data from IoT sensors, the company was able to develop sev- herent value of techniques such as control plans and indepen-
eral new applications that reduced operating costs in areas dent testing, whose importance should be engrained in tomor-
that could not be assessed earlier, because the product devel- row’s talent.
opment/product manager could now understand clients’ pain As ecosystems develop, companies must use ethical intelli-
points as well as all the solutions the company’s technologies gence to consider implications for all their stakeholders. At one
could provide. open innovation platform, we found ethical breeches by the par-
ticipants as well as the platform’s management. The lapses af-
4. Ethical Intelligence fected the quality of ideas and input from the community as well
Machines, overseen by smart humans, will make many design as the trust among stakeholders. Companies must build guard-
decisions. Though they are innately logical, they lack empathy, rails into their platforms if they want to keep the faith of society,

80 / Rotman Management Fall 2020

which already views corporations and intelligent machines with wider audience. All too often, such projects are killed after their
distrust. That could include more visibility into management conceptualization, but companies that institutionalize entrepre-
processes and decisions, a clearer articulation of privacy policies, neurial ecosystems can substantially improve their ability to be
and better identification and reporting of anomalies in the sys- innovative.
tem. Think of the impact on Facebook’s image if it had reported To be sure, the goal isn’t to have a bifurcated talent pool in
the issues it experienced with foreign bots in 2016 in real time. a company but rather an organization in which all the talent
works together in a continuum, from hardware-focused experts
Why Structure Matters to digital natives, from baby boomers to centennials. That’s how
Traditional companies will have to experiment with new organi- many design and innovation companies now function, with
zational structures to get the best out of their people. Otherwise, older designers using sketches and hand-formed foam proto-
tensions between well-entrenched managers and digital talent types while recent graduates go right to Computer-Aided Design
may thwart transformation, and the digital folks may walk out (CAD) software. Interestingly, the approaches can be effective
the door. if used together.
In their restructuring, it’s important for companies to signal At one design company we studied, the older designers,
that digital transformation is critical for their futures. One radical who preferred traditional methods, learned over time how the
approach is to replace the central R&D unit with a digital product younger designers worked, and the younger ones gained a deep-
design group. A well-known shoe company recently did this. The er sense of what they were doing from their older colleagues.
new group oversees the development of a new approach to prod- It wasn’t long before all the designers, regardless of age, were
uct design, testing and analysis, which will include customized using digital tools for project management, communication and
generative design and analysis tools. Top management views this collaboration.
group as spearheading the company’s future product develop-
ment process. In closing
Another option is to form a digital group that floats from It is never easy for companies to change, especially from within.
project to project across the organization, as one leading con- However, identifying and bringing in the skills needed to move
sumer electronics company has done. There, digital experts forward with innovation can help kick-start the transformation
hover over projects in various businesses and countries, provid- process. Indeed, doing so may make all the difference between
ing input whenever asked or needed. The flexibility reduces the success and failure.
number of digital experts the company needs, even as it helps
retain them, because they enjoy the variety of opportunities and
challenges the arrangement provides.
Some companies, like Apple, have internal venture teams
to develop new products. Others are now doing so with a genera-
tional twist by creating new venture teams made up entirely of
millennials and centennials to come up with new products and
processes. A large pharmaceutical manufacturer we studied in-
vited its youngest employees to conceptualize and implement a
Tucker J. Marion is an Associate Professor
new way to connect patients, doctors and the company during
of Technological Entrepreneurship at North-
clinical trials for its products. Those employees used their na- eastern University’s D’Amore-McKim School
tive expertise in mobile technologies and social media to keep of Business in Boston. Sebastian K. Fixson
all stakeholders informed and involved. Top management let is Associate Dean of Innovation and the Marla
Capozzi Term Chair of Design Thinking, Innovation, and Entrepreneurship
them run the show, without allowing the rest of the organization
at Babson College in Wellesley, Massachusetts. Greg Brown is a Product
to interfere. Funded by an internal venture capital panel, the Management Fellow at Onshape Inc. Reprinted with permission from
project was tested, and eventually the company rolled it out to a MIT Sloan Management Review.

rotmanmagazine.ca / 81
 AN AGENDA
FOR
BUSINESS
LEADERS
The outsized success of a few outlier companies
points to four steps that every business can take to contribute
positively to the future of democratic capitalism.
by Roger L. Martin

WHEN MY WIFE MARIE-LOUISE introduced me to Joe’s Stone Crabs she in a tank top and he in a short-sleeved shirt. Two more tables
of Miami Beach, a favourite of hers from when she had lived in over from them, three police officers in uniform chowed down
South Florida, I was promised a great meal; but I had no idea with enthusiasm.
what an intriguing business experience it would be. Our waitress, Joan, and the wine steward, Avi, were terrific.
Joe’s is a rarity: an American restaurant that has prospered I couldn’t stop myself from asking: What is going on here? They
for over a century. It is currently the top-grossing independent loved their jobs and the restaurant. Joan told us proudly about
restaurant in America — despite being the only one in the top her crab pin that was symbolic of the Waiters Fund. Staff sold the
100 that closes for three months per year when its principal fare, gold pins to raise a reserve for waitstaff that come into hard times
stone crab, is out of season. and need a bit of support. Avi talked about how great it was to
I was entranced from the moment I entered the restaurant. work at Joe’s. Based on our obvious interest in Joe’s model, Avi
The waitstaff all stopped to greet us warmly. Because I am a busi- suggested that we talk to fourth-generation co-owner Stephen
ness nerd and know that the average annual turnover in the U.S. Sawitz and helped us make that happen.
restaurant industry is 75 per cent per year — which means the Several months later, my wife and I had the pleasure of
average staffer stays for 16 months — I knew that these folks meeting with Stephen and his redoubtable mother Jo Ann Bass.
were anything but average. We started with a tour of the restaurant, during which Stephen
We were promptly seated in the main dining room, a space greeted every employee warmly by name and made sure to at-
of comfortable elegance with an open second story of generous tend to little pieces of business along the way. Perhaps because
windows. At the next table was a group of elderly ladies dressed he was born in the business, Stephen was incapable of dividing
in Sunday best. But behind them was a 20-something couple, it into siloes. Employees, purveyors, customers and community

rotmanmagazine.ca / 83
 Joe’s success points to four steps that every business can take
to contribute positively to the future of democratic capitalism.

were all present in his and his mother’s minds as they spoke — and it will be a lesser place for their absence. The $6.95 fried
about their business. half-chicken is a crucial piece of the restaurant’s complex adap-
For employees, Joe’s had to make it a productive and re- tive system.
warding life. Take J.T., the maître d’ who had been at Joe’s since The same thinking is evident in Stephen’s decision 25 years
1971 and whom Stephen invited to join our conversation. J.T. had ago to change the traditional entrance and put a large service bar
come from “a swamp in Louisiana” and after a couple of years where the original entrance used to be. The reaction internally
of cheerfully and efficiently washing pots, he became a bus boy. was that the new bar was so big that it eliminated a number of
After 19 more years, he applied to become one of the dining dining tables, which would reduce revenues. Stephen’s reaction:
room captains and got the job. Holding back tears, he credited “Exactly. And that is fine.”
Jo Ann for having bet on him nearly three decades earlier. After This is an important marker of non-reductionist thinking:
another 12 years, he became maître d’, and is still in that position Yes, the big bar might reduce the number of tables; but patrons
15 years later. at the main bar won’t have bartenders juggling their orders with
J.T.’s story is not unique for Joe’s. Founder Joe Weiss used the drink orders for tables (the primary function of the service
to drive his workers home after work because in his era, African- bar). And it would help those waiters get drinks to their table pa-
Americans weren’t allowed on Miami Beach after sunset and Joe trons faster. Introducing a friction in the form of a table-canni-
wanted them to work at his restaurant. In the 1970s, Joe’s offered balizing bar may have made the restaurant appear less efficient
health insurance, pensions and profit sharing for workers long at first blush, but in Stephen’s view the move was a no-brainer in
before those were common benefits in industry in general, let the long term for improving the guest experience and reducing
alone in the laggard restaurant industry. In an industry with 75 the pressure on both his bartending and waitstaff.
per cent annual turnover, Joe’s hourly employees stay an average This decision is part of a pattern at Joe’s: experimentation.
of 10 years and its overall staff an average of 15 years. Stephen has continually experimented — whether with a new en-
But the model can’t just work for employees only. It has to trance and outsized service bar, an outdoor dining area, a takeout
work for suppliers too — or ‘purveyors’, as Stephen refers to them. business or a summer menu to shrink the summer closure from
As indicated, Joe’s business is founded on stone crabs, which five to three months. All are thoughtful and reflective, though not
Stephen’s great-grandparents introduced to the dining public, traditional, tweaks to a complex adaptive system.
and today it is by far the biggest purchaser of stone crabs in the The business model is also environmentally sustainable.
country. Joe’s operates fisheries itself and in addition purchases Stone crabs are not killed in the process of harvesting and selling
large quantities from independent operations. When we talked them. Depending on size and sex, one or both claws of the crab
about the purveyors, the response was truly systemic. “We want are removed by the fisherman. If the removal is properly done,
our fishermen and women to be the best paid, so their sons and the stone crab can be returned to the sea where it can survive and
daughters will want to work with us.” regrow its claw or claws. Joe’s can take credit for popularizing the
This is not narrow reductionism: it is expansiveness. It bal- only meat meal that doesn’t involve killing the animal.
ances a traditional separation, in which most companies are Strictly speaking, Joe’s pursues inefficiently high compensa-
transactional in their supplier relationships, with a connected- tion for both employees and suppliers, inefficient use of space in
ness that acknowledges the interdependence between Joe’s sys- the restaurant and inefficient sale of low-price chicken entrées.
tem and that of the fishermen supplying it. That notwithstanding, its model has been proven to be monu-
Then there are the customers. With a medium portion going mentally effective for over a century, with no sign of slowing
for $44.95 and a large at $69.95, not everyone can afford stone down.
crab claws. Because of this, Joe’s insists on having an entrée for Joe’s outsized success points to four steps that every busi-
customers who want an affordable meal. The fried half-chicken, ness can take to contribute positively to the future of democratic
at $6.95, is the second-most-purchased entrée on the menu. capitalism: turn your back on reductionism; recognize that slack
This was Jo Ann’s baby. She recognized that if Joe’s features is not the enemy; guard against surrogation by using multiple
only $45-$70 entrées, it will be a very different place, and not in measures; and appreciate that monopolization is not a sustain-
a good way. The kids in the tank tops and the cops won’t come able goal. Let’s take a closer look at each.

84 / Rotman Management Fall 2020

STEP ONE: Turn Your Back on Reductionism with waste, must be eliminated in order to maximize the ma-
Executives are taught to manage machines. Most have an edu- chine’s efficiency. The management tools we use to do this are
cational background in business administration or engineering/ based on the techniques originally pioneered by W. Edwards
computer science, or both. This training teaches them to break Deming — who would probably turn in his grave if he knew
down their companies into constituent parts — individual disci- where we had taken his ideas. Deming’s tools have been a great
plinary pieces — and optimize each piece; all with the assumption boom to business efficiency and their application can contribute
that the pieces can be added back up to produce a productive and to a competitive cost structure, which is necessary for competi-
useful result. tiveness. But when the drive to eliminate slack is taken too far,
Even if they weren’t formally educated that way, they are in- it can wreak havoc. Deming himself recognized the systemic
doctrinated into that approach the instant they start their working complexity of businesses and taught that there is always an opti-
career when they are assigned to a narrow job in an organization mal level of slack for any business system — and that level is not
that is structured by piece-parts. This reductionism has handy el- zero. Slack is a manifestation of friction — of the sort that in the
ements, to be sure. It makes the resulting narrowly-defined jobs right amounts contributes to greater resilience.
much easier to fill and training employees much simpler. But it Brazilian private equity firm 3G Capital is learning this the
also makes employees much less valuable, interchangeable cogs hard way with its Kraft Heinz investment. Flushed with its ap-
in a big and not very effective machine. parent success in consolidating the global brewing industry with
On one hand, there is downward pressure on the compensa- Anheuser-Busch InBev (ABI), 3G successively gained control
tion for the interchangeable cogs because candidates with nar- of Heinz in 2013 and Kraft in 2015 and then engineered a merger
row, specialized skills are relatively plentiful and their ability to of the two food companies. It saw the resulting food conglom-
add true value is constrained by the way they are used to produce erate as riddled with slack that could be taken out with its zero-
ineffective piece-parts within what is actually a complex adap- based budgeting (ZBB) approach.
tive system. Meanwhile, companies have an insatiable desire for Under ZBB, each budget year starts with zero costs and every
the rare few magic value creators who know how to perform in- cost item has to be justified one by one. It sounds good in theory
tegrations that are necessary for and consistent with a complex and has delivered early cost wins for some 3G Capital companies,
adaptive system. This means the majority of employees are driv- including ABI. Initially, Kraft Heinz looked as if it might follow
en towards subsistence compensation and a very few are given suit. Between 2015 and 2018, ZBB was able to drive sales, general
whatever it takes to acquire their services. and administrative costs (SG&A) at the merged company from
The results of this managerial reductionism are negative 10 per cent of sales to 8 per cent of sales — an impressive 20 per
for all stakeholders: An unstable, unbalanced Pareto distribution cent improvement in overhead cost efficiency, consistent with
of employee incomes; an unsatisfactory, repetitive existence an all-out attack on the enemy: slack. However, it appears in
for most employees; and mediocre outcomes for customers, hindsight that some of those costs weren’t entirely wasteful
who never want to hear a service professional say ‘I can’t help slack. During the short period from the takeover in 2015, the
you. It is not my job. You need to speak with the [fill in the blank] gross margin at Kraft Heinz — i.e. revenues less cost of goods sold
department.’ as a percentage of sales—fell by 3.5 percentage points from 39.5
As Joe’s Stone Crabs illustrates, leaders should instead per cent of sales to 36 per cent of sales. Taken together, the two
embrace the reality that a business is a complex adaptive sys- percentage-point reduction in costs begot a 3.5 percentage-point
tem in which the components and subsystems are highly in- reduction in profit margin — a net detriment to the business of 1.5
terdependent human processes and that over-optimizing one percentage points.
part compromises optimization of another part and can lead to This substantial decay in its business prospects forced Kraft
alienation and disengagement from the very people you need to Heinz to announce a massive $15.4 billion write-down in its as-
be most engaged. sets in February 2019, one of the ten largest corporate write-
downs of the decade. 3G Capital is learning an important lesson:
STEP 2: Recognize That Slack is Not the Enemy Serving the customer distinctively at a profit is a goal that requires
In the dominant machine-based model, slack, which is equated thoughtful and intelligent slack — friction against efficiency.

rotmanmagazine.ca / 85
 The results of managerial reductionism are negative for all stakeholders.

