January–February 2025

Learning Emerging Skills Doesn’t Always Pay Off

It’s crucial for your company to invest in training that will have a lasting and meaningful impact on your organization. You may think that means focusing on new cutting-edge skills employees will use in the future, but research shows that strengthening the core skills workers need right away has a much bigger payoff.

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Just Because You Want to Lead Doesn’t Mean You Should

Why do incompetent people end up in positions of power? A team of researchers led by Stanford University’s Shilaan Alzahawi thinks it has at least part of the answer. The team asked 472 participants at an executive education program to self-report their level of ambition. The participants were then rated by peers, subordinates, managers, and themselves on 10 leadership competencies, including their ability to motivate others, manage collaborative work, coach and develop people, and present and communicate ideas. The results showed no relationship between ambition and leadership aptitude.

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The CEO of e.l.f. Beauty on Maintaining a Startup Culture While Scaling

Even as it has become a major player in the beauty industry, e.l.f. continues to operate like a startup, driven by its vision, mission, and values, acting as one nonhierarchical, passionate, high-performance team, and constantly exploring how to move further and faster than the competition.

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How to Marry Process Management and AI

Process management, which swept the business world in the 1990s and then fell out of favor, is experiencing a renaissance, thanks to AI. The two reinforce each other: AI helps firms significantly scale up improved processes, and well-managed processes make it easier to obtain the high-quality data needed to train AI. Combining them can generate huge productivity gains—but it requires a lot of change management. In this article the authors outline seven steps companies can follow to bring together people, data, analytics, and technology—in particular, AI—to revamp processes and achieve increasingly higher business performance.

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The Secret to Successful AI-Driven Process Redesign

Employee empowerment has long been a key principle of continuous improvement programs. Now that natural-language interfaces have made gen AI accessible to nontechnical employees, people throughout organizations are initiating both large and small process changes. Rather than displacing workers, gen AI is putting them in the center of machine-assisted processes that are transforming creative work, scientific discovery, physical operations, and manufacturing. You can think of this as kaizen 2.0—a movement in which employees, with the help of the latest technology, truly drive business transformation.

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Why People Resist Embracing AI

The success of AI depends not only on its capabilities, which are becoming more advanced each day, but on people’s willingness to harness them. Unfortunately, many people view AI negatively, fearing it will cause job losses, increase the likelihood that their personal data will be misused, and even attack humanity someday. Behind this resistance are perceptions that AI is too opaque, emotionless, rigid, and independent and that interacting with humans is preferable. This article explores each one of those psychological barriers to adoption and describes interventions managers can undertake to counter them and make employees more comfortable with using AI tools.

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Getting Strategic About Sustainability

Companies often overextend them­selves when it comes to sustainability by addressing too many issues at once, leading to scattered efforts that fail to generate a meaningful impact.

In this article the authors introduce a framework leaders can use to better focus their sustainability strategies. It consists of four lenses: the business value lens (What affects our bottom line?), the stakeholder influence lens (What are people trying to tell us?), the science and technology lens (What does the data tell us about our impact and future?), and the purpose lens (What do we stand for?).

Each lens uses different types of data and methods of inquiry, and each brings a particular set of issues into focus. Companies should invest in, innovate around, and build strategic coalitions for issues that fall at the intersection of all four lenses.

Applying these lenses will help leaders balance external pressures with internal priorities and objective data with stakeholder perceptions. The framework allows leaders to more effectively allocate resources to achieve meaningful sustainability outcomes. The authors use the example of Keurig Dr Pepper to illustrate the framework.

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What People Still Get Wrong About Negotiations

Most executives leave value on the negotiating table, for two main reasons: First, many executives mistakenly believe that they’re negotiating over a fixed pie and that gains for one side necessarily mean losses for the other. Second, they focus exclusively on how to claim value for themselves (by taking as much as they can of that mythical fixed pie) rather than coming up with ways to increase the size of the pie.

All too often, negotiators fail to share information with their counterparts about preferences on the various issues, fearful that they will be exploited if the other side knows what they value. They keep all their cards hidden and assume that this is the secret to being a tough negotiator.

To elicit the information necessary to create value, resolve conflicts, and reach efficient agreements, negotiators should use four key strategies: building trust, asking questions, sharing information, and making multiple offers simultaneously. A fifth strategy is also introduced: the concept of post-settlement set­tlements (PSS) to improve deals even after initial agreements have been made.

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Leaders Shouldn’t Try to Do It All

The authors, a former CEO of Procter & Gamble and a former dean of the Rotman School, respectively, frequently find themselves sitting across the table from overwhelmed leaders. These executives are trying to improve or turn around an organization or the piece of it they head. They all face a long—and typically lengthening—list of important items on their to-do lists. They all understand that the job of a leader involves working intensely hard. But for many of them the current state feels like too much—and it’s getting worse.

