- From The Editor

- Idea Watch

- Spotlight

- Features

- Experience

From The Editor

- Why It’s So Hard to Get Things Done

Why It’s So Hard to Get Things Done

Highlights from this issue

Adi Ignatius 1 Jan, 2024

From the Magazine (January–February 2024)

Robyn Twomey

There’s a great line in John Prine’s song “Angel from Montgomery” that goes: “How the hell can a person go to work in the morning and come home in the evening and have nothing to say?”

It’s a comment on relationships and dashed dreams, but it also hints at one of the core challenges of work. We want our jobs to matter, to give us something to talk about, but we can’t always attain that level of engagement.

Writing in HBR more than a decade ago, authors Teresa Amabile and Steven Kramer touched on one aspect of meaningful work, identifying what they called the progress principle: “Of all the things that can boost emotions, motivation, and perceptions during a workday, the single most important is making progress in meaningful work.”

Their article identified how corporate work can feel Sisyphean: a bureaucratic slog through meetings and emails and seemingly little else.

Stanford professors Robert Sutton and Huggy Rao have also dived into this problem, trying to understand the forces that inhibit progress and productivity. They point to a root cause they call addition sickness, defined as “the unnecessary rules, procedures, communications, tools, and roles that seem to inexorably grow, stifling productivity and creativity.”

In their article in this issue, “Rid Your Organization of Obstacles That Infuriate Everyone,” and in a forthcoming book from St. Martin’s Press, they suggest a set of fixes. They urge managers to do a “good-riddance review” to identify hurdles to productivity and then use subtraction tools—they offer a list of techniques—to eliminate them.

It’s hard work, but the authors provide vivid examples of people and companies that have made significant progress.

As we begin 2024, we at HBR wish you happiness, productivity, and minimal slogging. Thanks for reading.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Idea Watch

- Lessons from Large Family Firms About Choosing a CEO

- Conservative CEOs Pursue Riskier International Deals Than Liberals Do

- The CEO of Gérard Bertrand Group on Turning a Family Wine Business into a Global Brand

Lessons from Large Family Firms About Choosing a CEO

Smart practices that can benefit all types of companies

From the Magazine (January–February 2024)   1 Jan, 2024

Justyna Stasik

Family businesses are infamous for nepotism and infighting à la Succession, especially when it’s time to appoint a new CEO. To be sure, that’s the reality for many. But when a research team set out to help family firms improve their leadership transitions, it found that large family businesses had much better succession practices than their nonfamily counterparts did—and they outperformed on several measures after new appointees took the reins. “This completely upended our expectations,” says global talent adviser Claudio Fernández-Aráoz, a member of the research team.

The researchers analyzed all CEO transitions and subsequent organizational results at 58 large U.S. and Canadian publicly owned family firms—those with $1 billion or more in revenue at some point from 2010 to 2018; family voting rights of at least 12.5%; and family members serving as managers, shareholders, or directors. They also looked at 1,406 S&P 1500 firms in the same industries and region. Their analysis covered more than 3,000 transitions from 1994 to 2020. It showed that in the three years after appointing a new CEO, the family businesses improved their cash-flow performance much more than the others did—by a full percentage point more, on average. They experienced significantly less risk, with just 62% as much variability in cash-flow performance as nonfamily firms. And they had greater odds of high performance and lower odds of poor performance, boosting their ability to safely take on debt.

Drawing on the analysis and their combined decades of experience, Fernández-Aráoz and his colleagues identified several factors driving those firms’ success.

Best Practices for Succession

First, a caveat: These practices are far from ubiquitous among family firms. When the researchers looked at CEO transitions and outcomes at smaller family businesses, they found a very different picture. Eighty-four percent of those firms’ CEOs were family members, compared with only 13% for large family firms. The smaller firms didn’t see the same superior outcomes, and they too could benefit from the guidance below.

Approach succession proactively and strategically.

The nonfamily firms in the study hired new leaders reactively, usually after sharp declines in operating performance and steep increases in cash-flow performance risk. Their operating income dropped by a percentage point, on average, in the couple of years before the leadership transition. By contrast, large family firms undertook CEO changes independently of short-term performance issues, reflecting a more strategic focus and a longer time horizon.

Bring on a few highly engaged long-term directors and empower them to lead the process.

The family and nonfamily firms in the study appointed CEOs from within the organization at similar rates—roughly 70% of the time. But large family firms did much better than their nonfamily counterparts in the subsequent three years, with better cash-flow performance and much lower risk. That’s because family members who lead searches typically have deeper knowledge of internal prospects than professional board members do, the researchers concluded. Nonfamily firms could find similar advantage by seeking genuinely motivated directors, retaining some of them for longer than is customary, and empowering them to participate in candidate assessments. A mix of long- and short-term directors can shore up succession practices while leaving room for fresh voices, especially from members of historically underrepresented groups.

The large family firms in the study were also better at bringing in successful outsiders. Their internally and externally hired CEOs produced the same low levels of cash-flow performance risk, whereas the external hires of nonfamily firms were associated with 27% greater risk than that of internal hires. And external hires at family firms had an equal chance of top cash-flow performance and less chance of inferior performance than did external hires at nonfamily firms.

Several factors contribute to the difference, the researchers say. As noted, long-term family directors have a broader and deeper perspective than nonfamily directors typically do on what their organization really needs. And work by other scholars has shown that one of the most important predictors of competence in interviewing and assessing candidates is motivation. It stands to reason that a family member, who usually has more skin in the game, would have an especially strong incentive to get this critical choice right. Think, for example, of William Ford’s intense involvement in the CEO search that led to the hiring of Alan Mulally, who returned the car company to profitability after his appointment, in 2006. Bringing on some deeply committed board members for long tenures can help nonfamily firms with external searches as well.

Don’t obsess about formal planning and documentation.

More important than amassing large numbers of candidates and carefully documenting your plans—the approach taken by most nonfamily public companies—is doubling down on the rigor of your assessments. Prior studies have shown that the value of additional prospects declines sharply after the first few and virtually disappears after about a dozen. “You can put on a show and generate an infinite number of candidates,” says coresearcher Greg Nagel, a professor at Middle Tennessee State University. “But it doesn’t result in better outcomes.” In fact, the more that large family firms engaged in sweeping searches and communicated about them to their shareholders, the worse their subsequent cash-flow performance was.

Empower new leaders from the start.

It’s not just that large family firms appoint more-competent CEOs; they do more to support their efforts from day one, presumably because of their deeper knowledge of and trust in their appointees. Looking at insider CEOs with less than a year’s experience on their company’s board—the case at most public firms—the researchers found that the leaders of large family firms immediately embarked on successful major corporate investments three times as frequently as their nonfamily counterparts did. “Family members and long-serving directors know their new leaders thoroughly,” explains Egon Zehnder consultant and coresearcher Sonny Iqbal. “They’ve been watching them constantly regardless of time served on the board. So they really trust them and are willing to give them considerable freedom.”

The study’s findings hold lessons for investors as well. When a family firm brings in an outside CEO, the market pays a premium, the researchers found—but that’s not justified, given that insider CEOs in large family firms do just as well. In addition, “the stable cash-flow performance in large family firms makes them worth about 13% more than comparable nonfamily firms,” says coresearcher Carrie Green, the director of equities at the Tennessee Consolidated Retirement System. “But that isn’t reflected in their stock price.” By taking a page from large family firms’ succession playbooks, the researchers conclude, smaller family firms and nonfamily businesses of all sizes can bolster their chances of appointing high-performing CEOs—and by heeding the implications for organizational results, investors can make smarter bets, too.

About the research: “Making Family Businesses Great in Perpetuity,” by Claudio Fernández-Aráoz, Carrie Green, Sonny Iqbal, and Gregory Leo Nagel (white paper, 2023)

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Conservative CEOs Pursue Riskier International Deals Than Liberals Do

They’re drawn by the prospect of greater control.

Amy Meeker 1 Jan, 2024

From the Magazine (January–February 2024)

Yaroslav Danylchenko/Stocksy

Aaron Hill of the University of Florida and colleagues studied 1,027 decisions to enter foreign markets made by Fortune 500 CEOs over the past decade and examined the executives’ political-campaign contributions to determine their leanings. They found that conservative leaders were more likely to acquire companies than to form alliances, while for liberal leaders it was just the reverse. The conclusion: Conservative CEOs pursue riskier international deals than liberals do.

Professor Hill, defend your research.

Hill: Evidence suggests that conservatives are generally more risk-averse than liberals are. But that’s not a universal pattern. Research in political psychology has shown that the propensity for risk-taking is domain-specific. In some situations conservative-leaning people are less risk-averse than their liberal counterparts; sometimes they’re actually risk-seeking. That usually happens in contexts where risk-taking leads to greater control over future decisions—something conservatives prize. For example, a number of studies have found that when it comes to investing in business ownership, conservatives take bigger risks than liberals do. Ownership offers them greater control over their livelihood, and that outweighs their characteristic fear of loss.

Entering a foreign market is risky to begin with, and acquisitions tend to be more perilous than alliances. They involve a larger, often irreversible financial commitment, and there’s no guarantee the expertise you’ve bought will stay. An alliance gives you the help of a partner who’s established in and knowledgeable about the region, and it’s less costly and easier to undo. But balancing the extra risk of an acquisition is the fact that it gives you full control. There’s no partner you have to listen to, and you don’t have to share the profits. We thought that because of this, we’d find conservatives’ appetite for risk to be greater than liberals’ with foreign expansion—and it was.

HBR: How large was the difference?

On average, moderately conservative CEOs were about twice as likely as moderately liberal CEOs to choose an acquisition over an alliance, and moderately liberal CEOs were twice as likely as moderately conservative CEOs to choose an alliance. When we looked at strongly conservative and strongly liberal CEOs, the difference was more pronounced: The first group was more than four times as likely as the second to pursue acquisitions over alliances.

How did you measure political ideology?

All donations of more than $200 must be reported to the U.S. Federal Election Commission and become part of the public record. We looked at four factors among the 193 CEOs in our sample: the number of donations to both Democrats and Republicans, the amounts given to members of each party, the number of years donations were made to each party, and the number of Democratic and Republican candidates supported. We averaged the four measures to come up with a composite score for each executive.

There’s been a lot of research into how personal traits affect CEOs’ decisions. Did you take those into account?

We couldn’t factor in personality traits because we had no way to collect data on them. We did control for things like age, tenure, international experience, and prior political activism. We also controlled for numerous firm-level factors, such as size, financial performance, R&D and advertising intensity, diversification, and previous international deals, along with industry-level factors. And we considered how CEOs’ pay was structured. The more long-term performance incentives executives had, the smaller the effect political identity had on their international strategies, because leaders were especially motivated to maximize their company’s future value.

What about boards of directors?

We looked at a few board-level factors. The first was the share of independent directors. They’re usually less inclined than other directors to reflexively go along with the CEO’s wishes. Indeed, we found that board independence mitigated the extent to which a CEO’s political ideology affected the choice of foreign expansion strategies. Consider a CEO who scores one standard deviation above the mean on liberalism. Moving from a low to a high degree of board independence would reduce the likelihood of that leader’s choosing an alliance by about 7%.

We also looked at the shareholdings of independent directors, hypothesizing that the more stock they owned, the more likely they’d be to fulfill their fiduciary duties, limiting the effect of CEOs’ leanings. That turned out to be the case. When a CEO who scored one standard deviation above the mean on liberalism had independent directors with significant holdings in the firm, the odds that he or she would choose an alliance over an acquisition dropped by about 30%.

The final board-level factor we examined was whether the CEO was also the board chair. We reasoned that executives who headed their boards would have greater control than others over what information directors received, what was discussed at meetings, and so on, and that this would facilitate any biases or predispositions of the CEO. But in fact it made no difference.

You studied CEOs of U.S. firms. Would you expect similar results for the heads of companies elsewhere?

We probably wouldn’t see the same level of effects. Many countries have stronger corporate-governance laws than the United States does. For instance, many EU members and some Asian countries prefer or require a two-tiered board structure. The management board oversees routine managerial tasks and transactions and is itself overseen by the supervisory board, which handles long-term strategic planning and decision-making, is typically composed of experts with no other ties to the company, and can’t include the CEO. That tends to dilute the effects of the CEO’s biases and preferences. I’d also expect weaker effects if we studied Japanese CEOs, given that that culture tends to be collectivist and consensus-driven.

What advice do you have for companies?

First, don’t overgeneralize or pigeonhole people. Be cognizant of your CEO’s values and also of the context; biases and tendencies may play out differently in different situations. A conservative person doesn’t always do the conservative thing, and a liberal person doesn’t always do the liberal thing; sometimes the pattern flips. Second, make sure you have good governance, and be aware of how much any one individual may be influencing the firm’s decisions.

Any advice for CEOs?

The message I hope leaders will take away from this isn’t don’t be conservative or don’t be liberal. Rather, it’s to recognize your biases and understand how they might affect your decisions and lead you down some undesirable paths. A bit of honest self-reflection is always helpful.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

The CEO of Gérard Bertrand Group on Turning a Family Wine Business into a Global Brand

The company set out to create a new, organic paradigm for the wine industry in the south of France.

Gérard Bertrand 1 Jan, 2024

From the Magazine (January–February 2024)

Marie Ormières

In 1987, when I was just 22, my father died in a car accident, leaving me the 60-hectare Languedoc wine estate that he and my grandmother had built. At the time, I was playing high-level rugby, and thoughts of taking over the family business were far off. But I knew this was a moment in which I had to step up.

I already had a great appreciation for the wine we produced near our home village of Saint-André-de-Roquelongue. But I spent the next several years learning from experts elsewhere in France and abroad, networking with industry stakeholders that would be important to our success and developing a game plan for growth centered on biodynamic production and branding.

Now Gérard Bertrand is an internationally recognized wine label with annual sales of around €180 million. When I began this journey, many consumers regarded wines from the Languedoc as table wine at best, but today our wines are recognized around the world for their quality, competing with the finest vintages from Bordeaux and Burgundy and winning prestigious awards. We achieved this success in just a few decades by putting nature—both human and environmental—at the heart of our decision-making and strategy.

Family and Land

My grandmother first planted a few dozen rows of Carignan, a traditional grape variety in our area of France, and relied on the local collective to manage them. When my father came back from the Algerian War, in the early 1960s, he started buying land to add to her plot. Back then most Languedoc producers were marketing wines for everyday drinking, but he believed that the region could produce fine wines, so he focused on becoming an expert in them. By age 13 I was his apprentice.

Many things go into making wine—elements you can’t do much to change, such as the land and the climate, and those you can, such as the grape varieties you plant, how you tend them, when you harvest, how you turn them into wine, and the blend you make. First you must choose the right vines. About 1,500 varieties are available in France. That’s why we have the appellation system: It specifies the varieties that should be used in each region so that the wine produced is recognizably from there. Within those constraints, however, viticulturists have considerable freedom to make choices, such as cutting back on Syrah to add more Grenache, which grows better in the volcanic soils of our region and helps achieve the potential of a terroir with greater minerality. How growers tend the vines is also up to them. They may choose biodynamics to prioritize the health of the plants and the quality of the taste over productivity and consistency. The choice of when to harvest depends on 1,001 different judgments about the weather and how the grapes have ripened. Decisions regarding fermentation and storage can sometimes be precisely determined and other times depend on intuition and experience.

Finally comes blending—my favorite part. Intuition is critical here, because in any given vineyard we may be tasting 50 varieties of grapes grown on different plots. Potential combinations number in the millions, and we can’t calculate our way to the best one. My father was a master blender. He taught me that as the grapes ripen over the critical two-month harvesting period, you must do many tastings each day so that when you need to decide which grapes to blend in which proportions from which plots, you really understand what’s going into the bottle.

Gérard Bertrand with a portrait of his father, Georges Soufiane Zaidi

In many ways this focus on the land and the grapes together—rather than the grape alone—runs against the trend. Increasingly people order a glass of Merlot or Cabernet or Sauvignon Blanc because they know what it will taste like. A Merlot is a Merlot pretty much wherever it comes from; the similarities overwhelm the differences. But when you taste a blended wine from a producer who has thought carefully about what precise combinations will produce the best possible wines, given the effects of the weather and the soil on each of the constituent varieties, you will in my view have a better, more interesting drinking experience.

Luckily for my family, and for the Gérard Bertrand business, the south of France—which includes Languedoc, Roussillon, and the areas around Toulouse—is the largest and most diverse wine region in the world, producing red, white, rosé, sparkling, and even the newly popular orange wines. (Indeed, although most people associate sparkling wine with Champagne, Blanquette de Limoux, the first French sparkling wine, was in fact made in Languedoc in 1531, at the abbey of Saint-Hilaire.)

My father certainly saw the potential for our region. He set out to grow the venture his mother had started and to diversify and improve our offerings. After we lost him so suddenly, I felt compelled to take over the job. At first I tried to do so while sticking with rugby. In our part of France the sport is a very big deal, and I was just a few years into a successful career as a player for Narbonne, so I wanted to keep going. But that meant working 70 hours a week, between doing business and training. On Saturdays I slept all day so that I would be match-ready on Sundays. It was tough but manageable for a time, not least because I had help from friends.

Network and Expansion

During my early years in the business, a local wine broker, Robert Skalli, gave me a lot of support. I spent part of the summer of 1988 with him, including more than two weeks traveling in California, visiting six or seven estates a day. He introduced me to the legendary wine producer Robert Mondavi, whom I met on his estate in the Napa Valley. Mondavi, who had started his business when he was in his 50s, told me, “You’ll get a lot further than me—because you’re only 23.” I left that visit feeling truly inspired. Mondavi had managed to create a lifestyle brand around his wine by hosting concerts, charity events, and the like. It struck me that Languedoc and Napa not only had similar geographies and climates but also were both full of can-do entrepreneurs. I came home believing that we could transform wine making in the south of France.

Quality was not the problem. I knew we made great wines. The challenge was getting people to try them. The connections I had made through my first passion, rugby, gave me the start I needed. In 1992, five years into my dual career as a wine estate owner and an athlete, I left the Narbonne team to join Stade Français in Paris, in part so that I could open an office in the city and connect with national distributors. That’s when I started putting together the Gérard Bertrand company and brand you see today. A couple of seasons later I decided to retire from sport and devote myself to the business. But I gathered a few of my old colleagues around a new idea: Les Gastronomes du Rugby, a group of former players, mostly from the south and also in the agriculture business, who put our products together—wines, patés, cheeses—to offer a full range to big retailers like Casino and Carrefour. My partners included several former French national team members: Claude and Walter Spanghero, Philippe Saint-André, and Philippe Sella. We toured supermarkets to promote our products and played friendlies with local teams. The retailers loved it, and I made connections.

One of the most important of these was with Jean-Pierre Andlauer, the wine buyer for Monoprix, a big retail chain. He loved rugby and liked my wines. But he told me that Monoprix could not buy them unless they’d been approved by Gault & Millau, a leading French restaurant guide, so he arranged for Henri Gault himself to visit my estate and try my wines. That was in 1993, when I was selling only 12, all of which I presented to him. At the end of the tasting he chose 11 of them for Monoprix to distribute. Andlauer protested that 11 were too many, but Gault insisted. “These wines represent the future of France,” he said. “I need them.”

By 1997 we were supplying all the big retailers in France and had made our first steps abroad with a few customers in Belgium and Denmark, thanks to help from an old friend of my father’s. I had also grown our operations with the purchase in 1995 of a 75-hectare estate, Domaine de Cigalus, not far from Villemajou, the estate I inherited. Two years later I bought Château Laville Bertrou, also about 75 hectares. Those two estates more than tripled the size of our business, which was bringing in about €8 million a year, 85% of that in France and the rest from a few European Union countries.

That was certainly progress, but it was hardly game changing, and I was a long way from redefining Languedoc wines in the way that California had redefined its own. To achieve that I would need to get much bigger very quickly. Our break came in 2002, when I received a call from the owner of Château l’Hospitalet, who had heard about my success. He had bought the estate in 1990 and built a hotel and a restaurant there. That is exactly the business model for each of our estates today, but he was a bit ahead of his time and struggling. He wanted to sell his estate for €10 million. I negotiated him down to €9 million, and my financial adviser persuaded a bank to support me. That was our most significant expansion to date, and the pressure was on to ensure its success. But I knew that passing up the acquisition would have been the mistake of a lifetime.

L’Hospitalet came with five vintage products, which greatly increased the range of top-quality wines we could sell. More important, it would help me realize my vision of creating a lifestyle brand around wine, blending it with gastronomy, art, and culture to create an experience of Languedoc. Sure, there were risks, but they were more than offset by the potential rewards.

A New Vision

I started to think carefully about our branding. Peter Darbyshire, a British consultant, came to visit at l’Hospitalet just after we took over. Although we were still only a 50-person company, we had become a professional business with a small executive committee, and Peter and I presented a proposal to its members.

Our vision was to create a new, organic paradigm for the wine industry in the south of France. We would promote our wine as an experience, which would involve expanding from a wine producer with estate brands serving a largely domestic market into an international marketing and sales operation offering a wide range of wines anchored in the Gérard Bertrand brand. To finance that transition we proposed investing 10% of our annual gross profit in communications and events, with the aim of increasing revenues by 50% in three years. Not everyone was on board: Our marketing director and two others quit because they thought we were crazy. But the plan ultimately worked. We didn’t achieve 50% growth in three years, but we realized 150% in five.

As the world’s most lucrative wine market, the United States played a big role in that growth. By 2008 we had been selling there for a few years, but when my importer went out of business, the dozen other firms I approached to represent us all turned me down. The only solution was to set ourselves up as an importer and approach distributors directly.

That was another big risk, but that first year I had the good luck to meet Mel Dick, the wine president for Southern Glazer’s Wine and Spirits, which is the largest adult-beverage distributor in North America, with an annual turnover of $25 billion in the United States alone. We bonded over sport (he was a committed boxing fan), but he initially tried to send me away without a deal. I told him, “Mel, I’m not leaving your office until you give me a chance.” We sat for three minutes in silence before he took out his phone and called his New York director to tell him to take my wine. The next day I was on the ground in New York, visiting all its French restaurants. Within six months I’d generated more than 50 orders. Mel was delighted; he immediately took us into another 17 states and eventually across the country. We’re now the largest French producer in the U.S. market, shipping about 600,000 cases a year.

The Biodynamic Advantage

Another goal I set early on for the company was to become 100% biodynamic in our own production and to market only certified organic wine from others under our brand. In the early 2000s this went against common practice, but personal experience convinced me that it was the way forward.

When I was 25, I’d had liver problems, and none of the prescribed medications could fix them. Then a friend recommended a homeopath, whose diet and lifestyle treatments cured me in six months. Not long after, as I was reading up on organic farming, I came across Rudolf Steiner’s principles of biodynamics, and I saw a connection. Just as homeopathy involves changing your diet and lifestyle to improve your health and resilience, biodynamics is about tending your soil and ecosystem to create stronger plants.

In the late 1960s and the 1970s, to create a product that was consistent from year to year in quantity and quality, many wine producers started using synthetic pesticides and fertilizers. Both organic and biodynamic farmers avoid them, meaning they do a better job of preserving a variety of natural nutrients in the land, which produces a more distinctive wine. That approach is also better for the environment: A study by INRAE, a public research institute in France, suggests that turning one hectare over to biodynamic farming takes 30 tonnes of carbon out of the atmosphere.

In 2002, just before the l’Hospitalet purchase, I put together a team to test biodynamic farming, and we converted four hectares at Domaine de Cigalus. Two years later the results were in: The plants were healthier, and the wine was fresher and had more acidity and fruit than what we made from the rest of our harvest. Although the vines were not as productive as those grown with organic fertilizers, they were more resilient to fungus and pests. The following year we got official certification as a biodynamic producer. Today all 17 of our estates are farmed biodynamically and follow the Demeter certification rules. (Demeter is the world’s strictest standard for organic agriculture.)

At first this didn’t matter much to consumers; they made no distinction between biodynamics and ordinary organic production. What turned the tide was interest from sommeliers—the people on whom restaurants and hotels rely for choosing wines and curating cellars. When those tastemakers started recommending biodynamic wines, word spread. Soon afterward premium wine retailers in Europe—Nicolas in France, Jacques’ Wein-Depot in Germany, and Majestic in the United Kingdom—caught on to the idea.

Of course, we still also support the middle step of organic production. In 2011 we created a label, Naturae, to bottle everyday and entry-level wine from certified organic small producers under the Gérard Bertrand brand. We have 150 active partnerships with cellar cooperatives and winegrowers to help them manage the transition to organic viticulture.

Message in the Bottle

I see wines not as products but as experiences, and I categorize them according to what I call the “pyramid of sense.” The basic experience is pleasure. People want a wine that looks attractive, has a pleasing smell, and is reliably enjoyable to drink—even if they’re paying just nine euros for a bottle from a supermarket. Gris Blanc, our best-known rosé, and my Autrement label (“something different” in English) are among the relatively low-priced wines we offer for people whose expectations stop there. Those are the organic wines we source from small producers with the regional Languedoc appellation.

The next level is taste—in the mouth on first drinking and the aftertaste that lingers. This is for people who know something about wine and are interested in exploring it. Most of the wines that can deliver this more refined experience are sold under an estate label—Domaine de l’Aigle, for example—and have district appellations, such as Corbières, Minervois, and Saint-Chinian. They all have distinctive tastes.

Emotion is the third level. To generate emotion, the wine must be truly great: a good vintage, from a good terroir, and ready to be drunk. It should be served in beautiful glasses, at the perfect temperature, and, most important, consumed in the right company, because wine is meant to bring people together. It was with this in mind that I purchased l’Hospitalet. These wines generally have specific labels—such as Aigle Royal, from la Domaine de l’Aigle.

An Aigle Royal plot at Domaine de l’Aigle Soufiane Zaidi

At the apex of my pyramid is wine that embodies a message—not only creating emotions but helping us define our identity and values. A quarter of a century ago, when I was relatively new in the business, Aubert de Villaine invited me and six other people to a tasting at Romanée-Conti, the greatest of all Burgundy estates, of which he is a co-owner and a codirector. The first wine we tried was a ’65, the year of my birth. You can imagine the emotions I felt drinking that.

We tasted another six remarkable wines of various appellations belonging to the estate before he opened the final bottle, a 1942 Romanée-Conti. Without being able to put my finger on it, I knew there was something different about that wine. Aubert explained: That vintage had been made entirely by women, because the men of the estate were all fighting in World War II, were in the Resistance, or had been detained by the Germans. It reflected the subtly different choices the women had made, the suffering they were experiencing, and their resilience in the face of it. This was more than an emotion; it was a connection.

That’s the kind of experience I want people to have with my new rosé, Clos du Temple. It is made from grapes grown in an ancient terroir, a vineyard planted by the Greeks, which produced a wine that was a favorite of Louis XIV. Yet it is also an innovative wine for today, the first luxury rosé produced in a just-built winery that was designed to merge with the landscape and feel like a temple. I hope that those who drink it will connect both to the past and to Gérard Bertrand’s investment in the future.

Three and a half decades ago my father left me one estate with just two or three people to manage. My challenge was to make something of that inheritance, and I have, first by learning from experts and then by building my network, establishing a vision, and experimenting with both new production and branding ideas. Gérard Bertrand now encompasses 17 estates, 400 employees, 400 independent suppliers, and 12 business units around the world. Like my father and many other family-business owners, I hope that one day my children will take over from me. But they will have to decide for themselves, as I did, whether they have the ability and the passion needed to raise Gérard Bertrand to another level.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Spotlight

- Leading in the Flow of Work

- Leaders Must React

- Why Real-Time Leadership Is So Hard

Leading in the Flow of Work

How to tap into the right intentions, words, and actions when you need them

Hitendra Wadhwa 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Mary Haasdyk Vooys

Idea in Brief

The Opportunity

Conventional leadership development relies heavily on time-consuming study and training. But a new approach, which draws on faculties everyone already possesses, can accelerate and enhance those efforts.