So, what does positive friction look like in such situations? ber of accounts per customer; activity level per account; growth
In a body of work presented in her 2015 book The Good Jobs Strat- in customer-bank interactions; and customer retention’. More
egy, MIT/Sloan Professor Zeynep Ton studied retailers to un- accounts makes it harder to have more activity per account, so
derstand the implications of staffing decisions for retailer prof- the number of accounts wouldn’t have been slavishly pursued.
itability and success. In retailing, after the unavoidable cost of Rather, a balance would have needed to be targeted. That would
the goods on the shelves, the biggest cost is the cost of the staff. mean working harder to make more customers happy than try-
She observed that most retailers had evolved to a model in which ing to acquire more customers who would be unhappy with a
minimizing the cost of store staff is a central goal. One way was lack of attention.
to pay the lowest wages possible, which is why retail clerks and Some companies already do think and operate in this fash-
cashiers are among the lowest wage jobs in America. Still an- ion. Since its inception in 1970, Southwest Airlines has been
other way was to drive out all slack by reducing the number of the most successful airline in America by nearly every accepted
store-staff hours to the bare minimum required to serve custom- measure. Its unique low-cost strategy is heralded by many as be-
ers. Increased efficiency through low wages and the elimination ing a key source of its success. But another thing that contributes
of slack is their theorized success formula. to Southwest’s striking success is its multiplicity of internally-
But a smaller number of retailers — including Costco, Trad- contradictory proxies for success: Southwest seeks to be both the
er Joe’s and QuikTrip — have followed a very different model. lowest cost airline in America and No. 1 in customer satisfaction,
In addition to paying much higher wages than is customary in employee satisfaction and profitability.
the industry, they consciously and deliberately build meaningful This means, for example, that it can’t possibly pursue low
slack into their staffing. These are salesperson, clerk and cashier cost by driving down wage levels. It has to find cleverer ways to
hours that the staffing formulae used by their competitors would keep control of employee costs, and it does so by paying them
deem to be excessive. But rather than being less profitable due better than any competitor while helping them be so productive
to these purposely higher costs, these retailers earn much higher that labour costs per passenger seat-mile and as a percentage of
sales per square foot of space and much higher profitability than revenues are lower, not higher than competitors.
retailers who follow the standard model. The very fact of having four proxies reinforces that these
Why? Because customers love the superior service that they four proxies add up to an approximate measurement of the
receive from cheery and effective workers in a delivery system model’s outcomes, not a representation of the model itself. More
that features the presence of multiple manifestations of friction. generally, it recognizes that a system is a complex combination
These retailers understand that they exist in and are a part of a of parts and that success requires maintaining a balance between
complex adaptive system. In that system, slack is not an unalloyed that interdependence of the parts and separation between them.
enemy and all things that seem like ‘efficiency’ are not efficient.
STEP 4: Realize that Monopolization Is Not a Sustainable
STEP 3: Guard Against Surrogation with Multiple Goal
Measurements Eliminating the competition feels like a natural goal; it means
The surrogation of proxies for models is a natural and dangerous you’ve won. That’s why Intel attempted to eliminate Advanced
occurrence in the business domain, where it facilitates gaming Micro Devices (AMD), for which it was fined by the European
and makes executives unreflective about how their business re- Union. That is why Facebook is using its deep pockets and huge
ally works. The best defence against a proxy becoming the im- user-base to empower its Instagram subsidiary to ‘kneecap’ its
plicit surrogate for your model is to use multiple measurements rival Snapchat by copying its core product. Managers feel more
as proxies for progress of the model against the goal — in particu- secure when their customers have no alternative to the product/
lar, proxies that are internally contradictory. service they produce. Given that American monopolists from
Contradictory proxies encourage managers to think integra- Rockefeller to Zuckerberg have become among the richest men
tively and to take a systems perspective on the company’s opera- in history, the appeal of establishing a monopoly is understand-
tions. At Wells Fargo, imagine if, rather than the single proxy of able. But it has a downside: Monopolies don’t last in the natural
‘number of accounts per customer’, the proxies had been ‘num- world and they don’t last in business either.

86 / Rotman Management Fall 2020

 Monopolies don’t last in nature because they don’t adapt, pete aggressively to win the hearts, minds and pocketbooks of
and the fundamental rule of nature, as posited by Charles Dar- customers against formidable competition.
win, is survival of the fittest — by which he meant those most
able to adapt to the environment. And what drives adaptation in In closing
business? It is learning from one’s customers how to provide bet- It won’t be easy for executives to get started on this agenda, be-
ter value for them. Customers define value, not those who serve cause it will mean unlearning ideas and beliefs that are deeply
them. Providers can only hypothesize about what constitutes embedded. The best way to get started is for executives to use
customer value. Providers learn based on customer feedback and themselves as a proxy for the people in whatever system they are
hence customer feedback is the linchpin of positive adaptation. attempting to understand and operate. If they are starting down
It is very difficult to become a better provider of a given product the path of reductionism by breaking a problem into independent
or service in the absence of real customer feedback. piece parts, they need to ask themselves: Is that how I think about
It is not the mere existence of customer feedback that pro- problems/issues pertaining to myself? About my family? Or, do I
duces positive adaptation. Listening to customer feedback and think about problems that affect me in a more holistic manner?
taking action on it are both necessary preconditions for positive And if so, how could I think of this problem equally holistically?
adaptation. But change is never easy; it is tiring and expensive. As If they are working their way towards the elimination of all
a consequence, most companies, most of the time will only listen slack, they need to ask themselves: How do I feel when I have
to customers when they must, and they only have to when the absolutely no slack and am forced to run from one activity to the
customer can credibly threaten to become an ex-customer if the next without a break? Do I do my best work under those circum-
provider doesn’t listen and change. stances, let alone decent work? If not, why should I assume that
Therein lies the fundamental sustainability problem for mo- the process/activity from which I am eliminating all slack will
nopolists. They don’t have to listen to their customers. Anybody work efficiently when I am done?
who has to wait days to get their cable television service problem If they are enthusiastically pursuing the achievement of
fixed recognizes the phenomenon. The monopoly provider of progress on a given measurement, they need to ask themselves:
cable TV in your region doesn’t have to be responsive, because Do I respond well to being measured on one single dimension?
if you want cable TV, you have no choice. In the end, monopo- Or do I prefer and see as more realistic a multifaceted approach?
lists exist to serve themselves, not to serve their customers. They If so, how could I add further attributes to my measurement
don’t get the training that customers normally provide because system to make it something more consistent with how I would
the monopolist doesn’t have to train. want to be measured?
As a consequence, monopolists stultify over time. They may Finally, if they are enthusiastically working towards the
have virtually unlimited resources, but they don’t have the mo- elimination of competitors and achievement of monopoly posi-
tivation to deploy them productively. When the environment in tion, they need to ask themselves: If there were no consequenc-
which they operate necessitates major adaptation, they are un- es to ignoring our customers, would I work hard to listen to them
able to adjust because they are out of practice. and change what we do to make them happy? If not, then what
A great company needs great competitors to stay great. Of would cause me to believe that if we achieve the sought-after
the 10 companies that have been a component of the Dow Jones monopoly, we would continue to listen to and respond to cus-
30 for more than 30 years, nine (Exxon Mobil, P&G, United tomers? My hope is that these small things will help executives
Technologies, 3M, Merck, Amex, McDonald’s, Coca-Cola get started.
and Boeing) have always had at least one formidable competi-
tor. The only exception is IBM, which arguably didn’t have strong
enough competitors for too long a time and is now in a long-term Roger L. Martin is the former Dean of the Rotman School
swoon from which it may never recover. of Management (1998-2013) and is currently ranked second
on the Thinkers50 list of the world’s most influential manage-
Companies should compete aggressively against their com- ment thinkers. His latest book is When More Is Not Better:
petitors; just not with the intent of driving them out of business. Overcoming America’s Obsession with Economic Efficiency (Har-
That is because the only way to stay sustainably strong is to com- vard Business Review Press, 2020). For more, visit www.rogerlmartin.com.

rotmanmagazine.ca / 87
 New from Rotman-UTP Publishing

9781487503734 | available as an ebook 9781487506025 | available as an ebook

“Kossek and Lee have “For fintech aficionados and

thoughtfully – and finally – neophytes alike, this is a great
elevated the discussion on overview of the nuances and
gender equality and inclusion.” complexities of the history,
impact, and future of technology
Barbara Soria, Senior Vice President,
Human Resources, Capital Group in financial services. ”
Ghela Boskovich,
Founder of FemTechGlobal

@utpress | utorontopress.com
Idea Exchange
90 SARAH KAPLAN how to build back better

93 SATYA NADELLA leading with empathy

96 JULIE McCARTHY protecting your well-being in stressful times

99 CHARLENE LI on navigating the new normal

103 ANDREW ATKINS + SUZANNE BATES on grace under pressure

106 STEFAN THOMKE making experimentation work for you

109 JENNIFER RIEL (MBA ‘06) what ‘winning’ means now

112 JOAN C. WILLIAMS on making inclusion part of the next normal

115 BRENDAN CALDER on Getting it Done

118 CHRIS STAMPER (MBA ‘94) on charting a new path with the 4P’s

121 DAN HEATH on solving problems before they start

124 LISA KIMMEL on Canada’s trust landscape

 FACULTY FOCUS Sarah Kaplan, Professor of Strategic Management, Rotman School of Management

How To
‘ Build Back Better’
after COVID-19

AMAZON’S JEFF BEZOS SIGNED IT. So did Doug over. However, myriad signals tell us that returning to the
McMillon, the CEO of Walmart, and old normal won’t be adequate or even possible. COVID-19 is
Charlie Scharf, the CEO of Wells Fargo. revealing fractures in our economy that many in the corpo-
Last summer these corporate chieftains rate elite might not have paid attention to in the past.
and 178 others made a big fuss over affirm-
ing the Business Roundtable’s updated We need to build back better.
statement of purpose, declaring the end of shareholder pri-
macy in favour of “stakeholder capitalism” that aims to cre- ‘Build back better’ is an expression coined by a United
ate value for employees, suppliers, communities, and others. Nations task force charged with coming up with improved
What a difference a crisis makes. As America scram- disaster-recovery plans. For them, building back better
bled to deal with the health and economic fallout of the meant using recovery after calamities — they were think-
COVID-19 pandemic, workers in Amazon warehouses ing of earthquakes, tsunamis, and hurricanes — to restore
across the U.S. staged walkouts to protest unsafe working equitable social systems, revitalize livelihoods, and protect
conditions, and the company’s Whole Foods division had the environment. ‘Don’t just rebuild houses — install clean
to walk back an initial statement asking employees to donate water systems’; ‘Don’t just improve early warning systems —
sick days. Walmart’s ASDA division has canceled orders create safer roads and dwellings’.
from apparel manufacturers in places such as Bangladesh For us in the midst of the COVID-19 crisis, build back
even if production was completed or in progress. And Wells better means making good on the commitments to stake-
Fargo’s deferred-mortgage-repayment program — designed holders that everyone was so eagerly talking about last
to alleviate monthly payments for suddenly unemployed year. Even very short-term evidence indicates that a more
homeowners — still requires borrowers to repay the whole socially-responsible approach might also be a more resilient
lump sum after three months. approach. According to an analysis by Just Capital, com-
It’s a tightrope, of course. Companies are trying to stay panies that have prioritized workers and customers during
afloat. The J. Crew and Neiman Marcus bankruptcies are this crisis are doing better in the market. Scholarly research
harbingers of many to come. Some companies are just wait- in finance has shown that investing in corporate social re-
ing to get ‘back to normal’ and using bailouts to tide them sponsibility (CSR) creates greater social capital — norms of

90 / Rotman Management Fall 2020

trustworthiness and the propensity to reciprocate — which vocates have long asked for accommodations such as work-
leads to greater resilience, because being trustworthy is from-home options, requests that employers often denied
more valuable in times of uncertainty and upheaval. as too expensive or too complicated to implement. Now that
Even before the crisis, one-third of Americans thought abled people must work from home, organizations are find-
technology companies and banks had a negative effect on ing that it is indeed possible to hold meetings, teach classes,
the country, and more than half had a negative view of large and brainstorm remotely. Why wouldn’t we continue invest-
corporations overall. The trust isn’t there. Yet. What would it ing in these types of more flexible accommodations?
take to gain it? To build back better, companies need to rede- Modern capitalism has long rewarded ‘the ideal work-
sign, reorient, and realign. er’ — available at all hours, dedicated to the job, without
family encumbrances — but this is likely to change as people,
REDESIGNING WORK. First, companies need to radically rede- in quarantine, rediscover the simple joys in life: time with
sign work. Here, workers are guiding us to solutions. A living family, friends, gardening, baking, crafts, hiking, wood-
wage, guaranteed sick leave and care leave, and increased working, and so on.
safety will address many of the deep inequalities that the Finally, it all comes down to childcare. Many men
pandemic has brought even more clearly into focus. For working from home are now finding out just how intensive
many years, companies have resisted attempts to provide childcare is. Work has needed to morph to deal with parents
these benefits. taking shifts with the kids. As the economy reopens, wom-
But we have now seen that it is possible. Aldi, An- en are disproportionately going to be held back if adequate
heuser-Busch, Danone, and Nestlé, among others, have childcare options and work arrangements are not avail-
increased pay to essential workers. Dominion Energy, able. Childcare has always been a rate limiter in women’s
SimpliPhi, and S&P Global are offering more paid sick advancement. Companies now just have a clearer window
leave; and even Uber is now offering two weeks of paid through which to see the challenge.
sick leave to its drivers. Now that the previously unthinkable
has been accomplished, it seems hard to return to old ways. REORIENTING PRIORITIES. When companies commit to ‘pur-
Even at a moment when workers might not have much pose’, this must by definition reorient corporate priorities.
power given soaring unemployment rates, they are conduct- We have for the past five decades — guided by Milton Fried-
ing walkouts and strikes to improve their precarious situa- man’s 1970 dictate — glorified total returns to shareholders
tion. They are unlikely to stand down as the economy re- where interests of stakeholders were only a derivative of the
covers. The 1918 Spanish flu pandemic holds some lessons: duty to the shareholder.
One of the biggest waves of labour protest in U.S. history It wasn’t always this way. After the Second World War,
occurred just after that pandemic peaked. Twenty percent as Mark Mizruchi wrote in The Fracturing of the American
of the total workforce went out on strike — police officers, Corporate Elite, there was a broad settlement in which com-
steelworkers, dressmakers, coal miners, shipyard workers, panies acceded to the legitimacy of organized labour and
and even Broadway theatre actors — and they gained better other interests, accepting and even supporting federal legis-
working conditions as a result. lation to protect the environment, eliminate discrimination
Today, essential workers are being applauded for risk- in hiring, and so on. In the 1970s, stagflation, the oil crisis,
ing their own personal safety to supply food, transport and other economic concerns prepared the way for a differ-
goods, and care for the sick. Yet they have historically been ent settlement, one which for half a century has privileged
paid notoriously low wages with few benefits. Do we think the shareholder and led to a massive increase in inequality.
we can go back to an old normal when grocery workers, The COVID-19 pandemic creates an opening for a
home health assistants, farmworkers, and delivery drivers new settlement with different priorities. While companies
can barely scratch out a livelihood? Should we want to? are thinking about survival, they are also imagining new
The pandemic has forced many of us who still have futures. Even before the pandemic, there was a surfeit
jobs into completely new modes of working. Disability ad- of reasons for urgency: millennials who won’t work for

rotmanmagazine.ca / 91
 Saying you want to create value for all stakeholders
is one thing. Doing it is another.

companies that don’t emphasize social goals; greater in- Then stakeholders need a seat at the table. In Germany,
equality leading to political instability; the risk of disrup- labour is represented on the country’s supervisory boards. In
tions due to climate change; employees crafting viral social the U.S., we are seeing increasing pressure to do the same,
media posts to fight bad working conditions; consumers with a recent shareholder proposal at Walmart and a variety
boycotting unethical products. of legislative efforts in Congress. Other companies are cre-
One guide for this reorientation is already in place: the ating stakeholder committees on their board (Airbnb is an
UN Sustainable Development Goals (SDGs). These carefully example), charging individual board members with repre-
negotiated, consensus-driven themes address poverty, hun- senting different stakeholder interests, or creating separate
ger, health, education, gender equality, and decent work. stakeholder advisory groups.
They focus on the sustainability of cities and communities, Some of these actions could be mere Band-Aids on deep
of the climate, of the oceans, and of the land. Companies wounds if they’re not done seriously. Governance processes
have begun to sign on to individual goals, such as reducing will need mechanisms for understanding trade-offs cre-
carbon emissions or avoiding deforestation. The real power ated by stakeholder interests and finding innovative ways to
would be in using these 17 goals as a central part of corporate address them.
strategy-making and operations. Building back better may also amplify forms of gover-
Former Unilever CEO Paul Polman called for “heroic nance that are better attuned to diverse stakeholders. Co-
chief executive officers” to achieve the SDGs. Surely that operatives — with their democratic management processes
will be true. But it’s not enough. Companies will need to and economic participation by members — may be best
transform how they operate in ways that we are only begin- suited to a post-COVID-19 world. Or perhaps companies
ning to imagine. These transformations will require inno- should be required over a period of years to qualify as B Cor-
vation to create new opportunities for growth and prosper- porations, which are legally obliged to address their impact
ity, but that will require companies to avoid ‘pink-washing’, on all stakeholders. These are more radical approaches than
‘green-washing’ or ‘purposep-washing’. merely creating a board committee, but it is worth pointing
out that these models already exist and may be better guides
RECONFIGURING CORPORATE GOVERNANCE. Corporate boards for our new understanding of 21st-century business.
will need to prepare for this new normal. The COVID-19
crisis has shifted the conversation: More attention is being In closing
paid to companies that offshore their profits to avoid taxes The COVID-19 crisis shows us that corporate ‘purpose’ can-
but then seek bailouts, to the need for universal healthcare not just be a fancy bow that companies tie on top of their
and childcare, to the impact of reduced activity on air pol- operations to dress them up. Taking care of all stakeholders
lution, to unnecessary consumerism, to the possibilities cre- will require real transformation. In this moment of upheaval,
ated by a Green New Deal. we should be envisioning how we can build back better.
Saying you want to create value for all stakeholders
is one thing, but doing it is another. So, if companies are
going to make good on promises to pursue ‘purpose’, then
boards of directors will have to create new standard operat-
ing procedures.
The most obvious step is to create mechanisms for
these stakeholders to have a voice in oversight and decision-
making. This requires an honest assessment of who stake- Sarah Kaplan is Distinguished Professor and Founding Director of the
holders really are (the SDGs help here). It’s not just the usual Institute for Gender and the Economy at the Rotman School of Manage-
ment. She is the author of The 360º Corporation: From Stakeholder Trade-
suspects (for instance, customers or employees): Companies
offs to Transformation (Stanford Business Books, 2019). This article was
need to think about the communities in which they operate, initially published on fastcompany.com in the midst of the COVID-19
the environment, their impact on supply chains, and the like. pandemic.