The problem here is that whereas a company can always expand capacity to meet increasing demand, a leader’s hours are constrained by nature: As the saying goes, there are only so many hours in a day. Many leaders think they can get more done if they simply work harder and longer. But in due course they tire, their overall productivity falls, and they risk burning themselves out and exiting. In this article the authors, drawing on their own experience and that of CEOs they have advised, explain how to escape that trap.

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How Generative AI Improves Supply Chain Management

Over the past few decades, advances in information technologies have allowed firms working to optimize their supply chains to move from decision-making on the basis of intuition and experience to more automated and data-driven methods, which has increased efficiency and reduced costs. Unfortunately, business planners and executives still need to expend considerable effort to understand the recommendations coming out of their systems, analyze various scenarios, and conduct what-if analyses. They often need to pull in data science teams or technology providers to explain results or make updates to the system.

Now, advances in large language models (LLMs), a type of generative AI, are increasingly making it possible to perform those activities without such support. LLM-based technology can automate data discovery, insight generation, and scenario analysis, reducing the time to make decisions from days to minutes and dramatically increasing planners’ and executives’ productivity and impact.

The authors draw from Microsoft’s cloud business experience to explore how LLMs can be used to optimize supply chains. They also identify obstacles firms will need to overcome to deploy LLMs effectively.

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Want Your Company to Get Better at Experimentation?

For years, online experimentation has fueled the innovations of leading tech companies, enabling them to rapidly test and refine new ideas, optimize product features, personalize user experiences, and maintain a competitive edge. The widespread availability and lower cost of experimentation tools today mean that most organizations—even outside the technology sector—conduct tests. After initial adoption, however, many of them restrict experimentation to just a handful of carefully selected projects. That’s because their data scientists are the only ones who can design, run, and analyze tests.

Vastly increasing the capacity to conduct online experiments is becoming more critical as the expanding capabilities and applications of artificial intelligence—particularly generative AI—reshape innovation. Scaling up experimentation entails moving away from a data-scientist-centric approach to one that empowers everyone else on the product, marketing, and sales teams to run experiments. The authors suggest how to do that.

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Three Ways to Lead Learning

Today the development of new skills, knowledge, and mindsets is critical to most businesses’ key strategic efforts. This has given rise to a new breed of senior leaders—leaders of learning—who advocate for and organize learning initiatives for enterprises and their employees. But the evidence on whether their programs are actually effective is mixed, and both executives and employees remain skeptical about them. To find out why, an INSEAD professor and his colleague interviewed leaders of learning at 69 multinational firms. The problem, they found, was that companies often assume that there’s just one way to lead learning. But in fact there are three: Custodians believe that learning must serve the needs of the organization first and foremost and are a good fit for organizations seeking alignment. Challengers think individuals have an intrinsic right to grow and that learning must support their development. They’re best when firms need innovation. Connectors integrate both approaches and emphasize bringing people together to learn from one another. They are most fruitful in organizations that are siloed and need more collaboration. It’s critical to understand the differences among the approaches and the right context for each.

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How the Best Boards Engage with Management

Boards today face a thorny challenge: how to provide proper oversight of management while allowing it the autonomy it needs to be effective. Too often, boards maintain a single mode of engagement at all times, regardless of the type of decision to be made or its importance. This lack of flexibility can significantly undermine board effectiveness, especially in complex and rapidly changing situations.

This article presents four modes of engagement—passive, mentor, partner, and control—along with the unique characteristics of each. The key to becoming an agile board is to understand that the appropriate mode of engagement depends on the decision to be made. Many factors can affect which board engagement mode is right for a given decision. However, the authors’ research reveals that four are critical: impact on value, conflicts of interest, implications for the mission, and talent and capabilities.

Ultimately, agile boards not only enhance their own effectiveness but also foster a more collaborative and productive relationship with management, driving improved outcomes for organizations and their stakeholders. That is not just a nice-to-have—it’s a necessity.

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How Project Leaders Can Tame Unpredictability

Today’s business environment is characterized by constant change on a macro scale, but in our daily lives, it’s often the smaller unpredictabilities that threaten to derail our projects and decisions. This article draws on the agile methodology to offer project leaders a tool for managing unpredictability: vertical slicing. Each slice builds on the previous one to flesh out a large-scale initiative.

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Case Study: The CEO Suffered a Breakdown. Now What?

Alex Reinhardt was brought in to turn around a renewable-energy company that had been on the verge of bankruptcy until the German government bailed it out. After he fainted from overwork and burnout and had to take a medical leave, the board appointed an interim CEO. Now Reinhardt insists that he’s ready to return, and the board must decide whether to retain or replace him.

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Will You Make Good on Your New Year’s Resolution?

Three new books offer strategies to help: Big Goals, by Caroline Adams Miller; Tiny Experiments, by Anne-Laure Le Cunff; and Reset, by Dan Heath.

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Life’s Work: An Interview with Rick Steves

Rick Steves developed a deep love for travel when he was a teenager and soon realized that he could fashion a career out of teaching others how to plan smart itineraries while sticking to a budget. He talks here about adapting to new technologies, offsetting the negative environmental impact of frequent travel, and more.

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