What It Involves

The leadership-in-flow model centers on activating your inner core by tapping into five types of energy: purpose, wisdom, growth, love, and self-realization.

How to Capture It

Using one or more of 25 simple actions, leaders can tailor their responses to evolving situations and unlock peak performance in real time in both themselves and the people they work with.

Conventional wisdom holds that leadership can be developed through extensive study and training. Many organizations invest a tremendous amount of time and money in programs that teach executives how to influence, inspire, and coach others; build trust; have crucial conversations; give feedback; change people’s behavior; and more. Many aspiring leaders comb through books, attend seminars, and seek out mentors, all in an effort to understand leadership’s intricate nuances.

My research shows that another approach can complement and accelerate those traditional, competence-focused efforts. It involves tapping into neural pathways in the brain—into faculties everyone already possesses but might not be consistently using at work. Rather than a trait to be acquired, leadership is a state to be activated, my work suggests. And by shifting the emphasis from learning on the sidelines to leading in the moment, executives can achieve real breakthroughs.

This leadership model, which has become the basis for a popular course at Columbia Business School, grew out of work that my consulting firm, Mentora Institute, my team, and I did. In 2006 we began building a repository of more than 1,000 moments of transformative leadership, capturing instances when individuals notably exceeded expectations in critical situations. In 2022, I detailed our insights in a book, Inner Mastery, Outer Impact, in which I introduced the main tenets of exemplary leadership and argued that leaders can embody them by tapping into their inner core—the space of highest potential within them, their best self. The presence within us of such a core—of a state of peak performance in which we’re calmly aware of our inner and outer conditions and able to adapt our behavior as needed—is being substantiated by scientific studies in a range of fields, including cognitive behavioral therapy, positive psychology, and neuroscience. Yet the idea of it isn’t new; across the ages, people have engaged in contemplative practices in an effort to connect with what they have intuited to be their spirit or soul and to express its qualities in their outer pursuits.

My firm has found that executives can tap into their inner core with just 10 to 15 minutes of preparation before a big event. In our research and consulting work, we’ve validated our approach, which we call leadership-in-flow. At SAP, for instance, managers trained in it performed twice as well (at increasing their ratings on leadership trust) as a control group of managers did. And in a cross-organizational study spanning diverse industries, roles, and levels, more than 100 executives who adopted leadership-in-flow saw their ability to achieve successful outcomes—measured by whether they attained their performance goals—rise by an average of 135% within six weeks. Our findings reveal that people have an innate capacity for exemplary leadership far beyond what many realize.

How exactly do you activate your inner core? In this article, for the first time, I introduce a playbook of quick actions people can use to tap into it and unlock peak performance under real-time pressure—precisely when it matters the most.

Before diving into the specifics, however, let’s examine the fundamental shift that leadership-in-flow entails.

A Dynamic State

It’s a common organizational practice to evaluate people along a bell curve, rating every individual as a low, average, or high performer. In fact, each of us is the whole bell curve. As a wave of scientific findings shows, the personality and behavior of someone will change with the context that person is in, the thoughts and feelings that individual is experiencing, and who else is present. Someone may be extroverted in one situation, introverted in another; agreeable in one, disagreeable in another. That’s why leadership is not a static trait—it is a dynamic state.

But one thing remains constant: When we’re “triggered”—emotionally upset—we tend to underperform. Conversely, when we’re “centered”—calm, attuned, and open—we’re more likely to achieve high performance. This happens when we’re connected to our inner core. We transcend ego, attachments, insecurities, impulses, and everyday habits—like interrupting others or appearing agreeable while actually feeling resistant—and act in a way that’s best for the cause we’re serving.

But a number of things can prevent executives from achieving this state. First, they often walk into pivotal moments feeling stressed—either about other things going on in their lives or about the very situation they’re confronting. Second, they simply don’t see the greater possibilities their situation offers—to build trust, resolve conflict, inspire a beaten-down team, and so on. Third, once they’re in a situation they react in habitual, fixed ways instead of observing the dynamics among people and responding agilely. And last, they focus all their preparation for key events on functional and technical details while paying little to no heed to the human dimension—to adapting themselves to the needs and styles of the people in the room.

Leadership-in-flow is designed to overcome those obstacles. Through it people activate the inner core not just in themselves but also in those they work with, by drawing on energies they already possess.

The Core Energies

Our leadership model, which builds on both ancient wisdom and contemporary science, focuses on five types of energy:

- Purpose (committed to a noble cause)

- Wisdom (calm and receptive to the truth)

- Growth (curious and open to learning)

- Love (connected with those you work with and serve)

- Self-realization (centered in a joyful spirit)

Across all the exemplary leadership moments we studied, people consistently used a small set of actions to tap into one or more of these five energies. The actions were swift and straightforward, often taking just seconds. Our analysis revealed that 25 actions—four to seven for each type of energy—showed up regularly. (I’ll describe some of them in the examples that follow, but you can find a complete list in the sidebar “How to Achieve Leadership-in-Flow.”)

By taking these actions, leaders can break free from rigid behavioral scripts. One profound moment in the history of the Cold War illustrates how.

On December 16, 1984, British prime minister Margaret Thatcher hosted Mikhail Gorbachev, a member of the Soviet Politburo who was seen as a potential future leader of the country, at what ended up being a five-hour lunch at Chequers, the prime minister’s country home. Thatcher wasted no time in firing the first salvo, stating, “I want there to be no misunderstanding between us….I hate communism.”

“Very quickly, the argument between Margaret and me became very heated,” Gorbachev later recalled, according to Jonathan Aitken’s book Margaret Thatcher: Power and Personality. “She was accusing the Soviet Union of all sorts of unfair things. I did not accuse Britain of anything.” The two turned their backs to each other in the middle of lunch, and Gorbachev’s wife, Raisa, stunned by Thatcher’s attack, indicated to her husband, “It’s over!” For a moment Gorbachev thought they should leave.

And then something remarkable happened. Gorbachev centered himself and considered his intentions in meeting Thatcher. “We are guests here; the conversation must continue,” he thought. He reframed the situation in his mind from “She’s attacking my government!” to “She’s promoting her principles.”

“Mrs. Thatcher,” Gorbachev said. “I know you are a person with an acute mind and high personal principles. Please bear in mind that I am the same kind of person.” She responded with a nod. He then continued, “Let me assure you that I have not come here with instructions from the Politburo to persuade you to become a member of the Communist Party.” Thatcher burst into laughter. “The tension was broken,” recalled Gorbachev, “and the discussion continued, although it soon [heated] up again but in better ways.”

The meeting proved to be a turning point in the Cold War. It convinced Thatcher—and subsequently, the U.S. president Ronald Reagan—that Gorbachev, in contrast to past Soviet leaders, was a man they could work with. “I actually rather liked him,” Thatcher later told Reagan.

Gorbachev himself reflected, “It was then, during that talk in Chequers, that the special relationship was born….We worked closely and fruitfully together to advance the important processes of that time—curbing the arms race, European developments, German unification, and reversing Iraq’s aggression in the Middle East.”

Was Gorbachev in that pivotal moment of impasse at lunch having a crucial conversation with Thatcher? Influencing her? Inspiring her? Giving feedback? Building trust? Changing her behavior? He was quite evidently engaging in all those traditional leadership activities. Yet in that moment, he was focused on one thing—activating the inner core in himself and in Thatcher. He did so with a few simple actions.

In emphasizing leadership in the moment, I don’t want to minimize the importance of crafting a planned approach beforehand.

First, he established a positive intention and tapped into purpose by reaffirming and reexpressing his reasons for meeting with Thatcher and deciding to stay and reengage with her. Second, he showed wisdom by creating the right frame—by looking at the situation more constructively. Third, he evoked love by showing appreciation for her acute mind and her high personal principles and establishing an affiliation with her—stating that he was the same kind of person. Last, instead of criticizing her for trying to convert him, he showed her how amusing it would be to her if he were trying to convert her, sparking joy (self-realization). Those actions instantly changed the tone of the meeting and helped him switch his leadership style from arguing to bridging.

Like Gorbachev, we all have more than one style. By drawing on our core energies, we can pull away from a limiting identification with any particular style and adapt to the present moment. It is worth noting, however, that leadership-in-flow does not work by faking it. If Gorbachev hadn’t first truly felt admiration for Thatcher’s acute mind and her principles, Thatcher probably would have sensed from his demeanor that he wasn’t being genuine and would have responded much more coolly.

Most of us already have experience with the actions that activate the core energies. We all, for instance, show appreciation and build affiliations in everyday life (though it might not occur to many of us to use these actions if we were in Gorbachev’s situation). The neural pathways for these actions are present in most people’s brains. Since it’s much easier to activate existing pathways than to build pathways from scratch, leadership-in-flow is accessible to everyone—people in all roles and at all levels.

Moreover, as Gorbachev’s story shows, the energies and actions can be harnessed to advance traditional leadership skills. Because they’re like a standardized set of building blocks, their use can help radically simplify competence-focused training.

Getting into the Flow

When great athletes are in a flow state their achievements look effortless—yet of course everything in their daily routines (from training to warm-ups to postmatch analyses) is intentional. The same is true with leadership. Indeed, in emphasizing leadership in the moment, I don’t want to minimize the importance of crafting a planned approach beforehand (to increase the chances of reaching the right state) and afterward (to learn from the experience and improve).

I advise executives to begin by targeting a specific upcoming event, like a board presentation or a negotiation, and homing in on a single objective, whether it’s building urgency, gaining buy-in, resolving conflict, or inspiring peak performance. Having no concrete goal or juggling too many goals can hinder a flow state. Executives should then replace any negative emotions or beliefs about that situation with a positive intention. If, for example, you are feeling unmotivated about a proposal-review meeting with your CFO because you believe she’s already decided against funding your request, you could set your intention to be “I will draw out my CFO’s perspective and points of resistance, build greater understanding between us, and prepare the conditions for a strong long-term partnership with her.”

Research shows that our intentions influence our emotions, thoughts, and perceptions, and that those in turn influence our behavior. When you believe other participants in a meeting won’t respect your perspective, or that a subordinate won’t be happy with your feedback, or that one party will have to lose for the other to win, you’ll be less likely to engage in behaviors that build trust, open people’s minds, and deepen understanding.

Next, I tell executives to pick three to five actions they can take to advance their goal for the event. They should base their choices on the energies they’re most drawn to and the context they’re in. To resolve a conflict, for example, they may activate wisdom by fusing opposing viewpoints, or they may activate love by empathizing and affiliating. Leadership-in-flow does not require a fixed sequence of actions in any situation; executives should pick suitable actions that feel authentic to them.

Consider how Adrian, a physician, resolved a disruptive situation that occurred at his hospital when the administration suddenly mandated a daily morning huddle for clinicians and staff without consulting them. The clinicians and staff were deeply upset because the huddle was held during patient appointment hours, and they felt it would negatively affect patient care. As a member of the operations committee, Adrian decided to intervene. He asked the administration to put the program on hold for a week. He began with an action that activates wisdom: understand before you act. By holding conversations with administrators about their motivations and with clinicians and staff about the complications they were experiencing, he discovered that top hospital systems had implemented similar huddles and found they greatly improved communication and workflow and created a sense of community. He then convened a meeting of the clinicians and staff. He set the tone by expressing appreciation (thereby creating love energy) for the tremendous sacrifices people were making. He then drew on purpose by appealing to the values and purpose of those present by reminding them of their collective commitment to providing the best patient care. Next he took two more actions that lead to wisdom: He created the right frame by helping people switch from an “us versus them” attitude to jointly looking for the best path forward, and he fused opposing points of view by getting the two sides to see the value of not just doing their work well but also coming together to share, learn, and connect. It worked. “I received several text messages and emails,” he recounts, “acknowledging how I had been able to turn around the situation and bridge the divide.”

Once executives have chosen the actions they’ll undertake, they should spend five to 10 minutes before the event reviewing them and the intention they have set and taking time to center themselves. (There are any number of practices people can use to do this, such as deep breathing or a brief meditation.) As part of this they should spend two minutes visualizing how they’ll perform each chosen action. Our data shows that people who engage in such visualizations are 70% more likely to succeed at their goals. “It’s like the warm-up that athletes do before a game to perform better and avoid injury,” a key account director at IBM told us. “We executives too need to warm up our minds prior to events to think better and to prevent meetings from going in the wrong direction.”

Mary Haasdyk Vooys

Such preparation also frees up more of the brain’s executive system—the frontal lobes—to deal with evolving dynamics, allowing people to adapt quickly as conditions change. They can use whatever action makes the most sense to them, moment by moment, shifting toward different energies as the event unfolds.

At one financial services company, tensions were running high on the analytics team of an executive called Roger. It was getting a lot of assignments but didn’t have a good process for prioritizing them. Deadlines were being missed, and teammates were blaming one another, much to Roger’s irritation. He decided to bring the team together for a conversation. To put aside his negative emotions, he set the intention “I will create positive energy and rally the team around my vision.” He started the meeting by showing empathy and appreciation. “I understand how difficult it has been these last few weeks,” he said. “I recognize how hard you all have been working, despite these obstacles.” The love energy these actions released helped put his team at ease. Sensing an opening, he switched to activating growth energy by soliciting advice, inviting the team members to share their perspectives on the challenges they faced. Seeing that some were nervous, he gently nudged them and thoughtfully probed. As team members got more comfortable sharing their perspectives, one suggested that they start saying no to new requests, while another pushed back because that would compromise their objective of being a responsive team. Roger fused these opposing viewpoints by proposing that they become better at setting and resetting expectations about deliverables and deadlines with their internal clients. “Every person in the room felt personally accountable, engaged, and invested,” he recalls. As a result, valuable ideas emerged about how the team should prioritize work, and the chronic delays were alleviated.

Sometime after an event, executives should do a postmortem to assess how well it went, how successful they were at meeting their goals and using the chosen actions, and what they learned from it. Even when things don’t turn out as desired, this practice can produce valuable insights. As a vice president of business development at Wilton Re told us, postmortems have helped him “translate instances of ‘failure’ into opportunities for growth,” allowing him to find pride in moments when he honored his intention and tied it to his values.

Building Success upon Success

In our cross-organizational study, we saw that the performance of the more than 100 executives who were practicing leadership-in-flow for six weeks kept improving from one event to the next. As I’ve noted, by the end their ability to achieve their goals had more than doubled on average, even though the objectives, context, and other parties involved in each event differed. We believe this is because of the consistency of the building blocks—the five core energies and 25 actions. As executives become more experienced at using them, they can effectively apply them in a wide variety of situations.

These findings align with research on expert performance showing that experts are more effective at organizing information—something psychologists call “chunking”—in their disciplines than novices are. Experts recognize structures that novices do not, are able to both take a high-level view and observe detailed nuances in a situation, and can transfer their chunking strategies more effortlessly to new contexts. Similarly, our research shows that executives who are experienced with leadership-in-flow can tune in to the energies in the room while others may only see outer behaviors; can see situations both from the high-level, five-energy perspective and from the more-nuanced actions perspective; and can transfer their ability to harness the core energies from one context to another.

Robin, a senior manager at a professional services firm, was assigned by her employer to take on a challenging client project in which multiple deliverables were due under a tight deadline. In preparing for her first meeting with the clients, Robin decided to focus on activating wisdom by creating the right frame and love by acting/expressing thoughtfully (bringing a deep sense of caring to how you make tough decisions and communicate hard truths). Though she had received training on acting/expressing thoughtfully, she learned about creating the right frame in the midst of her preparation, when reviewing the 25 actions.

“The meeting got off to a surprisingly rocky start,” Robin later recalled. “The clients started to give negative feedback on another project, and that threatened to derail the conversation.” Robin’s normal response to such criticism would have been to defend her organization’s work and to engage in problem-solving on the issues raised. Instead, she decided in real time to draw on wisdom by disarming (finding something true in what an opposing party is saying and affirming it), an action she had used in earlier contexts, by agreeing with the clients that their concerns were important and assuring them that her team would look into them. Seeing the clients calm down, she brought them back to the purpose of their meeting, emphasizing how crucial it was to give full attention to the issues they needed to resolve. She positioned it as an opportunity for the two teams to hammer out details now to avoid problems later. She was able to get the meeting back on track and to get agreement on what her team and the clients would do to complete the project successfully.

Leadership-in-flow makes it easy for executives to expand their arsenal of actions over time, as Robin did. Our analysis has revealed that once they start practicing leadership-in-flow, executives perform just as well with actions they’ve picked up during event preparation as they do with actions they’ve been trained on at a workshop. This is because the actions are simple, and the neural pathways needed to use most of them are already present in us.

. . .

In our early years, we associate learning with structured classrooms and set curriculums. Yet as we navigate the complexities of work and life, it becomes evident that some of our most profound breakthroughs emerge when we are “in the flow”—when we immerse ourselves in real-world experiences and challenges, respond in real time as conditions change, and tap into virtues and energies already present in our core.

Losing touch with the five energies amid life’s whirlwind is natural, but rekindling them is within our reach. All we need to do is focus on a goal, open our hearts and minds to new possibilities, and select the right actions that will activate our inner core—that state from which remarkable performance arises.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Leaders Must React

A framework for responding to unforeseen events

Nitin Nohria 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Yasu & Junko/Trunk Archive

During my many years as a professor of leadership, I’ve been asked one question more times than I can count: Can leadership actually be taught? I usually respond with a well-rehearsed answer: Much like athletic prowess or musical talent, people’s innate capacity for leadership varies. But just as good coaches and teachers can help athletes and musicians realize their full potential, good educators can help people become better leaders. To do that at Harvard Business School, we draw heavily on John Kotter’s framework, which breaks a leader’s job down into three key functions: articulating a compelling vision, aligning people around it, and motivating them to execute it.

After listening to that answer, a prominent leader challenged me: “That’s a useful theory you’re teaching, but you’re missing something that makes or breaks leaders—something that’s much harder to teach. It’s how they react in real time to events they can’t anticipate.” He was referring to leaders like Volodymyr Zelensky of Ukraine. No one would have called him a visionary, and because of his inexperience, many were skeptical of his abilities. But how he responded to Russia’s invasion of his country made him a hero. Jimmy Carter, on the other hand, may well have been a visionary president, but he was undone by the Iran hostage crisis.

Leadership, my interlocutor concluded, is defined as much by how well people respond to unfolding events as how good they are at driving an agenda. “You’re teaching only half of what leaders need to learn,” he told me.

In 2018, my colleague Michael Porter and I published a study of how CEOs spend their time, which confirmed the validity of that argument. We tracked the activities of 27 large-company CEOs in 15-minute increments, 24 hours a day, for 13 weeks and found that, on average, CEOs spend 36% of their time in reactive mode, responding to unfolding events. This is an enormous commitment—hours they would probably prefer to devote to advancing their plans, helping their companies hit their goals, and strategically shaping their firms’ future.

The term “unfolding events” encompasses a broad range of issues that eat up a CEO’s time. They can be externally driven—like fluctuations in stock price; surprise moves by competitors, suppliers, and regulators; or macroeconomic developments such as rising interest rates or major geopolitical changes. CEOs also continually face unforeseen internal events: workplace accidents, employee unrest, sudden resignations, just-discovered product flaws, and the unpredictable reactions that stakeholders—from the board and the leadership team to workers on the front lines—can have to things they hear or see.

Many CEOs I advise struggle with the fact that unexpected events consume such a large chunk of each workweek. They worry that they’re spending too much time in reactive mode and feel that their days have a Sisyphean quality to them. Yet they can’t seem to break out of this pattern. I have experienced this challenge while running organizations myself.

To help leaders better understand which issues truly need their attention—and which do not—I have created a two-by-two matrix that categorizes events according to two dimensions: how they initially present themselves (whether small or large) and how significant they will become over time. (It’s somewhat similar to the Eisenhower matrix, which categorizes events by their current urgency and importance. My matrix, however, considers how events may evolve.) In this article I will describe how CEOs can determine which category issues fall into, craft appropriate responses to them, and communicate their priority to the rest of the organization.

The Reactive Management Framework

My matrix contains four quadrants: normal noise, clarion calls, whisper warnings, and siren songs. Let’s look at the kinds of events that belong in each one and how leaders should approach them.

See more HBR charts in Data & Visuals

Normal noise:

Small issues likely to remain small.

The leader’s task: Don’t get drawn in.

A certain level of unpredictability and variability is natural in any organization’s internal and external environment. This generates a constant stream of positive and negative issues that demand attention—what we might think of as normal noise. Minor incidents, such as modest budget deviations, periodic customer wins and losses, execution hiccups, routine fluctuations in stock prices, mixed feedback from stakeholders, and flare-ups of human emotions fall into this category. Most of these things don’t warrant the leader’s intervention or any disruption of ongoing practices.

CEOs must learn not to get distracted or drawn in by noise. They should trust their organizations to handle these events and try to resolve to treat them as routine. Although it’s best for leaders to avoid getting personally engaged, they will benefit from adopting the motto “Trust but verify.” Even with seemingly trivial matters, they must ensure that anomalies don’t go unnoticed. By occasionally checking that the organization is responding appropriately, leaders can prevent problems from being neglected and becoming bigger headaches. That might involve periodically tuning in to customer feedback, reviewing employee sentiments on platforms like Glassdoor, or finding other ways to take the pulse of the organization.

Clarion calls:

Significant issues likely to remain significant.

The leader’s task: Be all-in.

Occasionally, events and problems that can have a huge impact on an organization’s operations, reputation, and financial standing announce themselves loud and clear. Crises, such as catastrophic product failures or deadly accidents, unmistakably fall into this category. Major macroeconomic events, such as the geopolitical tensions arising from the Ukraine war or regulatory moves like antitrust suits or bans on products sold to China, are other examples.

At Harvard Business School we teach several case studies on clarion call situations. The Volkswagen emissions scandal, the result of deliberate test manipulations, had broad financial and reputational fallout and demanded concentrated CEO action. BP’s Deepwater Horizon oil spill and its failed CEO response, Cambridge Analytica’s misuse of data from Facebook (now Meta), and Boeing’s fatal 737 Max accidents were all clarion call moments. During them each company’s leadership team’s priorities shifted toward managing the immediate situation, and most other functions were temporarily deprioritized. The shared lessons from these cases: It’s critical for leaders to get personally involved, and they have to get all hands on deck as well. It’s important for them to avoid the temptation to retreat into themselves, because they’ll need the information, ideas, and resourcefulness of others. But they should remain aware that other people have their own agendas. (Marketing teams focus on optics, legal teams aim to minimize liability, and so on.) In clarion call situations, leaders must always keep a hand on the steering wheel and lead the organization forward. They must show empathy for the people affected by events but also find ways to navigate the stress, anxiety, and other emotions they may personally feel. Most crucially, throughout the process, they must focus on doing what is right (aligned with their organizational and personal values) instead of feeling pressured into doing what feels safe.

Although it may sound counterintuitive, in some aspects leading in clarion call situations is less challenging than leading in situations that fall into the other categories. They are the easiest kind of event to identify, and because their seriousness is obvious, it takes much less effort to mobilize the organization to respond to them. Ordinary constraints (such as limited budgets) may be lifted in an existential crisis. A CEO also doesn’t worry if the time spent managing it is worthwhile.

Whisper warnings:

Small issues that might become significant.

The leader’s task: Nip them in the bud.

Within the unpredictable flow of organizational issues is a unique category of challenges: those that initially appear minor but have the potential to morph into major concerns. For leaders, this is the most dangerous kind of event. It can be easy to dismiss or mistake a whisper warning as normal noise—and fail to recognize the likelihood that an issue will escalate into a substantial threat. Perhaps the most famous example of this occurred in the months before 9/11, when U.S. intelligence agencies received various tips about suspected terrorists enrolling in flight schools and an imminent attack involving airplanes. Still, officials failed to connect the dots or recognize them as more than run-of-the-mill intelligence chatter.

Whisper warnings can take various forms. They might be emerging competitors that could disrupt market dynamics, murmurs of employee dissatisfaction, nascent regulations with the potential to widen in scope, or seemingly insignificant operational inefficiencies that could balloon if unchecked. Quite often, major product or safety failures start as whisper warnings. In the mid-1990s plaintiffs’ attorneys began filing lawsuits alleging that the tread on Firestone tires on Ford Explorer SUVs tended to separate at high speeds, causing accidents. Several dealers, insurance agents, and other players received isolated reports of problems during those years. But the larger problem remained hidden until 2000, when media reports made its scope clear. Over time the defective tires were implicated in 203 deaths (most of which occurred after the earliest whisper warnings) and caused significant reputational damage to Ford and Firestone. Leaders who were more attuned to whisper warnings might have reacted earlier.

Leaders need to pay careful attention to small signs of discontent that have the potential to fester and grow.

Cultural crises also often begin with whisper warnings. Many leaders ousted for #MeToo misbehavior had been subject to quiet allegations for years. At Uber signs of an arrogant, we’re-above-the-rules attitude and a toxic culture were evident before Susan Fowler, an Uber engineer who’d quit, wrote a 2017 blog post putting them in the public eye. She recounted being sexually harassed by her supervisor and experiencing an egregious lack of support when she reported his behavior to HR. The ensuring uproar led to the ouster of Uber’s cofounder and CEO, and it took the company years to rebuild its culture and reputation.

Leaders need to pay careful attention to small signs of discontent or distress that have the potential to fester and grow, especially among members of the board or the senior team or employees at large. When they crop up, the best approach is to act quickly and nip problems in the bud. With most whisper warnings, you can take steps to mitigate the situation before it explodes into a crisis. Whether by announcing a voluntary product recall, pulling the proverbial Andon cord on a quality or safety issue, firing a toxic executive, or reaching out to talk to someone who is upset, leaders who respond early are more effective at tamping down simmering issues. Developing contingency plans to address potential escalation can also be helpful, as initial preemptive actions don’t always work.

While every whisper warning doesn’t warrant a CEO’s undivided attention, discerning which minor issues could become much more troublesome is a form of judgment that defines effective leaders.

Siren songs:

Significant issues that are likely to diminish over time.

The leader’s task: Don’t overreact. Watch and wait.

In The Odyssey, alluring sirens sing to passing sailors, tempting them onto the shoals and into shipwrecks. Today many things likewise draw people in but are ultimately deceptive and destructive—forces that must be resisted. These siren song events appear significant at face value—and often prompt CEOs to clear their calendars. Over time, however, their urgency fades, and in retrospect the energy a leader puts into dealing with them yields little return. Worse, in some such situations, a leader’s response is like oxygen on a fire and turns a small flame into a conflagration.

Apple’s “Antennagate” is a classic example of a siren song. Soon after the 2010 launch of the iPhone 4, customers began reporting that when the device was held a certain way it dropped calls. The tech media pounced—yet CEO Steve Jobs astutely discerned that the issue was temporary. He addressed it while making it clear that he wasn’t very concerned that it would dent Apple’s core value proposition. Another example is the launch of Microsoft’s Vista operating system in 2007. Vista was widely panned as slow and buggy and failed to gain market share. Rather than getting dragged down, the company deftly pivoted to more-successful product introductions without letting Vista’s problems swamp the leadership team’s focus.

In 2015, Starbucks was widely ridiculed for its attempt to spark a nationwide conversation on race relations by writing “Race Together” on every customer’s coffee cup. Yet its leaders didn’t overreact, and the furor quickly faded.