92 / Rotman Management Fall 2020

QUESTIONS FOR Satya Nadella, CEO, Microsoft

Q
&A
When some people hear the word empathy being used
in a business context, they think ‘What does that have to
do with business?’ How do you respond to that mindset?
I would argue that empathy has everything to do with busi-
ness. If you accept that innovation is about meeting the un-
met (and often unarticulated) needs of your customers, you
have to ask, “How can we get in touch with those unarticu-
lated needs?” Only through our ability to listen to people,
observe them, read between the lines and extrapolate. That
requires a deep sense of empathy — making it a necessary
ingredient for succeeding with any innovation agenda.
At Microsoft, we are rising to this challenge by putting
the necessary conditions in place for our people to develop
Empathy should be a empathy. One word we use a lot is respect. If you don’t start
from a place of respect for the other person’s viewpoint —
requirement for business their history and their mindset — it will be very difficult to
leaders, according develop empathy for them. Way before you think of any of
the high-level things, like the new products or services you
to Microsoft’s CEO. will eventually introduce, you have to address these basic
elements.
Interview by Jenny Luna
Before you became the CEO of Microsoft, you headed up
its Cloud business. Did you realize that role was putting
you on a path to become CEO?
Not at all! I don’t think I had even thought about a Microsoft
where Bill [Gates] and Steve [Ballmer] were not actively
engaged. Business school graduates are an ambitious lot,
and many of them ask, ‘When can I become a CEO?’ My

rotmanmagazine.ca / 93
 The true currency of a great culture is inclusiveness.
Achieving that is the core job for today’s leaders.

advice is as follows: Don’t wait for your next job to do your How have you led by example on this front?
best work. If you think about every job you have as the most I try to set an example, every day. Take diversity and inclu-
important job you will ever have, good things will happen. sion. Just saying ‘We have to make progress’ on that front
is not enough. You need to recognize that progress on such
When you took on the role of CEO, you faced very high challenging issues can only come from widespread behav-
expectations. You were following two legendary leaders iour change. Take an everyday experience like a senior
in the role, and many people felt the next CEO should leadership meeting. We have some amazing women on our
come from outside. How did you handle all of that? team, and I need to always be cognizant of whether they
I was a consummate insider. I have literally grown up at are fully participating in the discussions. Are we listening to
Microsoft over the past 28 years. Even though Steve was them and ensuring they provide input? It’s important to start
not a founder, he had ‘founder status’. Together, he and Bill with that type of sensibility.
built this company. As a non-founder CEO, I recognized that We even changed the compensation of our senior lead-
I needed to make explicit some of the things that founder ers — including mine — to ensure that gender equality is a
CEOs take for granted, just by virtue of what they mean to major priority. Compensation isn’t everything, but having
the organization. I had to rekindle and reinforce our original real metrics in place around goals, and then compensating
purpose. Two pillars — our sense of purpose and the corpo- people based on that, is a great start.
rate culture — had to be made explicit. It’s not only about the senior levels. We also recog-
When I joined Microsoft in 1992, our mission was bold nized at one point that every intern class that joins Microsoft
but simple: To put a PC in every home and on every desk. each year is more diverse than the last. But when we looked
That was pretty inspiring. Except by the late 1990s, we had around we said, where is that diversity in the company? The
more or less achieved that in the developed world. Since true currency of a great culture is inclusiveness, and achiev-
then, we struggled for some time with, What’s next for us? ing that, I think, is the core job for today’s leaders.
I believe everything that needs to be known about Microsoft
today can be traced back to our origin, which was based on You made the bold bet that cemented Microsoft’s strat-
the idea that we are building technology so that others can egy with respect to the Cloud business. How did you rally
build more technology. We needed to get back to that core others around your vision when many were convinced it
identify. Of course, we had to express it differently, and that wouldn’t work?
led to us describing our mission going forward as ‘empower- The challenge was that we had a very successful business in
ing people and organizations’. the client server area. When your senior team is studying the
We also had to work on our culture. I think it was 1998 numbers and you say, ‘Here’s a new business idea. The gross
when we found out we had become the largest market cap margins will only be a quarter of our current business, but...’,
company in the world. I clearly remember that day: When rationality tells people to avoid that as much as possible. But
you walked around the campus, you could see that people in tech and many other businesses, such transitions are in-
thought, ‘Wow, we must be God’s gift to mankind! We are evitable. So the question is, how do you make this transition?
all so smart! Look at us!’ Except that was not the case. The Steve was actually the one who gave me permission
market cap victory was only a temporal thing. What actually to move ahead with it. Many leaders are going to have to
matters is your ability to learn, to grow and to be grounded make similar bold decisions over their careers. He basi-
in the realities of your customers. As CEO, that is what I cally removed the constraint of gross margin and said, ‘Get
wanted: A culture that stood for being a learning organiza- out there and win this market for us!’ That’s what made it
tion above all else. possible.

94 / Rotman Management Fall 2020

 We can’t abdicate our responsibility to create
a future that we all want to live in.

You are a big proponent of AI. How do you see it aug- what you are good at, what makes you tick, what are your
menting humanity rather than detracting from it? passions. And then, to learn how to understand and empa-
One of the areas I am deeply involved with is accessibility. thize with others. I believe a lot of that satisfaction we get in
Just think about what AI has already done for the people life is because of our ability to empathize. Back in my mid-
who need the most help. If someone has a debilitating dis- 30s my colleague said something that had a profound im-
ease like ALS, using Eyegaze, they can type and communi- pact. He said ‘You’re going to spend more time at Microsoft
cate. And if you have a visual impairment of any sort, you than you will spend with your family’. I realized he was right.
can interpret words by using the latest in computer vision. His point was, work needs to have a deeper meaning rather
Already, AI capabilities are helping more of us participate than just being transactional.
fully in our societies. The only way work is not going to be transactional is if
That doesn’t mean we shouldn’t be clear-eyed about you relate to the people you work with and with your cus-
AI’s potential consequences. As creators of these platforms tomers. Technologies will all be passé in time, but people
and tools, even before we get to the important topic of eth- and their achievements can have a very long life in terms of
ics, we need to improve software engineering so that things value. Personally, I take great pride in the people I’ve men-
like bias are dealt with. We are creating AI, so we get to tored who have gone on to do great things.
shape what it looks like and carefully design the systems
where humans are removed. We get to decide, as a society, You once said, “When everyone is celebrating you, that
what we are comfortable with — and not comfortable with. is when you should be most scared.” I think it’s safe to
On the employment side, I do believe that overall, there say that people are celebrating Microsoft’s renewal. How
will be more jobs created than lost. The question is, how do do you keep yourself and your teams grounded amid the
we use all the levers at our disposal — both economic and success?
social — to skill people up for the jobs that will be created? I recently read a book by David Brooks called The Second
Many of those skills will likely be different from the ones Mountain. The first mountain is where we seek excellence
that we value today. We can’t abdicate our responsibility to and success in our individual career. But eventually, once
create a future that we all want to live in. you achieve that, you get to that second mountain, where
success is about relating to your community and the world
What is your advice for aspiring leaders seeking to bal- at large. That’s why we celebrate that small business in Ke-
ance the pressure to grow as a company with a respon- nya that is benefiting from our products, and that public
sibility to society? sector company in Indonesia or Vietnam. Invoking an ev-
Greater scrutiny of large organizations is absolutely some- eryday sense of purpose — for yourself and for your people
thing that is going to happen, and I believe large organiza- — is incredibly important.
tions should welcome it. We can learn from it. As a compa-
ny, we need to both recognize the opportunities afforded by
technology and the responsibilities they come with, whether
it be security, privacy, or ethics.

Let’s circle back to your personal leadership style and Satya Nadella is the Chief Executive Officer of Microsoft. Before be-
coming CEO, he was Executive Vice President of Microsoft’s Cloud and
values. How do you stay true to your own style while
Enterprise group, responsible for building and running the company’s
knowing when and how to grow in a different direction? computing platforms. This interview took place at the Stanford Graduate
It’s a journey of a lifetime to really unpack who you are and School of Business in January 2020.

rotmanmagazine.ca / 95
 FACULTY FOCUS Julie McCarthy, Professor of Organizational Behaviour, Rotman School of Management

How to Take Control

of Your Well-Being

THE COVID-19 PANDEMIC has had a wide-rang- to combat these overwhelming feelings. Given that each of
ing impact on the global workforce, from us has a finite amount of energy, it is essential to take steps to
job losses to layoffs and salary cuts. But per- conserve and replenish our inner resources on a daily basis
haps the most ubiquitous impact has been - particularly in times of stress. This helps to avoid burnout
increased stress, which can wreak havoc on and build resilience in order to deal with pressures and chal-
us both mentally and physically. lenges. We can achieve this in a number of ways, but two of
Even before COVID-19, 58 per cent of Canadians re- the areas that I will focus on here are healthy habits and in-
ported experiencing excessive levels of stress at work every terpersonal connections.
day. And in times of heightened uncertainty and rapid nega-
tive change, stress levels rise even further. In March of this HEALTHY HABITS. We know that sleep is incredibly impor-
year, my Rotman colleague John Trougakos and I launched tant. It enables resource recovery and is directly linked to
a large scale study of well-being with workers from across our mood states. In fact, a lack of sleep is strongly related
Canada. We tracked over 700 employees for more than to levels of depression and anger. We also know that sleep
three months and in this article we will share some of our is highly related to the productivity and quality of our work.
preliminary findings. The increased work and family demands over the past
The first thing we found is that employee stress levels few months have led many to have trouble getting the dura-
should be of significant concern to leaders. People are wor- tion and the quality of sleep that they need. Experts say we
ried about their families’ health and their financial future. should be striving for seven to eight hours a night. Given that
They are feeling increased pressure to perform, both as a many people’s schedules have been flipped upside down, we
parent or caregiver, as well as professionally. Employees may be able to consider taking short naps in the day to reju-
across Canada are also feeling high levels of uncertainty and venate our energy. These naps should be kept to under 30
a lack of control, which some people told us has taken over minutes; otherwise you can sink into deep REM sleep and
every aspect of their life. you might feel even more exhausted when you wake up.
These are powerful illustrations of the complexities that In a world where we are joined at the hip with our
Canadians are experiencing right now. The good news is smartphones, it is also critical to defend our final hour be-
that there are things we can do as individuals and as leaders fore bedtime. Many studies show that the blue light from

96 / Rotman Management Fall 2020

 Employee stress levels should be of
significant concern to leaders.

our cell phones and other devices actually interferes with manager told us: “My team has become closer than we ever
melatonin production, making it more difficult to get into could have imagined. Everyone from line level to my man-
a deep sleep state. This means that, at a minimum, for that agers are all looking out for one another.” Another told us:
last hour before bedtime, unwind and eliminate screen time. “I am spending a lot of time staying in touch through group
Last but not least, to the extent that you have control over messages with friends and video chats with family. I feel
it, trying to maintain consistent sleep schedules is incred- connected to people digitally, but also because we’re all go-
ibly important for rejuvenating your energy because it keeps ing through the same situation together.”
your circadian rhythm in check. There are, however, some important caveats when we
In addition to sleep, exercise is a powerful tool at times talk about maintaining and building interpersonal connec-
of high stress. Not only does it stimulate chemicals that feed tions. The first is emotional contagion. We know that emo-
our brain like endorphins and serotonin, it also lowers the tions spread very quickly from one individual to another.
risk of illness and disease and alleviates depression and anx- When we feel happy, our smile can prompt a quick smile in
iety. In fact, it can actually make us feel happy. return and spread happiness around a room. At the same
Nevertheless, many of us find it challenging to fit fitness time, negative emotions spread quickly, with feelings like
in. Recreation facilities and sports complexes have been fear and anxiety quickly escalating to outright panic among
closed during the shutdown, but there are many ways that a group. Awareness of emotional contagion is incredibly im-
you can exercise within the confines of your home. There are portant during times of high stress, particularly if you are in
countless online programs and interactive activities available a position of power. Research demonstrates that leaders set
via virtual networks. Some of us may be lucky to have desk the tone and so it is critical to stay calm and collected to help
treadmills or other exercise equipment within our homes. minimize levels of panic and stress in others.
If we don’t, simply walking in place is a great idea. Consideration of the mode of communication is also
Finally, try making a goal-setting chart to track your critical. Technological advances have made it possible for
exercise. Rotman Professor Gary Latham created Goal Set- us to quickly engage in interactive video chats with small or
ting Theory, and from his work and hundreds of other stud- large groups. This is a very rich mode of communication that
ies we know that the process of setting goals and putting up provides us with invaluable information because we are able
a chart to track them is enormously productive. to see the expressions and reactions of those who we’re talk-
ing to which helps determine how they may be feeling and
INTERPERSONAL CONNECTIONS. Another driver of rejuvenation what they might be thinking.
is the connections that we have to other people. Research At the same time, we need to recognize that these tech-
shows that strong relationships act to build our energy and nologies can be emotionally demanding. When conducting
are a primary driver of resilience. In fact, in times of stress, online team calls, people are engaging in impression man-
humans have an innate tendency to reach out and protect agement by controlling their expressions and emotions. As
those they are close to. A recent paper I published similarly leaders and family members, we need to make sure that we
showed that leaders and managers have an innate tendency don’t overburden people with constant video calls. It is es-
to want to protect their employee groups. sential to determine whether the goals of the communica-
It is important to note that while COVID-19 has led tion align with the medium we are using. In many cases it
to increased physical distancing, it has not necessarily in- may not be critical that we can all see one another at every
creased social distancing. People are finding ways to stay single meeting. In some cases, simple voice-only calls can
virtually connected during the pandemic, with many groups work, and these should be mixed in with video conferences
engaging in online chats using Zoom and other apps. One in order to minimize stress levels.

rotmanmagazine.ca / 97
 PSYCHOLOGICAL DETACHMENT. On a final note, research shows our social interactions more positive. Many individuals are
that it is not enough to just get physical and social rejuvena- finding creative ways to do this, including interactive online
tion. In order to regain energy and maximize our resources, games and theme parties that help to alleviate stress.
we need to couple this with mental recovery, or psychologi- While it is always important to take care of ourselves,
cal detachment. This means that if you’re on the treadmill it is even more critical during times of extreme stress. We
and you’re Googling updates on COVID-19, you are actually know from research that in order to rejuvenate our energy
not capitalizing on that recovery experience. When you’re we need to get a healthy amount of sleep, we need physical
exercising, try to detach your brain and avoid rumination. exercise, and we need to maintain strong interpersonal con-
This can be accomplished by selecting activities that you nections. And at the same time, we need to find time to men-
truly enjoy or engaging in activities with family members or tally detach on a daily basis. Together, these rejuvenation
friends so that you can really keep your mind in the moment. strategies lead to greater resilience, giving us the capacity to
To stay in the moment it is also important to engage in combat the stresses and pressures we face in an increasingly
mindfulness strategies like breathing exercises and men- challenging world.
tal focus activities. We can also minimize news and media
channels, which often focus on the negative, and instead
Julie McCarthy is a Professor of Organizational Behaviour and
try to focus on the positive things that are happening in our Human Resource Management in the Department of Management
lives. Emphasizing the positive in our interpersonal interac- at the University of Toronto Scarborough, with a cross-appointment
tions is yet another invaluable technique. If we are on a call to the Organizational Behaviour area at the Rotman School of Manage-
ment. This article is based on a session from the Rotman Webinar Series
with our friends but we are spending the entire time talking
“Managing Uncertainty: Adapting to and Learning from the COVID-19
about stress and negative news, we are not maximizing our Crisis”. To watch it and other sessions from the series, visit the Profes-
rejuvenation. Instead, we should consider fun ways to make sional Development section of our website, rotman.utoronto.ca.