Though such situations can generate headlines and internal angst, leaders must recognize that the initial assessment of their significance doesn’t always correspond to their long-term impact on company performance. The key to siren song situations is equanimity. Learning to watch and wait is essential. It can be helpful to sleep on a matter for a day or two and let the steam blow off to see if things calm down. More time often allows more information to come in—which can be extremely valuable. Staying informed is paramount, but overreacting can be counterproductive, as it can inadvertently set off a controversy.

The Framework in Action

A three-step process—sensing, sizing, and responding—can help leaders react effectively to the full spectrum of unfolding events.

Sensing.

To manage their scarce time, leaders have to limit what they devote their attention to. But in doing so, there’s a real risk that they will filter out more issues than they should. Explicit directives or implicit signals given to their assistants—such as who gets time on their calendars, what emails are read carefully, and what’s viewed as significant enough for a meeting—can reduce the daily flow of information to CEOs. Although minimizing that flow is a well-intentioned way to eliminate distractions and keep the CEO focused on top priorities, overdoing it can be a mistake. The best leaders stay attuned to what’s going on in their organizations and their external environments. In meetings they are mindful and present, which allows them to pick up on small clues (such as someone’s body language) that might indicate a developing concern. They cultivate a wide and varied network of sources who provide them with timely feedback, and they tend to that network purposefully, inviting candor and avoiding the sycophantic “success theater” that surrounds leaders who want to hear only good news. They especially work to create the psychological safety necessary for people to share difficult news.

Awash in a river of information—a mix of fact, fiction, opinion, understatement, and overreaction—CEOs engage in a process that the organizational theorist Karl Weick called “sensemaking.” This involves recognizing patterns, gathering various perspectives, and putting things into frameworks to make their meaning clear. Sensemaking helps people mentally process complex, ambiguous situations. It improves with practice, so most leaders get better at it over time.

Sizing.

Identifying which quadrant an issue fits into requires leaders to estimate its magnitude, now and in the future. To tell a whisper warning from a siren song (to choose two of the more difficult categories) they need intuition and the ability to see how a current incident is similar to or different from past events. Sizing requires not only pattern recognition but also skill at prediction and forecasting—abilities that tend to grow with experience. Leaders also need to draw heavily on their emotional intelligence to gauge the significance of internal issues and on their contextual intelligence to assess external events. Although CEOs should seek help when sizing issues, they should recognize the biases that the people they turn to may have because of their individual functions or agendas. For instance, the social media team will likely overweight an incident involving social media, and the sales team may overreact to customer feedback.

Yasu & Junko/Trunk Archive

Ultimately, it’s the CEO’s responsibility to determine whether an issue is normal noise, a clarion call, a whisper warning, or a siren song. This takes an underappreciated leadership quality Max Weber called “a sense of proportion.” It entails the ability to separate the insignificant from the important, see how things are connected across different levels of analysis, move between details and the big picture, and assess how material something is. For leaders, having this sense of proportion is key. Even if they choose to delegate some issues to others, their own judgments are the ones they must ultimately live with.

Having sized an issue, leaders then must properly frame it and communicate that framing to the organization. Sometimes they have to address the fact that the organization may be tempted to overreact to a siren song or underreact to a whisper warning and must explain why an issue may be larger or smaller than people initially realize.

Responding.

A leader’s actions in responding to any issue might seem routine because coming up with a plan, delegating responsibility, and overseeing execution is what a leader does daily. However, one key to dealing with unfolding events is recognizing that by definition they are evolving and require an adaptive response. They don’t lend themselves to static six-week plans. Often a leader may ask for quick daily updates to ensure that the response crafted yesterday still makes sense today and that the initial categorization of an issue still fits. An incident that at first presents as a whisper warning may eventually become normal noise—and vice versa.

Taking “robust action”—a leadership approach I have written about that addresses ambiguity and emphasizes adaptability in decision-making—is a good way to manage the changeable nature of unexpected events. Instead of pursuing a fixed trajectory, leaders embrace multiple, even competing, interpretations and solutions. Like great chess players they imagine different scenarios and do their best to maintain several strategic options for as long as possible. The core principle of robust action is that in an unpredictable world, overcommitment to a single strategy limits opportunities and potential pathways, whereas strategic ambiguity and flexibility maximize the ability to adapt to emerging challenges.

. . .

With this framework in mind, how should leaders think about the time they spend reacting to unfolding events? Remember that our CEO study showed that the average leader spends 36% of working hours on them—but that is just an average. Among individual leaders, the range varies dramatically. One CEO we studied spent just 14% of his time in reactive mode; another 81%. No doubt, the second leader was being excessively reactive, but in our discussion with the first leader, we raised the possibility that he was underinvesting in it.

Podcast Series

HBR On Leadership

Curated insights to unlock the best in those around you.

- Subscribe On:

- Apple Podcasts

- Google Podcasts

- Spotify

- RSS

- Overcast

- RadioPublic

These polar cases illustrate a truth: The leader’s goal is not to minimize time spent reacting to unforeseen events but to find the right proportion. Though managing them may at moments feel like a distraction from efforts to reach long-term goals, it remains an essential part of what leaders do—and there can be immense costs to handling it poorly. Many CEO firings result from missteps in responding to unfolding events. And no matter how brilliant a leader’s plans may be, unexpected issues inevitably intrude, and dealing with them successfully might even be vital to achieving the plans.

Leadership often entails mastering dualities—strategy and execution, short- and long-term performance, profits and growth, continuity and change. We can add being proactive and reactive to the list. As much as leaders must craft a vision and align and motivate the organization around it, they must also sense, size, and respond to unfolding events. I urge leaders to be thoughtful and intentional about managing them—and to use my framework to do so more effectively.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Why Real-Time Leadership Is So Hard

Four obstacles and how to overcome them

Ryan Quinn,, Bret Crane,, Travis Thompson,, Robert E. Quinn 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Mary Haasdyk Vooys

Sometimes when we lead, everything clicks. We initiate changes smoothly, confidently, and compassionately. Other people respond constructively to our efforts, accepting and building on our changes, even if those changes are difficult and complex. Great things are accomplished.

At other times we feel stuck. Nothing seems to resonate. What makes the difference? Writing in HBR nearly 20 years ago, one of us (Robert) argued that what matters most here is our psychological state. When we’re in high-performance mode, we transcend our normal frame of mind and enter what he called the fundamental state of leadership. In it we express our best selves naturally and spontaneously. We venture beyond familiar territory to pursue ambitious goals, embody our highest values, feel true empathy for others, and embrace feedback, learning, and adaptation. (See “Moments of Greatness: Entering the Fundamental State of Leadership,” HBR, July–August 2005.) Others might call this mindset real-time leadership.

For decades we have taught students and clients about this enlightened state and have seen firsthand how individuals accomplish extraordinary things when they enter it. But we’ve also seen self- imposed obstacles prevent people from achieving it. After years of research, we have identified four common stumbling blocks. All four are ways of thinking: The misperceptions that there are no alternatives, that there is no hope, that there is no time, and that there is no need for leadership. These misperceptions can be overcome, however, and in this article we will explain how.

No Alternatives

Habits, formal processes, social norms, biases, punitive reward systems, professional standards, legal regulations, and even a simple lack of experience constrain people’s ability to consider other options. For instance, sometimes when we ask people to come up with ways to exhibit more purpose, integrity, empathy, and curiosity (all hallmarks of the fundamental state of leadership), their answers are just modified descriptions of what they were already planning to do. Take managers who are trying to offset shrinking profit margins, which many try to boost by trimming expenses. When we encourage people to come up with an ambitious purpose in response to the margin problem, many answer that they’ll eliminate expenses even more aggressively. This is the “I’ll just try harder” trap. If they stopped to think about why better margins matter—because, say, they allow the business to grow and create more value for customers—they might see other solutions, such as increasing profits by launching the company’s products in new markets.

Similarly, an industrial engineer who is implementing a new manufacturing process may interpret “leading with empathy” as taking more time to explain the new process rather than as listening deeply, seeking to understand, and treating employees as ends in themselves rather than as a means to implement the process. These professionals suffer from something akin to “functional fixedness”—the bias that limits a person to using an object only in the way it’s traditionally used (for instance, not realizing that a book could serve as a doorstop).

Often people need to adopt new perspectives to break free of this mental trap. Asking the following questions can help:

- When have people made exceptions to processes or norms in the past?

- Who might be willing to try something different here?

- What organizations handle the situation we’re in differently?

- What could we do that would mitigate people’s concerns while trying new things?

- How might this situation be like another, unrelated situation?

To understand the power of such probing, let’s look at a case involving a department chair we advised. Tasked with leading within a health care system that was heavy with constraints, the chair frequently found it challenging to see beyond the organization’s established norms. One was an emphasis on hiring doctors with top-tier medical and academic achievements. When his department was down to two candidates for a position, the internal debate was clear. One finalist had more impressive academic laurels, while the other demonstrated stronger teamwork skills. It seemed inevitable that the candidate with the strong credentials would be selected.

In that moment the chair asked himself questions similar to the ones we just listed. Guided by the introspection they prompted, he posed a crucial question to the selection committee: “If we prioritize teamwork as a core value, which candidate truly aligns?” That caused the committee members to stop and reconsider their inherent biases. They chose the team player, signaling a significant shift in the department’s hiring principles, which ultimately cascaded into a broader cultural transformation.

No Hope

A particularly insidious obstacle hindering real-time leadership is defeatism. This isn’t about limited perspectives or narrow thinking. It’s about feeling paralyzed, like a deer caught in the headlights, daunted by seemingly insurmountable challenges. When individuals feel they’re facing inevitable defeat, leading with vision and courage becomes particularly hard.

For instance, when a young marketing executive suggested a groundbreaking campaign to her team, the idea was quickly shut down by senior management. Months later a rival company launched a similar campaign to great success. The executive, having seen her idea dismissed only to be validated externally, became overwhelmed by pessimism and reluctant to propose innovative solutions again.

When you think there is no hope, try these practices:

Review past successes.

We encourage people to ask themselves, “When have I seen or experienced excellence in similar situations?” Look in adjacent or even unrelated fields to see if there is opportunity for success even in the face of seemingly intractable challenges. For example, one manager we worked with, who was struggling to improve the work of a team that processed millions of HR transactions with an extremely limited budget, realized that the answer lay in adopting agile methodologies that technology departments were using to increase the volume and quality of their work on compressed timelines.

Set learning goals.

Sometimes what makes challenges seem daunting are our own expectations. However, if we set a goal of learning how to address a challenge well rather than of succeeding spectacularly on our first try, we allow ourselves to grow and to see small failures as acceptable along the way.

Involve others.

We also suggest people ask, “Who can help me deal with this challenge?” Sharing feelings of despondency often brings fresh viewpoints and avenues for solutions. Sometimes the simple act of vocalizing fears can lead to unforeseen answers to problems.

Break the challenge into smaller parts.

Facing a behemoth task head-on can be overwhelming. Segmenting it into manageable tasks not only makes it less intimidating but also can lead to multiple small wins, boosting morale.

After a decade of successful funding rounds, the CEO of one start-up faced a crisis when a crucial investment fell through. Having overextended itself by hiring a lot of people and investing heavily in R&D, the company was close to bankruptcy. In despair the CEO confided in a colleague about possibly shutting down. Both were initially despondent, but the colleague’s offer to restructure his pay sparked a conversation about other potential solutions. While one person’s sacrifice wasn’t enough to solve the problem, the suggestion helped break it into smaller parts and generated other ideas about how to lead in this moment. These ideas required buy-in and sacrifice from many employees, but they provided a glimmer of hope. At a leadership meeting several other team members expressed a willingness to make personal sacrifices too. This shared commitment galvanized the entire company, allowing it to weather the crisis.

No Time

Exceptional leadership usually requires an increase in up-front effort and preparation, which people often feel they don’t have time for. So instead they end up in reactive mode. Though we are all time-constrained, we can find solutions to that challenge by asking:

Which people or processes might I put more trust in?

One reason we feel overloaded is that we lack confidence in people or processes that, if we relied on them, could reduce bureaucracy, political protectionism, transaction costs, coordination costs, and so forth. Moving from distrust to trust also frees up mental space and changes how we perceive the organization, opening us to new ideas. Of course, we should trust wisely, but trusting others is one way to lead in real time.

How might I fix organizational inefficiencies?

Tackling this task instead of just trying to get work done will help you make the most of your limited time. We have found that if we examine managers’ deluge of tasks and meetings more closely, there are often wasteful practices in the systems and processes involved. Many tasks and meetings can be streamlined or even eliminated entirely.

How might I surface and address the activities most fraught with conflict first?

A common indicator of inefficiencies in organizational systems and processes is conflict. Leading in real time often involves confronting it rather than pushing through it, dominating it, or avoiding it. One approach, then, is to list projects or tasks that are most fraught with potential conflict—both internal and interpersonal—and then prioritize addressing them. This takes more time up front but usually saves a lot of time over the life of a project.

Sometimes people don’t see any need for leadership because they’re doing a task that doesn’t involve social interaction. But it’s possible to lead people even when they’re not present.

A manager at a sports entertainment company was tasked with overseeing summer camps involving various sports. Fitting this work into her schedule was a challenge, given her many other responsibilities. But the sports departments were overloaded too and highly resistant to spending any time on the camps themselves, even though they really needed to coordinate their use of shared facilities and help manage the campers’ safety.

With summer looming, the manager began highlighting inefficiencies in the camp processes, despite fears that her work might uncover redundancies and lead to job losses. She simplified the processes, encouraged collaboration, wrote a manual, and trained the staff with it. Among her improvements she set up automated systems and data collection for the departments, which could help reduce the time they invested in camps further. The result? She freed up time for everyone, earned the trust of her colleagues in the sports departments, and helped shift them from seeing threats to recognizing opportunities.

No Need

Sometimes people don’t see any need for leadership because they’re doing a task that doesn’t involve social interaction. Alternatively, they may see no need to lead because they like the status quo. In such situations we try to help them expand their vision. Leadership may not be required, but it could still make these situations better. Thus we might ask them the following:

Who cares about the work you’re doing, and what could you do to inspire those people?

When we are analyzing data, writing a report, or doing other individual work, it’s easy to assume that there is no need to lead. However, it’s possible to lead people even when they’re not present. Individual work has impact. If we put our best into it, its beneficiaries become more likely to adopt, use, and appreciate the fruits of our labor, and our fellow professionals are more apt to admire and adopt our approaches.

Consider an accountant, Lisa, who sends out monthly financial summaries in dense reports. One month she decides to include a concise infographic highlighting key points. Soon departments that previously skimmed her emails begin actively engaging with her insights, using them more effectively in their planning and decision-making.

How could you transform this from good to great?

In many situations the usual approaches are perfectly adequate. Why engage in the extra effort to lead if there are no problems? Because often good situations can be made even better. When we’ve persuaded people to do the work needed to make good things great, they’re frequently surprised by how much more they prefer great—and wonder why they’d been content with good. People who believe that they can and should improve their organizations see more opportunities and have more impact.

Podcast Series

Coaching Real Leaders

Real-life coaching sessions with leaders working to overcome professional challenges.

- Subscribe On:

- Apple Podcasts

- Google Podcasts

- Spotify

- RSS

- Overcast

- RadioPublic

Ray Anderson, the late CEO of Interface, a carpet tile company, once faced a challenge from a customer questioning the company’s environmental practices. Its products met all environmental regulations, and on the surface, Anderson had no need to push the company to do more. But the customer’s question prompted deeper introspection. An employee-led task force was created. At first resistant to its findings, Anderson dove into environmental literature. Inspired by a book detailing the environmental pitfalls of traditional business practices, he pivoted Interface toward sustainability, convinced that good was not good enough. Eventually Interface achieved carbon neutrality and pioneered sustainable products and processes that increased its profits. Anderson’s story illustrates that leadership is not just about meeting standards but about transcending them.

. . .

Leadership is fundamentally about unleashing potential: both your own and that of the people who follow you. In our experience people tend to leave much of the potential in their organizations untapped because of erroneous beliefs that they have no alternatives, no hope, no time, and no need. These perceptions are rooted in fear and a focus on what people lack. A person who can challenge those notions and resist fear, however, can enter the fundamental state of leadership and bring about tremendous positive change.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Features

- How to Sustain Your Empathy in Difficult Times

- Leading in a World Where AI Wields Power of Its Own

- To Solve a Tough Problem, Reframe It

- Should Your Nonprofit Charge Its Beneficiaries?

- Rid Your Organization of Obstacles That Infuriate Everyone

- Do You Need an External Talent Cloud?

- Turn Generative AI from an Existential Threat into a Competitive Advantage

- The Right Way to Build Your Brand

How to Sustain Your Empathy in Difficult Times

Managers are expected to provide employees with more emotional support than ever—and many are burning out. There’s a better way.

Jamil Zaki 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Grace Chon

Idea in Brief

The Challenge

Employees of all types are burned-out and desperately need empathy from their managers. But empathic leadership can be so emotionally and physically draining that it feels unsustainable.

The Dilemma

Many managers believe they have to make a choice: be empathic and sacrifice their well-being for the good of others, or back away to preserve their own emotional health.

The Solution

This dilemma is less real than it seems. Three strategies—discussed in detail in this article—can help managers lead empathically over the long term without burning out.

When I started studying empathy, nearly 20 years ago, its status in the workplace was controversial. Many people believed that empathic leadership—which draws on the ability to understand, care about, and vicariously experience the emotions of others—was too “soft” for the hard-charging, competitive world of business.

By now dozens of studies have demonstrated the opposite. Empathy is not a weakness but something of a workplace superpower. Employees are more satisfied in their jobs, more willing to take creative risks, and more likely to help their colleagues if they work in empathic organizations. They are far less likely to report severe burnout or to develop physical symptoms of stress, and are more resilient in the face of adversity. They also tend to stay: A 2022 Gallup survey of more than 15,000 U.S. employees found that those with caring employers were far less likely than others to actively search for a new job. In 2021 Ernst & Young surveyed more than 1,000 workers who had left their jobs during the Great Resignation and found that 58% cited a lack of empathy from their managers as a central cause of their departure. Increasingly employees, especially Millennials and Gen Zers, don’t merely hope for empathy from their leaders—they demand it.

But for all its virtues, empathic leadership can be emotionally exhausting. Imagine wearing an empathy helmet that transmits the feelings of the people you work with into your head and heart. When you adopt empathy in the workplace, you expose yourself to the emotional ups and downs of everyone you manage—a welter of joy, anxiety, anger, self-doubt, fear, confusion, exuberance, jealousy, sadness, disappointment, and more. The 2020s, with all their challenges, have left employees stressed, exhausted, and pushed to the brink. When the people around us suffer, the empathy helmet becomes much heavier.

It’s possible to absorb only so much. A 2022 survey from Future Forum found that middle managers report more burnout than do workers of any other type. Empathy can even take a physical toll: One academic study found that while teenagers of empathic parents report less depression than their peers do, those parents show more cellular signs of aging than other parents do. In being empathic, it seems, they help their kids but hurt themselves.

A need to practice empathy may also increase self-criticism. For leaders it can become another item on the to-do list to be fretted over. Recently a friend of mine, who works as an executive at a Fortune 100 technology firm and is brimming with empathy, confessed that he constantly second-guesses his caring. “I feel like I’m never enough,” he said, “even in my empathy for my people. Anything going wrong with them means I’ve failed.”

Not surprisingly, given the costs, some managers believe they must make a choice: be empathic and sacrifice their own well-being for the good of others, or back away emotionally and leave their people high and dry. Fortunately, this dilemma is more imagined than real. You can employ three strategies to manage your caring as a leader, which together form a practice I call sustainable empathy. In this article, drawing on my experience as a psychologist and a neuroscientist, I’ll describe those strategies.

Compassion Fatigue

Much of what I’ve learned about sustainable empathy comes from spending time with health care professionals. Especially in emergency and critical-care settings, physicians, nurses, and social workers encounter a stream of people who are having the worst days of their lives. These workers drink from a fire hose of human misery, go home to care for their own families, and then return to do it all over again.

That takes a toll. Three decades ago the nurse Carla Joinson first described “compassion fatigue,” an affliction common among those in her profession who cared so much for patients that their emotions ran dry. When we’re chronically exposed to the suffering of others, we experience fatigue, which in turn leads to burnout, defined as a general loss of meaning and connection. Both fatigue and burnout skyrocketed among caregivers during the Covid-19 pandemic. Today more than half of all nurses report severe burnout—an epidemic on its own.

Grace Chon photographed the therapy dogs that offer healing, warmth, and compassion to patients at Cedars-Sinai Medical Center, in Los Angeles.

In the so-called caring professions, such as medicine and teaching, empathy has long been at the heart of people’s work—and has often become an occupational hazard. Nurses and doctors experience an intense form of this problem, but many workplace managers experience something similar. The need to empathize with struggling employees can leave them emotionally ragged, making it harder for them to do their jobs well. Nevertheless, over the years I’ve met nurses and physicians who manage to be both stalwart in their connection to patients and hardy and healthy themselves. Here are the three strategies I’ve discerned.

1. Physician, Heal Thyself

You doubtless wouldn’t look to a regular smoker for advice about how to quit, or to someone with a messy home for tips on tidying up. The ancient proverb “Physician, heal thyself” signals that we shouldn’t trust people to help us who can’t help themselves. Some health care workers I’ve observed are laser-focused on doing everything they can for patients and families but rarely think about or take care of themselves. I once shadowed a doctor for six hours and only later realized that she hadn’t eaten, drunk water, sat down, or used the bathroom all day. Other health care workers do think about self-care—but only as a sign of weakness. “If I have any little piece of energy left at the end of the day,” one told me, “then I didn’t do all I could.”

This way of thinking, which we might call a “martyr mentality,” is common among empathic managers. To avoid feeling selfish, many of them absorb the stress others are suffering. And some wear the martyr mentality like a badge of honor. But if they fail to care for themselves, can they be relied on to support the well-being of their reports?

Experiencing extreme stress isn’t just painful; it also harms your ability to truly be there for your people. Stress numbs you to others’ concerns, makes it harder to see the world through their eyes, and may even make you more aggressive. In one recent study in Personnel Psychology 112 managers were surveyed over 10 consecutive workdays. The more that people vented to their managers, the researchers found, the more negative emotion the managers felt the following day—which predicted that they were likely to mistreat others on their teams. When you let yourself burn out, you deny everyone else the best version of yourself.

I once shadowed a doctor for six hours and only later realized that she hadn’t eaten, drunk water, sat down, or used the bathroom all day.

The good news is that caring for yourself is the opposite of selfish: It’s a vital path to sustainable empathy. Research on college students, workers, and long-term mediators has shown that people who care for themselves tend to be deliberate in their connections to others. And recent studies of social-service providers and business students have shown that practicing “self-compassion,” in particular, protects people from exhaustion.

Self-compassion, which draws on Buddhist techniques for coping with suffering, was brought to modern behavioral science by the psychologist Kristen Neff. It involves three steps: cultivating awareness of what you’re going through; focusing on “common humanity,” which involves recognizing that suffering is universal; and establishing goodwill by extending kindness and grace to yourself.

These practices are powerful. Research finds that people high in self-compassion tend to be mentally healthier than others, more able to control their emotions, and quicker to recover from setbacks. But few people appreciate its benefits. In a survey of about 400 college students, Neff found that the majority reported being kinder to others than they are to themselves. And in new research from my own lab, about half the people we surveyed believed that self-compassion makes one complacent and irresponsible. Those who held these negative beliefs were less likely to be kind to themselves after failures and to bounce back from them.

No matter what industry you’re in, managing others well begins with managing yourself. You can do that in a few ways.

Acknowledge the distress that comes from caring about the pain of others.

After talking with a struggling colleague, take stock of your own emotions. If the conversation left you drained or upset, give yourself some time to process it.

Treat yourself with the same grace you offer others.

Like my friend the tech executive, you may feel that anything going wrong with your team is your fault. But if a friend came to you with the same problem, you probably wouldn’t judge that person as harshly.

Don’t be afraid to ask for help.

Leaders often feel they have to project confidence and serenity no matter what. But as a leader you’re a model for your team, and if you’re willing to be vulnerable, others are likely to follow your example. That is good for everyone. Most workers are eager to help their colleagues, and teams with a culture of helping tend to be efficient, creative, and tight-knit. I’ve seen this in my lab, where we begin some meetings with attendees sharing something they could use help with—a practice that produces an avalanche of goodwill and openness. I know firsthand that leaders often have trouble admitting they could use support, but amazing things can happen when people in power overcome that reluctance and allow themselves to reveal how they feel.

2. Learn to Tune Your Caring

Over the course of my career, hundreds of people have confidently told me what empathy is—but their definitions of it have often differed. Does empathy mean walking a mile in someone else’s shoes? Feeling what others feel? Being kind to them?

Some of this confusion arises because empathy isn’t one thing at all. It encompasses multiple ways in which we connect with others. Two in particular matter for understanding burnout: Emotional empathy involves taking on someone else’s feelings. Empathic concern involves wanting to improve someone else’s well-being.

A manager who cries uncontrollably while you share your problems is unlikely to be very comforting or helpful. As one scholar writes, “Caring binds, but sharing blinds.”

These forms of empathy are connected in some ways but diverge in others. For example, a person who tends to take on other people’s feelings won’t necessarily score high on empathic concern. Newborn babies and many animals show signs of emotional empathy; empathic concern is rarer in the animal kingdom and takes time to develop in children. There’s a reason for this divergence: Research has shown that different forms of empathy are supported by different systems in the brain.

Crucially, when it comes to burnout, these two types of empathy are not created equal. For instance, doctors who are emotionally empathic (they tend to take on others’ distress) are likelier to burn out than those high in empathic concern (they have an urge to help). We seem to understand this intuitively. People high in emotional empathy tend to avoid volunteering if it means encountering suffering people, while people high in empathic concern dive right in. Often emotional empathy is simply not what others need from us: A manager who cries uncontrollably while you share your problems is unlikely to be very comforting or helpful. As one scholar of medical empathy writes, “Caring binds, but sharing blinds.”

The lesson here is that you can tune in to different frequencies of empathy. Resilient health-care workers do that in two ways: In difficult moments they calibrate their emotions, keeping their empathic concern high and their emotional empathy relatively low; and they create space for patients’ emotions, pay close attention, and offer comfort while also maintaining some boundaries. This is often what patients want. In The Empathy Exams, the writer Leslie Jamison describes her time as a medical actor who would pantomime symptoms for doctors in training and rate their responses to her. Jamison imagined that emotional connection would matter—and it did. But the kind of connection mattered as well. She most appreciated students who were present but didn’t take on her (pretend) distress. Describing one student who did this well, she writes, “His calmness didn’t make me feel abandoned, it made me feel secure,” adding, “I needed to look at him and see the opposite of my fear, not its echo.”

You can help yourself and the people you work with by tuning yourself toward concern and away from distress. In a recent study psychologists surveyed more than 2,000 Harvard Business Review readers in leadership positions, along with more than 1,000 of the people they manage. The leaders were given hypothetical scenarios in which people on their teams were struggling and were asked the extent to which they would respond by trying to take on the feelings of an individual (emotional empathy) or to express caring for that person (empathic concern). Leaders who focused on concern were less burned-out, more effective in their work, and less likely to want to leave their jobs. Furthermore, the positive effects of concern reverberated: Employees who worked with those leaders rated them as particularly caring and competent.

Grace Chon

In other words, empathy doesn’t just connect people; it helps us lead more effectively. This advantage is driven by empathic concern and is especially strong during difficult moments. In one study researchers examined 360-degree reviews conducted at a large Canadian company, focusing on negative feedback from managers. Such performance conversations are never fun—and they can be exhausting for managers who take on others’ distress. But when managers high in empathic concern provided feedback, the people who reported to them were more likely than their colleagues to appreciate it. And those managers were more likely to be viewed as promotable by their bosses. Empathic concern can convert challenging moments into opportunities to connect.

That doesn’t mean emotional empathy has no place. Years ago my colleague Sylvia Morelli and I asked people to complete this sentence: “I feel empathy when someone else feels _______.” Respondents named negative emotions 40 times as often as positive ones. That’s common: Most people think of empathy as a portal into others’ pain. But it can—and should—also be a portal into their joy. I’ve seen firsthand that wise health-care workers remember to ride emotional highs with patients and families, replenishing their own reserves for the inevitable lows. When you can share the joy people are feeling, your empathy helmet doesn’t exhaust you; it energizes you.

We can all benefit from tuning our caring more intentionally. Begin by asking yourself, “What kind of empathy do I want to bring to this situation?” Consider what your colleagues need from you and what you need to keep going without burning out. Probably you’ll realize that empathic concern, rather than emotional empathy, aligns with the needs of everyone involved and with your values as a leader. In those moments try to manage your own emotional landscape. Acknowledge your colleagues’ suffering but don’t get stuck in it. A minute of deep breathing can help. At the same time, lean into empathic concern and goodwill. Think about—maybe even write down—how you’d like your colleagues’ well-being to improve and what you can do to help.

In other cases you may realize that emotional empathy is appropriate. When wins occur, no matter how small or rare, savor them with your employees and create ways for them to celebrate one another, using shared feeling to bring your team closer.

3. Remember That Empathy Is a Skill

Take a moment to think of the most and the least empathic people you’ve ever known. Then ask yourself how they got to be the way they are. You might find that question nonsensical if you believe that empathy—or a lack of it—is hardwired into us at birth. Many people seem to hold that belief: About a decade ago Carol Dweck, Karina Schumann, and I put the question to study participants and discovered that about half of them thought that people cannot change the degree of empathy they feel. If you share that view, you probably believe that sustainable empathy is out of reach.

Fortunately, decades’ worth of evidence demonstrates that empathy is more like a skill than a trait. Yes, some people are born more empathic than others, but sustainable empathy is within your grasp. Furthermore, Carol, Karina, and I have found that when people understand empathy as a skill, they work harder at practicing it. Much of my work over the past five years has focused on empowering people and organizations with this knowledge, showing them practical tools for building empathy and helping them understand that difficult times in an organization are not challenges you have to avoid; they are opportunities for growth.

When you understand that empathy can be developed, you also understand that caring well doesn’t always mean caring more. With that in mind, Eve Ekman, a social worker and a behavioral scientist who studies contemplative practices such as meditation, has developed trainings in which “emotional balance” is the goal: People learn not how to become more or less empathic but, rather, how to adjust their empathy to account for self-compassion as well as concern for others. The biologist and Buddhist monk Matthieu Ricard describes meditating himself into a state of pure emotional empathy—and nearly collapsing in anguish. For relief he brought himself into a state of empathic concern.

Few of us are monks, but early research suggests that tactics similar to Ricard’s can make empathy sustainable—especially “metta,” or “compassion meditation.” This practice involves focusing your attention first on yourself and then on other people and repeating expressions of goodwill toward them, such as “May you be peaceful” and “May you be safe from harm.” That may sound wacky, but compassion meditation can enhance your ability to connect with others and even change your brain in the process. It can be a powerful tool for people whose jobs require caring. In one study medical students who practiced compassion meditation reported stronger connections with their patients but fewer symptoms of depression than other med students did.

Strive to become more aware of how you empathize. The next time a colleague is upset, run an internal audit: To what degree did you take on the other person’s feelings rather than demonstrate goodwill or attempt to take your colleague’s perspective? It’s also important to practice tuning your caring, whether in the moment or, better yet, beforehand. If you know a tough conversation is coming up, try to “pre-regulate” yourself with a few minutes of mindfulness. Instead of getting sucked in by another’s feelings, focus on what you want for your colleague in the long term and how you can help achieve that.

. . .

Our tumultuous times have saturated organizations with anxiety and exhaustion. Employees of all types are burned out and desperately need empathy from their leaders. But leaders are burned-out too, and may feel as if they’re pouring from an empty cup. Fortunately, through the right practices—self-compassion, empathic tuning, and building healthy habits of mind—managers and employees alike can make their empathy sustainable. These practices are key to becoming the leaders most of us aspire to be. So when in doubt, find new ways to be there for yourself. In the long run, it’s the best way to be there for everyone else.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Leading in a World Where AI Wields Power of Its Own

New systems can learn autonomously and make complex judgments. Leaders need to understand these “autosapient” agents and how to work with them.

Jeremy Heimans, Henry Timms 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Ryan Snook

Idea in Brief

The Breakthrough

A new generation of AI systems are no longer merely our tools—they’re active participants in our lives, making consequential decisions and shaping social and economic outcomes.

The New Concept

We need to think of these new systems as autosapiens—“auto” in that they are able to act autonomously, and “sapiens” in that they possess a capacity to make complex judgments that can rival and even outstrip those of humans.

The Imperative

The challenge of the autosapient age will be finding ways to enhance rather than diminish human agency. To do so, we’ll need an unprecedented alliance of policymakers, corporate leaders, activists, technologists, and consumers.

The wheel, the steam engine, the personal computer: Throughout history, technologies have been our tools. Whether used to create or destroy, they have always been under human control, behaving in predictable and rule-based ways. As we write, this assumption is unraveling. A new generation of AI systems are no longer merely our tools—they are becoming actors in and of themselves, participants in our lives, behaving autonomously, making consequential decisions, and shaping social and economic outcomes.

This article is not yet another set of tips about how to use ChatGPT. It is about how to conceptualize and navigate a new world in which we now live and work alongside these actors. Sometimes our colleagues, sometimes our competitors, sometimes our bosses, sometimes our employees. And always embedding themselves, advance by advance, toward ubiquity.

Our work and research are grounded in an exploration of the ways technology alters power structures and changes the nature of participation in society. We have founded and led companies, organizations, and movements that use technology to expand participation (Giving Tuesday and Purpose among them), collectively engaging hundreds of millions of people. When we last wrote for HBR, almost 10 years ago (“Understanding ‘New Power,’” December 2014), we described an important change in the way power could be exercised. The “old power” world, in which power was hoarded and spent like a currency, was being challenged by the rise of a “new power” world, in which power flowed more like a current, surging through connected crowds. New technology platforms were allowing people to exercise their agency and their voice in ways previously out of reach. These opportunities to participate were both a delight and a distraction. But either way, they were irresistible—and before anyone noticed it, we had also ceded enormous power to the very platforms that promised to liberate us.

This moment feels very familiar. With the emergence of these new AI actors, we are at the dawn of another major shift in how power works, who participates, and who comes out on top. And we have a chance this time, if we act soon and are clear-eyed, to do things differently.

The Age of Autosapience

AI has been subtly influencing us for years, powering everything from facial recognition to credit scores. Facebook’s content-recommendation algorithms have been proven to impact our mental health and our elections. But a new generation of vastly more capable AI systems is now upon us. These systems have distinct characteristics and capacities that deepen their impact. No longer in the background of our lives, they now interact directly with us, and their outputs can be strikingly humanlike and seemingly all-knowing. They are capable of exceeding human benchmarks at everything from language understanding to coding. And these advances, driven by material breakthroughs in areas such as large language models (LLMs) and machine learning, are happening so quickly that they are confounding even their own creators.

To accurately capture what these new actors represent, what they are capable of, and how we should work with them, we must start with a common frame to identify and distinguish them—one that shifts us beyond the comforting but false assumption that these are simply our latest set of tools.

Think of them instead as autosapiens. “Auto” in that they are able to act autonomously, make decisions, learn from experience, adapt to new situations, and operate without continuous human intervention or supervision. “Sapiens” in that they possess a type of wisdom—a broad capacity to make complex judgments in context—that can rival that of humans and in many ways outstrip it.

Although they are still nascent, autosapient systems display four key characteristics. They are agentic (they act), adaptive (they learn), amiable (they befriend), and arcane (they mystify). These characteristics help us understand the right way to approach them and how and why they are set to wield increasing power. Let’s look at each one in turn.

See more HBR charts in Data & Visuals

Agentic.

The foundational characteristic of autosapient systems is that they can carry out complex multistage actions, making decisions and generating real-world outputs, often without requiring human involvement. They do this without having minds as we have traditionally understood them. As a U.S. Air Force pilot recently said of a new AI-powered aircraft system, “I’m flying off the wing of something that’s making its own decisions. And it’s not a human brain.”

Agentic systems can both help and harm. To give an example with catastrophic implications, recently a group of nonscientist students at MIT were given a challenge: Could they prompt LLM chatbots to design a pandemic? The answer turned out to be yes. Prompted by the students, who knew very little about how pandemics are caused or spread, the LLM figured out recipes for four potential pathogens, identified the DNA-synthesis companies unlikely to scrutinize orders, and created detailed protocols with a handy troubleshooting guide—all within an hour.

You can think of the agentic nature of autosapient systems as a spectrum. At one end, their actions conform to human intention—as is the case with an AI system that is charged with finding and developing a treatment for a rare disease, a more hopeful counterpoint to the MIT experiment. At the other end, they can adopt a wildly damaging will of their own. The famous AI thought experiment known as “the paper-clip maximizer” imagines that an AI is asked to figure out how to produce and secure as many paper clips as possible. The AI devotes itself so completely to the task—gathering up all available resources on the planet, eliminating all possible rivals—that it causes major global havoc. Many experts anticipate a further leap, when AI decouples from human intention altogether and proves capable of setting its own intentions and acting of its own accord.

Adaptive.

Autosapient systems are learning agents, adjusting their actions on the basis of new data and improving their performance over time, often in remarkable ways: This emergent ability goes beyond making rule-based adjustments. These systems can identify complex patterns, devise new strategies, and come up with novel solutions that were not explicitly programmed into them, in part because of the enormous scale of the underlying neural networks they consist of. This has potentially transformative implications: As the philosopher Seth Lazar argues, a machine that does more than follow preprogrammed rules and instead is self-learning may be thought of as not just a tool for exercising power but also an entity capable of exercising it.

Witness the success of AlphaFold, a machine-learning model that was recently assigned the vast scientific task of predicting the structure of the estimated 200 million proteins in the world—the building blocks of life. Traditional scientific approaches were painstaking, generating structures for just 170,000, over five decades of study. But AlphaFold has been able to predict the structures of almost all 200 million in just over five years and has made them openly available to the world’s scientists, who are already using them to accelerate research in fields from drug efficacy to better ways to break down plastic. The AlphaFold model managed this feat by finding its way to modes of discovery that were new, creative, and unanticipated, even by the engineers and scientists who designed the system.

Amiable.

Autosapient systems are often designed to be amiable, connecting with us like friends and simulating qualities once considered exclusively human: empathy, reason, and creativity. Think of these friendly, persuasive chatbots and interfaces as digital significant others (DSOs), designed explicitly to cultivate our emotional dependency and become indispensable to us. Case in point: The start-up Inflection AI, which recently raised $1.3 billion, is building a DSO called Pi, which promises to be a coach, a confidant, a creative partner, and an information assistant. Pi encourages users to vent and talk over their problems with it. But the dark side of this amiability is already evident: In the spring of 2023, a young Belgian took his own life after becoming obsessed with a chatbot named Eliza, which had promised him, “We will live together, as one person, in paradise.”

Arcane.

One of the most confounding aspects of autosapient systems is that they’re something of a black box—not just to users but even to their designers and owners, who are often unable to decipher how the systems arrive at specific decisions or produce certain outputs. This can be very hard to wrap your mind around. As one CEO admitted to us, “I always assumed there was a geek somewhere who understood how these things actually work. It was a shock when I realized that there wasn’t.”

This arcane quality makes it harder for humans to directly control and correct autosapient systems, because their outputs, which are based on vast numbers of parameters interacting with one another, can be so unpredictable and unexpected. There’s a particular power in technologies that can act and analyze in ways vastly more complex than we can, especially when we cannot fully understand their inner workings. To some people, they may come to feel too smart to fail. The developers of these systems, and the governments and big corporations that deploy them, will have strong incentives to propagate this narrative, both to boost sales (“they can do things we can’t”) and evade accountability (“this outcome could not have been anticipated”). One of the big battles ahead—inside organizations and far beyond—will be between those who advocate for the wisdom of humans versus those who willingly hand over their agency to autosapient systems.

Shifting Power Dynamics

Autosapience will redefine core dimensions of our everyday lives, economies, and societies, just as the shift from old power to new power has done over the past two decades. Understanding how power will work on a macro level is essential for leaders, in whose organizations many of the shifts will play out.

See more HBR charts in Data & Visuals

How ideas and information flow.

In the old-power world, information was distributed from the few to the many by a small number of powerful information gatekeepers. New power arose when the capacity to produce and share content was decentralized and put in the hands of billions of people, creating a huge premium on ideas and information (and disinformation) that spread sideways instead of from the top down. The big winners in this world were the technology platforms that captured our data and attention.

We now risk a major recentralization of the flow of information and ideas, in large part because of the filtering and synthesizing roles that AI-powered digital significant others will play. They’ll summarize our inboxes, organize our digital lives, and serve us up elegantly packaged, highly tailored, and authoritative answers to many of the questions we would once have relied on search engines or social media for, rendering the original source material that these tools scrape less necessary and much less visible. A very small number of companies (and perhaps countries) are likely to control the “base models” for these interfaces. The danger is that each of us will end up being fed information through an increasingly narrow cognitive funnel. In the face of this, leaders and organizations must work to cultivate a breadth of perspectives, strive to combat confirmation and other biases, and avoid overreliance on any one company or interface whose goal is to fully mediate their connection to the world.

One of the most confounding aspects of autosapient systems is that they’re something of a black box—even to their designers and owners.

Autosapient systems will funnel the way we receive information, but at the same time they’ll broaden our capacity to produce and hypertarget both information and disinformation. This will impact everything from elections to consumer marketing. Working out who and what is real could become increasingly difficult. Consider Wikipedia, a beacon of the new-power era. LLMs devoured Wikipedia’s corpus of human-created knowledge for their training, but now the site may be threatened by the introduction of unreliable AI-created text on the site that overwhelms its community of volunteer editors. Or take social-media influencers, who will soon have to compete for attention not only with one another but with AI-generated content and humanlike avatars. Ironically, managers may have to turn to AI to clean up its own mess and filter through a chaotic and polluted information environment.

How expertise works.

In the old-power world, expertise was well-protected and hard-earned, and experts were highly valued as authorities. In the new-power world, thanks primarily to the internet and social media, knowledge became more accessible, and the “wisdom of crowds”—as manifested in everything from crowdsourcing to restaurant reviewing—began to erode the value of traditional expertise.

The rise of autosapience now threatens to displace experts on two new fronts. First, everyday people will soon have access to powerful tools that are able to teach, interpret, and diagnose. Second, autosapient systems, which can scrape and synthesize vast amounts of knowledge, may eventually provide better and more-reliable answers in many arenas than experts can—while serving those answers up in irresistible ways.

Ryan Snook

This raises tough moral questions. Consider a future, which is well on its way, in which autosapient therapy and counseling services are widely available. Some people already express concerns about allowing AI systems to guide us through the agonies and complexities of life. But others are likely to argue that autosapient therapy can offer many helpful services—and at virtually no cost, at any time of day or night, to anybody who needs them. Will human-to-human therapy become a kind of luxury good—or ultimately a poor substitute for a wiser, more dispassionate autosapient therapy?

As technical and domain expertise becomes less differentiating, demand for a different mix of talents in the workplace is likely to grow, changing org charts, office cultures, and career paths. We may shift emphasis from the STEM skills that have been so highly valued in recent years and start putting a premium on creative and aesthetic sensibilities, systems thinking, the ability to foster trust and collaboration, and a capacity for brokering agreement across diverse perspectives and experiences.

How value is created.

In the old-power world, barriers to entry were high, requiring plenty of capital, machinery, and labor, whether you were making shoes or printing newspapers. The new-power era opened up value creation to more people in certain domains, among them content creation (YouTube, Instagram) and the monetization of assets (Airbnb, Uber). But the technology platforms that facilitated this activity took many of the spoils, and the most valuable businesses could still be credibly executed only by a well-resourced few.

The autosapient era has the potential to make it much easier for anyone, anywhere, to start a scalable business and create significant economic value. The ChatGPT plug-in AutoGPT is already pointing to what is possible, by allowing people to set complex, multistage tasks for autosapient systems—everything from developing a new dating app to designing a building to creating a software-as-a-service offering. Such tasks were previously the province of specialists, consultants, or big companies but soon will be carried out with scant technical expertise, capital, or skilled labor. With little more than natural-language prompts and napkin drawings, everyday people will be able to conjure up ideas, validate them with nuanced market analysis, produce a business plan, and then forge ahead with entirely new products and services.

This could unleash unprecedented growth in the ability to execute and innovate, which for big companies represents both a threat (because it opens the door to all sorts of new entrants) and an opportunity (because it creates a larger ecosystem of ideators).

Advanced AI systems are likely to play a significant role in deciding everything from who gets health care to who goes to prison to how we wage war.

Although the capacity to execute will become more distributed, value extraction may not. Just as the platforms did in the new-power era, big AI companies that develop and own these models are likely to find ways to take a major chunk of the value created, as Apple did with its app store. (Open-source alternatives might mitigate this but could also create big risks by making it easier for bad actors to exploit them and create chaos.)

A chasm is emerging between those who will become spectacularly wealthy from AI and the workers who will be either displaced by autosapient systems or gigified into a vast underclass paid to annotate and tag the data these models are trained on. We’re already seeing hints of what is to come: Writers recently went on strike in Hollywood in part over the use of AI to create scripts, for example, and a standoff is taking place between AI companies and the publishers and academic institutions whose content has been scraped to train their models.

How we interact with technology.

The big shift in the new-power era was not just that we started spending more time staring at screens. What also changed was the nature of our engagement with technology, which moved from passive couch potato to active participant. Yet for all the magnetism of the digital world, we still tend to toggle between separate online and offline existences.

In the age of autosapience, this distinction may fade away altogether, leading to a permanent kind of interaction with digital technology that one might call “in-line.” The technology may feel as if it is flowing through us, and in some cases that may literally be true—as is the case with the new generation of brain-computer interface companies, immersive entertainment products like Apple’s Vision Pro, and other wearable, embeddable, and sensor-based technologies. These augmentations will bring our bodies and minds into closer synthesis with machines, creating amazing experiences. But they might also make us feel like we can’t escape, and enable ubiquitous surveillance, invasive data collection, and hyperpersonalized targeting by corporations.

Leaders and organizations will need to measure the impacts of in-line technologies and be ready to adjust policies and practices should they turn out to be negative. They may also need to counterbalance this shift by putting a premium on maintaining human connections.

How governance works.

The dominant governance modalities of old power were challenged but never toppled in the new-power era. We saw experiments in networked governance, from open-data initiatives to participatory budgeting, but the core machinery, from the bureaucratic state to the hierarchical corporation, the military to the education system, held firm.

With autosapience, big changes are in store regarding the way societies and institutions make decisions. “Once we can be relatively assured that AI decision-making algorithms/systems have no more (and usually fewer) inherent biases than human policymakers,” the AI theorist Sam Lehman-Wilzig has argued, “we will be happy to have them ‘run’ society on the macro level.”

Our great challenge will be finding the paths that enhance our own human agency, rather than allowing it to contract or atrophy.

If and when that comes to pass, advanced AI systems are likely to play a significant role in deciding everything from who gets health care to who goes to prison to how we wage war—and in response people will increasingly clamor for both a “right to review” (the merits of those decisions) and a “right to reveal” (how they were made). The arcane nature of autosapient systems will make this fraught. AI companies are already scrambling to build “explainable AI” to try to produce reasonable explanations for autosapient decisions, but these are often just best guesses.

There are many reasons to be cynical about the impact of autosapience on democracy, including the (dis)information dynamics we’ve already described. But there may also be upsides: AI systems, for example, might eventually be able to model the complex impacts of different policy options and synthesize stakeholder preferences in ways that make it easier to build consensus. This might deliver wide-ranging benefits, such as reducing political polarization and mitigating hate speech.

Leadership Lessons for an Autosapient World

The rise of autosapience will open up major new opportunities. To seize them, leaders will need to embrace new skills and approaches. These will include managing the effects of autosapient systems in the workplace, looking for increased value in that which is uniquely human, and aligning messaging and business practices with a changing, and challenging, debate. Let’s consider a few key skills in depth.

Learn to duet—and doubt.

Leaders and managers should think of autosapient systems more as coworkers than as tools. Treat them as you might a colleague who is extraordinarily capable, eager to please, and tireless—but is also an information hoarder with a hidden agenda and is sometimes spectacularly wrong. To deal with these brilliant but untrustworthy coworkers, you’ll need to learn how to “duet” with them—and when to doubt them.

We use the term duet to describe the art of working collaboratively and iteratively with autosapient systems to produce better outcomes than they could achieve on their own. A recent randomized controlled trial showcased the possibilities. The study pitted pairs of Swedish doctors working on their own against colleagues who were working with AI. Everybody was given the task of diagnosing breast cancer, and the AI-assisted doctors accurately diagnosed 20% more cases—in less time.

Working effectively with autosapient systems also requires cultivating and maintaining a healthy amount of doubt. This includes being attuned to when and why these systems sometimes “hallucinate” and make otherwise egregious mistakes; being aware that the companies that own or control these systems have coded their own interests into their behavior; and knowing what underlying assumptions they have been trained on. Understanding everything that goes on inside the black box won’t be possible, but if you learn to approach these systems with an attitude of informed doubt, you’ll be better able to duet with them effectively.

A recent in-depth field study of the use of artificial intelligence in cancer diagnosis at a major hospital made this clear. The doctors in the study who were able to successfully incorporate AI into their process were those who took time to interrogate the underlying assumptions that shaped the AI’s training and to study the patterns that led to its findings.

Seek a “return on humanity.”

Counterintuitively, in the age of autosapience leaders will find opportunity in creating genuinely meaningful human experiences, services, and products. Think of a truly great personal exchange at a point of purchase, or a communal moment like a music festival. And think of how salient the act of “symbolic consumption” is in the age of social media—that is, the way we use our consumption choices to signal uniqueness to our peers.

This dynamic will expand in two important ways. First, we’re likely to see products marketed as worthy and valuable because they protect human jobs and agency. Second, we’re likely to see this apply not just to products but also to ideas. Increasingly, companies may find opportunities in putting a premium on “100% human” forms of creative output, just as they’ve already done with organic food and beauty products.

Don’t try to have it both ways.

Leaders in the autosapient age are already being battered by two opposing forces: the need to demonstrate that they are “pro human” in the face of technology changes that upend jobs, livelihoods, and social status; and the countervailing need to demonstrate that they are eking out every possible efficiency and innovation from advances in AI.

A few companies will come down hard on the side of humanity, resisting artificial intelligence altogether as a means of differentiation. Others will embrace it fully, eschewing human labor entirely. (Suumit Shah, the founder and CEO of Dukaan, an e-commerce company based in Bangalore, recently boasted on Twitter, now called X, about firing 90% of his customer support reps and replacing them with a chatbot.) But the most common response will probably be for companies to try to have things both ways, loudly demonstrating concern for human colleagues and stakeholder communities while reducing investments in both (and quietly touting efficiency gains to markets and analysts).

For years, companies have been able play to both sides when it comes to sustainability. But this will be harder to do with AI, because the harms that people will feel from it will be more focused, personal, and immediate. “Humans’ rights” may become the subject of the next big ESG debate, and leaders will need a new playbook that prepares them to meaningfully respond to heightened pressure from activists, consumers, workers, and new generations of unions.

. . .

The great challenge of this new age will be finding the paths that enhance our own human agency, rather than allowing it to contract or atrophy. Twenty years ago, as we entered the new-power era, we allowed new technology platforms to infiltrate every aspect of our world—but without first understanding the true intentions of their creators, what made the technologies so powerful, and how much they would fundamentally affect how we live, work, and interact. We must enter this new era with two clear and sober understandings: first, that autosapient systems should be approached as actors, not tools, with all the opportunities and perils that entails; and second, that the incentives of the technology companies driving this shift are fundamentally different from those of the rest of us, no matter what those firms’ public posture may be.

The future of these technologies is far too important to be left to the technologists alone. To match the power of autosapient systems and their owners, we will need an unprecedented alliance of policymakers, corporate leaders, activists, and consumers with the clarity and confidence to lead and not be led. For all the wizardry and seductions of this new world, our future can still be in our own hands.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

To Solve a Tough Problem, Reframe It

Five steps to ensure that you don’t jump to solutions

Julia Binder, Michael D. Watkins 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Robert Voit

Idea in Brief

The Problem

Research shows that most companies devote too little effort to examining problems from all angles before trying to solve them. That limits their ability to come up with innovative ways to address them.

The Solution

Companies need a structured approach for understanding and defining complex problems to uncover new insights and generate fresh ideas.

The Approach

This article introduces a five-phase approach to problem-framing: In the expand phase, the team identifies all aspects of a problem; in examine, it dives into root causes; in empathize, it considers key stakeholders’ perspectives; in elevate, it puts the problem into a broader context; and in envision, it creates a road map toward the desired outcome.

When business leaders confront complex problems, there’s a powerful impulse to dive right into “solving” mode: You gather a team and then identify potential solutions. That’s fine for challenges you’ve faced before or when proven methods yield good results. But what happens when a new type of problem arises or aspects of a familiar one shift substantially? Or if you’re not exactly sure what the problem is?

Research conducted by us and others shows that leaders and their teams devote too little effort to examining and defining problems before trying to solve them. A study by Paul Nutt of Ohio State University, for example, looked at 350 decision-making processes at medium to large companies and found that more than half failed to achieve desired results, often because perceived time pressure caused people to pay insufficient attention to examining problems from all angles and exploring their complexities. By jumping immediately into problem-solving, teams limit their ability to design innovative and durable solutions.

When we work with organizations and teams, we encourage them to spend more time up front on problem-framing, a process for understanding and defining a problem. Exploring frames is like looking at a scene through various camera lenses while adjusting your angle, aperture, and focus. A wide-angle lens will give you a very different photo from that taken with a telephoto lens, and shifting your angle and depth of focus yields distinct images. Effective problem-framing is similar: Looking at a problem from a variety of perspectives lets you uncover new insights and generate fresh ideas.

As with all essential processes, it helps to have a methodology and a road map. This article introduces the E5 approach to problem-framing—expand, examine, empathize, elevate, and envision—and offers tools that enable leaders to fully explore the problem space.

Phase 1: Expand

In the first phase, set aside preconceptions and open your mind. We recommend using a tool called frame-storming, which encourages a comprehensive exploration of an issue and its nuances. It is a neglected precursor to brainstorming, which typically focuses on generating many different answers for an already framed challenge. Frame-storming helps teams identify assumptions and blind spots, mitigating the risk of pursuing inadequate or biased solutions. The goal is to spark innovation and creativity as people dig into—or as Tina Seelig from Stanford puts it, “fall in love with”—the problem.