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98 / Rotman Management Fall 2020

QUESTIONS FOR Charlene Li, Author, The Disruption Mindset

Q
&A A disruption expert de-
scribes how the global
pandemic will change us—
and our world—for good.
The global pandemic has changed the world in countless
ways. You advise that business leaders approach ‘the
new normal’ in three phases. Please explain.
The first phase, which most organizations have already ad-
dressed, is to restart. This involves thinking about re-open-
ing your business and looking at issues like safety, security,
and how you will operate in a socially distanced way. Once
these things are in place, leaders need to think about re-
forming their business model by examining and questioning
everything they do. Things have changed so much that many
will need to completely reconsider and revise their strategy,
how they deal with customers — and maybe even the key
Interview by Karen Christensen
aspects of their culture.
The third phase is to revise your purpose. Every leader-
ship team needs to revisit the very core of what their busi-
ness is about. This is a time of such radical change that many
will need to revise it. Going forward, you need to be able to
say, ‘This is absolutely the direction in which we should be
moving’. Having total clarity around that will be your guid-
ing light during all of the uncertainty that lies ahead.

rotmanmagazine.ca / 99
 When you question everything, it shows that you are not taking
for granted that things are ever going to be the same.

As indicated, you believe it is essential to question just they think about strategy, leadership and culture in a very
about everything about how things were done before. different way. The key thing they all do is, they are very fo-
Why is that so important? cused on the future and are almost obsessive about where
When you question everything — in the most respectful way, their customers are going to be in the future. Then, they take
of course — it shows that you are not taking for granted that actions today to prepare for that future.
things are ever going to be the same. This means you’re giv- Also, they’re not as surprised as others when things go
ing stakeholders — your employees, customers, suppliers — wrong because they have anticipated that things could go
the benefit of the doubt and saying ‘We fully recognize that wrong. And they anticipate that when things do go wrong,
your needs may have changed, and we want to understand new opportunities might come about. As a result, even when
that’. Even in non-crisis times, if you don’t regularly ques- crises like COVID-19 comes along, they have the discipline
tion whether you are effectively addressing the needs of and the culture to be able to swing into action.
your stakeholders, you are likely missing the mark.
Can you provide an example of a company that does this
Innovation was at the very top of many business agendas well?
before the pandemic hit. Will it move to the back burner I think Microsoft has done a fantastic job. When Satya
while things get back up and running? Nadella came in as CEO, he did a reset of the company,
The need for innovation and ingenuity did not go away with starting with its culture. His focus is on empathy — which
the shuttering of businesses. It has instead shifted to address is not what you would expect from a big tech company. He
more arising needs, and if companies can shift with those brought empathy right to the core of the business, affecting
needs, they can fill the gap. everything from how the company develops products, to
So many examples of ingenuity have surfaced in recent how they sell them, to how colleagues treat each other and
weeks. For example, some closed schools rerouted their work together.
school buses to deliver meals to people who were home- As a result, when COVID-19 hit, they were one of the
bound; in Ireland, small business AMI refurbished high- first companies to send all of their employees home to work.
quality laptops from companies to meet a demand to rent They could see how dangerous and disruptive it would be
or buy laptops for employees working from home; and train- and they said ‘We need to begin social distancing’ before
ers and yoga instructors brought their clients together on anyone else had even thought about doing that. They are
Zoom calls. very active in China, so they could see first-hand what was
As a leader, you can find the next disruption opportu- happening and how it was likely going to spread around the
nity by aligning yourself and your entire team around un- world. In the midst of the pandemic, they’re still innovating,
derstanding the needs of your emerging customer. Instead they’re continuing to support companies, and they’re mak-
of asking, ‘What should we do next?’, ask instead, ‘How can ing their teams available to people. That’s a sign of a highly
we best serve?’ structured organization.

Are companies with a disruptive mindset better equipped Talk a bit about the importance of ‘social listening’ going
than others to tackle what lies ahead? forward.
Definitely. It has always astounded me how disruptive orga- Social listening has been around for a long time, but it has
nizations seem to thrive in uncertain times, and it’s because been dominated by the idea of ‘understanding what people

100 / Rotman Management Fall 2020

 Remote work is here to stay.

are saying and thinking about your brand.’ I think we need Remote work is here to stay. In the past, people wouldn’t
to turn that on its head and make it about understanding let you work from home because they didn’t trust that you
what people themselves — your current and potential cus- would actually do your work. They needed you to come into
tomers — are doing and saying, period. It should be a way an office and prove that you were putting in the hours. Now,
to figuratively walk in the shoes of your customers — not in we have had to trust everyone to get their work done — and
the context of your brand, but in terms of what’s happening lo’ and behold, everyone is getting their work done! And in
in people’s lives. many cases, they’re even more productive than before.
To do this, you can use existing social tools like Linke- I also think we’re going to have a lot more empathy for
dIn, Instagram and Facebook. Locate current or target the fact that we all have lives, and work is just one part of
customers on these platforms and follow them, watch what that life. When we’re on Zoom calls and we see the chaos
they’re saying and doing, and what they are interested in. happening in our colleagues’ homes, it makes us more ac-
The idea is not to send messages to these people but to say commodating, flexible and understanding. In the past we
‘Wow, that’s great’ or ‘That’s terrible, tell me more’. You were told not to bring our personal life to the office — but
can use these platforms as a springboard to have conversa- with COVID, there was no avoiding it, and that will hope-
tions and begin an engagement, all in an effort to under- fully increase our empathy for one another. I would actually
stand the individual. I don’t think anyone in this day and go so far as to say that the traditional workplace model has
age wants to be messaged to; we want companies to truly been blown apart. It will no longer be about a physical area,
understand us. but about how we choose to work together.

Digital connectivity has been a bit of a savior during the Going forward, what does a prepared leadership team
pandemic. How will it change things going forward? look like?
More than anything else, this pandemic has taught us that I truly believe that empathy is the most important skill a
relationships matter. It took us being socially distanced from leader can have, and again, that requires a lot of listening.
each other to realize how important it is to be connected to It means you have to set aside your biases and your view of
each other. I really don’t want us to lose this moment where the world, step into the shoes of the people you’re trying to
we recognize how important relationships are. I hope it will understand and develop a relationship with them — whether
make us focus — as individuals and as businesses — on what it be your customers, your partners, your shareholders, or
is really important. members of your community.
In organizational terms, we have always believed that We will no longer be solely driven by profits. It has be-
the workplace was a physical place — that you had to go to come clear that focusing on optimizing the bottom line is
an office to be connected with other people. If anything, not good for the long-term health of an organization and its
this crisis has proved that a workplace is made up of the people. We need to figure out how to take care of the health
relationships we have with each other. Will we travel as of not just the bottom line but of our employees, our custom-
much for business anymore? Definitely not. Why would you ers and our community.
get on a plane to attend a meeting when we can just hop on
Zoom and do it in the next hour or so? There is an ability to Do you feel like leaders are up to the task?
get so much more done now because we’re not constrained Unfortunately, everything we’ve been taught about leader-
by time and distance. ship does not prepare us for this challenge. In fact, it’s just

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 We need to figure out how to take care of the health of not just the
bottom line, but of our employees, our customers, and our community.

the opposite. If we follow the lessons of the past, we will Any parting wisdom for leaders who might feel daunted
not do this correctly. We have to completely rethink things. by what lies ahead?
Many people will realize that it’s okay to sacrifice a portion of After more than two decades of studying disruption, I have
their profits in order to have a healthier workforce and orga- learned that it has one major upside: it creates significant
nization. We need different ways of thinking about our busi- opportunities for change. That’s because when a disruption
ness and it’s going to require very enlightened leadership to happens, our sense of normal is torn apart into pieces and
understand how to make these trade-offs. thrown into the air. The people who thrive with disruption
jump into the air to catch the pieces before they fall. Those
You have talked about four possible scenarios for the who duck their heads and hope not to get hit become the
near future. Please summarize them. victims of disruption. My hope is that people will leap high
This work was done by The Trium Group, a San Francisco- with courage and conviction so that they can be the disrup-
based consulting firm. Their first scenario would see a grad- tive leaders we so desperately need in the coming months.
ual recovery where the economic free-fall will quickly spring I wish I could promise that the journey ahead will be
back as soon as the pandemic fades. This could happen if so- smooth sailing. It’s going to be anything but. That’s what
cial distancing works, our hospitals are not over-run, ventila- disruption is: It forces us out of our comfort zone and makes
tors are produced, new drugs are created, and government us come face to face with our biggest doubts and fears. But if
financial stimulation is effective. This scenario requires that you can look past them to the opportunities to serve created
society re-opens before a vaccine is ready. by disruption, you will have a focus to steady your hand.
Their second scenario is one of ‘fits and starts’. Things New journeys are always challenging, but they force us
start to move forward but they get pulled back because a sec- to move forward rather than staying mired in the past. In the
ond wave of COVID-19 comes along. The third scenario is wise words of Winston Churchill, “Never let a good crisis
the perfect storm scenario, whereby the public health crisis go to waste”.
persists and we experience an unprecedented, prolonged
global shutdown. Clearly, nobody wants this to occur. And
the fourth scenario is called the Great Correction. In this
one, people suddenly stop fighting and the world goes into
major collaboration mode. Pharmaceutical companies work
together and as soon as one of them finds a vaccine, they
share it with the world. We beat COVID and we all actually
come out of this better.
The question is, how can we make sure the Great Cor-
rection is the scenario that occurs? One thing I’ve been
struck by when I present these scenarios to people is that
they aren’t ready to accept that one of these things is going
to ‘happen to them’. They want to actively ensure that the
Great Correction happens — and that gives me hope. The Charlene Li is the New York Times bestselling author of six books, includ-
ing her latest, The Disruption Mindset: Why Some Businesses Transform
foregone conclusion is that it is up to us to decide which of While Others Fail (Ideapress Publishing, 2019). She is the founder of
these scenarios actually come to fruition. We can all have an Altimeter Group, which was acquired by Prophet in 2015. She continues
impact on how this plays out. to work with Prophet as a Senior Fellow.

102 / Rotman Management Fall 2020

POINT OF VIEW Andrew Atkins + Suzanne Bates, Executive Communication Experts

Grace Under Pressure:

Strategies for Keeping
Cool in a Crisis

OVER THE PAST SEVERAL MONTHS, our lives have Losing your cool is not a weakness. It is a sign that you
been upended by the global pandemic. The are human. Deep emotions are part of life’s struggle. Suc-
adjustments to life we anticipated as tempo- cessful people hold themselves to high standards. Some-
rary are morphing to new, still largely unfa- times, we fail.
miliar ways of working and living. Our teams It is important to look at these feelings not as failure,
have endured these changes as well, and we but an opportunity to mature and display even more grace
have also tried to help them manage it all. under pressure without sacrificing our mental and emotion-
All this while leading transformation to our al health. Composure is a cultivated skill, nurtured in part
companies’ processes, systems, products, through self-care, and in part through new learned behav-
and operations. We are not going back to life iours. We are not born knowing how to do this. We learn it
as it was, but turning a page. through experience and practice.
The sheer length of time we have man- Interestingly, composure in leadership is not as com-
aged this level of stress has a compounding impact on our mon as one might hope. Our research analyzed responses
physical, mental, and emotional health. While hope is on from over 39,000 people who rated their leaders on quali-
the horizon for an end to the current pandemic, it does not ties of executive presence, including composure. The result:
change this fact. In addition, people around us face chal- Of the 15 qualities measured, composure ranked last. And
lenges — our parents, spouses, colleagues, employees. We almost all surveys were completed before the COVID-19
may not wish to acknowledge even to those closest to us that crisis struck.
we are experiencing anxiety, frustration, and even anger and In our work we measure six behaviours related to com-
depression. As a result, we may lose our cool more than we posure. While some ranked higher than others, only one
would like to admit. barely made it into the upper 50 per cent in leader ratings.

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 If you fail to show grace under pressure,
people will be less likely to follow you.

So there is clear evidence that even in the best of times, lead- ive default thinking and behaviour shows up as a loss
ership composure is rare. of composure. In contrast, slowing down our thinking
Why is this such a critical finding for today’s leaders? enables us to engage our reasoning and allows us to be
Because composure in the midst of a crisis is crucial to cre- more composed.
ating psychological safety, an area Amy Edmondson has Insert some space to create a moment before you
explored extensively. People will not feel safe sharing bad respond. Ask questions. Buy yourself time before re-
news if they believe you will overreact. Instead, they will sponding by listening to the answers. Take a breath
avoid you, and the result is that you will not hear timely in- and count to ten to calm down and reduce the reflexive
formation that is vital for perspective-taking and decision thinking that often hijacks us and causes us to overre-
making in times of crisis. act. If you have a cup of water or coffee, take a drink to
Composure in leaders also makes them more credible. provide a moment to collect your thoughts.
It makes us believe in them. If you fail to show grace under
pressure, people may forgive you, but they will be less likely 2. TAKE THE LONG VIEW. Most successful leaders have a bias
to follow you. Research shows that composure creates con- for action. They move ahead by quickly dispatching
ditions for other people to think clearly, to act in a timely with problems. This ‘over-strength’ often leads to pre-
way, and to get the right things done. Right now, these things cipitous decisions that have unintended consequences.
are ‘job one’ for all leaders to keep their companies stable Ask yourself, ‘What are the potential consequences of
and forging ahead. this decision if conditions change?’ Use the ‘Power of
What types of behaviours help you show your compo- 10’: Instead of just considering what to do in the next 10
sure? We asked people to rate the leader on the following minutes or 10 hours, ask yourself and others ‘What will
six statements: the consequences be 10 weeks, 10 months, or 10 years
• Knows how to shift others from a reactive to a proactive from now?’ This will call up a longer time horizon so you
frame of mind. can be strategic and attend to the long term.
• In critical moments, seems to be at his/her best. You might also go a step beyond anticipating the
• Is frequently a source of stability when others are flus- likely outcomes of an action or decision and explicitly
tered. ask, “What are possible unintended or unanticipated
• Knows how to de-escalate emotions and focus discus- outcomes?” When one of our clients took this extra step
sion. before committing to a plan, they realized that their ac-
• Has a calm, thoughtful style that helps make sensitive tions could have precipitated a regulatory audit.
issues discussable.
• Prompts a thoughtful attitude and objective perspective. 3. EXAMINE EMOTIONS. Emotion creates a chain reaction,
sparking similar, and often stronger reactions in others.
What are the best strategies for developing these qualities? Ask yourself, ‘How am I feeling about this?’ Let yourself
We have six suggestions. feel the emotion. Acknowledge if you are fearful or an-
gry. Experiment with moving closer to those emotions,
1. HIT PAUSE.Leaders lacking composure will react reflex- not ignoring them. Psychologists tell us that when we
ively rather than generating and evaluating options. In approach intense emotions, and then back away, it of-
Thinking, Fast and Slow, Daniel Kahneman describes ten makes them less powerful.
how reflexive, emotional, autopilot responses, or ‘fast Another proven technique for managing emotion
thinking’, can often have unanticipated consequences is to use humour. Look for the levity and encourage oth-
and be biased and illogical. In times of stress, our reflex- ers around you to do the same. Humour prompts us to

104 / Rotman Management Fall 2020

 In a crisis, you should communicate more, not less —
even if you don’t know exactly what to say.

step back from a situation and reset our emotional but- from the heart and from experience. Encourage resil-
tons, which also serves to broaden our perspective. ience, and share stories of people who are demonstrat-
ing it, as well.
4. RECHARGE. Successful people push relentlessly through As a leader you must tell the truth, and show that
challenges. Driving ahead, working longer hours, and you are assessing the situation realistically. You must
worrying through the evening might help you solve a also balance this with what author Kevin Cuthbert
short-term problem, but this approach is unsustainable. calls ‘bounded optimism’. Striking the right chord by
Make no mistake: you will burn out. communicating well will be a ‘viral’ phenomenon that
It may seem counterintuitive, but you are a better eclipses any health pandemic. Give people hope. Be
problem-solver when you recharge. Always remember there for them. Remarkably, this will help you to culti-
to put on your own oxygen mask first. Don’t sacrifice vate and maintain your own composure.
doing things you love. Read, exercise, sleep, eat well,
spend time on personal pursuits. Practicing self-care is In closing
essential. Your vacation or recreation plans may have At an unprecedented time like this, new challenges have
evaporated or been drastically curtailed, but you still been added to every leader’s agenda. Moving forward will
need to take time to step back from your work responsi- demand that they summon all of their strength and resil-
bilities. Healthy stress management is rooted in physi- ience. Showing composure and grace under pressure will
cal, emotional, and psychological well-being. ensure that their followers are also moving in the right di-
rection.
5. RECOGNIZE YOUR TRIGGERS. A loss of composure is epi-
sodic, rather than constant. A change triggers an emo-
tion-laden reaction. Our self-image, professional drive,
and personal standards can contribute to unrealistic ex-
pectations that we fight to meet. Prior to the COVID-19
crisis, this presented a challenge. With the added stress-
es of a loss of work routines and balancing work and
home responsibilities, triggering situations abound.
Let go of expectations about what you ‘should’ be
able to do — with new home-based demands to care
for children whose summer plans changed, to support
a spouse who may have lost a job, or housebreaking a
new puppy, you may feel stretched and frustrated that
you can’t ‘do it all.’ Recognizing and accepting the ‘new
normal’ can help you reset your expectations. Also, take
Andrew Atkins leads the Research, Innovation and Practice team at
stock of the demands you place on yourself. Identify
Bates. In 2014 and 2015, Trust Across America named him one of the Top
what it’s OK to live with, rather than striving to main- 100 Thought Leaders on Workplace Trust. He has held senior leadership
tain an unrealistic ideal. positions with Bank of America, Genuity, Fidelity Investments, Arthur D.
Little, and Interaction Associates. Suzanne Bates is CEO of Bates Com-
munications, a global consulting firm whose clients include CVS, Dow
6. SHARE YOUR WISDOM. People need to be together, to talk,
Chemical and Fidelity. She is the author of All the Leader You Can Be: The
and hear from you in a crisis. Communicate more, not Science of Achieving Extraordinary Executive Presence (McGraw -Hill 2016)
less, even if you don’t know exactly what to say. Speak and four other best-selling books.

rotmanmagazine.ca / 105
 QUESTIONS FOR Stefan Thomke, Professor, Harvard Business School

Q You have said that every organization should embrace

the practice of continuous experimentation. Why is this
so critical, particularly right now?

&A
The main reason is that experimentation is the engine of
innovation. As a result, anyone who cares about innovation
must also care about experimentation. Innovation is about
novelty and value creation, but it is equally about uncertain-
ty. There can be R&D uncertainty, production uncertainty,
market uncertainty, customer experience uncertainty, to
name a few. We typically deal with the uncertainty element
by relying on our experience. But that can be quite limiting.
The fact is, when you’re trying to create something new, in
most cases you don’t have any prior experience with it.
Some might say, ‘In that case, look to the data’. But
again, the same problem arises: If something is going to be
novel, by definition, there is not much data around it. That
leaves us with the notion of experimentation, which allows
us to test what works and what doesn’t.
Like everything else, experimentation is changing.
There are companies out there running thousands — if not
An innovation expert tens of thousands — of experiments as we speak. They are
doing this online, they’re in brick-and-mortar environments,
explains why disciplined and across B2B and B2C. The results are affecting everything
experiments are critical these companies do, and this practice is incredibly powerful.
If you don’t understand how to experiment and you aren’t
to value creation. doing it at scale, you are at a competitive disadvantage.
Interview by Karen Christensen
You have said that in the realm of experimentation, suc-
cess and failure co-exist in a paradoxical balance. Please
explain.
Failure is very important to innovation. If you already know
that something works, it’s not really an experiment. The
companies in online spaces that I’ve studied tell me that
they fail eight to nine out of 10 times. It’s just a normal by-
product of innovation for them.

106 / Rotman Management Fall 2020

 If something is novel, by definition,
there is not much data around it.

I do want to make a distinction between failures and Behavioural experts like Daniel Kahneman have
mistakes. Mistakes do not add any value, and they should shown that there are lots of reasons why we make these
definitely be minimized. Failure is different because it usu- kinds of mistakes. We mistakenly attribute cause and ef-
ally gives you an answer to a question. There is a learning fect to what are just random events; we weigh losses much
objective involved, while with mistakes, there is no learning more heavily than gains; and we tend to happily accept
objective. good results that confirm our biases, but to challenge bad
Take a company like Amazon, which has numerous results that go against our assumptions. Exactly 400 years
distribution centres and warehouses. If they set out to build ago, Francis Bacon wrote Novum Organum, a philosophi-
yet another one, there is really no innovation or learning ob- cal work about exactly this — how humans are not great at
jective involved. It’s just operational execution. If the project processing information because we get fooled by our own
goes wrong, it means they screwed it up. Clearly that’s not a hubris. Experiments are a very powerful mechanism to cor-
good thing, and it is very different from innovation, where rect these human weaknesses — and keep us honest.
the initiative is all about learning — and fast.
You have extensively studied the largest accommodation
Incrementalism doesn’t get much positive press, but you platform in the world, Booking.com. Describe how it em-
believe there is a place for it. Tell us about ‘high velocity braces the experimental mindset.
incrementalism’. One of the key attributes of an experimental organization
Innovation comes in many different flavours. People often is that it democratizes experiments. Booking.com runs a
think of it in terms of breakthroughs or disruption. But it massive number of experiments — in the tens of thousands
turns out that most innovation in the world today is incre- each year. They use these to optimize the landing page that
mental — and that is not a bad thing. It is actually very pow- users see when they come to the website to find a place
erful right now in a digital context, because when you can to stay. Prior to the global pandemic, they had more than
scale something instantly to hundreds of millions of people, 1.5 million bookings per day on their site.
even a small change like a two or three per cent improve- The company has democratized experimentation in
ment can have a massive impact on revenue. the sense that any employee can launch an experiment on
Breakthroughs and disruptions don’t happen very of- millions of customers without getting permission from man-
ten, so focusing on incrementalism can be a good thing — as agement. Something like 75 per cent of its technology and
long as you do it fast. This is where the high velocity aspect products actively use the company’s experimentation plat-
comes into play. We need to be iterating — responding to form. So they are — or they were, and will be again — experi-
feedback and pivoting — very quickly. As indicated, a signifi- menting continuously.
cant performance change can be the result of many high ve- They also have interesting checks and balances in place
locity, small changes. That’s exactly what we’re seeing with to make sure people don’t launch bad or unethical experi-
a lot of online businesses. ments. Employees who want to try something have to be
totally transparent about their experiments. Before they
Talk a bit about how human foibles like hubris and bias launch it, they have to show it to everyone on the platform,
can get in the way of innovation. and people can provide feedback right away. That’s a very
This goes back to how we deal with uncertainty as human democratic way to check up on each other.
beings. We really don’t like it; so we often rely on experience Also, anyone in the company has the power to stop
and expert opinions. Many senior executives feel like they an experiment. Of course, no one would do that unless
get paid to make tough decisions, so they want to make them they felt like something really bad could happen. This is a
quickly. But when it comes to innovation, as indicated, we very interesting company in terms of understanding the cul-
are wrong most of the time. Even experts are wrong most of ture you need to create to make experimentation work on
the time when it comes to predicting customer behaviour. a large scale.

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 The goal is for people to run experiments at large scale,
without management permission.

You believe that every organization should invest in its that it has created for their people, making it clear that cer-
own large-scale experimentation system. What do these tain kinds of experiments are not okay. That’s what I mean
look like? by great power coming with great responsibility.
There are different elements. Companies like Booking.com,
Amazon or Facebook have their own internal platforms for Sadly, Booking.com—one of the companies that does
experimentation, because when they got started on this all of this so well—is being hit hardest by the global pan-
there were no third-party tools around. But today you can get demic . What is it going to take for them to rally?
tools that help you set this up. The three big pillars involved Sadly, travel is sort of ‘done’ for some time, so any company
here are Process, Culture and Management. I have identified in that industry has been severely affected by this. It’s impor-
seven components — I call them the ‘Seven S’s’: scale, scope tant to remember that these are unusual times and to keep
and speed (which I group under Process); shared values and morale up. If anything, I believe experimentation and in-
skills (Culture); and standards and support (Management). novation will get us out of this crisis. The capability that got
Booking to where it wanted to be will also be an important
You believe that along with the great power of experi- capability to get through this crisis.
mentation comes great responsibility. Can you please I have been writing about testing for experimentation
touch on that? for more than 25 years now, and I’ve never seen so many ar-
I think a big piece that needs to be discussed a lot more is the ticles on testing as I have in the past few weeks. If any good
ethical side of experimentation. Whenever you begin to con- comes from this, perhaps it will be a heightened awareness
template a new experiment, you must think carefully about that smart testing is really, really important, whether you’re
whether users will consider it to be ethical. The answer isn’t dealing with a health crisis, a business crisis — or just day-to-
always clear-cut, so you need to examine that question if you day operations.
don’t want to spark a backlash. As we have seen, Facebook It’s too bad that we had to discover the great value of
has failed to do this on more than one occasion. testing through a crisis, because the best time to develop a
In medicine they say, ‘do no harm’, and I believe that great testing capacity is when you’re not in a crisis. In the
is always a good guiding principle. Sometimes the stakes U.S., we have been paying the price for that.
are not high — such as when you want to change a colour or There is no doubt in my mind that having a smart test-
a button on a landing page. Nonetheless, ethical consider- ing strategy is at the heart of not only solving the public
ations need to be part of your culture. health side of this, but also for dealing with the economic re-
It’s a tricky balance. You want all your people to run covery. Without smart testing, we won’t have any good data,
experiments at large scale, hopefully without management and when you don’t have good data, it is extremely difficult
permission. But that, of course puts the burden on employees to make good decisions. And that applies to every organiza-
to make judgments. Some companies create a peer-review tion out there.
committee that goes through an approval process — similar
to what we have in hospitals and universities. But if you want
to go for scale, a review board will slow things down and you
will not be able to run tens of thousands of experiments. You
need to create systems that delineate these kinds of things.
There are certain kinds of experiments that have to be really
thoughtful and the ethics have to be thought through, versus
other kinds of experiments where you can put your foot on Stefan Thomke is the William Barclay Harding Professor of Business
Administration and Chair of the General Management Program at
the pedal very quickly. Harvard Business School. He is the author of Experimentation Works:
Booking.com, for example, has ethics training as part of The Surprising Power of Business Experiments (Harvard Business Review
its onboarding process. And LinkedIn has ethical guidelines Press, 2020).

108 / Rotman Management Fall 2020

POINT OF VIEW Jennifer Riel (Rotman MBA ‘06), Global Director of Strategy, IDEO

It’s Time to
Redefine ‘Winning’

IN A MOMENT OF CRISIS, it can be difficult to have a widely understood definition of winning that goes
think beyond the next hour, the next day, or beyond making money for shareholders.
the next week. The global COVID-19 pan- Fifty years ago, in “The Social Responsibility of Busi-
demic has been difficult for each of us, as we ness is to Increase its Profits”, economist Milton Fried-
grapple with our duty of care to our employ- man argued that the purpose of a business is to serve its
ees, to our communities, to each other, and owners. The leader’s role, he wrote, is “to conduct the
to ourselves. business in accordance with their [owners’] desires, which
The unprecedented disruption created by this crisis generally will be to make as much money as possible while
should be seen first and foremost in humanitarian terms, conforming to their basic rules of the society.” This no-
connecting to the very real personal toll of this disease — tion, which is the foundation of the doctrine of sharehold-
serious illness and lives lost, isolation and fear, worsening er value maximization, is now pervasive. But it is showing
unemployment and economic precarity. The primary ques- considerable signs of wear and tear as we become more
tion in this moment should be: how might we each play our aware of the negative consequences of putting profits
part in bringing this pandemic to an end? But it is a moment ahead of people.
too, for reflection, on the future. Who do we want to be Solely prioritizing short-run outcomes for sharehold-
when we emerge from the worst of this? What do we want ers does little to bring meaning to our work; it stymies
our organizations to stand for? These are questions of strat- innovation; it reduces our business fitness; and it makes
egy — of what it means to win. much, much harder the real work of strategy. Meaning
How does your organization define winning? What comes from creating real value in the world, which means
is that challenging shared goal that gets your people out we need to think broadly in terms of who we’re winning
of bed each day, excited to play their part? If your organi- with (and for). Innovation requires a long-term perspective,
zation is like most I’ve worked with, you may struggle to so we need to think about winning beyond this quarter or
answer that question. Despite all the time and resources even this year. Business fitness (the financial and strate-
poured into strategy work each year, few organizations gic resilience of a company over time) depends on being

rotmanmagazine.ca / 109
 Unless we look further out, we will continue to
plunder the future in order to fund the present.

attuned to things that shareholders may not see. To ensure come victims of chasing our own tail, cutting our internal
our viability, we need to seek out signals as to what custom- spending in capital, R&D, or IT to reach the market expec-
ers, employees, and societies care about. Strategy is about tations. We were developing our brand spends on a quar-
building a firm that can win both now and in the future, terly basis and not doing the right things...We were catering
so we need to be more holistic in our approach to making to the shorter-term shareholders.”
choices. Polman decreed that the company would stop quar-
If it is time to move past shareholder value, how might terly reporting and stop giving guidance. He embarked on a
we define winning in a more useful way, one that spurs far-reaching environmental sustainability effort, and he re-
rather than stops innovation? How might we set aspira- invested in R&D, talent development, and brand building.
tions that don’t suggest a win-lose frame? How might we Polman believed that shareholders whose interests
seek instead to create value for customers, for employees, were aligned with Unilever (i.e. long-run profitability and
and for investors? environmental sustainability) would eventually buy into
his plan. Taking a long-term perspective on winning not
FIND THE RIGHT LANGUAGE. In the process of developing a strat- only let Unilever invest in innovation for customers and in
egy for kyu, the collective of organizations that includes development for its people, it let leadership focus on the
IDEO and SYPartners, some leaders rejected the notion of fundamentals of the business rather than managing short-
‘winning’ entirely, recoiling at a word that felt tied to a scar- run expectations. As a result, it created lots of shareholder
city mindset. If we’re winning, they asked, who is losing? value, too. In the decade Polman headed Unilever, its stock
Tim Brown and Susan Schuman, the kyu vice chairs price increased 170 per cent, creating more value for share-
who co-led the strategy discussions, thought hard about holders than most companies in the FTSE 100. This is a
how to navigate that challenge. As Brown notes, they came win-win-win solution, and it was powered by a willingness
to see that “we’re really creating a community at kyu — a to show up differently in the world.
collective that aims to unleash creativity and to help people
flourish.” He goes on: “What we realized is that communi- DEFINE YOUR PURPOSE. A third way to redefine winning pro-
ties don’t win or lose, they thrive or falter.” The kyu strategy ductively is to connect our aspirations to a larger purpose.
focuses on what it would mean to create a community that Think of purpose as the human ‘why’ that explains the rea-
can truly thrive over time. Thriving may not be the term that son a company exists. The best purpose statements are very
resonates with your organization, but language matters. To human: they connect the work of the organization to real
redefine winning to be more inclusive, work with your team people, to real needs, and to real problems to be solved. By
to find a mental model for winning that works for you, then defining a meaningful purpose, companies can demonstrate
build shared definitions of the models you choose. to employees and customers what they stand for and why.
The purpose can then set the context for the strategy; we can
SHIFT THE TIMELINE.Another way to push on current, unsus- define what winning means in service of our overall purpose.
tainable definitions of winning is to publicly shift the time One company that demonstrates the power of con-
horizon so that sustainability — both economical and eco- necting purpose to strategy is Orbia. Until 2019, Orbia was
logical — can be integrated into our aspirations. Unless we called Mexichem and it was mainly known as a chemical
look further out, we will continue to plunder the future to company. Last year, along with a new brand, Orbia unveiled
fund the present and to degrade the planet to drive profit. a new purpose: To advance life around the world, tackling
For inspiration on what is possible, look to Paul Polman, some of humanity’s biggest shared challenges, like food se-
former CEO of Unilever. curity, water scarcity, and livable cities.
In an interview for my book Creating Great Choices, Had it continued to define itself as a chemical com-
Polman explained how he set out to change the time hori- pany, Mexichem could have followed a path to near-inev-
zon at Unilever: “One of the things I had to do was to move itable commoditization. Instead, CEO Daniel Martinez-
the business to a longer-term plan,” he said. “We had be- Valle and Orbia’s leadership team worked with IDEO to