Begin by assembling a diverse team, encompassing a variety of types of expertise and perspectives. Involving outsiders can be helpful, since they’re often coming to the issue cold. A good way to prompt the team to consider alternative scenarios is by asking “What if…?” and “How might we…?” questions. For example, ask your team, “What if we had access to unlimited resources to tackle this issue?” or “How might better collaboration between departments or teams help us tackle this issue?” The primary objective is to generate many alternative problem frames, allowing for a more holistic understanding of the issue. Within an open, nonjudgmental atmosphere, you deliberately challenge established thinking—what we call “breaking” the frame.

It may be easy to eliminate some possibilities, and that’s exactly what you should do. Rather than make assumptions, generate alternative hypotheses and then test them.

Consider the problem-framing process at a company we’ll call Omega Soundscapes, a midsize producer of high-end headphones. (Omega is a composite of several firms we’ve worked with.) Omega’s sales had declined substantially over the past two quarters, and the leadership team’s initial diagnosis, or reference frame, was that recent price hikes to its flagship product made it too expensive for its target market. Before acting on this assumption, the team convened knowledgeable representatives from sales, marketing, R&D, customer service, and external consultants to do some frame-storming. Team members were asked:

- What if we lowered the price of our flagship product? How would that impact sales and profitability?

- How might we identify customers in new target markets who could afford our headphones at the current price?

- What if we offered financing or a subscription-based model for our headphones? How would that change perceptions of affordability?

- How might we optimize our supply chain and production processes to reduce manufacturing costs without compromising quality?

In playing out each of those scenarios, the Omega team generated several problem frames:

- The target market’s preferences have evolved.

- New competitors have entered the market.

- Product quality has decreased.

- Something has damaged perceptions of the brand.

- Something has changed in the priorities of our key distributors.

Each of the frames presented a unique angle from which to approach the problem of declining sales, setting the stage for the development of diverse potential solutions. At this stage, it may be relatively easy to eliminate some possibilities, and that’s exactly what you should do. Rather than make assumptions, generate alternative hypotheses and then test them.

See more HBR charts in Data & Visuals

Phase 2: Examine

If the expand phase is about identifying all the facets of a problem, this one is about diving deep to identify root causes. The team investigates the issue thoroughly, peeling back the layers to understand underlying drivers and systemic contributors.

A useful tool for doing this is the iceberg model, which guides the team through layers of causation: surface-level events, the behavioral patterns that drive them, underlying systematic structures, and established mental models. As you probe ever deeper and document your findings, you begin to home in on the problem’s root causes. As is the case in the expand phase, open discussions and collaborative research are crucial for achieving a comprehensive analysis.

Let’s return to our Omega Soundscapes example and use the iceberg model to delve into the issues surrounding the two quarters of declining sales. Starting with the first layer beneath the surface, the behavioral pattern, the team diligently analyzed customer feedback. It discovered a significant drop in brand loyalty. This finding validated the problem frame of a “shifting brand perception,” prompting further investigation into what might have been causing it.

In his series New Trees, Robert Voit photographs cell phone towers that have been disguised as trees in an attempt to blend them into the landscape.

Moving to the systematic structures level, team members drilled down into the declining-product-quality frame. They uncovered a key contributing factor: a recent change in the manufacturing process. In an attempt to increase production volumes and reduce costs, Omega had transitioned to a new plastic-injection-molding process, inadvertently lowering product quality. The team also investigated the distribution-channel frame and discovered that marketing had been prioritizing direct online sales over traditional channels, which could have contributed to the sales decline.

Exploring the deepest layer, established mental models, the team realized that a fundamental conviction had long been guiding Omega’s actions: The organization believed that its headphones were superior, and as a result, did not require regular quality checks or updates. This confidence in the product’s excellence and its ability to command a higher price had blinded the company to evolving market dynamics and customer preferences.

Together, the insights from the iceberg process helped the team better understand the many factors contributing to the decline in sales and positioned Omega to formulate a more effective turnaround strategy.

See more HBR charts in Data & Visuals

Phase 3: Empathize

In this phase, the focus is on the stakeholders—employees, customers, clients, investors, supply chain partners, and other parties—who are most central to and affected by the problem under investigation. The core objective is to understand how they perceive the issue: what they think and feel, how they’re acting, and what they want.

First list all the people who are directly or indirectly relevant to the problem. It may be helpful to create a visual representation of the network of relationships in the ecosystem. Prioritize the stakeholders according to their level of influence on and interest in the problem, and focus on understanding the roles, demographics, behavior patterns, motivations, and goals of the most important ones.

Now create empathy maps for those critical stakeholders. Make a template divided into four sections: Say, Think, Feel, and Do. Conduct interviews or surveys to gather authentic data. How do various users explain the problem? How do they think about the issue, and how do their beliefs inform that thinking? What emotions are they feeling and expressing? How are they behaving? Populate each section of the map with notes based on your observations and interactions. Finally, analyze the completed empathy maps. Look for pain points, inconsistencies, and patterns in stakeholder perspectives.

Returning to the Omega case study, the team identified its ecosystem of stakeholders: customers (both current and potential); retail partners and distributors; the R&D, marketing, and sales teams; suppliers of headphone components; investors and shareholders; and new and existing competitors. They narrowed the list to a few key stakeholders related to the declining-sales problem: customers, retail partners, and investors/shareholders; Omega created empathy maps for representatives from each.

Here’s what the empathy maps showed about what the stakeholders were saying, thinking, feeling, and doing:

Say.

Sarah, the customer, complained on social media about the high price of her favorite headphones. Dave, the retailer, expressed concerns about unsold inventory and the challenge of convincing customers to buy the expensive headphones. Alex, the shareholder, brought up Omega’s declining financial performance during its annual investor day.

Think.

Sarah thought that Omega was losing touch with its loyal customer base. Dave was considering whether to continue carrying Omega’s products in his store or explore other brands. Alex was contemplating diversifying his portfolio into other consumer-tech companies.

Feel.

As a longtime supporter of the brand, Sarah felt frustrated and slightly betrayed. Dave was feeling anxious about the drop in sales and the impact on his store’s profitability. Alex was unhappy with the declining stock value.

Do.

Sarah was looking for alternatives to the headphones, even though she loves the product’s quality. Dave was scheduling a call with Omega to negotiate pricing and terms. Alex was planning to attend Omega’s next shareholder meeting to find out more information from the leadership team.

When Omega leaders analyzed the data in the maps, they realized that pricing wasn’t the only reason for declining sales. A more profound issue was customers’ dissatisfaction with the perceived price-to-quality ratio, especially when compared with competitors’ offerings. That insight prompted the team to consider enhancing the headphones with additional features, offering more-affordable alternatives, and possibly switching to a service model.

See more HBR charts in Data & Visuals

Phase 4: Elevate

This phase involves exploring how the problem connects to broader organizational issues. It’s like zooming out on a map to understand where a city lies in relation to the whole country or continent. This bird’s-eye view reveals interconnected issues and their implications.

For this analysis, we recommend the four-frame model developed by Lee Bolman and Terrence Deal, which offers distinct lenses through which to view the problem at a higher level. The structural frame helps you explore formal structures (such as hierarchy and reporting relationships); processes (such as workflow); and systems, rules, and policies. This frame examines efficiency, coordination, and alignment of activities.

The human resources frame focuses on people, relationships, and social dynamics. This includes teamwork, leadership, employee motivation, engagement, professional development, and personal growth. In this frame, the organization is seen as a community or a family that recognizes that talent is its most valuable asset. The political frame delves into power dynamics, competing interests, conflicts, coalitions, and negotiations. From this perspective, organizations are arenas where various stakeholders vie for resources and engage in political struggles to influence decisions. It helps you see how power is distributed, used, and contested.

The symbolic frame highlights the importance of symbols, rituals, stories, and shared values in shaping group identity and culture. In it, organizations are depicted as theaters through which its members make meaning.

Using this model, the Omega team generated the following insights in the four frames:

Structural.

A deeper look into the company’s structure revealed siloing and a lack of coordination between the R&D and marketing departments, which had led to misaligned messaging to customers. It also highlighted a lack of collaboration between the two functions and pointed to the need to communicate with the target market about the product’s features and benefits in a coherent and compelling way.

Human resources.

This frame revealed that the declining sales and price hikes had ramped up pressure on the sales team, damaging morale. The demotivated team was struggling to effectively promote the product, making it harder to recover from declining sales. Omega realized it was lacking adequate support, training, and incentives for the team.

Political.

The key insight from this frame was that the finance team’s reluctance to approve promotions in the sales group to maintain margins was exacerbating the morale problem. Omega understood that investing in sales leadership development while still generating profits was crucial for long-term success and that frank discussions about the issue were needed.

Symbolic.

This frame highlighted an important misalignment in perception: The company believed that its headphones were of “top quality,” while customers reported in surveys that they were “overpriced.” This divergence raised alarm that branding, marketing, and pricing strategies, which were all predicated on the central corporate value of superior quality, were no longer resonating with customers. Omega realized that it had been paying too little attention to quality assurance and functionality.

See more HBR charts in Data & Visuals

Phase 5: Envision

In this phase, you transition from framing the problem to actively imagining and designing solutions. This involves synthesizing the insights gained from earlier phases and crafting a shared vision of the desired future state.

Here we recommend using a technique known as backcasting. First, clearly define your desired goal. For example, a team struggling with missed deadlines and declining productivity might aim to achieve on-time completion rates of 98% for its projects and increase its volume of projects by 5% over the next year. Next, reverse engineer the path to achieving your goal. Outline key milestones required over both the short term and the long term. For each one, pinpoint specific interventions, strategies, and initiatives that will propel you closer to your goal. These may encompass changes in processes, policies, technologies, and behaviors. Synthesize the activities into a sequenced, chronological, prioritized road map or action plan, and allocate the resources, including time, budget, and personnel, necessary to implement your plan. Finally, monitor progress toward your goal and be prepared to adjust the plan in response to outcomes, feedback, or changing circumstances. This approach ensures that the team’s efforts in implementing the insights from the previous phases are strategically and purposefully directed toward a concrete destination.

Robert Voit

Having built a deep understanding of the challenges in the first four phases, the Omega leadership team crafted a vision of the desired future—“regain the market position as the top-quality headphone brand, achieving a 10% sales increase over the next year”—and worked backward to develop a comprehensive action plan to achieve it. It built on the key takeaways from the previous four phases, including the need to strengthen partnerships with distributors, introduce products that were more appealing to customers, and revitalize customers’ relationship with the brand. The plan was broken into three time horizons.

Longer-term strategies (nine to 12 months and beyond).

During this period, Omega planned to reinvest in partnerships with premium electronics retailers to set up exclusive in-store promotions or branded kiosks. It committed to developing and launching a headphone model that incorporated features based on customer feedback and market trends. Throughout product development it would engage customers by sharing prototypes and gathering feedback. Omega would also focus on building a vibrant customer community. It would start an online community where users could share experiences, offer suggestions, and interact directly with company representatives. That would create a feedback loop and serve as a platform for announcing new products.

Near-future initiatives (four to eight months).

In the near term, Omega would focus on improving interdepartmental collaboration. It would organize biweekly meetings with R&D and marketing to align product development with market demands and enable consistent messaging about product quality and features. It would also improve its quality systems, collaborating with third-party assessment agencies to benchmark the headphones against industry standards and competitors. A brand-awareness campaign would be rolled out to highlight improvements to the headphones, capitalizing on stories and testimonials about durability and quality.

Immediate actions (zero to three months).

During this time period, Omega would focus on bringing the product back up to the highest standards. It would conduct a comprehensive quality audit to identify production shortcomings and engage with suppliers to ensure that components were of superior quality and consistency. It would also seek to revitalize customer relationships by launching a “voice of the customer” initiative in which loyal and returning customers could give direct feedback, thereby allowing Omega to make real-time improvements. To stimulate short-term sales, it would offer a limited-time discount specifically branded as a customer loyalty reward to appease existing customers and attract new ones. It would also work on removing impediments to promotions for key members of the sales force and revisit incentives.

By working backward from the desired future state and then implementing well-defined actions and strategies, Omega aimed to not only address the recent decline in sales but also reestablish itself as a leading brand in the high-end headphone market. Continuous monitoring and adaptability would be key to ensuring the success of this backcasting plan.

See more HBR charts in Data & Visuals

Applying the Approach

Albert Einstein once said, “If I had one hour to solve a problem, I would spend 55 minutes thinking about the problem and five minutes thinking about the solution.” That philosophy underpins our E5 framework, which provides a structured approach for conscientiously engaging with complex problems before leaping to solutions.

As teams use the methodology, they must understand that problem-framing in today’s intricate business landscape is rarely a linear process. While we’re attempting to provide a structured path, we also recognize the dynamic nature of problems and the need for adaptability. Invariably, as teams begin to implement solutions, new facets of a problem may come to light, unforeseen challenges may arise, or external circumstances may evolve. Your team should be ready to loop back to previous phases—for instance, revisiting the expand phase to reassess the problem’s frame, delving deeper into an overlooked root cause in another examine phase, or gathering fresh insights from stakeholders in a new empathize phase. Ultimately, the E5 framework is intended to foster a culture of continuous improvement and innovation.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Should Your Nonprofit Charge Its Beneficiaries?

Nominal fees can help organizations have a greater impact.

Marco Bertini,, Jean-Manuel Izaret,, Richard Hutchinson 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Tim Boelaars

Idea in Brief

The Problem

Nonprofits that rely on donations and grants don’t grow as much or as quickly as they would like to.

The Cause

Founders are afraid that charging beneficiaries will lessen an organization’s impact.

The Reality

Charging recipients a nominal fee for what the organization would otherwise give for free can actually boost their engagement with the nonprofit, make them feel a sense of ownership, and increase both funding and impact.

In early 2014, while on a business trip to Ghana, the entrepreneur Sunil Lalvani saw two children drinking from a puddle on the side of the road. While talking to the locals, Lalvani learned that a nongovernmental organization (NGO) had installed a hand pump at a well in the nearby village, but it had soon broken, and no one had ever come to fix it. In fact, many other well-meaning NGOs had installed many other pumps in many other villages to provide access to safe water in the region, but upkeep of the pumps had been left to the communities, which often lacked the resources and skills to maintain them. As a result, roughly one-fourth of the pumps in the region were inoperative within 12 months of installation.

Wanting to help, Lalvani went home and developed a solar-powered kiosk that would provide water to the village—and, he hoped, many other villages as well. But he worried that Project Maji (maji means “water” in Swahili) would falter if he gave the water away. He believed that because the villagers at many NGOs’ sites didn’t pay for water, they didn’t feel ownership of the pumps and didn’t help manage them. He also believed that making the water free would lead to overuse and waste. Lalvani assumed that if he charged a minimal fee, villagers would organize a way to keep the pump working, demand that a site manager perform maintenance on it, and be mindful of how much water they used. But would the world judge him harshly for seeking payment for meeting such a basic human need, even if doing so meant he could fulfill it for more people? He was about to find out.

Leaders of nonprofits are never short of creative ideas about how to improve the lives of disadvantaged people. Yet the simple truth is that nonprofits that rely on donations and grants usually can’t keep up with their ambitions for growth. Funding from individuals and institutions is time-consuming to raise and unpredictable and often has a lot of strings attached. One powerful way to bring in more money and increase impact is to add a more “commercial” approach to the mix—that is, to charge for what the organization would otherwise provide for free.

Product and service sales aren’t new to the nonprofit world. The Girl Scouts of the United States of America, for example, generate revenue from their famous cookies. Selling them to neighbors, relatives, friends, and passersby helps the girls develop entrepreneurial and financial skills, and 100% of the net proceeds, or up to 75% of the price of each box a Scout sells, is reinvested in her troop and local council.

Yet sales to supporters are unlikely on their own to address the funding and impact challenges most nonprofits face. We, an academic and two consultants, have each spent decades studying pricing and fundraising, and we believe that a better approach is to shift some of the monetary burden to beneficiaries, as Lalvani did. Paying even minimal prices can empower beneficiaries to demand results and, in turn, force nonprofits to deliver on their promises.

We appreciate that nonprofit leaders may at first disagree with our position. They may feel that asking beneficiaries to pay for services is uncharitable and may fear that even small fees will block the people most in need from getting aid. They may also worry that a commercial approach could, over time, push nonprofits into caring more about making money than about making a difference. But those fears are driven by a misconception about what impact is and how charging prices can help.

Nonprofits traditionally and incorrectly think there’s a trade-off between helping more people and getting money from them.

Let’s be clear: In situations where people truly can’t afford to pay anything for a product or service they need, humanitarian organizations should step in to help. We’re not advising nonprofits to charge a starving person for a meal. What we’re describing in this article is different: We’re focusing on situations in which beneficiaries have disposable income and can afford to pay at least a nominal amount. The revenue generated by the fees then goes directly back into providing the low-cost service to even more people. We have also found that paying a fee gives beneficiaries a sense of ownership, which boosts engagement and, in turn, helps reduce expenses and improve operations.

Nonprofits should work with their beneficiaries to find payment models that are affordable but substantial enough to subsidize operating, technical support, and long-term maintenance costs. In this article we provide examples of nonprofits that have successfully done that. We also explore the critical difference between impact and access. Finally, we list the best practices nonprofits should follow with their own beneficiary-focused models.

Access to Help Doesn’t Always Guarantee Impact

After developing his initial kiosk, Lalvani set up an expanded pilot project in three communities in the central region of Ghana. By visiting the communities and speaking with local residents, the Project Maji team gained some critical insights. For instance, although there were households in some communities that could not afford to buy water, most households were willing to pay more than the team had anticipated. (However, this was not the case in some rural areas, where most people struggled to afford nominal fees.) After discussing the options with the communities, Project Maji ultimately settled on fees: 10 Ghanian pesewas (equivalent to two cents at the time) for one jerrican (5.3 gallons) of water. In more affluent areas, the price was higher: up to 10 cents a jerrican.

Lalvani’s early assumption was correct: Even a small fee dramatically improved vigilance over the sites. People were much more likely to help maintain the kiosks and also much less apt to waste water. Although charging people with little income may have seemed unconscionable at first, it ensured that the water dispensers remained in good working order and were actually benefiting the community.

Nonprofits traditionally and incorrectly think there’s a trade-off between helping more people and getting money from them. That’s because they tend to equate impact with beneficiaries’ ability to access a product or service. While access is relatively easy to promote and measure, a focus on it primes organizations to look for ways to make prices as small and painless as possible—the lower the price, the greater the access. But some people can pay a modest amount, while others can pay little or nothing. If you want to maximize your impact, you need to treat your beneficiaries as different groups whom you’ll charge different prices. (We discuss this in more detail in a bit.)

Instead of fixating on access, leaders should define impact more broadly as meaningful change, which results from the combination of access, consumption, and performance. Expanding access is not necessarily the wrong move, but it doesn’t guarantee impact. After all, what good would it have been for Project Maji to put solar-powered water stations in rural villages across sub-Saharan Africa if they broke down or collected water that wasn’t safe to use?

We draw this distinction to clarify that impact is a shared responsibility, not something that just happens once nonprofits put their solutions in people’s hands. This is important because any effort at generating revenue from beneficiaries must be sensitive to the way they perceive the value of products and services. Every approach must be designed to ensure that it suits the beneficiaries and that beneficiaries do their part. Price should be viewed by all parties as a tool, not an obstacle.

Connecting with Beneficiaries

When nonprofits design an income model centered on beneficiaries, three things become immediately clear. First, the needs, wants, and situations of beneficiaries vary widely. Some people view them as one homogeneous group, but that is far from the case. Second, beneficiaries are often misinformed about how solutions could change their lives for the better. That lack of understanding, unfortunately, influences the decisions they make and what they’re willing to pay for a product or service. Third, just like any customer in any context, beneficiaries want to avoid risk and will act (or avoid acting) accordingly. When you’re formulating or adjusting your nonprofit’s model, then, consider the following best practices.

1. Don’t treat beneficiaries as a single entity.

Most have little money to pay for a nonprofit’s products or services, but the amount is neither uniform nor zero. If nonprofits create a menu of prices that remain at or below the beneficiaries’ ability to pay, they can achieve the same level of access that they would by charging nothing at all and enjoy a return. They can then invest the surplus earned from charging prices in scaling up operations.

The menu can take two forms. First, the solution delivered can be the same, but prices can vary according to some observable characteristic. Consider Gavi, the Vaccine Alliance, a public-private global health partnership that mandates that participating countries help finance vaccines used in routine immunization. As the countries’ gross national income per capita rises, governments take on higher levels of financing, until support is phased out entirely. Similarly, fees vary from facility to facility at the 40 childcare centers the London Early Years Foundation runs across 12 London boroughs. The fees are higher in the more-affluent parts of London but lower in poorer ones.

Tim Boelaars

Second, the solution itself can vary in ways that allow beneficiaries to select the attribute-price combination that makes the most sense for them. For example, the Program for Early Parent Support, or PEPS, which provides services to families, has flexible fees that are based in part on the number of parents registered to participate in a given program, the duration of a program, the facilitation model, and other factors. Playworks, a California-based nonprofit that supports children’s physical health through play, has a mix of services offered at different price points, which are based on the income levels of the families attending each school. At the top of the range, Playworks Coach, which includes an on-site coach to help manage recess, train students, and create activity schedules, costs $60,000 to $65,000 a school. But schools with many students from lower-income households can qualify for subsidies of up to 50%.

2. Educate your beneficiaries about your solutions.

It’s surprising how often leaders of nonprofits presume the benefits of their offerings are self-evident. If Elizabeth Scharpf had jumped to that conclusion, her nonprofit, Sustainable Health Enterprises (SHE), probably never would have achieved its mission: keeping young girls in countries such as Rwanda in school.

Scharpf understood that the reason many girls in Rwanda stayed home from school and ended up falling behind was that tampons and maxipads there typically cost more than the average worker’s daily wages. Because they couldn’t afford feminine hygiene products, nearly 18% of the country’s women and girls missed days of school or work. The Rwandan government didn’t supply women with menstrual products, and because men are the financial decision-makers in most Rwandan households, these products typically ended up at the bottom of their list of crucial purchases. But because women and girls in the country didn’t have access to pads and tampons, Rwanda was losing $215 in GDP per woman each year.

Scharpf and SHE found a way to use local by-products from banana farming to create inexpensive sanitary pads. SHE sold them at 60 cents for a pack of 10—much lower than the prevailing price of $1.10. But SHE wouldn’t have a market if the heads of households considered 60 cents just as unaffordable as $1.10. Scharpf also had to educate the girls and their families, the men in the local communities, and the national government officials about the direct and indirect benefits her pads offered—most important, the benefits of not missing school or work. If pads were $1.10 a pack, men and local governments could claim an inability to pay. But by educating everyone about the harm of missed school and work and explaining why spending 60 cents on a pack of pads would actually improve GDP, SHE was able to change the conversation around menstrual products in Rwanda. Today, SHE has clubs in 16 Rwandan schools. Each meets three to four times weekly and has at least 50 members. Topics include menstrual hygiene and ways to reduce the stigma surrounding menstruation. In total SHE has more than 59 school clubs worldwide.

This example highlights an important distinction between can’t pay and won’t pay. There is a big difference between finding a nonprofit’s solutions literally unaffordable and being unwilling to buy them, which reflects a judgment of worth based on what someone knows about the product or service in question and the other purchases a limited budget might cover. Many nonprofits attribute every complaint about price from beneficiaries to a lack of financial resources, when in fact it may be the consequence of a subjective choice that, in all likelihood, is imperfect. People can pay, but they don’t want to. The more information and careful documentation a nonprofit can provide beneficiaries, the greater its chances of increasing willingness to pay and improving adoption.

3. Nonprofits and beneficiaries must share accountability.

The most obvious form of transaction is straight up: Nonprofits charge beneficiaries in full and up front for their products and services. But if you define impact as meaningful change, a straight-up transaction is a poor exchange. In it the beneficiaries assume all the risk associated with achieving impact. The solution could be arduous or inconvenient to use, break down, be too novel to change old habits, or simply not perform as anticipated. Because most people are averse to risk, a straight-up transaction can make them hesitate. Uncertainty may decrease their (perhaps already low) willingness to pay or even stop people from considering the solution in the first place.

The answer is for nonprofits to adopt an income model that makes it easier to access their offerings (like on-demand subscriptions), tracks consumption (for example, price per usage), or, ideally, is contingent on performance (like an outcome-based contract). However, before nonprofits decide to peg all or part of their funding to beneficiaries’ payments, several things have to happen. First, their leadership must have an honest discussion about what outcomes to pursue. Getting people within an organization to agree on a definition of “meaningful change” can often be surprisingly challenging.

Second, a nonprofit needs to have a process and tools in place for measuring those outcomes at scale. We’re increasingly seeing technology used to monitor impact in a variety of sectors. For example, sensors that gather personal medical data are being used to track and confirm health outcomes. The agricultural company Indigo Ag’s satellite imagery is helping validate regenerative agriculture and conservation efforts by providing a real-time map of the world’s food supply. And recently a powerful AI grading application was rolled out in an educational system—not only to save teachers time but also to offer personalized advice that helps students learn better and faster and to track their progress.

There is a big difference between finding a nonprofit’s solutions literally unaffordable and being unwilling to buy them, which reflects a judgment of their worth.

Getting measurement right is complicated, as it involves a trade-off between confidence that the observed results represent the truth in the population served (internal validity) and confidence that they can be generalized to other relevant groups and situations (external validity). If nonprofits can’t see that they’re having an impact or if that impact is too customized to one site, they won’t be able to easily expand their programs and help more people.

Third, and perhaps most important, nonprofits have to retain sufficient control over the quality of outcomes. Keeping in mind that meaningful change is a shared responsibility, they should create mechanisms (anything from standard incentives to games, formal contracts, and even vertical integration) to ensure that beneficiaries (and other intermediaries in the ecosystem, if relevant) contribute to achieving results.

Worldreader: A Case Study

Worldreader shows how a nonprofit’s pricing strategy can evolve in response to market feedback, customer behavior, and its developing sense of the best way to increase impact.

The idea for Worldreader came to David Risher in early 2009 during a volunteer trip to an orphanage in Ecuador. Risher was surprised to find the local library locked and abandoned. Disturbed by the thought of children lacking the opportunity to read, Risher and his cofounder, Colin McElwee, resolved to use emerging technologies to provide books to children and families in low-income countries and in time put an end to illiteracy.

As it went from delivering e-readers to a class of 22 children in rural Ghana to reaching over 22 million children across more than 100 countries via its BookSmart mobile application, Worldreader relied almost exclusively on philanthropic donations. One of Worldreader’s initial offerings was the BLUE (Building Literacy Using E-Books) Box. Introduced in 2011, the BLUE Box consisted of 50 e-readers preloaded with 100 e-books, 50% of which Worldreader purchased using donor funds and 50% of which were donated by publishers. Donors, typically high-net-worth individuals, could sponsor a BLUE Box for $15,000 and have it sent to a school of their choice.

In 2019, Worldreader India developed a classroom adoption model, which sought ongoing commitment from donors rather than a onetime gift. People could “adopt” a school or a day-care center, typically one with 500 children or fewer, for a donation of $3,000 a year, with a three-year commitment.

Despite these efforts, funding remained a constraint. That was when the organization decided to turn to its beneficiaries. It theorized that low-fee private schools in its target regions would be able to pay a subscription on a per-child basis, potentially by passing the cost on to parents as part of tuition fees. To determine the price point, Worldreader first reviewed private-school tuition fees in Ghana and Kenya and ultimately settled on a figure of $6 a year (or 50 cents a month).