110 / Rotman Management Fall 2020

define a higher bar with a bold new purpose. Now the team months have demonstrated, a shareholder-led definition of
is working to connect its strategic choices, its resource al- winning is not only hollow, it can leave organizations with
locations and its employee incentives to that larger pur- nothing to fall back on in a time of crisis. We need a far
pose. Doing that means reorganizing the structure of the richer, more aspirational understanding of what it can really
company into five business groups, each aimed at address- mean to win.
ing a unique global challenge, defining meaningful sus- To get there, ask how we could define a winning aspira-
tainability targets for each business, and investing in in- tion, using language that fits our organization; push out on
novation in significant new ways. the time horizon; connect strategic goals to a larger sense of
That’s really the power of purpose: it can align the purpose; and give ourselves room to dream big.
organization, motivate employees, and promise custom-
ers something they can believe in. No wonder purpose-led
companies tend to have higher employee engagement,
happier customers, and better overall performance. They
win on multiple dimensions. Jennifer Riel (Rotman MBA ‘06) is IDEO’s Global Director of Strategy
and the co-author (with former Rotman School Dean Roger Martin) of
In closing Creating Great Choices: A Leader’s Guide to Integrative Thinking (Harvard
Business Review Publishing, 2017). Prior to joining IDEO, she spent
Winning isn’t easy. It’s tempting to define it narrowly, to
13 years at the Rotman School of Management, teaching undergrads,
make the task seem easier. For example, ‘Winning means MBAs, and executives how to think creatively about their toughest
increasing our stock price this quarter.’ But as the last few challenges.

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416.978.4343 | [email protected]

rotmanmagazine.ca / 111
 QUESTIONS FOR Joan C. Williams, Professor of Law, University of California, Hastings

Q
&A
While well-intentioned, research shows that anti-bias
programs rarely deliver. What are organizations getting
wrong when it comes to this kind of training?
So much! The kind of bias training that has been the indus-
try standard for the past decade is not effective because it’s
about the cognitive causes of bias. What people need to
know is what bias looks like on the ground in everyday work-
place interactions. That’s what my research has focused on
for the past decade.
We can’t look at today’s organizations as meritocracies,
because, typically, they really aren’t. The fact is, in most or-
ganizations, the group that dominates doesn’t have to prove
itself as much, and this happens because of the subtle forms
of bias that are constantly being transmitted by formal and
informal systems. If we want to see results, we will need to
take proactive steps to interrupt those systems consistently.

A leading feminist What are some of the most common biases that affect
diversity and inclusion in the workplace?
scholar encourages In my research I have found that three are particularly com-
leaders to make diversity mon, and unfortunately, they often work in tandem. I call
the first one Prove It Again, whereby some groups have to
and inclusion part prove themselves more than others. I call the second one
of the new normal. Tightrope, whereby a much broader range of behaviour is
accepted from some groups than from others. If you’re not in
Interview by Maggie Screaton one of those groups, you are on the ‘tightrope’ and you have
to be much more politically savvy to get ahead. Then there’s
Tug of War. Say your workplace is a boys’ club. Some women
may see the path of least resistance as joining the boys club
and aligning against other women. Or for people of colour,
the tug of war can be that they’re seen as being too white or
not white enough.

112 / Rotman Management Fall 2020

 If you’re serious about diversity and inclusion,
you need to be keeping process metrics.

This combination of having to be more competent, to be biases playing out at every single one of those stages, in
show your competence more and having far more compli- none of them or in only one — but you won’t know until you
cated politics is a very powerful (and often lethal) combina- examine the process metrics.
tion. And that’s even before we talk about the differential With informal systems like work assignments, you have
effects based on motherhood versus fatherhood. In my re- to ‘pin down the jellyfish’ because you likely don’t have a
search I have found that the biases triggered by motherhood formal system to study. At biasinterrupters.org, we have a
are even greater than the big three I just described. simple survey that leaders can use to find out who is doing
the office ‘housework’: who is sending the follow-up emails,
Are individual leaders able to interrupt these biases? who is finding the time to meet, who is planning the celebra-
Not alone, but leaders are an important part of the picture. tions? That’s all good team building stuff, but typically it’s
The way to interrupt bias is through everyday workplace not the path to promotion. This is another situation where
interactions, and that requires at least two different sets of you have to measure who is doing what.
stakeholders. One is HR, which should be designing formal The second step — and in some ways this is even more
systems like hiring and performance evaluations to interrupt important — is to find out who is doing the ‘glamour work’ —
bias. An informal study of the tech sector found that person- those assignments that lead to promotions. Pin down what
ality was mentioned in 66 per cent of women’s evaluations, they are and then have individual managers keep track of
but only in one per cent of men’s. That is a good example of who gets them. The research suggests that even a simple
what we call a ‘process metric’. If you want to pinpoint where level of accountability on these things is a gentle bias inter-
exactly bias is playing out in your organization, you need rupter that could have a big effect.
to track these evidence-based process metrics — and HR has
a central role to play. Tapping into people’s existing networks has always been
Then there are the individual leaders who control the a go-to way to fill open roles within organizations. Why
informal systems that play a powerful role in shaping the should we be limiting that kind of referral hiring?
workplace experience, including access to career-enhanc- We shouldn’t, necessarily, but in most cases the single stron-
ing assignments and access to mentors and sponsors. Bias gest determinant of who is in your social network is simi-
breeds in informal systems, which is one of the reasons why larity. If your goal is to reproduce the demography of your
it’s concerning that so many tech companies have aban- current workforce in a certain level or a certain job, by all
doned performance evaluations. Instead, they just provide means, use referral hiring. If your goal is to take steps to-
feedback on an ongoing basis. That is concerning, especially wards diversity, referral hiring is probably going to have to
since one of the strong patterns we have found is that people either be balanced out by different kinds of hiring or elimi-
of colour are not given developmental feedback in the same nated altogether. As indicated, you need to keep track of
way as white people are. who ends up getting hired through referral networks and
who ends up getting hired in other ways. If you have a lop-
You believe rethinking the way we recruit and hire is a sided demography, then you have a problem and need to be
critical first step in breaking down bias. What else can proactive about it. Businesses treat every other problem by
leaders do to drive diversity in the workplace? seeking evidence and then using it to solve it. Why aren’t we
The first message is, if you’re serious about diversity and doing that with workplace bias?
inclusion, you need to be keeping process metrics. If your Why is it so important to ‘manage for bias’ on a daily
company has a problem with its sales function, what do you basis?
do? You look to the metrics, and you keep trying things until Because bias is happening on a daily basis. To de-bias a
you nail the desired metrics. In recruiting you should be ana- workplace, you have to teach people to recognize it and arm
lyzing the demography of your pool, who survives resume them with strategies that interrupt it. One-off bias training
reviews, who gets interviews, who survives interviews, who can’t change a culture because doing anything once cannot
gets hired, and the startup packages provided. There might change a culture.

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 In most cases, the single strongest determinant
of who is in your social network is similarity.

My colleagues and I have developed a next-generation to persuade the disbelievers. There will always be some rea-
approach to bias training called the Individual Bias Inter- son why the business case doesn’t apply. I don’t think the is-
rupters Workshop that presents the research, the bias, and sue is the business case. I think most people are convinced of
an example of how it commonly plays out. Prove It Again, the need to achieve diversity; but they don’t know how to get
for instance, can play out as ‘the stolen idea’. We put people there. It’s more of a change management issue.
in groups and get them to brainstorm about how they could
comfortably interrupt an instance of a stolen idea. Can your prescription for interrupting bias at the team
This accomplishes two goals. First, it leads to a reset level be scaled up and applied enterprise-wide?
in company culture. Once The Stolen Idea has been named Absolutely. Individual managers can get started by figuring
as a bias and everyone has talked about it, that makes it a out who’s doing the ‘office housework’ and who’s getting
lot harder to do. Second, you end up with a toolkit for how the glamour work. They can say, ‘Okay, in filling out perfor-
to interrupt bias in a low-key way that doesn’t require you mance evaluations I’m going to make sure I measure people
to spend too much political capital. This is really different against objective criteria, rate them based on those criteria
from some companies’ mindset of, ‘if you see a bias, call it and provide an explanation, if only to myself, when I waive
out!’ If that’s your jam, God bless you, but most people will criteria for person A but apply it to Person B.’ They can ask
not do that. HR to gather the process metrics to find out whether there’s
a certain demography to their hiring and, if so, where the
You have found that bias is ‘baked into’ performance re- problem enters in. They can use individual bias interrupt-
views. What can be done about that? ers: When the Stolen Idea occurs, they can say, ‘Hey Tim, so
There are ways to structure performance evaluations so that glad you picked up on Katie’s idea. You’ve added something
they can help interrupt bias, rather than help perpetuate it. important. I wonder if this is the next step.’ That’s a good
These are best practices that help an organization be a more example of a low-key bias interrupter. Such efforts, applied
effective meritocracy. For example, you shouldn’t accept a consistently, make enterprise-wide initiatives possible.
performance evaluation with only a global rating. That is a
petri dish for bias. Which organizations do you think are setting the bar high
What makes for a good performance evaluation is what around anti-bias right now?
industrial psychologists have been telling us for decades: The organizations that are setting the bar high are those that
Figure out what the job is, measure the person against the are keeping metrics and insisting that people meet them.
job and provide evidence and accountability. This is impor- At the risk of repeating myself, if you’re serious about this
tant because in-group favouritism often means that objec- you need to do what a business does for any other problem:
tive rules are applied rigorously to out-groups, but quite leni- Use evidence, establish the current and desired metrics,
ently to in-groups. and keep trying until you meet them.
That can also happen in a hiring context. You’ll have a
national search and the rules of the search are applied very
rigorously until a golden boy comes in and all of a sudden,
he’s the ‘search of one.’ He doesn’t meet any of the criteria,
so he’s never been judged against anybody who does, and
yet he gets hired. This happens all the time.

As you have indicated, most organizations aren’t doing Joan C. Williams is a Distinguished Professor of Law, UC Hastings
anti-bias training properly. How do we build a business Foundation Chair and Director of the Center for WorkLife Law at the
University of California, Hastings. Described as having “something ap-
case for doing it right?
proaching rock-star status” in her field by The New York Times Magazine,
I actually stopped working on a business case ten years ago. she has played a central role in reshaping the conversation about work,
No matter how much evidence you have, it’s never enough gender, and class over the past quarter-century.

114 / Rotman Management Fall 2020

FACULTY FOCUS Brendan Calder, Entrepreneur in Residence, Rotman School of Management

Getting It Done
Interview by Karen Christensen

You developed the GettingItDone® management system key questions to form your strategy: What is our winning
and have been teaching it to Rotman MBA students for 19 aspiration? Where will we play? How will we win? What ca-
years. What are its key principles? pabilities will we require? And what management systems
The system applies the thinking of three do we need? Our course helps particularly with that fifth
well known management gurus. The first question. Roger is actually the one who brought me to the
is the late-great Peter F. Drucker, the Rotman School back in 2001.
father of modern management. He had I teach the course with my co-instructor, John O’Dwyer,
plenty of great ideas, but the one we em- who has a PhD in Organizational Behaviour and Strategy.
brace in our framework is management by I am just a passionate practitioner! He’s the brains and I’m
objectives. I ran into him in the early 1970s and was lucky the brawn, as we tell our students.
enough to get to know him pretty well in the late 1990s.
I have been a devout apostle of his methods throughout Your GID system involves an annual cycle. With things
my career. changing so fast, is such a cycle still relevant?
The second guru is the late British-born management We do recommend an annual cycle, but that doesn’t mean
behaviouralist Bill Reddin, who believed that that there you just set it up in two days and then everyone goes to sleep
was only one realistic and unambiguous definition of man- for the rest of the year. This is a living, adaptive system.
agerial effectiveness: The extent to which a leader achieves There are a wide variety of things happening throughout
the output requirements of the position. For him, the man- the cycle.
ager’s only job is to be effective in this way. A Drucker fan Throughout an annual cycle, the tools depicted in the
himself, Bill built on Drucker’s management by objectives graphic get used over and over again. The yearly map is just
to create ‘effective management by objectives’. meant to show leaders what they should be focusing on at
The third guru featured in our framework is former which point in the cycle, and which tools fit well with each
Rotman School Dean Roger Martin, author of Playing to other to create optimal outcomes. But even as you adhere
Win and The Opposable Mind. Roger is well known for Inte- to the system, you can never lose sight of what is going on
grative Thinking and Design Thinking, but he also knows outside of your four walls — not ever. That is why the system
a thing or two about strategy. Our system embraces his con- Includes a face-to face weekly meeting called a ‘Monday
cept of the Choice Cascade, which entails answering five Morning Team Action List’ meeting.

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 You can never lose sight of what is going
on outside of your four walls.

Another of the tools you recommend is ‘Clue Manage- It is true, however, that it is difficult to get away from a
ment’. How does that work? hierarchy. There are big dogs and small dogs. That’s natural.
Clue Management is a concept from Mike Kami, a contem- The issue is what you do with them. Once you decide what
porary of Drucker who wrote a book about this in the late it is that you want to accomplish, you need to make sure
1980s. His basic idea was that you should expose yourself that all the roles and decision rights are really clear. That,
to a wide variety of unfamiliar ideas and information. For by definition, forms a sort of hierarchy. So the system is
example, he suggests going to the newsstand on a regular not anti-hierarchy or pro-hierarchy, but it does acknowledge
basis (whether it be digital now or bricks-and-mortar) and the concept.
picking out a wide variety of magazines on different topics.
If a cover or headline catches your attention, grab it. Then, What sort of individual leadership style works best in the
you scan them all and rip out the articles or images that you GID system?
find compelling or want to learn more about. This is called None. Bill Reddin’s major contribution was that in his time,
‘razorblade reading’. You then organize all the torn out/ the world was mostly either task-oriented or relationship-
copied articles into separate folders, by topic. Then review oriented. You were either a good people person or you were
the folders once a month and look for trends. Trust me: really good at execution. He recognized that there is a third
they’re in there. important dimension involved, and that’s effectiveness. You
Over time, something amazing happens. It will take can be effective or ineffective within each of those two
two or three months, but you will start getting clues about basic styles.
what’s going on out there and what might be around the What leaders need to be able to do is ‘style flex’. They
corner. I have found this technique very useful. Back in need to understand a relationship style and a task-oriented
the day, I was running a high-tech — for its time — bank. style and know when and where to use each, in an effective
At one point we were installing a new IT system, so I went manner. And that comes from mindfulness and situational
to my IT executive and asked, ‘When are we going to put awareness. You have to have situational sensitivity. Once
that in place? She said ‘We’re actually going to download you have assessed a situation, you then apply the style that
it tonight’. This was back in the early 90s. I asked, ‘What matches the context. To give an example, when you go to
does that mean?’ She explained how downloading works, a wedding, do you use the same behavioural style as when
and that on the web, companies can send things to each you go to a funeral? Of course not.
other, over the net. No one style is always right, but there is always effec-
Because I had clue management in place on this topic, tive style and ineffective style. We focus on four couplets.
I understood the importance of the world wide web and First, you’re either a Collaborator or a Compromiser. Com-
the growing information highway. I’d been watching it com- promisers aren’t effective. Second, you’re either a Benevo-
ing for some time. So I said to her: ‘We need to get our own lent Autocrat or an Autocrat. Autocrats are not effective.
website. My company was called FirstLine Trust Com- Third, you’re either an Administrator or a Deserter (inef-
pany, and even today, if you google ‘FirstLine’, it comes up fective). And fourth, you’re either a Developer or a Mis-
first on the list. Even though the company doesn’t exist any- sionary (ineffective). These are the four ‘style tradeoffs’,
more — CIBC closed it down about five years ago — it is the and you have to be self-aware and flex between them to suit
first thing that pops up. That is an actual result of applying any situation.
clue management to your strategy.
What are the two of the most important concepts for to-
Is the GID system hierarchal or does it espouse a more day’s leaders to embrace from the GID system?
flat organization? First, a leader/manager has to make strategic choices. Rog-
The answer is, neither. It’s up to you and your team to er Martin’s Choice Cascade helps you do that. The second
decide what the best format is for you. It’s all about ‘distrib- overriding concept is a disciplined approach to executing the
uted leadership’. Command and control went out in 1975 — team’s strategic choices by using the tools in the GettingIt-
although some people still cling to it. Done toolkit.