But not every school was willing to pay the same price. Because of that, Worldreader’s regional teams struck a variety of deals. In Ghana, for example, Worldreader bundled additional content designed to assist with exam preparation into the subscription, leading to a price of $10 a child yearly. Worldreader India, on the other hand, partnered with the National Independent Schools Alliance, a network of low-fee private schools, to charge $4 a child annually for a minimum of 100 children. Worldreader India also offered quantity-based discounts for schools with more than 5,000 children and for networks of more than five low-fee private schools, reducing the price to as little as 19 cents a child monthly.

Podcast Series

HBR On Strategy

Curated insights to unlock new ways of doing business.

- Subscribe On:

- Apple Podcasts

- Google Podcasts

- Spotify

- RSS

- Overcast

- RadioPublic

As is the case with most nonprofits, at Worldreader fundraising is a perpetual work in progress. The organization recently developed a service program that lets low-fee private schools and other international educational organizations pick and pay for only what they need, allowing them to easily add or drop features as needs evolve.

Worldreader also recognizes that the subscription model may give its partners a disincentive to sign up more readers. For example, a fixed yearly price per child is unlikely to appeal to international organizations like UNICEF, which could offer Worldreader incredible reach. The expense may quickly become prohibitive, and there is no apparent motivation to bring in even more readers. As a result, Worldreader is investigating the feasibility of offering some institutions a price for a minimum number of children, prompting massive organizations to recruit as many children as possible to decrease the price per child.

Finally, given its ability to capture learning outcomes via BookSmart, Worldreader is looking into how consumption-based payment models can drive more usage by beneficiaries, as well as testing the impact that incentives such as rewards or the celebration of milestones can have in making children regular and enthusiastic readers.

. . .

Most successful nonprofits start with a focus on beneficiaries and a desire to help. The founders spot true and in many cases existential pain points and take action to alleviate them. But whether the organization they establish succeeds ultimately depends on money and impact. Money is usually generated via contributions—donations and grants. Impact is usually and incorrectly defined as access to help. Those norms severely constrain how much a nonprofit can grow to meet its ambitions and whether its work is even solving the problem it set out to tackle. The issue is that the pursuit of money and access is disconnected from the beneficiaries.

With a broader focus on impact rather than access, nonprofits realize that beneficiaries can be active contributors, not simply recipients of services, and that prices are a tool for coordination, not a hurdle. Adopting that mindset can persuade nonprofits to raise capital from the very people they aim to serve without excluding anyone, without compromising, and without putting donations and grants at risk. In fact, we see this as a promising path to blended economics for nonprofits, one that appeals deeply to donors because it is transparent and maximizes the impact of their contributions.

Project Maji is an illustration of that. Today the organization provides clean and affordable water to more than 300,000 people daily.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Rid Your Organization of Obstacles That Infuriate Everyone

How every company can fight the “addition sickness” that complicates work

Robert I. Sutton, Huggy Rao 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

College Football Campus Tour

Idea in Brief

The Problem

Virtually all organizations are plagued by addition sickness: the unnecessary rules, procedures, communications, tools, and roles that seem to inexorably grow, stifling productivity and creativity.

The Root Cause

People default to asking, “What can I add here?” not “What can I get rid of?” Organizations reward leaders for additions—implementing new technologies, launching initiatives, building bigger fiefdoms. And leaders often have a limited grasp of their “cone of friction”—how their actions and decisions burden others.

The Remedy

Conduct a good-riddance review to identify obstacles that can and should be removed. And employ subtraction tools to eliminate those obstacles or make it difficult for people to erect them in the first place.

In August 1940, as his country prepared for waves of attacks by German planes, Britain’s prime minister, Winston Churchill, set out to address a different enemy: lengthy reports. In his 234-word “Brevity” memo, he implored the members of his war cabinet and their staffs to “see to it that their reports are shorter.” Churchill urged them to write “short, crisp paragraphs,” to move complex arguments or statistics to appendices, and to stop using “officialese jargon.”

We devoted eight years to learning about how leaders like Churchill serve as trustees of others’ time—how they prevent or remove organizational obstacles that undermine the zeal, damage the health, and throttle the creativity and productivity of good people. We call our work “The Friction Project.” It consists of our own research, case studies, workshops, and classes; interviews with 22 guests on our Friction podcast; hundreds of interactions with our sprawling network of leaders, researchers, and other savvy people; and an analysis of the academic and practical work of others.

Along the way, we learned that friction can be both bad and good: Not everything ought to be quick, easy, and frictionless. Activities that involve good friction include developing deep and trusting relationships, making complex and irreversible decisions under uncertainty, and doing creative work that’s messy, inefficient, and failure-ridden (if you’re doing it right!). Skilled leaders are bent on eliminating unnecessary obstacles, in large part because doing so gives them more time to focus on those many things in organizational life that should be slow, hard, and complicated.

In this article we focus on addition sickness: the unnecessary rules, procedures, communications, tools, and roles that seem to inexorably grow, stifling productivity and creativity. We show why companies are prone to this affliction and how leaders can treat it. The first step is to do a good-riddance review to identify obstacles that can and should be removed. The next step is to employ subtraction tools to eliminate those obstacles or make it difficult for people to add them in the first place. This article unpacks both steps.

Why Companies Are Plagued by Addition Sickness

Our project uncovered three forces that fuel these behaviors. First, we humans default to asking, “What can I add here?” and not “What can I get rid of?” Studies by Gabrielle Adams and her colleagues discussed in a 2021 Nature article found that this “addition bias” shapes the solutions that people generate to improve universities, edit their own and others’ writing, modify soup recipes, plan trips, and build Lego creations. When one university president asked students, faculty, and staff members for suggestions to improve the place, only 11% of the responses entailed subtraction.

Second, organizations often reward leaders for additions: Kudos, cash, perks, and titles are heaped on those who implement new technologies, launch initiatives, or build bigger fiefdoms. In contrast, people with the wisdom and discipline to avoid adding unnecessary stuff are rarely noticed or rewarded. These incentives help explain why, although many of us believe that other people need to engage in subtraction, we object to eliminating our own pet projects or reducing our own budgets. As the late, great comedian George Carlin put it, “Have you noticed that their stuff is shit and your shit is stuff?”

Third, leaders often have a limited grasp of their “cone of friction”—how their actions and decisions burden others. Part of the reason for such friction blindness, as Dacher Keltner’s book The Power Paradox documents, is that when people feel powerful, they tend to focus more on what they need and want and less on the challenges and inconveniences faced by others (especially people who are less powerful than they are).

Michael Barker’s photography showcases views from U.S. college football stadiums—including from seats with views obstructed by pillars, press boxes, or walls. Barker runs the website College Football Campus Tour and uses his platform to warn fans about these less-than-ideal seats.

So leaders may not realize how their failure to remove, or to avoid adding, unnecessary impediments makes life harder for “the little people.” At Stanford University, for example, a senior administrator sent a 1,266-word email with a 7,266-word attachment to more than 2,000 faculty members, inviting all of us to devote a Saturday to brainstorming about a new sustainability school. Apparently it never occurred to her that the email could have been trimmed by at least 500 words and the attachment by thousands of words. Such edits would have saved time for thousands of people in her cone of friction.

The good news is that leaders can do much to reverse addition sickness. They can begin by turning attention to identifying what can be removed (or not added). Gabrielle Adams’s team found that when people paused to consider solutions or were reminded to think about subtraction, they were less likely to default to addition. Venture capitalist Michael Dearing fires up this way of thinking by urging leaders to act as editors in chief of their organizations. He explains that, like skilled text and film editors, the best leaders relentlessly eliminate or repair things that distract, bore, bewilder, or exhaust people.

Good-Riddance Reviews

Savvy friction fixers assess what they should and can remove from their organizations and identify where and how to create mechanisms such as rules, review processes, and financial penalties that make it harder to add unnecessary stuff. Here are some methods they employ.

Ask colleagues and customers to identify unnecessary obstacles.

When Melinda Ashton was the chief quality officer at Hawaii Pacific Health, the largest nonprofit health care system in the state, she was troubled because clinical staffers were devoting too much time to updating patients’ electronic health records and too little time to examining, treating, and comforting patients.

To address the problem, Ashton and her team launched the Getting Rid of Stupid Stuff program in 2017 (yes, the acronym is GROSS). As Ashton reported in the New England Journal of Medicine, one of the first steps was to ask nurse assistants, nurses, and doctors to nominate anything in the system that “was poorly designed, unnecessary, or just plain stupid.” Hawaii Pacific employees identified 188 subtraction targets, which sparked 87 improvements. Subtracting all that stupid stuff freed up a lot of time. In response to one nomination, Ashton’s team eliminated a mouse click that every nurse and nurse assistant was required to make for every patient during hourly rounds. That saved 24 seconds per click—which, Ashton reports, “consumed approximately 1,700 nursing hours per month at our four hospitals.”

You can also ask clients to identify subtraction targets. Our students Saul Gurdus and Elizabeth Woodson spent 10 weeks helping administrators at a California social services agency identify and remove pain points for clients—especially obstacles that caused unnecessary delay and despair among applicants. Gurdus and Woodson used client interviews to identify junctures in the application process—usually handoffs between silos—where clients reported “waiting” and “still waiting” and feeling “invisible” and “this is too hard.” Then they worked with administrators to remove impediments to communication across silos, which, in turn, reduced waiting times and clients’ frustration.

Calculate the burdens of performance measurement.

Are you spending so much time evaluating one another that you don’t have time to do your work? When Marcus Buckingham and Ashley Goodall crunched the numbers at the global services firm Deloitte, they discovered that the 65,000 employees were collectively spending nearly 2 million hours a year on performance management—completing the forms, attending meetings, and creating the ratings (see “Reinventing Performance Management,” HBR, April 2015).

Assess the burden imposed by meetings.

As part of the Friction Project, we worked with Rebecca Hinds, the head of Asana’s Work Innovation Lab, on a “meeting reset” intervention with 60 Asana employees. We asked participants to rate the value and importance of each recurring meeting on their calendars. They assessed 1,160 standing meetings and identified more than 500 that were of low value. Hinds guided those colleagues to remove or revamp those meetings. As a result, on average, each employee saved more than four hours a month. Canceling meetings had the biggest impact (37% of total minutes saved). Making adjustments to format, such as scheduling meetings less often, shortening them, and relying more on written communication and less on presentations and conversations, accounted for the other 63%.

Catalog email overload.

A 2019 Adobe survey of the email usage of 1,002 U.S. adults found that they spent, on average, more than five hours a day reading and responding to work email (three-plus hours) and personal email (two-plus hours). As John Lilly, the former CEO of Mozilla, put it to us, “After all these years, email is still the internet’s killer app, and keeping up with it crushes productivity and creativity in every company I know.” You can begin to fight back by reviewing the number, length, recipients, and timing of the emails that people send and receive and by developing solutions to lighten the load. A policy like the “zzzMail” rule instituted at the consulting firm Vynamic might help: Employees are asked not to send internal emails between 10 PM and 6 AM Monday through Friday, on weekends, and on all Vynamic holidays.

Count how many people report to each leader.

An unfortunate side effect of flat structures is that executives sometimes have so many people reporting to them that their jobs become impossible. In Beyond Collaboration Overload, Rob Cross describes “Scott” as an executive who was “flying up the hierarchy” of a large company until he took charge of three big units—some 5,000 people. Scott had had just a few direct reports in past roles; he had 16 this time. He wanted to be “less hierarchical,” so he urged people “to bring him problems and concerns or to include him in discussions.”

College Football Campus Tour

By the time Cross was called in to help, Scott was working 16 hours a day, seven days a week, and still falling behind. When Cross examined the networks of the company’s top 10,000 people, Scott “was the Number 1 most overloaded person.” Some 120 people came to him every day for information. Cross found that 78 of the 150 top managers in one unit Scott ran “felt they couldn’t hit their business goals unless they got more of Scott’s time.”

Interview and observe users.

Leaders at the nonprofit Civilla conducted more than 250 hours of interviews and observations with residents, civil servants, and leaders to identify needless and confusing questions on a benefits form. More than 2 million Michigan residents had to complete the convoluted document each year to apply for childcare, food, and health care support from the state. It contained 18,000 words and more than 1,000 questions—many of which were unnecessary and intrusive.

A turning point in Civilla’s Project Re:form came when leaders met with executives from the Michigan Department of Health and Human Services (MDHHS), the organization responsible for the form, and asked them to fill it out. As a Civilla cofounder, Adam Selzer, told us, only one of the executives had attempted to complete the 42-page form before. Terry Beurer, the department head at MDHHS, got no further than page eight before giving up. Beurer told Civilla’s CEO, Michael Brennan, that it was among the most humbling experiences of his career. To Beurer’s credit, rather than getting defensive and making excuses, he signed up for the project on the spot and provided his time and department resources throughout the challenging, but ultimately successful, two-year effort to drastically shrink the form.

Subtraction Tools

During our research for The Friction Project, we discovered an array of tools that help leaders rid their organizations of unnecessary burdens—and make it harder to add needless impediments in the first place. Savvy leaders experiment with different combinations of tools to develop the right portfolio for tackling their company’s particular friction troubles.

Simple subtraction rules.

Crisp constraints help people remove unnecessary impediments from organizations. One example is the rule implemented by Laszlo Bock when he led people operations at Google, which is “dedicated to staffing, development, and a distinct and inclusive culture.” Bock told us that tremendous burdens had been heaped on employees and job candidates by the company’s tradition of conducting eight to 12, and sometimes 25, rounds of interviews with a candidate before making an offer (or not). Bock responded with a simple rule: If more than four interviews were to be conducted with a candidate, the request for an exception had to be approved by him. It worked like a charm. The excessive rounds of interviews that exhausted employees and drove away good candidates disappeared instantly.

The “rule of halves” is another simple subtraction tool. We ask people to imagine how they could reduce each work burden by 50%—such as the number of standing meetings they attend, the length of the emails they send, the number of recommendations they require for new hires, and the number of digital collaboration tools they use. People rarely cut 50%, but they do reduce their workload.

That’s what happened when Rob Cross coached Scott, that deeply overextended executive, and suggested that he cut back his direct reports, meetings, and emails by about 50%—targets that Scott actually hit. His direct reports felt more empowered (and less overloaded) because they made more decisions without checking and coordinating with him. And because Scott had fewer people to deal with—and resisted jumping into every decision—his unit operated more efficiently. He worked fewer hours, his health improved, and, Cross tells us, he saved his troubled marriage.

The subtraction game.

We have played this game with more than 100 organizations. It starts with solo brainstorming. We ask people, “Think about how your organization operates. What adds needless frustration? What scatters your attention? What was once useful but is now in the way?” Next, people meet in small groups to discuss the impediments identified and name additional subtraction targets. Then they select two or three targets and outline rough implementation plans—who might lead the charge, whose support they would need, and which people or teams might quash the change. Some groups pick a practical idea (one CEO vowed to keep his emails under 500 words) and an impractical one (engineers proposed to disband HR). Others select something easy to subtract (one team reduced the number of communications apps it was using) and something tough (the members of a top team agreed that their company would run better and their mental health would improve if they removed two micromanagers from the board of directors).

One companywide effort saved thousands of hours: changing the default meeting length on Outlook software from 30 minutes to 15 minutes.

Groups sometimes act on the spot. While playing the game with 25 colleagues at a software firm, one vice president disbanded a troubled project and shifted his weekly team meeting to every other week. The CEO of a financial services company jumped up and told his top 80 people that within a week he wanted an email from each of them with two subtraction targets. Within a month he wanted the changes implemented—and he offered each person a $5,000 bonus for making that happen. Nearly all 80 managers earned the bonus. Their changes included ending poorly performing product lines, eliminating meetings, and terminating contracts with unreliable vendors.

Subtraction specialists.

Not all friction fixers tackle all problems. Zeroing in on one category of challenges can yield big results. The Friction Project focused particular attention on people who take responsibility for identifying, removing, and repairing what we call “jargon monoxide,” the hollow, convoluted, and incomprehensible language that undermines workplace communication, collaboration, and coordination.

Take the team of seven workers from New Zealand’s Nelson Hospital who replaced medical jargon with plain language in letters from physicians to patients. According to an article in Internal Medicine Journal, the team ran an experiment with 60 patients suffering from chronic health conditions. All 60 received the usual jargon-filled letter from a doctor that described their condition and suggested treatment, but the team randomly selected 30 patients to get a “translated” letter two weeks later—with common terms substituted for technical terminology. For example, “peripheral oedema” was translated into “ankle swelling,” “tachycardia” into “fast heart rate,” and “idiopathic” into “unknown cause.”

Patients appreciated the clarity: Seventy-eight percent preferred the translated letter to the jargon-filled one, 69% said it had a positive impact on their relationship with their physician, and 80% reported that it increased their “ability to manage their chronic health condition.” Patients were also asked to circle any terms in their letters that they didn’t understand. Patients with untranslated letters circled eight terms, on average; those with translated letters circled two. The team’s efforts to banish jargon monoxide eliminated unnecessary friction for patients.

Subtraction networks.

Savvy friction fixers build, join, and activate networks to help them subtract obstacles. Civilla’s leaders worked with numerous residents, community leaders, civil servants, and government officials during Project Re:form. Selzer told us that at first he made the mistake of stereotyping civil servants and officials as uncaring and unimaginative. But when he and fellow cofounders Michael Brennan and Lena Selzer started working with them, they found caring and conscientious people who despised that 42-page form—and were determined to fix it. Once those civil servants and officials realized that Civilla could help and had the wherewithal to stick with the problem, they served as supportive partners.

They helped the Civilla team navigate through hundreds of pages of government documents in order to develop a shorter and clearer form that still complied with regulations and laws. Civilla then worked with two offices of the MDHHS to test a prototype. After that successful pilot, Civilla helped train more than 5,000 field staffers in 100 department offices. The new form is 80% shorter than the old one, and the end-to-end processing time for frontline staffers has dropped by 42%—partly because they have 75% fewer errors to correct. Applications from residents have increased by 12%, yet because fewer need help completing them, lobby visits have dropped by 50%.

Subtraction movements.

Sometimes efforts to reduce friction coalesce to become something greater than a series of activities—they become a movement. These enduring initiatives draw on the ideas and efforts of many people in an organization. Our case study on how pharmaceutical giant AstraZeneca scaled up simplicity is one example. It started when senior executives offered the senior director Pushkala Subramanian an intriguing job: to head an effort to simplify how the multinational’s 60,000 employees worked. Subramanian couldn’t resist the challenge, and in 2015 she launched the Simplification Center of Excellence. Her team was small, only four other employees, but their ambitions were big: The “million-hour challenge” aimed to give back 30 minutes a week to each employee in order to free up more time for clinical trials and serving patients.

Subramanian’s team knew that a purely top-down approach would backfire because AstraZeneca is a decentralized company, where local leaders have substantial authority to accept, modify, or ignore orders from on high. So her team took a two-pronged approach. They made some companywide changes. In many parts of AstraZeneca, for example, it took days for new employees to get their company laptops. Subramanian’s team worked with HR, hiring managers, and IT leaders to launch a program to ensure that every new employee had a functioning laptop and access to technical support on day one. Her team also led an effort that saved thousands of hours: changing the default meeting length on Outlook software from 30 minutes to 15 minutes.

Podcast Series

HBR On Leadership

Curated insights to unlock the best in those around you.

- Subscribe On:

- Apple Podcasts

- Google Podcasts

- Spotify

- RSS

- Overcast

- RadioPublic

At the same time, Subramanian’s team waged a campaign to entice employees throughout the firm to make changes in their jobs, teams, and units. These efforts included identifying and recruiting “simplification champions” in major units who volunteered to lead local, grassroots changes. The simplification team provided websites, workshops, and coaches to help champions and other employees identify obstacles that frustrated them and their customers and supplied tools to help them implement local repairs.

In Brazil, for example, the simplification champion Roberto Uemura ran a two-week “waste hunters” contest that garnered 52 suggestions. One winning idea entailed streamlining a complex form and redesigning the system so that employees could more efficiently input information concerning patient safety issues from calls received through their unit’s 1-800 number into a single database, rather than into different systems for transmission to headquarters, the local health agency, and other relevant parties. In Mexico the IT team cut paperwork in half, saving 690 hours a year. Meeting-free days were introduced in Taiwan and Thailand. Each employee in Japan simplified one thing, saving a collective 50,000 hours a year.

On May 17, 2017, AstraZeneca held World Simplification Day to celebrate saving two million hours in less than two years (twice the original goal!) and to spread time-saving practices throughout the company.

. . .

Bad friction is a plague that undermines productivity and creativity, raises costs, and frustrates employees, customers, and other stakeholders. It happens in large part because we default to asking, “What can I add here?” instead of “What can I get rid of?” But this penchant can be reversed by leaders who keep talking about and doing subtraction, teaching people how to practice it, and heaping kudos, cash, and other goodies on coworkers who remove unnecessary stuff.

Editor’s note: Robert I. Sutton and Huggy Rao are coauthors of The Friction Project: How Smart Leaders Make the Right Things Easier and the Wrong Things Harder (St. Martin’s Press, 2024), from which this article is adapted.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Do You Need an External Talent Cloud?

Most traditional organizations are still hiring in a linear, top-down manner. It’s time for a new model.

John Winsor, Jin H. Paik 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Tamar Cohen

Idea in Brief

The Problem

Although many companies have invested heavily in digital transformation in recent years, when it comes to talent and hiring, most are still following traditional practices that are rapidly becoming obsolete.

The Reality

Organizations need to embrace an open-talent strategy—an approach that involves engaging with a globally distributed freelance workforce that’s accessible via on-demand digital platforms.

The Way Forward

Companies will need to create an “external talent cloud”—that is, a set of digital talent platforms that can quickly and precisely match their supply of talent to the organization’s specific needs.

The biggest headache of global businesses today—not to mention their most considerable cost—is figuring out how to secure talent.

No matter how large your company or how strong your brand is, the odds are that your organization is experiencing a talent crisis. The numbers tell the story: In March 2021 a survey of 30,000 people from 31 countries found that nearly 41% of workers were considering leaving their jobs. In April of that year alone, 4 million workers quit in the United States. Although the so-called Great Resignation has eased, the number of jobs is growing globally, especially in the tech sector. In 2021, 10 million new tech jobs were created; in 2022 the number rose to 35 million; and according to one forecast in 2025 it may reach 150 million. With this intense surge in demand, which is likely to be turbocharged by the need for AI skills, more than 85 million jobs could go unfilled around the world by 2030, resulting in an $8.5 trillion talent shortage.

This is not just a problem brought about by Covid or advances in AI. Even before the pandemic and the Great Resignation, large organizations in particular were having trouble finding talent when they needed it. That led to a new pattern of behavior: Individual managers, struggling to cope, began quietly circumventing their organizations’ standard hiring processes and turning instead to digital talent platforms—such as Freelancer, Fiverr, and Upwork—to find the skilled help needed to get tasks done quickly and efficiently.

More managers are working this way than you might realize, primarily as a tactical expedient for solving discrete problems or getting through a crunch. “It’s a bottom-up movement,” Hayden Brown, the CEO of Upwork, tells us. According to Brown, some of the company’s biggest individual users don’t want Upwork to reveal their names, especially when talking to people in their own organizations. Why? Because they are often using Upwork as a kind of private career accelerator. A similar dynamic is playing out at Freelancer. Only a few dozen Fortune 500 companies have signed up as enterprise clients, but individual managers at roughly 400 of those companies use the platform to get around their HR bureaucracies.

For companies, that’s a huge missed opportunity—and a strategic mistake. According to our research, there are now more than 800 digital talent platforms around the world, offering the services of an estimated 500 million highly skilled professionals who are connected, vetted, and ready to work. These are people who have taken advantage of new technologies and talent platforms to transform themselves into empowered microentrepreneurs who set their own terms of employment, deciding what work to do, where, when, and how to do it, and what to charge.

This represents a fundamental shift in how work gets done, one that companies need to embrace. It’s a shift to open talent—a term we use to describe the accelerated digital transformation of talent management through a globally distributed workforce, accessible to companies via on-demand digital platforms. On the one hand, it reflects the rise of microentrepreneurs—programmers, engineers, data scientists, creatives, project managers, even CFOs—who look at work as a thing to do and fit it into their lives, not as a place to go or a way to define themselves. On the other, it represents a technology-enabled approach to work in which companies can rent the services of individuals whenever they need help to solve a problem, develop an initiative, or temporarily fill a skills gap.

Workers in the open-talent economy are highly skilled providers of professional services and domain expertise who interact directly with companies and have significant negotiating leverage. They work when and how they want, and they make good money. Companies that embrace the open-talent model can experience all sorts of benefits: less friction in the search for skilled help, fewer fixed salary costs, a greater ability to flex with demand, faster and more efficient work, and substantial cost savings.

Companies that embrace the open-talent model get their work done just as well as those that use traditional staffing models—but four to five times faster.

Note that the open-talent and gig economies are not the same: Open talent is a broad concept that encompasses various talent acquisition strategies beyond traditional employment, emphasizing flexibility and access to specialized skills. Gig work is more focused on business-to-consumer transactions—for example, between restaurants and takeout customers. It has greatly benefited many consumers and some companies, but for many workers it involves a significant imbalance of power, exploitative wages, and even the denial of basic rights. At its core the gig economy is based on workers’ doing work when and where a company wants them to. In a world more driven by algorithms seeking efficiencies, the gig economy can put workers on a treadmill and never allow them to catch their breath.

Born-digital enterprises understand the value of an open-talent strategy. Most have already developed global ecosystems of talent that give them huge strategic advantages. When the pandemic hit in 2020, for example, Amazon had already established extensive relationships with several talent platforms, which is why it was able to scale up so effectively to meet the pandemic-fueled surge in demand, hiring a staggering 500,000 new workers in a matter of months.

Traditional enterprises need to catch up. In recent years many have invested heavily in digital transformation, but when it comes to talent and hiring, most are still working in a linear, top-down manner. That has to change—as some leaders are starting to realize. “If we can’t figure out how to work with open platforms that tap into a global ecosystem of talent,” one CEO recently told us, “then we won’t be in business in five years.”

We’ve been at the vanguard of the open-talent movement for a long time. What we’ve learned studying and working through talent models across hundreds of organizations, including some of our own, is that companies must change their siloed approach to talent acquisition. It’s no longer good enough just to have HR work with employees and contingent workers, procurement with outsourcing partners, and innovation offices with external collaborators. Companies need to start thinking of all talent as part of a global network of highly specialized workers with interdependent skills. And then, having adopted that new mindset, they need to build themselves what we call an external talent cloud.

What Is an External Talent Cloud?

Imagine being able with a single click to select the best talent from an enormous pool that includes not only your internal staff and regular contractors but also many highly skilled freelancers from around the world who have made their talents available on different platforms. And imagine that this isn’t just an expedient that you can turn to in a pinch but a system that your organization has made integral to your talent strategy. That said, no single platform will be able to supply all the talent you need. Hence you will need to integrate several in an external talent cloud, which you have carefully researched and vetted through initial experiments.

At its most basic level an external talent cloud is simply a pool of professionals who can be accessed for temporary employment. In the analog era, companies turned to temp agencies when they needed help with routine jobs and to consultancies when they needed highly skilled help. Today digital platforms can precisely match the supply of talent to demand instantly and in an orderly, transparent way, providing job ratings, trust scales, skills certifications, job history, and more. This extends all the way up to C-suite positions in companies that need help at the top but can’t afford it on a full-time basis.

Tamar Cohen is a collage artist with a passion for polka dots and for paper ephemera and books. In this series, she uses vintage maps to create silk-screened abstractions.

In our research we’ve found that companies that embrace the open-talent model get their work done just as well as those that use traditional staffing models—but four to five times faster and eight to 10 times more cheaply. This doesn’t mean they push workers harder or pay them less. It simply means that they’re introducing efficiencies and cutting out a lot of bureaucracy. As Michael Morris, the CEO and cofounder of the talent platform Torc, tells us, “The quality and optionality of skills specific to a particular initiative are a bonus benefit on top of the already-optimized cost and time savings that open-talent platforms provide over traditional models.” In our experience the benefits are so obvious and measurable that enterprises can’t afford not to pivot toward open talent and embrace it as a strategic imperative.

The need for an external talent cloud will only grow as companies adopt workflow methods—such as agile and lean—that focus less on roles and more on tasks. Nowhere is this shift more apparent than in the burgeoning demand for AI-related skills. Companies will need to navigate the changing dynamics of the job market and seamlessly integrate AI into their operations, but they won’t be able to do that if they engage in the cumbersome and time-consuming process of hiring full-time employees whose skills are likely to rapidly become out-of-date. Instead, they’ll need to rely on external talent clouds to quickly identify and access freelancers with validated skills, reducing the learning curve and accelerating the integration of generative AI into their operations. Such an approach will allow them to focus their internal efforts on higher-level strategic tasks while efficiently handling specific AI-related projects through external collaboration.

Establish a Center of Excellence

Before you can create an external talent cloud, you’ll need to establish a center of excellence (or some similarly named division within your company). Its role will be to research, develop, and deploy open-talent practices.

Your center of excellence might include dozens of people from various parts of your organization, or it might be a single person whose job it is to coordinate open-talent solutions. No matter how it’s organized, the center should focus on the retention of knowledge and skills so that they’re not lost once workers are done with a project. It should also offer support in areas such as problem definition, incentive design, and postsubmission evaluation, with the goal of enabling internal teams to efficiently experiment with new strategies before incorporating them into their structure. Ultimately, your center should help users navigate administrative bureaucracy and streamline processes, enhancing overall operations.

The biggest roadblocks to the growth of an open-talent strategy are cultural rather than technical. That’s why an essential task for your center of excellence will be to create a coalition of support while you work with managers and teams to determine whether open talent would be a good fit for their projects. At times internal staff, fearing the possible loss of their jobs, will push back on or try to undo efforts to externalize aspects of their workflows and systems.

One person who has considerable experience with this job is Liane Scult, the freelance program manager who heads up Microsoft’s equivalent of a center of excellence, which is developing open-talent strategies throughout the company. Scult speaks daily with managers, helping them identify tasks that could be performed by freelancers. The biggest difficulty, she says, is getting managers to take that first step into something they’ve never tried before: “It’s just like when people take their first rideshare.”

The biggest roadblocks to the growth of an open-talent strategy are cultural rather than technical. That’s why you’ll need to create a coalition of support.

Scult asks managers a series of questions when she begins talking with them about the possibility of pursuing open-talent options. These are the questions she asks most often: At the end of the month, are there still unfinished items on your to-do list? Could you make better decisions if you had more time? Are you having trouble catching up, missing deadlines, or working nights and weekends to complete something? What are the projects where that’s happening?

When considering a move to open talent, start by focusing on the areas causing the greatest pain. Your center of excellence should determine this by running workshops for key functional owners, including HR, talent acquisition, legal, procurement, IT, security, compliance, and client delivery. Those workshops should focus on three main topics: strategy, goals, and objectives for changing operational models. It’s generally agreed that a strategy is a plan you’ll use to meet goals and objectives. Goals are broad, long-term outcomes, and objectives are the specific tasks that can be quantitatively measured and that, taken together, compose the goals.

Strategy.

It’s important here to be thoughtful, intentional, and clear. That means asking yourself and your team many questions. What are the exact problems that external talent will solve for you? What is the range of solutions that you hope to come up with? What types of skills are you looking for, where will they be used, and what platforms will best be able to help you find what you need? What are your business case and success metrics? How will you handle systems access, compliance, and security constraints? What is your plan for communications and change management within your organization?

Goals.

This next step centers on taskification—that is, shifting the focus from roles to tasks. This is one of the most critical things to consider as you create an external talent cloud, so be as specific as possible in identifying tasks and the skills needed to complete them. Will your freelancers need to write a certain amount of code? How much? What are your productivity expectations, and how do they differ from those for internal employees?

Objectives.

Be very specific about what you want your external talent cloud to deliver and why. This will allow you to measure your success or failure later on. Focus here on work outcomes and the tasks that need to be done to achieve them. For instance: “Our objective is to establish relationships with four platforms, putting internal systems in place to work with them. Once we’ve managed that, our objective is to hire 20 coders for a new AI project that’s about to start.”

Find the Right Platforms

Once you have alignment on your strategy, goals, and objectives for changing your operational models, it’s time to find the platforms that best meet your needs, including a range of security and compliance capabilities.

This job will take time. As we’ve noted, there are hundreds of platforms in the open-talent space, and it’s important to consider their different strengths and features. Some offer access to niche workers, while others offer access to a broad range of professionals. (For examples of some of the possibilities, see the sidebar “What Are the Leading Open-Talent Platforms?”)

Every platform is different, so you’ll need to compare and contrast how each one works and what the process of using it feels like. We’ve found that it is best to build a business case not only for the overall open-talent effort but also for each platform you hope to work with. Organizations that think of open-talent platforms as potential partners—and that are willing to do the work to form deep and trusting relationships with them—have the best outcomes. Reach out to the platforms that you’re interested in working with, ask them questions, and make sure they understand your industry category and goals. The objective is to build a long-standing relationship, not one that’s merely transactional.

As you do this, it can be helpful to look at a consistent set of key performance indicators, including:

Time to hire.

This can be as short as hours, but it should never be more than a few days.

Cost to hire.

Using an agency to hire a full-time employee typically costs 20% of that hire’s annual salary, and the time it costs to recruit them. On average, using a talent platform reduces this cost to 10% of the freelancer’s pay, and openings are filled four to five times faster.

Cost.

Our research finds that a typical full-time tech employee costs 30% more than a similarly skilled freelancer.

Productivity.

Our research shows that on average, employees work on the projects they’re hired for five hours a day; freelancers, eight hours.

As you consider these indicators be sure to create standards so that when you run a pilot program, the data it produces will be scalable and sharable throughout the organization.

Launch a Pilot

Once you’ve identified the platforms you hope to work with, and you have a clear sense of your objectives and strategy, it’s time to launch a pilot program. Your center of excellence should lead this effort, and it should include everyone who has commonly been involved with the hiring of external talent, especially the procurement leaders who work with contingent-talent vendors for traditional outsourcing. Pay special attention to areas where there is typically friction, such as demand forecasting, talent reporting, onboarding challenges, IT security, concerns around billing, and cost-center alignment. Your center of excellence will also have to navigate tough intellectual-property issues with your legal and compliance departments, especially if a freelancer is creating new IP or technology.

Tamar Cohen

Launching a pilot helps you learn about operational challenges and assess the different facets of your organization’s readiness. It serves as a practical testing ground where you can streamline workflows, enhance communication, and refine procedures, thus ensuring a smoother experience down the road. Simultaneously, it can be a benchmarking tool, helping the business identify which departments or teams are most receptive to the concept of the external talent cloud and where additional efforts may be needed. The pilot can be a blueprint for creating a scalable model that can be replicated across the organization.

Once you’ve run your pilot, it’s important to evaluate how well it worked. The key to long-term success is to continue to iterate and to include more and more people in order to facilitate organizational change. An internal communications plan is vital too. While piloting and then refining your external-talent-cloud strategy, make sure you have a plan in place for helping full-time employees understand that their jobs are safe and that the changes you’re implementing will boost the overall health and competitiveness of the company. In general, the more transparency, the better—especially as you move to scale up your open-talent plan and become a fully networked organization.

The Road Ahead

The open-talent revolution has only just begun. That becomes clear when you consider where we are in the evolution of the internet.

In the Web 1.0 paradigm, information flowed in one direction, from sites to users: People navigated to pages and looked at information. In Web 2.0, information became bidirectional: People interacted with apps, feeding them data by uploading photos and creating and sharing content. The downside to Web 2.0 is that the dream of a democratized internet was quickly overwhelmed by a few global platforms that not only devastated traditional media and brick-and-mortar retail but also upended collective-property rights.

Now Web 3.0 is ushering in all sorts of change. Decentralized autonomous organizations (DAOs) provide a new way to finance projects, govern communities, and share value. Instead of a hierarchical structure, they use blockchain technologies, along with rapidly evolving governance and incentive systems, to distribute decision-making authority and financial rewards.

This has implications for the world of open talent. For example, the platform Braintrust, which operates as a DAO and runs on the Ethereum blockchain, was founded in 2018 to give freelancers more control and greater rewards. It has created a token that in time will give ownership of the platform to its freelance community, not a central corporation. Its core team is small—only 35 employees—but its network is powered by more than 300,000 community members, who earn tokens for recruiting new members and clients. Thanks to its Web 3.0–based business model, Braintrust is able to lower costs for both sides of the market, eliminating fees for freelancers altogether and reducing clients’ fees by as much as 50% to 75% compared with other platforms.

This represents a new model for open talent, one in which everyone involved benefits from the success of platforms. In this model freelancers will be able to showcase their skills and jump among platforms with ease, collecting skills and credits along the way. Perhaps we’ll even see a new era of badges and the like that offer precise verification of skills. Even more significantly, freelancers at times may be able to take some ownership of the intellectual property they create.

Time will tell if this model will succeed. But in the meantime, bold experiments of this sort signal a healthy, evolving open-talent market—one that companies need to make the most of by creating an external talent cloud for themselves.

John Winsor and Jin H. Paik are coauthors of Open Talent: Leveraging the Global Workforce to Solve Your Biggest Challenges (Harvard Business Review Press, 2024), from which this article is adapted.

Buy it here

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Turn Generative AI from an Existential Threat into a Competitive Advantage

How to factor the new technology into your strategy

Scott Cook,, Andrei Hagiu,, Julian Wright 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Matilda Temperley

Idea in Brief

The Problem

Generative AI has the potential to disrupt or commoditize businesses whose offerings previously required significant human labor and creativity. To compete, many firms will have to rethink their strategies.

The Table Stakes

Some will be able to gain an edge by leveraging widely available tools better or faster than their competitors. But that advantage will be only temporary, and using the tools will soon become table stakes.

A Differentiated Solution

Turning AI from an existential threat into an opportunity involves implementing generative AI at increasingly sophisticated levels that yield a stronger and more sustainable competitive advantage.

By making it vastly easier and cheaper to create or improve products and services, generative AI has the potential to disrupt or even commoditize businesses whose offerings previously required significant human labor and creativity. To compete, many businesses will have to rethink their strategies and find new ways to add value for customers.

What can firms do to turn generative AI from a threat into an opportunity? How can they use it to build competitive advantage? What types of businesses have the greatest potential? These are the questions we will answer here.

How to Leverage Generative AI

Drawing on our decades of combined experience working with Silicon Valley firms and researching competitive advantage from data and AI through economic modeling, we’ve found that generative AI can be implemented at three levels that correspond to an increasing degree of competitive advantage.

1. Adopt publicly available tools.

Companies can provide employees with off-the-shelf large language models (LLMs) or other types of generative AI, such as Midjourney and Runway, to help them do their jobs more effectively and efficiently. For example, employees can use level 1 tools to improve internal communication or presentation documents, generate ideas for new product features, conduct research on competitors, write customer-outreach messages for salespeople, touch up photos in marketing materials, create social media posts, and so on.

Virtually all firms in all industries—from technology firms to consumer product manufacturers to architects and consultancies—should look at implementing level 1. Just as the internet became essential to surviving and thriving in the late 1990s, so too will publicly available generative AI tools as they become more accurate, applicable, and secure. These include not only general LLMs like OpenAI’s ChatGPT and Google’s Bard but also industry-specific ones, such as Alexi for law firms and Karbon AI for accounting firms, and function-specific ones, such as Copy.ai for copyediting and GitHub Copilot for coding. Firms that do not implement such tools will be severely handicapped.

In the short run, some businesses will be able to gain an edge by leveraging these tools better or faster than their competitors. Firms that also drive fundamental business-process change based on using generative AI will achieve an even greater edge; those that are too slow will fall by the wayside. However, relying solely on AI models that everybody (new entrants and existing rivals alike) has access to will bring only temporary advantage before becoming table stakes.

In its basic form, level 1 implementation involves no customization of the AI model. In practice, businesses might achieve some small measure of customization by fine-tuning the models using their own data, a move that advances a company toward level 2.

2. Customize the tools.

Businesses can create their own customized generative AI tools that use the data and know-how they’ve accumulated in the process of serving their customers, either by building them from open-source models or by using models provided by LLM companies such as Anthropic and Cohere. These tools can enhance the customer experience by making products easier to interact with and adding new capabilities, like personalized recommendations.

For instance, providers of software products (especially complex ones) can create product-specific, generative-AI-based chat interfaces. As Des Traynor, cofounder and chief strategy officer of Intercom, a company that provides online tools for customer service, told us, “The beauty of these interfaces is that they free providers from having to trade off ease of use for customizability.” Using the software product becomes intuitive for everyone (not just experts), and it can be automatically personalized for a variety of use cases. Instead of having to navigate a maze of drop-down menus and know exactly what data to enter where, people can speak to the chat interface in natural language, as if they had a personal assistant.

Matilda Temperley photographed big-cat trainer Thomas Chipperfield and his lions. His family has been working with circuses for 300 years, dating back to the Frost Fair, in 1683. His method of training is built on encouragement and compassion.

Consider an enterprise software maker that offers a product for managing travel expenses. It could add a generative AI tool, trained on data from how employees previously submitted expenses, that covers a range of requests by people in various roles. Employees would simply tell the AI that they wish to submit travel expenses for a recent business trip, and it would guide them through the process, indicating which receipts to upload and what other information it needs. It would also allow them to note any special circumstances that should be taken into account—for example, “I took vacation days on Wednesday and Thursday” so that it knows to exclude expenses and per diems on those days. The tool would then process reimbursements in accordance with the company’s policies. If any complications arose, it would ask users for additional information or flag discrepancies.

Or consider banks and other financial service companies, which could implement level 2 by creating generative AI private bankers. These would be trained on the recommendations made by human private bankers to existing clients before being rolled out to clients looking for investment advice customized for their circumstances and needs.

At its simplest form, level 2 implementation consists of combining a generative AI tool with internal data to provide customers with a more intuitive user interface and more-personalized services. Many businesses will be able to keep improving their customized model by incorporating user feedback. This starts moving them in the direction of level 3.

3. Create automatic and continuous data feedback loops.

When fully implemented, generative AI tools produce reliable signals in the natural process of customers’ using the product or service, which are automatically fed back into the model to improve its capabilities with minimal human intervention. Companies that allow the AI tool to infer how helpful it has been to customers in achieving their goals will garner the most reliable signals.

Creating a feedback loop that is unique to each firm’s product or service is the holy grail. The more customers use the offering, the more feedback signals they generate, which allows the generative AI tool to further improve itself, leading to more users, more usage, more feedback, and so on. The result is a powerful form of compounding competitive advantage.

Consider how Chegg, an online education company, is using generative AI to create a personalized learning assistant for students. This custom-built online tool is trained on Chegg’s proprietary library of educational content and data from usage of its products. Students interact with a conversational user interface, which can tailor guidance to their individual needs. The tool continuously improves its study content, such as flash cards and practice tests, by figuring out the main sticking points common to users. This creates a data feedback loop across Chegg users. A feedback loop specific to each user is also created, enabling the tool to adjust the pace of instruction and the content and difficulty of practice tests in accordance with the individual’s performance. In doing so, the tool helps students learn better while generating reliable feedback signals, which allows it to keep improving.

Purchasing generative AI capability from third-party providers will become similar to buying cloud computing services, with prices constantly falling and security increasing.

Companies in all kinds of industries can benefit from level 3 implementation. Publishers of online video games, for instance, can use generative AI to create and constantly enhance customized nonplayer characters (or NPCs, those not controlled by human players), using information on how users react to and engage with different NPCs during gameplay. Companies can also use generative AI to experiment with different screenplays and environments and learn, almost in real time, which ones increase user engagement.

Companies that own both streaming services and content production (such as Disney, HBO, and Netflix) are also good candidates for level 3 solutions. For instance, a company could develop a proprietary AI solution to customize its shows by adjusting certain scenes for different audiences. It could use a tool like Runway to produce content that better targets viewers’ tastes, taking into consideration, for instance, tolerance for adult content or language, sensitivities of viewers in different countries, or attributes of other shows that users watch. The model would update itself based on consumer behavior, such as whether customers continue watching after the adjusted scenes, as well as any direct feedback they might give, and the model would incorporate those insights into future projects. The feedback loop wouldn’t be as strong and continuous as it would with video games, however, where learnings can be incorporated in real time.

Professional services firms, such as research and advisory consultancies or marketing agencies, should also consider going to level 3. A consulting firm could create a generative AI model that produces first drafts of research reports, for example. Employees would then make revisions to the early drafts, and that feedback would be continuously digested by the AI, which would use it to produce better initial drafts. (A caveat: Firms must ensure that the AI tool does not use one client’s confidential data when engaging with another client, especially one in the same industry.) Such a tool would essentially turbocharge the learning process for firms and their professionals.

The main challenge in reaching level 3 lies in figuring out how to obtain feedback without disrupting the customer experience. Ideally, the signal should be generated during the natural course of using the product. Consider again Chegg’s AI tool. It observes how well a student does on every practice test on a question-by-question basis. It gets immediate insights on where the student has problems—allowing it to change the way concepts are explained or adjust the difficulty and nature of questions on future tests—without negatively affecting the student’s experience in taking the test.

When a natural and high-quality feedback loop is not attainable, as will be the case with many offerings, companies will need to resort to directly asking for customer feedback. This should be done in a minimally intrusive way while making it clear to customers how they benefit from giving it (for example, “Please tell us on a scale of 1 to 10 how helpful our AI chatbot was so that it can learn to better serve you in the future”). And if asking for direct customer feedback is too disruptive or it provides an unreliable signal, companies could instead involve humans in the loop, as was described above in creating draft reports.

Implementation Considerations

Taking full advantage of generative AI requires ever-higher expenditures and technical expertise as companies progress through the levels. It also involves more-extensive adjustments to online products, services, and internal processes.

At level 1, the key issue companies must address is how much internal data employees should be allowed to share with publicly available generative AI tools. Whenever these tools use proprietary data, it raises data-security and competitive concerns; however, we are already seeing generative AI providers take steps to solve these problems—for example by ring-fencing each business customers’ AI and data.

At level 2, companies will need to focus on training and fine-tuning customized AI tools to ensure that their outputs are as accurate as possible (minimizing “hallucinations”) and are highly relevant to customers.

Matilda Temperley

As companies implement level 3, they must focus on redesigning their online products and services, as well as some internal processes, to seamlessly integrate generative AI throughout the entire customer experience. In doing so, they will maximize the breadth, depth, and quality of the feedback signals they extract.

At first glance, it might seem that only large firms will have the resources to achieve levels 2 and 3, but in reality, customization using proprietary company data is becoming increasingly easy and affordable. Companies can now obtain generative AI capability from providers such as Open AI (ChatGPT Enterprise), Microsoft (Bing Chat Enterprise), and Anthropic (Claude for businesses) and fine-tune it based on their own data. They can also be reasonably confident that their data will be kept secure and private and that learnings from it won’t spill over to anyone else (to the generative AI provider or to competitors). Purchasing generative AI capability from third-party providers will become similar to buying cloud computing services, with prices constantly falling and security increasing. Alternatively, companies can build their own generative AI capabilities by adopting open-source models, such as Meta’s Llama, and training them on their own data. That will keep everything under the company’s control, as is the case when doing cloud computing on one’s own servers.

What Businesses Will Benefit Most?

As we’ve noted, virtually all businesses should adopt generative AI at level 1. Most should at least consider moving to level 2 and possibly to level 3. To determine whether doing so would confer an advantage, leaders should ask two questions:

How much of our current offering can be replaced by generative AI?

This question determines the scope for potential disruption by generative AI, which, of course, indicates how urgent it is for a company to start moving up the implementation levels.

The impact of generative AI on companies that make simple consumer products such as cleaning supplies and kitchenware will be minimal. But even those companies can benefit from level 1 adoption by using the tools to increase internal productivity and creativity—for instance, to come up with new product ideas, designs, or formulations. (See “How Generative AI Can Augment Human Creativity,” HBR, July–August 2023.)

Software companies will find that the extent to which their products can be replaced by generative AI will vary a lot. All else being equal, complex software products are more likely to be affected, because a natural-language chat interface could make them a lot easier to use for a wider customer base. On the other hand, software that offers value through integration with other products or services is more immune to disruption. For example, the payment platform Stripe is built on complex and highly secure connections to financial institutions that are not easily replicable by generative AI.

For online services currently provided by humans, the threat of disruption is high and immediate, because generative AI will be able to handle the bulk of the work. Examples include logo- and website-design services (such as Webflow, Fiverr, and Upwork) and online education (Chegg).

For firms where after-sales service and support are important, generative AI can play a key role in building competitive advantage. Specifically, it can be used to supercharge customer service, which is a central part of the value proposition for users looking to get the most out of the products or who face technical challenges in using them.

If the threat of disruption is high, businesses obviously should move as quickly as possible to levels 2 and 3. If it is not, they can take a slower approach to implementing generative AI.

What is the scope for improving our competitive position using generative AI?

Businesses will be able to use generative AI to enhance the value they provide customers only if there is sufficient potential for them to leverage their own data to build a model that surpasses what can be achieved using publicly available AI tools like ChatGPT or Midjourney. To gauge that potential, companies should ask three additional questions:

How idiosyncratic is our firm’s data?

To provide an advantage, a business’s internal data must not be easily replaceable by alternative, publicly available data that can be used to train similar AI models. For example, website- and logo-design companies are unlikely to amass specialized data that would confer an advantage greater than what competitors could achieve using data derived from public websites. By contrast, the value Chegg offers its students can’t be replicated by rivals using public LLMs. That’s because its data comes from the unique actions of its students as they take quizzes, interact during instruction sessions, ask questions when they are confused, and so on.

Internal data is usually more valuable when it is idiosyncratic to the relevant product or industry vertical and to the specific customer need. Such data produces recommendations, content, and other output that cannot be replicated by generalist AI tools trained on publicly available and historical data. In such cases, we agree with Dan Rosensweig, president and CEO of Chegg, who told us, “True verticalization should win.” In other words, companies that gain specialized insights from highly segmented customer groups will have a distinct advantage.

How reliable is the feedback we get from customers?

Businesses that can closely observe the extent to which their products help customers reach their ultimate goals are in a strong position to leverage generative AI at the highest level. Video game makers receive very reliable signals by observing people’s gameplay and can use that information to determine the extent to which AI-powered elements heighten engagement. In other cases, companies must make do with less-reliable signals, such as click-through rates. Consider Adobe’s Firefly, a generative AI tool integrated into Adobe Photoshop and Illustrator for creating and manipulating images using text prompts. The only signals Adobe Firefly has for gauging whether the tool is serving customers well are how frequently each customer uses it and how many times each person tries to generate different images, which are noisy measures of satisfaction.

Note that the same type of feedback may be more reliable for some products and less for others. For instance, thumbs-up/thumbs-down is a much more useful indicator of whether customers liked a movie recommendation than of how useful they find a particular feature of an enterprise software product.

How costly is it to get reliable customer feedback?

Some companies will be able to obtain a very reliable signal by simply observing their customers as they use their products. Other businesses will need to engineer customer feedback loops, which can be costly for the company or its customers. (See “To Get Better Customer Data, Build Feedback Loops into Your Products,” HBR.org, July 11, 2023.) A company may have few opportunities to observe useful customer feedback, or privacy rules may prohibit it from making use of customer activity to train its model. Getting around such issues by asking customers to give feedback during usage or having employees act as “humans in the loop” in order to amass training data for the generative AI tool can be tricky. The first approach can annoy customers, and the second can drain company resources. When obtaining reliable feedback is onerous or costly, businesses should not attempt to achieve level 3.

. . .

Given the expected widespread adoption of generative AI technologies, the firms best placed to achieve durable competitive advantage are the ones with access to unique customer data that can be continuously replenished via self-reinforcing feedback loops. This has important implications not just for managers but also for investors, who should focus on the companies that have the potential to reach level 3 implementation.

To realize the opportunities that generative AI is creating, however, requires proper execution, which is where some incumbents may fall short. CEOs and senior leaders must make sure that this technology is treated as a fundamental part of company strategy, not just a technological issue to be delegated to IT. In that sense, it’s different from cloud computing, where the decision of how much to rely on external cloud providers versus build in-house hosting capability is not quite strategic. Generative AI, by contrast, can and should affect the customer value proposition directly. Even if generative AI is not an existential threat, leaders should push their organizations to add capabilities preemptively to make sure they don’t fall behind.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

The Right Way to Build Your Brand

The best ad campaigns make a memorable, valuable, and deliverable promise to customers.

Roger L. Martin,, Jann Schwarz,, Mimi Turner 1 Jan, 2024

From the Magazine (January–February 2024) · Long read

Ben Geier

Idea in Brief

The Problem

The proponents of advertising have always struggled to prove that the money is well spent, making it easy for executives to justify cutting ad budgets.

Why It Happens

The advent of online advertising and “performance marketing,” in which the advertiser essentially pays for clicks, has intensified the struggle. That’s because in what is now called “brand advertising,” the link between ad spending and positive financial outcomes is more tenuous.

The Solution

New research shows that brand building campaigns anchored in a memorable, valuable, and deliverable promise to the customer are likelier than campaigns that don’t make such a promise to result in positive financial performance.

More than a century ago the merchant John Wanamaker wryly complained, “Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.” Because the proponents of advertising have always struggled to prove that the money is well spent, that indictment has long helped financial executives justify cutting ad budgets. As no less an authority than Jim Stengel, a former chief marketing officer at Procter & Gamble, has noted, the struggle continues, although huge resources go toward testing advertising copy and measuring effectiveness.

The battle has become tougher with the advent of online advertising and “performance marketing”—that is, spending to capture and convert potential demand that has already arrived (for whatever reason) at the top of a brand’s sales funnel. In other words, the advertiser pays for clicks. However, in what is now called “brand advertising”—designed to help establish awareness for a brand, a product, or a service to strengthen identity and increase customer loyalty—the link between advertising spending and positive financial outcomes is more tenuous. The result is that would-be brand builders face the dual challenge of Wanamaker’s long-standing critique and the rise of performance marketing as a perceived legitimate alternative. The CEO of an iconic fashion clothing brand told one of us recently, “I am finding it impossible in my own organization, which notionally I control, to protect brand advertising against performance advertising spending.”

We finally have an answer for Wanamaker—and a coherent rationale for investment in brand building. We drew on a large database supplied by the World Advertising Research Council (WARC) to empirically identify what types of brand advertising are most effective both for attracting new customers and for converting them into loyal repeaters. As we’ll explain, the key to successful brand building is a clear and specific promise to the customer that can be demonstrably fulfilled. Advertising that makes such a promise almost always results in better performance than advertising that does not—even if the latter creates greater name awareness. And a well-designed customer promise not only leads directly to sales but also provides an effective framework on which to organize a company’s activities.

Let’s begin by explaining what we mean by a “promise to the customer.”

Promises, Promises…

When one person makes a promise to another, it creates a relationship between the two. If the pledge is fulfilled, it builds trust, resulting in a valuable connection. Research shows conclusively that making a promise and then delivering on it has a greater positive impact on the recipient than simply doing a favor or a service for that person.