116 / Rotman Management Fall 2020

 GettingItDone® Gurus

MARTIN DRUCKER REDDIN

RESULTS
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TE T
EN U
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FOCUSSED
R

RI TP
AT

O OU
EG
Y

EFFECTIVENESS

O E
W TIV
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CAN BE LEARNED

A M EC
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C SC
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BO IV &
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Individual, Team and Organizational Effectiveness

FIGURE ONE

You believe this approach can actually enable an organi-

zation to avoid being disrupted. How so?
To be clear, you’re never going to be able to stop disruption,
you’re just going to be able to get an early warning about it.
To achieve that, we teach people to be fast, fluid, and flex-
ible, instead of slow, sticky, and stiff. Imagine the workplace
with an outside-in perspective. Everything is in the context Brendan Calder is a Professor of Management and Entrepreneur in
of your customer. All the time. The result of this stance is Residence at the Rotman School of Management, where he chairs the
Desautels Centre for Integrative Thinking and was the founding chair
that you see disruption coming much earlier, and are ready
of the International Centre for Pension Management. Prior to joining
to do something about it. And because you have the tools, Rotman, he was CEO of CIBC Mortgages Inc. and co-founder of First-
you do. Line Trust Company, Canada’s first mortgage bank.

rotmanmagazine.ca / 117
 POINT OF VIEW Chris Stamper (Rotman MBA ‘94), Former Chief Marketing Officer, TD Canada

Charting A New Path

for Your Organization:
The 4Ps
WHERE DO WE GO FROM HERE? That is the ques- Purpose goes deeper than a Mission or Vision state-
tion being asked by just about everyone, ev- ment. While both are important for articulating the goals of
erywhere. With the onset of the COVID-19 an organization, your purpose is the core reason you exist.
pandemic, business priorities immediately Further, every stakeholder an organization does business
shifted from ‘how will we grow?’ to ‘how will with must be aligned with your purpose. It is not enough
we survive?’ to have a CSR program yet have manufacturing process or
As our medical and government leaders have indicat- suppliers that are not in sync with that program. Make no
ed, we will get through this extremely difficult period and mistake: Integrity matters more than ever before.
come out the other side. But there is little doubt that society
will be different. It already is, and as a result, it is incumbent KEY QUESTIONS:
upon leaders to chart a new path. • What does our organization stand for?
Whether you work for a large corporation or a small • What is most important to our customers?
business, an NGO or a not-for-profit, new thinking and ap- • What is most important to our employees?
proaches are required. In this article I will present a frame- • How do we align what our customers want, what our
work that can serve as a roadmap to prepare your business employees deliver and what our organization stands
for the other side of the curve. The 4Ps Framework consists for at a broader level?
of four defining elements of a successful and sustainable • How are we driving an emotional connection with our
business model for surviving and growing in 2020 and be- products and services?
yond: Purpose, Presence, Personalization and Protection.
In this article I will take a closer look at each element. ELEMENT 2: PRESENCE
Historically we have asked, How can we find more custom-
ELEMENT 1: PURPOSE ers? But the future is about making sure customers can find
Organizations with a strong sense of purpose have been you. Presence, and in most instances, omnipresence is what
shown to be more than twice as likely to have above-aver- will differentiate successful companies from those that
age shareholder returns. Purpose has also been correlated don’t make it. Increasingly it will be paramount to know the
strongly with ten-year total shareholder return. And it has best avenue to reach your audience with the right message
never been more important that it is today. From corporate at the right time. And connecting with your customers will
social responsibility, hiring and compensation to product have to be done on their terms.
design, development, manufacturing and marketing — Presence also means having an integrated approach for
all are impacted and shaped by your core purpose. Who offline and online, traditional and non-traditional, bricks
you are and how you operate should permeate everything and mortar, contact centre and digital. Establishing your
you do. footing in these channels should be a mixture of strategy

118 / Rotman Management Fall 2020

and trial and error. Cost and barriers to entry will determine Being relevant, meaningful, timely and transpar-
how fast and how often. ent will be critical to reaching your customers effectively.
Interacting with consumers on their terms, where they Studies show that as long as organizations use the data
want, means being active on many digital platforms. Digi- they have to help customers in a meaningful way, people
tal is a lot more than display advertising. It also includes are open to sharing data and it results in an enhanced
search-engine marketing (SEM), search engine optimiza- experience and a deeper relationship. Getting to the heart
tion (SEO), video, livestream, augmented reality, podcasts, of what the customer wants and delivering a product or
voice interaction, chat, messaging, key social channels like service that recognizes that is what sets great organiza-
Facebook, LinkedIn, Instagram and Twitter and experi- tions apart.
mental channels like TikTok. The new personalization is a combination of two dis-
Traditional media continues to deliver on customer in- tinct but complimentary strategies:
fluence, so TV, radio (yes, radio!) and streaming content will
be a key part of the mix to find your customers. Digital also ‘THE WHAT’. What is offered is influenced by a number of fac-
includes the ability to shop, purchase and interact directly tors including customer level pricing; product customiza-
with your organization through the web, apps, and messag- tion on a number of different design and manufacturing
ing. Just like physical channels, your digital presence must features; behavioural segmentation and alternative distri-
bring your brand to life and connect directly to your purpose. bution strategies. The ‘what’ should address the individual
Far too many organizations believe the answer is one or needs of each customer.
the other — physical or digital. The truth is that they must
both evolve together in order to deliver the full consumer ‘THE HOW’. How will you deliver a unique message about ‘the
experience. Seamless and frictionless interactions are es- what’ to the consumer? The how is about understanding
sential to make sure the offline and online worlds deliver on how consumers want, expect, and respond to messaging
customer expectations. about ‘the what’. Presence is what affords you the best op-
portunity to deliver ‘the what’ message to your customers
KEY QUESTIONS: in a relevant way and through relevant channels.
• What does our customer journey like?
• What is the level of integration between our offline and KEY QUESTIONS:
online processes? • How are we leveraging data to drive better customer
• How do our multiple channels interact with each other insights?
at each customer touchpoint? • What makes each customer unique, and do we in turn
• How do we ensure the purchase experience is built from deliver uniqueness to them?
the customer-out? • How is our organization leveraging AI and machine
• What is the experience for customers who move be- learning to drive deeper personalization?
tween different parts of our business? • How can we integrate our data with data from other
sources to drive deeper personalization?
ELEMENT 3: PERSONALIZATION • What feedback mechanisms are in place to enhance
This has been called the era of Big Data, but the truth is, customer satisfaction?
we have more data than insights and considerable raw com- As we harness the power of AI and machine learning, the
puting power that we don’t or can’t leverage. unique needs, preferences and experiences of each cus-
At the same time, it is becoming increasingly difficult tomer will drive exponential growth in options and choices.
to put more messages in front of consumers, who are be- Personalization will be driven not just by your organization’s
ing overwhelmed by the sheer volume of communication. data, but also by the data collected by others. Over time,
This has led to ineffective strategies to target them and data aggregation and integration will drive even deeper per-
a less than fulfilling experience for many. sonalization.

rotmanmagazine.ca / 119
 Business continuity planning has always been a best practice,
but now it is a core competency.

ELEMENT 4: PROTECTION KEY QUESTIONS:

The fourth and most critical element of the 4Ps Framework • What do we do with the data we collect and how do we
is Protection, which consists of the safekeeping of your cli- keep it safe?
ents’ data, their well-being, their privacy and preferences, • What customer and employee access permissions do
and your reputation. Customers rate security and protec- we have in place?
tion as the key elements in a business relationship. Yet data • Are we prepared for a data breach?
breaches seem to happen every day. In 2019, almost 7.9 • Is data and customer protection a Board-level priority
billion records — including credit card numbers, home ad- for us?
dresses, phone numbers and other highly sensitive informa- • What is the extent of our customer and employee busi-
tion — were exposed through data breaches. ness continuity planning?
Organizations large and small need to make the safe-
keeping of their data a top priority. Historically, this involved If you can answer these questions confidently, protection
simple steps like backing-up data to an alternate storage ve- underlies your business model — which bodes well for you.
hicle. Today, safekeeping includes cloud storage, archiving, If you can’t, prioritizing the protection of your business and
disaster-recovery planning and the shift to a model where customer information should become your top priority.
organizational data is continuously protected in real time
vs. a batch process or one-time duplication. In closing
The rise of AI and machine learning makes this an even As a business leader, focusing on the integration of these
greater imperative. What your organization does with the four critical factors — Purpose, Presence, Personalization
data it collects, how it uses it, stores it and even sells it will and Protection — will ensure that your business grows well
be a priority for customers who believe it is theirs to control. beyond 2020. While all four elements are critical, if you fail
Customers want data transparency and access: They want to Protect your customers, Purpose, Presence and Personal-
to know what you have and how you plan to use it, and they ization will not matter.
want a say in this. As a result, organizations will have to play Every organization and every leader needs to prepare
a greater role in educating their customers about policies for a new normal. Looking back to remember where you
and programs that leverage data. have come from and what you have learned, combined
Finally, as the pandemic has demonstrated, organiza- with a new approach based on the 4Ps, will accomplish two
tions need to place the physical protection of their employ- things: It will help to determine the path forward for your
ees and customers at the heart of their business. Customer organization and it will set it apart.
and employee business-continuity planning has always
been a best practice for the best organizations, but now it is
a core competency. Those with robust business-continuity
plans will be able to pivot and adjust to changing business
realities. This is about more than physical well-being. It
Chris Stamper (Rotman MBA ‘94) is a former senior executive and
means being truly there for your employees and customers Chief Marketing Officer for Canada at TD. He has also served as Chair
through the good times and the bad. of the Canadian Marketing Association.

120 / Rotman Management Fall 2020

QUESTIONS FOR Dan Heath, Best-Selling Author and Senior Fellow, Duke University

Q
How do you define ‘upstream thinking’, and why is it so
powerful?
There’s a public-health parable that captures the distinction:
You and a friend are having a picnic by the side of a river.
Suddenly you hear a shout from the direction of the water
— a child is drowning. Without thinking, you both dive in,
grab the child, and swim to shore. Before you can recover,
you hear another child cry for help. You and your friend jump

&A
back in the river to rescue her as well. Then another strug-
gling child drifts into sight . . . and another . . . and another.
The two of you can barely keep up. Suddenly, you see your
friend wading out of the water, seeming to leave you alone.
“Where are you going?” you demand. Your friend answers,
“I’m going upstream to tackle the guy who’s throwing all
these kids in the water.”
That’s what I’m getting at in my book, Upstream. So
often, we get stuck in a cycle of reaction. We’re constantly
putting out fires and responding to emergencies, and that
cycle becomes self-perpetuating, because every minute
spent reacting to a problem is a minute not spent prevent-
ing it. We can spend our whole lives in reaction mode unless
we consciously shift our focus upstream.

You have said that focus is both the strength and the
weakness of organizations. Please explain.
The author of four New Organizations are designed for specialization. We push
York Times bestsellers people into silos and functions and we grade them on how
well they perform on certain constrained measures. And it
describes how ‘upstream works! It makes us more efficient — but it comes at a cost,
too. It’s kind of like the blinders worn by racehorses: they
thinking’ allows you to make us faster, yes, but at the expense of our peripheral
solve problems before they happen. vision. We start losing our ability to answer really important
questions that lie beyond our immediate role.
Interview by Karen Christensen In the book there’s a case study of Expedia, which was
receiving 20 million calls per year from customers asking
for copies of their travel itinerary. The call-centre people
who received these calls were measured on how quickly
they could resolve the issue, and they did a great job whit-
tling down that call time. That’s focus. But even as 20 mil-
lion calls were fielded efficiently, there was no one in the

rotmanmagazine.ca / 121
 We can spend our whole lives in reaction mode—unless
we consciously shift our focus upstream.

organization whose job it was to wonder, ‘Wait a second. and tangible. But if you think about what it would take to
Couldn’t we stop customers from needing to call us at all?’ prevent crime, it gets much hazier. What would you do?
That’s an upstream question. When they finally did ask that How would you know it had worked? How exactly would you
question, they managed to drive down the number of itiner- prove that a crime had not happened? Careful tracking of
ary-seeking calls to zero, basically. At a $5 cost per call, we data is the answer, but of course that opens up a whole new
can credit them with a $100 million upstream victory. can of worms regarding gaming, downgrading, and so forth.
And think of the funding complications: We know the police
For most problems, we can take either an upstream or a force has a budget to solve crimes that have happened, but
downstream approach to a solution. Describe what these who exactly would pay for the crimes that did not happen?
look like for a particular problem. And so on.
You can think of the downstream/upstream approaches on To be clear, I actually think we’re too far downstream on
a spectrum. Let’s take the problem of drowning kids (from crime, despite the obstacles discussed above. But the point
the parable), but transplant the setting to public pools. is that going upstream is not always an easy win. There are
A downstream approach would be to wait until a child is times when we’ll decide that preventing a problem is too
drowning and then frantically attempt to rescue them. A costly or uncertain to contemplate. For instance, we could
few steps upstream from there would be to anticipate that eliminate most highway traffic fatalities by reducing the
drownings might happen. So, you put a lifeguard on duty speed limit to 20 mph — but that doesn’t seem to be a trade-
with a life preserver. Even Further upstream from that off that people would embrace.
would be a requirement for kids to wear armbands corre-
sponding to their skill level, so that novice swimmers might You have identified three key barriers to upstream think-
wear yellow armbands. (This is something the YMCA ing. Please summarize them.
does.) That visible signal helps lifeguards keep a more care- The three barriers are problem blindness, a lack of own-
ful eye on inexperienced swimmers. And to go yet further ership, and tunneling. That latter is a term from the great
upstream, we could teach swim lessons en masse to young psychology book Scarcity. Problem blindness says that we
kids. What better way to prevent drownings than to teach can’t fix a problem if we can’t see it. Sometimes a problem
kids to swim? is so ubiquitous that we don’t code it as a problem; it just
Of course, this same spectrum applies to business chal- seems like an inevitable part of life. Think of sexual harass-
lenges. LinkedIn, for instance, sells a recruiting product ment in the workplace in the ‘60s and ‘70s. It was so wide-
to corporations on a subscription basis. Years ago, its sales spread that, at the time, women were often encouraged to
focus was on ‘saving’ accounts in trouble. In other words, if ‘just roll with it’.
you thought a customer might not renew their subscription, The lack-of-ownership barrier relates to the focus issue
you’d send in an ace salesperson to save the day in month 11 described earlier. If your house is on fire, it’s clear who owns
of an annual license. But then a leader named Dan Shapero the solution: the fire department. But if you ask, Whose job
asked, “Why don’t we stop spending money to ‘save’ ac- is it to ensure that my house doesn’t catch on fire in the first
counts and start spending it to onboard customers prop- place?, that’s a much murkier question. The homeowner?
erly in the first month of their account?” That switch to an The construction firm that built the home? The bureaucrats
upstream focus — preventing dissatisfaction before it hap- who wrote the building codes? All of them? Unfortunately,
pened — ended up cutting their churn rate in half. when ownership is fragmented like that, it often means that
no one will respond.
Is upstream always best? Tunneling refers to a lack of bandwidth to solve prob-
No. I mean, all things being equal, we’d certainly rather stop lems. In a tunnel, you try to make your way forward. If you
problems before they happen. But all things are not equal. hit a problem, you just want to work around it and get it be-
The issue is that the further upstream we go, the more com- hind you so you can keep moving. You don’t have the time
plex and ambiguous the work becomes. If there’s a crime, or energy to ask, ‘Why did that problem happen? Could I
you can catch the criminal afterward. That’s downstream solve it at a systemic level?’ You just keep going. Tunnelling

122 / Rotman Management Fall 2020

 We all love heroes who save the day—but what about all
the people who keep the day from needing to be saved?

is very familiar, I suspect, to most of us. But it’s a terrible heroes who are quietly, competently making the world a
trap. Because every problem that you ‘work around’ is a better place.
problem that will keep recurring.
So, in short, problem blindness says: I don’t see the prob- Do you advise that we take this approach as individuals
lem; a lack of ownership says, That problem is not mine to fix; and as citizens as well?
and tunneling says, I can’t deal with that right now. And the I have a friend who told me about a revelation she had one
combination of these factors keeps us downstream. day in a parking lot. She said that whenever she was park-
ing at the mall or grocery store, she’d zip around in her car,
You have said the industry that is most in need of up- hunting for the perfect spot. And she’d make herself crazy
stream thinking is healthcare. Talk a bit about how the trying to beat other cars to a spot that opened up. And then
current scenario exemplifies this need. it dawned on her: I’m wearing a step counter on my wrist, yet
I interviewed Patrick Conway, a former deputy adminis- I’m driving myself mad to keep from walking 50 extra steps.
trator of CMS (Medicare/Medicaid) in the U.S., and he said: Would it really kill me, she wondered, to just park a little
“We’ll pay $40,000 a year for the price of insulin, but we further away?
won’t pay $1,000 to prevent someone from ever getting From that moment forward, she resolved to park in the
diabetes.” That’s basically the story of our health system. most remote spot in the lot. She thought of it as a VIP space.
I mean, the problem is more extreme in the U.S., but I think No one would park close enough to bang their door into her
there are comparable dynamics in many countries. Health- old Honda Accord. She’d pick up some extra steps on the
care functions as an expensive ‘Undo’ button. If something way to the door, and she would never endure another sec-
is wrong with you, we’ll try to correct it. Broken hip? We’ll fix ond of anxiety or anger about where she’d park. How many
it. Blocked artery? We’ll unclog it. With some luck, you’ll be problems in our lives do we tolerate because we’ve forgotten
restored to your previous state. But that’s all downstream. that we can fix them?
It’s hard to find people in the health system whose job it is
to make you healthier — as distinct from fixing the prob- For leaders who want to embrace this approach, what
lems that make you unhealthy. That is changing somewhat, are the first steps?
thanks to different kinds of payment models and incentives. The first step is a somewhat counterintuitive one: Taking
But the change is slow and incremental. ownership for a problem that may not be of your making.
Downstream/reactive work demands action. A tornado
Are there organizations or leaders who personify up- devastates a town; a patient suffers a heart attack; a toddler
stream thinking? soils a diaper. These problems must be addressed. It doesn’t
One obvious answer is Toyota — in the sense of a culture feel like there’s a choice. Meanwhile, despite the enormous
that encourages employees to analyze problems and tweak stakes, upstream work is often voluntary. A group of people
systems. Toyota’s employees basically never get caught in come together and declare: We did not create this problem,
the tunneling trap described earlier. And a great upstream but we will be the ones to fix it. What could be more powerful
leader was Intel’s Andy Grove, who had an uncanny ability than that?
to spot problems on the horizon and address them early. His
memoir was called Only the Paranoid Survive, which is pretty
diagnostic of his overall ethos.
But to me, the larger issue is that, as a society, we’re
absolutely terrible at recognizing and celebrating upstream
heroes. We love heroes who save the day: firefighters and
first responders and turnaround artists and cops and emer- Dan Heath is the author of Upstream: The Quest to Solve Problems Before
They Happen (Avid Reader Press / Simon & Schuster, 2020) and the co-
gency-room surgeons. But what about all those people who
author, with his brother Chip, of four New York Times bestsellers: Decisive,
keep the day from needing to be saved? One reason I wrote Switch, Made to Stick, and The Power of Moments. He is a Senior Fellow at
Upstream was to shine a light on their work — the invisible Duke University’s CASE Centre, which supports social entrepreneurs.

rotmanmagazine.ca / 123
 QUESTIONS FOR Lisa Kimmel, Chair and CEO, Edelman Canada

Q
How would you describe the trust landscape in Canada
right now?
Every fall, we survey people around the world to measure
their trust in four institutions: government, business, NGOs
and media. Last fall we found that Canadians were quite
distrusting of all these institutions — and government was
at the bottom of the list. At that time, only 50 per cent of
respondents trusted government, 53 per cent trusted both

&A
business and media and 55 per cent trusted NGOs.
Fast forward a few months and we re-surveyed Cana-
dians in the midst of the global pandemic, and found record
highs in reported trust across all four institutions. This in-
cluded a 20-point jump in trust in government, which actu-
ally moved from fourth position into first. This significant
increase can be explained by the fact that the federal gov-
ernment built confidence by embracing partnership and
collaboration. Where there were once tensions between
political parties, we have seen a decline in hyper-partisan
rhetoric, as leaders at all levels of government presented a
consciously united front to contain the pandemic and pro-
vide economic support.
This was very interesting to us, because over the 20-
year history of the Edelman Trust Barometer, one trend we
have noted is that when a federal election is looming, we
typically see a rise in trust across all institutions — and in
The CEO of Edelman particular, government. For the first time last fall, we didn’t
see that in Canada. But then COVID-19 came along and the
Canada shares findings picture changed.
from the firm’s special
You found that Canadians are quite divided—almost
report on Canadians’ 50/50—about the possible increase in data collection
trust in institutions during the global that may be looming to deal with pandemic tracing. What
does this tell you?
pandemic. While Canadians were comfortable with government re-
stricting our physical movement to contain the virus and
Interview by Karen Christensen
manage the healthcare system, we are very divided when
it comes to the tracking of our personal data. This suggests
that much more debate and discussion will have to occur to
figure out the most effective ways of containing this virus.
As you indicate, only half the population is comfortable

124 / Rotman Management Fall 2020

 Many people feel like ‘the system’ is not
equipped to help them move forward.

Key Findings from Edelman

Special Report on COVID-19
• 65% of respondents trust their employer to respond
effectively and responsibly to the coronavirus outbreak
with resorting to the tracking of personal data in order to
contain the virus. If tracking is the most important thing that • 42% of respondents believe that business should be
needs to happen in the absence of a vaccine, Public Health working in partnership with government to combat
officials and government officials are going to need make a the virus
very strong case as to why Canadians should be comfortable
• 78% of respondents believe businesses have a respon-
giving up their privacy in order to do this. sibility to ensure their employees are protected from
the virus in the workplace and that their employees
Describe the ongoing state of ‘trust inequality’. do not spread the virus into the community
We categorize our survey participants into two groups: the
• 43% of employees want their employer to update
informed public and the mass population. We define the
information about the virus at least once a day
informed public as those who are university or college edu-
cated, who are in the top quartile of income earners in the
country and who are higher consumers of media; and the
mass population is everyone else. One question we ask in
our annual survey is, ‘Do you believe your family will be have put in place to either fight the public health crisis, the
better off five years from now?’ In recent years, very few economic crisis or both.
people from the mass population have agreed with that —
and the number was less than 25 per cent this year. What Describe the differential in trust between the traditional
this says is that these people don’t feel like ‘the system’ media and social media.
— an amalgamation of the four institutions we cover — is We’ve seen that widen over the last few years. When we do
equipped to help them move forward. our annual survey, traditional media in Canada is always
The trust gap between the informed public and the the most trusted — and it’s higher than the global average
mass population is directly tied to the outlook that people for the markets we survey. Social media is at the bottom of
have around their futures. One of the key issues driving that the list, usually teetering around 25 to 30 per cent of people
is fear of job loss, which is tied to a host of factors. People saying they trust it, and we’ve seen that gradually decline in
are fearful that they’re going to lose their jobs through au- recent years due to questions around the dissemination of
tomation. They worry about not having the necessary skills fake news. Social media is not viewed as a credible source
required for the jobs of tomorrow; and then, of course, there of general news and information.
are evolving global economic and trade dynamics. When At the same time, we have seen an increase in trust in
you layer on the pandemic, 49 per cent of respondents traditional media to a record high during the pandemic.
are concerned about losing their job. There is a significant People are looking for trustworthy, reliable, credible sourc-
amount of fear and anxiety out there. es of information, and Canadians have concluded that tra-
ditional media is the most trusted source.
Can you talk a bit about the ‘trust bump’ that you found
for certain industries in recent months? How has the pandemic changed people’s expectations
We’ve actually seen a trust bump phenomenon across all of business leaders in general?
of the industries we measure on an annual basis, with the What has been made clear is that the expectation of Cana-
most notable being in telecom, consumer packaged goods dians for all institutions — but predominantly government
and healthcare. I think the fact that those sectors have seen and business — is that they need to contribute in a mean-
the most significant bump is a result of the initiatives they ingful way to helping solve the problem. While a majority

rotmanmagazine.ca / 125
 We see a growing expectation that businesses
will help to address societal challenges.

Employers Are Expected to Adapt Operations

Percent in Canada who expect their employer to take each action

Net percent of Canadian employees Remote working 47

who expect their employer to make
one or more of these changes in
their operations: Contingency plans 46

Cancel non-essential meetings/events 45

78% Reduce direct contact

Business travel bans

43

41

FIGURE ONE

of Canadians believe that government needs to take the We’re still in the midst of all this, but to date, who have
lead in addressing a whole host of issues and challenges as- been the most credible expert voices?
sociated with containing the virus, businesses also need to People tell us it’s doctors, scientists and public health au-
contribute in a meaningful way. That could mean produc- thorities. In Canada, it’s clear that Prime Minister Trudeau
ing essential products, protecting frontline workers or fig- has really deferred to Chief Medical Officer Theresa Tam.
uring out how we get to our ‘next normal’. Only 28 per cent And so have the Premiers, to their provincial Chief Medi-
of Canadian respondents felt that CEOs were doing an out- cal Officers. In my view they have all been very effective in
standing job handling the demands posed by the pandemic. communicating the seriousness of the situation. They’ve
So clearly, business leaders are not delivering on people’s been very transparent, even in sharing difficult informa-
expectations. tion, while at the same time reassuring Canadians that the
government is doing whatever it can to manage the country
One of your suggestions is for businesses to focus more through the crisis.
on solutions than selling. Please explain.
This isn’t the time to be actively promoting the benefits of What surprised you most about your findings?
your products or services. Instead, businesses should focus Just how significant the ‘trust bubble’ is — because that’s
on what is most needed by citizens and what is most critical what I believe it is. Despite the confidence that people have
to solving both the public health and economic challenges in government to solve and address all of the challenges as-
that we all face. Whether it’s shifting your manufacturing sociated with this pandemic, the reality is that the govern-
facilities to create essential products like masks and hand ment is not going to be able to deliver on all of those expec-
sanitizer or working closely with your competitors on solu- tations. To me, this is actually an opportunity for businesses
tions to the issues at hand. A wonderful example is the col- and their leaders to step up and help in addressing some of
laboration that is happening in the pharma sector, where the key issues — whether it be in partnership with govern-
companies are working together in partnership to come up ment, in collaboration with others in their industry, or as an
with a vaccine. individual organization.

126 / Rotman Management Fall 2020

 Employers Are Expected to Adapt HR Polices
Percent in Canada who expect their employer to take each action

Net percent of Canadian employees

Encourage employees with possible 58
who expect their employer to make
symptoms to stay home
one or more of these changes in
HR operations: Prevent certain at-risk employees
49
from coming to work

76%
Give paid sick leave to employees 45
or contract workers

Pay for the treatment of workers

36
without health insurance

FIGURE TWO

Based on your findings, what steps should leaders be tak- The last thing I would say is around the notion of pur-
ing to navigate the ‘next normal’ that awaits us? pose. Over the last few years we have seen a growing expec-
The first and most pressing issue is around the return to tation that businesses help to address societal challenges.
work. That’s really going to be the next test of trust, both Leading with purpose and making sure that purpose is core
for government and for businesses. Our survey results in- to the DNA of your organization is going to be increasingly
dicate that Canadians feel like it’s up to the government important to build and maintain trust going forward.
and public health authorities to provide guidance in terms
of what is appropriate for the return to work. Business lead-
ers can use those guidelines as a framework for their own
companies, but they also need to be somewhat flexible and
accommodating to their particular employee base. It can’t
be a one-size-fits-all approach, because some individuals
will be at greater risk than others by having to physically be
in an office or on a worksite. Ultimately, leaders must priori-
tize the health and safety of their stakeholders. That needs
to be their number one priority — or else they risk eroding
whatever trust bump they may have seen in recent months.
The other thing is that leaders have done a much better
job throughout this pandemic of communicating frequently
with their employees and other stakeholders. My hope is
that they won’t fall back into previous habits or behaviours
and not be as engaged with their employees moving for-
ward. They should continue to prioritize open, honest and
frequent communication. Lisa Kimmel is Chair and CEO, Canada and Latin America, at Edelman.

rotmanmagazine.ca / 127
Learn from
the best
Each year, the Rotman School of Management
hosts almost 100 public talks by bestselling
authors, executives and other thought leaders.
The School also hosts conferences for managers
and executives.

Highlights

september 10, 5:00 pm edt livestream september 29, 5:00 pm edt livestream october 8, 5:00 pm edt livestream
Andrew Marantz Rotman Management Michael Hallsworth
Staff Writer, The New Yorker; Author
Topic: Antisocial: Online Extremists, Techno-
Short Talks Managing Director, BIT; Author
Topic: Behavioral Insights: Applying
Topic: A Toolkit for Leaders
Utopians, & the Hijacking of the American Evidence About Human Behavior to Practical
Conversation (Viking, 2019) Problems (MIT Press, 2020)
october 5, 4:00 pm edt livestream
september 16, 5:00 edt livestream Christine Beckman november 10, 5:00 pm est livestream
Professor, USC; Co-Author
Scott Sonenshein Joshua Gans
Professor, Rice University; Co-Author Melissa Mazmanian Professor, Rotman; Author
Topic: Joy at Work: Organizing Your Associate Professor, U of California; Topic: The Pandemic Information Gap
Professional Life (Little, Brown, 2020) Co-Author and the Brutal Economics of COVID-19
Topic: Dreams of the Overworked: Living, (MIT Press, 2020)
september 17, 8:00 am edt livestream Working & Parenting in the Digital Age
(Stanford, 2020)
Cass Sunstein november 12, 5:00 pm est livestream
University Professor, Harvard Law School;
october 5, 5:00 pm edt livestream
Mark Bulgutch
Author Former Sr. Editor, CBC; Co-Author
Topic: Too Much Information: Understanding Roger Martin Peter Mansbridge
What You Don’t Want to Know (MIT Press, Professor Emeritus and former Dean,
2020) Former Anchor, CBC’s “The National”;
Rotman; Author
Co-Author
When More Is Not Better: Overcoming
Topic: Extraordinary Canadians:
september 28, 5:00 pm edt livestream America’s Obsession with Economic
Stories from the Heart of Our Nation
Efficiency (HBR Press, 2020)
Kaushik Basu In Conversation With: Amanda Lang,
(Simon & Schuster, 2020)
In Conversation With: Heather Reisman,
Professor, Cornell University; former Anchor, BNN Bloomberg
Chief Economist, World Bank; Author Founder & CEO, Indigo Books
Topic: The Republic of Beliefs: A New
Approach to Law and Economics
(Princeton, 2018)

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