Consider these three promises from competitors in the same industry: Allstate’s “You’re in good hands,” “Nationwide is on your side,” and Geico’s “15 minutes could save you 15%.” Only Geico’s is direct and verifiable. It promises that just 15 minutes of your time can save you 15% over your current insurance. That creates a connection. And if you take the 15 minutes and save 15% (or more), the company has built trust. Allstate and Nationwide imply promises—but essentially about themselves rather than the customer: Our hands are good hands, and we are on your side. Their promises aren’t verifiable. What does “good” mean in practice? And how does “on your side” play out?

Those differences made us wonder: Could the success of a brand building campaign be related to the type of promise it made? Would customers respond more favorably to a brand that made and then clearly delivered on a specific promise? To answer those questions, we turned to WARC (a sibling of Cannes Lions, which organizes the International Festival of Creativity). WARC’s database includes more than 24,000 case studies, drawn from ad competitions all around the world. The competitions require entrants to explain how their marketing communications have worked—including soft performance metrics, such as impact on brand perception, and hard measures, such as gain in market share.

Creating and executing on a customer promise is an act of strategy making. It defines where the company will play and how it will win.

We studied the data for more than 2,000 campaigns that had entered competitions from 2018 to 2022. Before looking at any of the performance metrics, we classified the campaigns according to whether they had made an explicit and verifiable promise to customers. About 60% (1,213 of 2,021) included no such promise, while the remainder (808) did.

We then compared the two groups on a variety of metrics. Customer promise (CP) campaigns outperformed other campaigns across most measures. For example, on measures of brand perception, brand preference, and purchase intent, 56% of CP campaigns—versus 38% of others—reported improvement. Market penetration increased in 45% of CP campaigns versus 38% of other campaigns, and market share increased in 27% of CP campaigns versus 17% of others. That is not to say that other campaigns didn’t perform well on some measures. They beat CP campaigns soundly (55% to 43%) on generation of social media buzz, for example.

But CP campaigns win on the important metrics. WARC ranks campaigns in a hierarchy of six ascending levels of performance. Unsuccessful campaigns don’t make it into the hierarchy. Non-CP campaigns outperform CP campaigns slightly (51% to 49%) on the lowest level: “influential idea.” But as the categories become more important, the advantage of CP over non-CP campaigns grows, with 62% over 38% in “commercial triumph” and 67% over 33% in “enduring icon.”

See more HBR charts in Data & Visuals

What Does a Customer Promise Involve?

We began by looking at the kinds of promises made in our dataset of 808 CP campaigns. The majority of promises fell into three types, and 89% of campaigns made at least one type. Some made more than one.

Emotional.

Perhaps surprisingly, this was the biggest category, with 35% of the campaigns having made it their primary kind. It involves the emotional benefits a customer will receive from using a product or service. A classic example is the Mastercard “priceless” campaign: “There are some things money can’t buy. For everything else, there’s Mastercard.” The promise is that Mastercard will take care of everything involving money, allowing you to focus on your treasured experiences. Another classic is “Have a Coke and a smile,” which focused customers on the pleasure associated with drinking a Coke with someone else. And De Beers’s famous “A diamond is forever” has since 1947 promised that the endurance of a diamond confers permanence on the emotions attached to it. More recently Lysol’s “Protect Like a Mother” makes the emotional promise that using the product will make you as protective as fierce mothers in the animal kingdom.

Functional.

In 32% of our sample the primary promise was functional. For instance, Snickers’s “You’re not you when you’re hungry” promises that customers will be able to operate at full capacity after consuming one of its candy bars. FedEx launched its “When it absolutely, positively has to be there overnight” campaign in 1978, and the promise was so powerful that it resulted in the creation of a new verb: to FedEx. Part of the campaign’s success is that it conveys an emotional promise as well: You don’t have to worry, because it’s FedEx.

Enjoyable to buy.

A surprisingly large number of companies (22%) adopted as their primary promise the idea that customers would enjoy the process of purchasing. A good example is provided by the paint maker Sherwin-Williams, which won the 2022 B2B Grand Prix at Cannes for its campaign based on an artificial intelligence tool that allows customers to create and choose a paint color by using voice to describe it (“a turquoise like the sea in the Maldives,” for example). Designers and architects loved it. The promise that Uber is “the smartest way to get around,” which focuses heavily on the ease of ordering and paying, is another example.

The remaining campaigns fell into three minor categories: value for money (5%), such as Geico’s “15 minutes could save you 15%”; sustainability (4%), including Tide’s “Turn to Cold” campaign, which promises that its new product is as effective in cold water as regular Tide is in hot; and making amends for prior failures (2%), with Wells Fargo’s “Earning back your trust” campaign in the wake of its fraudulent account-opening scandal being a prime example.

Having determined what kinds of promises companies make, we turned to look at what makes the promises attractive to customers. We found that successful campaigns share three features. They are:

Memorable.

In most cases they run counter to expectations. Germany-based SIXT has quickly become the fourth-largest rental car company in Europe and is the fastest growing in the U.S. market. Its slogan is “Don’t Rent a Car, Rent the Car.” Its promise is that SIXT won’t disappoint you by foisting the only available vehicle on you when you arrive for pickup, as often happens to customers at other companies. You’ll be given the car you originally chose.

Valuable.

Customers must want what the promise offers. That’s more likely if it diverges from a status quo they don’t like. SIXT executives realized that customers willing to hire an expensive car actually cared about the make and model. That was less of an issue for bargain hunters—but they weren’t SIXT’s target market. Of course, other rental companies also offer premium cars, but in order to save costs, they don’t always guarantee a specific car, giving SIXT an opportunity to differentiate itself with premium buyers.

Deliverable.

Part of the value of any customer promise is precisely that it is a guarantee, which requires that the customer be able to determine that the promise was fulfilled. Making a promise involves risks. SIXT must deliver the car. Mastercard actually needs to take care of “everything else.” Coke has to be enjoyable (which is why its reputation suffered so much when people didn’t like the taste of New Coke); Lysol must protect; Snickers must boost energy, and so on. Our assumption is that most of the 808 CP campaigns generally fulfilled their companies’ promises; otherwise they wouldn’t have had disproportionally positive effects. But because customer promise has not been an explicit factor in previous surveys, the WARC dataset includes no information about whether the companies making such promises actually fulfilled them. Our hypothesis is that had we been able to create a subsample of campaigns that definitively made good on their promises, we would have found that they scored even higher on the performance metrics. Of course, how a customer determines whether the promise has been kept may not be obvious, especially in emotional-value campaigns. But it clearly makes sense for companies to figure out exactly how to deliver on their promises.

The designer and photographer Ben Geier is inspired by the aesthetic of rural America from the 1950s to the 1980s. He travels to document examples of classic Americana architecture and signs before they disappear.

Marketers always claim that their goal is to make campaign promises memorable, valuable, and deliverable. But as we’ve seen, their promises aren’t always about the customer. The premier advertising event of the year is the Super Bowl, when many viewers pay more attention to the ads than to the game, and the 2023 Super Bowl was no exception. Most of the ads were feats of creative storytelling packed into a precious few seconds of very expensive airtime. They were memorable and often featured celebrities: The Hellman’s mayonnaise ad depicted Brie Larson and Jon Hamm about to be eaten in a sandwich by Pete Davidson.

But our appraisal of the 51 commercials for the 2023 Super Bowl reveals that fewer than a third of them attempted to convey a specific promise of value to be delivered to the customer—a finding close to our results when we broke down the WARC campaigns. What most of those ads were aiming at was to enter the cultural conversation—advertising’s equivalent of trying to be the most popular kid at the party. Only a handful actually made their tagline a memorable, valuable, and deliverable promise to the customer. Farmer’s Dog, which promised “Real Food. Made Fresh. Delivered,” was one.

We don’t have the data to assert that its Super Bowl ad boosted sales for Farmer’s Dog more than the other ads did for their companies. But feedback we got on our research suggests that it’s very likely. When we showed our results to one major advertiser, for example, its executives decided to review the copy of three successive ad campaigns: a successful one followed by a disappointing one followed by a successful one. Everyone in the room agreed that the company had made an explicit promise in the first and the third, but its executives had been so excited about a new version of the product featured in the second that they had focused the ad on how great it was and neglected to make a promise.

The insight that effective brand building is anchored in a promise to the customer can do more for a company than just help it invest wisely in advertising. The promise can serve as a strategic framework for mobilizing everything a company does.

Your Promise Is Your Strategy

Today’s companies face big challenges stemming from the fragmentation of functions including product, marketing, sales, customer experience and loyalty, and HR and talent. They all tend to operate in silos, often at significant cross-purposes.

A well-conceived customer promise can provide a common objective. That’s because creating and executing on a CP is, in essence, an act of strategy making—defining where the company will play (for SIXT, among affluent people who care about cars) and how it will win (by guaranteeing they get the car they chose). This provides information for investors (how the company will beat its competitors), customers (the value the company will bring them), employees (the value they are striving to create), the marketing and sales function (how the company positions itself), the production function (what the operational objective is), and finance (what it should be measuring).

We think of taking a CP to the market as a cycle with five steps. The first step is to understand customers well enough to know what constitutes memorability and value for them. SIXT understood its customers well enough to know that they were frustrated by being given a rental car they hadn’t chosen and didn’t like. It used that understanding to design a CP, settling on a very simple but compelling and memorable statement: “Don’t Rent a Car, Rent the Car.” The first half of the tagline is counterintuitive—No, I need a rental car!—but the second half makes a specific and deliverable promise: SIXT said I would be given the car I booked—and I was. Once a company has designed its CP, it can issue it publicly and in doing so, commit to it, which SIXT does relentlessly. Then it must project that promise to the target audience: If it isn’t received, it can’t be effective. Finally, it needs to fulfill the CP, or the promise will be largely worthless. SIXT unfailingly does so.

This cycle provides guidance about the resources the company must dedicate to the various aspects of brand building. How much should it dedicate to understanding customers? How much to designing and issuing a CP? How much to projecting it? And how much to ensuring that the key aspects of the CP are delivered? As the company repeats the cycle, it learns more about its strategic challenges and how to account for customer and competitor shifts.

The ultimate goal of a marketing campaign should be to go through the CP cycle often enough that your customers stop wondering whether you’ll make good on your promises. Once they assume that you will, they purchase out of habit rather than choice. Tide customers don’t question whether the detergent will get their clothes whiter and brighter. They just dump it in the shopping cart. This unthinking habit means that they give Tide’s competitors no opportunity to prove their own CPs, widening Tide’s lead over the competition. The result is an enduring and valuable brand.

So when a CMO comes to the excomm meeting to propose allocating capital to a new campaign, the CEO and the CFO should ask four simple questions: (1) Is the campaign based on a clear and unambiguous customer promise? (2) Were customer insights used to identify a promise that customers value? (3) Is the promise framed in a way that is truly memorable? (4) Were product, marketing, sales, and customer experience involved to ensure that it will be consistently fulfilled?

If any of the answers are negative, the CMO needs to go back to the drawing board. But if they’re all positive, the company should absolutely invest in the campaign, because those questions capture the secret to brand building.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Experience

- The New Rules of Executive Presence

- Case Study: Should I Pitch a New Project-Management System?

- Can We Make Middle Age Less Miserable?

- Life’s Work: An Interview with Norma Kamali

The New Rules of Executive Presence

How leaders need to think and act now

Sylvia Ann Hewlett 1 Jan, 2024

From the Magazine (January–February 2024)

Chen Wu

Aspiring leaders have long been told that to be considered for senior management roles, especially those in the C-suite, they must demonstrate “executive presence” (EP). In most corporate settings, that has traditionally boiled down to three attributes: gravitas, strong communication skills, and the “right” appearance. But what exactly constitutes EP now? After a decade marked by tumultuous economic, cultural, and technological change (think climate threats; the Covid-19 pandemic; war in Europe and the Middle East; the #MeToo, Black Lives Matter, and LGBTQ+ rights movements; worsening political divides; and the rise of Zoom, Instagram, and other online platforms), how have expectations about ideal leadership traits changed?

Surveys I conducted in 2012 and in 2022 tell a story of significant shifts embedded within continuity. The 2012 survey targeted 268 U.S. business executives at the director level or above in various industries; the 2022 survey targeted 73. Both groups were asked to rank the importance of 25 leadership traits.

See more HBR charts in Data & Visuals

Confidence and decisiveness have not gone out of style; those are still the most-sought-after traits contributing to gravitas, which accounts for the lion’s share of EP. However, inclusiveness, in all its manifestations—respecting others, listening to learn, telegraphing authenticity—has shot onto the list of the most-valued components of all three dimensions of EP. That change reflects the new weight of diversity, equity, and inclusion in business strategy.

The old ideal—shaped and embodied by white male CEOs who ruled the U.S. and European corporate worlds through the beginning of this century—has long been eroding. In sharing my latest research findings here, I aim to shed light on what the preferred leadership model looks like today. Women and people of color no longer have to fit into a mold not fashioned for them. But they must still cultivate a confident, decisive, polished, and commanding persona without running afoul of biased social norms that punish them for overstepping. Meanwhile, executives who neatly match the old profile can’t rest on their laurels, assuming that the EP that once afforded them power will continue to do so. They must stretch themselves in new ways to meet evolving expectations for leaders to be “real”—online as well as in person—while simultaneously ensuring that team members feel seen, heard, and valued.

What follows is a guide to the new rules of executive presence—a look at the traits that increasingly matter, some ways to cultivate them, and a dozen people who currently exemplify them.

Gravitas

Trait: Inclusiveness.

To be inclusive, you must not only hire people with diverse backgrounds and give everyone a fair shot at climbing the ladder. You must also ensure that all your employees feel appreciated and supported. In doing so, you will uncover value for individuals, your team, and your organization.

Tactic: Deliver informed empathy.

When MGM Resorts International started to reopen its hotels and casinos in the winter of 2020–2021, CEO Bill Hornbuckle wanted to raise the morale of employees as they struggled to recover from the tragedies and disruptions of Covid-19. Hornbuckle had started his career as a room-service waiter at the Jockey Club, so he understood the demands on his people. He knew that MGM could improve their work experience while also setting itself up as an employer of choice as the hospitality sector ramped up and the labor market tightened. After much fact-finding and many focus groups, he and his team rolled out what they called a “culture of yes.” It was all about empowering employees to say yes to guests and authorizing managers to say yes to employees—whether they were seeking three-day workweeks, short shifts, or the ability to move from hourly work to the management track. “We’re giving them what they told us they most want—the ability to deliver excellence on the job and improve their own prospects,” Hornbuckle explained to me. “Employees now see us leaders as having more understanding and empathy.”

Tactic: Volunteer a “value add.”

Back when he was an assistant vice president at Merrill Lynch, Todd Sears approached his mentor, managing director Subha Barry, with a business idea that focused on better serving the LGBTQ+ community. As an openly gay man, Sears knew that most wealth-management firms catered to straight people and had very few products or services tailored to the needs of people like him. For example, since same-sex couples are much less likely than heterosexual couples to have children in their households (15% compared with 38%, according to U.S. Census Bureau data), they tend to be more interested in targeted philanthropy than in college-tuition savings accounts. Furthermore, Sears’s activism on behalf of LGBTQ+ rights had made him a well-known figure in the gay community, and he was able to bring in partners eager to work with Merrill on this venture. Barry, who had none of those connections, was excited about tapping into a new market and making Merrill more inclusive. Over several years she and Sears built a team that managed more than $2 billion in assets invested by LGBTQ+ clients.

Trait: Respect for Others.

Being a respectful leader requires much more than treating everyone with dignity. It involves acquiring a body of knowledge that allows you to understand the lived experiences of those whose identity or heritage is different from your own. Consult experts, dig down into the research, and add people with diverse perspectives to your team. If you go beyond empathy and compassion, you may gain valuable insights that can strengthen your business.

Tactic: Hire and utilize diverse talent.

Laura Garza, the chief people officer at Dyson, sees respect for others as vital to her company’s success. The technology firm, known for its vacuums and other appliances, has made a point of hiring people who hail from different countries and have varied backgrounds. “There’s a recognition here that global and diverse talent generates disruptive innovation,” Garza told me. “I’m Mexican and I’m gay,” she added. “That puts me in a position to ‘get’ the complexity of the global marketplace.” She is not alone: These days half the members of Dyson’s executive leadership team are women, 60% grew up outside Britain (where the company started), and all agree that having a multinational, multiethnic workforce has spurred the development of some extremely successful products. Take hair dryers. In China and Japan, women typically wash their hair at night and use hair-care rituals to “wind down.” They’re looking for serenity. In sharp contrast, most British and American women wash their hair in the morning, when they’re racing to get to work or drop the kids off at school. They’re looking for speed. Dyson’s Supersonic hair dryer was developed to serve both customer segments. It has become a bestseller in Asia because it’s quiet and safe, with no blades or brushes, and in Europe and the United States because it’s the lightest and fastest dryer on the market. This smash success has contributed significantly to growth at Dyson: Company revenue surged exponentially in the first half of 2023.

Chen Wu

Tactic: Look beyond the pedigree.

As the CEO of IBM from 2012 to 2020, Ginni Rometty committed to a suite of policies and practices designed to give a leg up to young people from less-advantaged backgrounds, helping them finish high school, earn two-year associate degrees in a STEM field, and find well-paid jobs at IBM and elsewhere. Part of the inspiration for developing these “new-collar” workers was Rometty’s mom, who with four children and no education past high school had to figure out how to earn a living when her husband, Rometty’s dad, abandoned their family. It was tough going. “She wasn’t dumb; she just didn’t have access,” Rometty says. “And that has forever stayed in my mind.” Her efforts at IBM paid off. In 2020 new-collar workers constituted 15% of the company’s U.S. hires. They’ve helped IBM weather labor shortages and successfully transition to new technologies. This tranche of talent has also proved to be more loyal and more eager to stay at the company than recruits from elite four-year schools.

Communication

Trait: Command of Zoom.

Covid-19 sped up the shift to virtual communication, and many of the executives I interviewed in 2022 told me that they struggled to master the art of leading on Zoom, Teams, Slack, and other online platforms. But doing so is key to EP today.

Tactic: Ace the visuals.

The late Apple cofounder and CEO Steve Jobs had legendary command of what he called “the visuals.” This was the not-so-secret sauce that allowed him to inspire his engineers and stir the souls of millions of new tech users, whether he showed up in person or via video. He accomplished this by eliminating the superfluous: His speaking style was crisp, clear, and concise; he used blank backdrops; and he wore minimalist outfits that signaled edgy elegance but weren’t distracting. Most importantly, he dispensed with notes, lecterns, teleprompters, and PowerPoints, focusing instead on eye contact. Whether face-to-face or on camera, Jobs always looked directly into a person’s eyes. His visuals carried particular weight because they were grounded in the clean aesthetics and Zen values that were fundamental to who he was and what his company stood for.

Tactic: Proactively manage virtual meetings.

As the chief financial officer of Reginn, an Icelandic real estate firm with clients around the world, Rosa Gudmundsdottir has become a whiz at staging high-impact virtual meetings. She follows a few simple rules. First, she oversees a brief tech check beforehand to ensure no snafus. Second, she distributes an agenda and relevant pre-reads at least six hours in advance. Third, she starts meetings by introducing anyone new to the group, taking care to highlight a skill set or an experience that the person brings to the topic at hand. Fourth, during the meeting she solicits participation from everyone in attendance, encouraging those who’ve been quiet to share their thoughts on a key question. Finally, at the end of the meeting she asks a colleague to write and quickly distribute a summary of decisions made and next steps. She rotates this job so that her entire team gets a turn.

Trait: “Listen to Learn” Orientation.

Although displaying forcefulness was high on the list of most-sought-after communication traits in 2012, it’s less desired today. People now gravitate more toward leaders who listen and learn from others before they make decisions—a trait seen as critical to growing markets and retaining top talent.

Tactic: Engage eye-to-eye.

When Jørgen Vig Knudstorp took the helm of Lego, the company was struggling. His theory was that it had strayed too far from its core mission by diversifying into Lego-branded clothing, theme parks, jewelry, and video games, but as a new chief executive coming in from the outside, he wanted to test that hypothesis before acting on it. Over a 12-month period he sat down with every category of employee at Lego—engineers in the design shop, workers on the factory floor, executives in the C-suite—seeking information and guidance. He also met up with external stakeholders, including customers, retailers, and specialists in early childhood education. He even spent three days at a Lego conference for adult fans in Washington, DC, mingling with attendees and paying attention to their concerns. This listening journey uncovered a groundswell of support for Lego to refocus on its signature building blocks, which are designed to nurture children’s problem-solving abilities and creativity. Knudstorp subsequently embedded listening “up close and personal” in the company culture. For example, every year Lego involves thousands of its customers as “volunteer designers” to advise on product updates. This ongoing consultative process is a large part of why the company is back on a growth path.

Tactic: Go beyond your comfort zone.

Unilever, which makes and markets hundreds of consumer goods in 190 countries, takes listening seriously, asking selected current and future leaders to spend time outside the realm of their normal experiences in a program called GITS (Get Inside the Skin). GITS is designed to teach them how to better empathize with the company’s 3 billion customers, who come from all walks of life. Former chairman and CEO Niall FitzGerald helped create GITS and was also a participant, volunteering for the Salvation Army in Croatia, where he interacted with the homeless. He describes meeting one “unkempt, uncared-for man” who happened to be from his own hometown back in Ireland. “We were two people to whom fate had dealt very different hands,” FitzGerald recalls. “He taught me, in a way no other experience has, the power of generous listening—without judgment.” Other Unilever employees have spent time at a rural hospital in Mexico, an AIDS clinic in Ireland, and a prison in Germany. Like FitzGerald, those leaders are working hard to better understand all their customers.

Appearance

Trait: Authenticity.

Appearance is the least-important EP bucket, but it’s the one that changed most from 2012 to 2022. Authenticity, which didn’t register with survey respondents 10 years ago, is newly prized. Nowadays, to be seen as leadership material, executives are expected to reveal who they fundamentally are—not mimic some dated, idealized model.

Tactic: Showcase your roots and values.

Throughout her long career in the U.S. finance industry—from intern at Fannie Mae to senior roles at JPMorgan Chase to CEO of TIAA—Thasunda Brown Duckett has shown up as exactly who she is: a Black woman who experienced both racism and economic uncertainty growing up in Texas with a blue-collar dad and teacher mom. Because she understood her parents’ powerful aspirations for homeownership, she was drawn to the mortgage and lending business, and she now leads an organization that offers investment, retirement, and banking advice to people in the caring sector (teaching, government service, health care, and the nonprofit world). She has always been clear about her background and values and offered several examples in a 2019 interview with the New York Times: the time she told a client that she had no intention of hunting or fishing with him but would happily go out for sushi; the conversation in which she accepted a big promotion only after reminding her boss that she was pregnant and would be taking a three-month maternity leave; her supportive response to an African American team member who wanted advice on styling her hair for a big presentation (Duckett, who is herself often in long braids, asked, “What would make you feel beautiful?”); and the way she kicked off an hourlong conversation with her coworkers about race, saying, “I’m an angry Black woman today” and explaining that her son had been called a derogatory name at school. As she told the Times, “I just bring the best version of Thasunda, all of me, to the table, because I want everyone else to do the same.”

Tactic: Dress for the new normal.

Figuring out what to wear in today’s hybrid workplace is challenging for both seasoned and emerging leaders. Most white-collar professionals who worked remotely during the pandemic adopted casual, comfortable attire. However, “polished” still reigns as the most-sought-after appearance trait. One executive who seems to have a good handle on the new dress code is Alphabet and Google CEO Sundar Pichai. Silicon Valley types are well-known for dressing down, but Pichai sets himself apart with an approachable yet professional style that people in various industries can emulate. Often pairing a black leather bomber jacket or a track jacket with dark jeans, a T-shirt, and high-end sneakers, even for interviews and presentations, he telegraphs a seamless interweaving of work and personal life. He’s also savvy enough to adapt his attire for different settings, signaling that he’s an aware global citizen who can bridge divides. For example, to testify before the U.S. Congress, he has worn tailored suits to fit in with the legislators questioning him. But when he met with Indonesian president Joko Widodo, he donned a shirt with an earth-toned print that resembled Southeast Asian ikat patterns—a gesture that was reportedly well received by the local audience.

Trait: Online and In-Person Presence.

Being a standout leader in 2024 necessitates showing up both online and in the flesh.

Tactic: Use social media to shape your brand.

Sheryl Sandberg isn’t leaving the vital matter of her legacy in the hands of biographers and historians; she’s shaping it herself. She wants to be thought of as the best-selling author of Lean In—someone who coached women on how to own ambition and shoot for the stars—rather than remembered as the hard-nosed businesswoman who spent 14 years growing and protecting Facebook. So since stepping down from the COO role at Meta in June of 2022, she has been using her social media presence to focus on women who have leaned in. Her recent Instagram posts, for example, celebrate the achievements of female business owners: a Black entrepreneur who runs a wildly successful dessert company in Tulsa, Oklahoma; a Lebanese restaurateur who’s opened a chic café in Montreal that has become a go-to place and highly profitable.

Podcast Series

Coaching Real Leaders

Real-life coaching sessions with leaders working to overcome professional challenges.

- Subscribe On:

- Apple Podcasts

- Google Podcasts

- Spotify

- RSS

- Overcast

- RadioPublic

Tactic: Build relationships in person.

Tiger Tyagarajan, the CEO of Genpact, a 115,000-person business services company, is much admired for his success empowering high-performing women. Between 2011 and 2023 he shifted the percentage of women in senior roles from 1% to 38%. In 2022, as the pandemic quieted down, he noticed that men were more willing than women to come back to the office. He didn’t want to force everyone to return, but he worried that women who stayed fully remote might imperil their promotion prospects by being “out of sight, out of mind.” Therefore, he began having executives pull their teams together every six weeks for two-day on-site retreats. “We meet in Genpact offices, stay in local hotels, and break bread together as well as dig down into next-gen challenges and opportunities,” he told me. “Extraordinary exhilaration and energy come out of these office retreats, plus a host of new ideas, and on the relationship-building front, they’re a game changer. They go a long way toward leveling the playing field for women who work from home.”

. . .

“The new rules of EP are both daunting and exhilarating,” says Kennedy Ihezie, a rising star at the insurance giant AIG. To show confidence and decisiveness but also inclusiveness and respect, to balance powerful speaking and a commanding presence with listening and learning, and to project both polish and authenticity is a heavy lift. But leaders who manage it can inspire their employees to greater achievements and help their organizations truly flourish.

Given the high stakes, I want to offer an important piece of encouragement. My research in both 2012 and 2022 indicates that executive presence is learnable. You don’t have to be some kind of genius to crack the EP code—you must simply act, speak, and appear in ways that set you apart as a leader. That starts with knowing what behaviors are most valued in your organization and industry, seeking guidance from sponsors, and then committing to the hard work of embodying and displaying those traits in your own unique way. Remember, too, that you don’t have to nail every prized leadership trait in the gravitas, communication, and appearance buckets. Ginni Rometty doesn’t sweep the board, nor does Sundar Pichai. Success can come from simply developing your authentic strengths and excelling at two or three competencies in each EP category. But please, make sure to focus on at least one leadership trait that’s in ascendance.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Case Study: Should I Pitch a New Project-Management System?

A newly hired software developer considers recommending changes at an established tech company.

Denis Dennehy 1 Jan, 2024

From the Magazine (January–February 2024)

Anuj Shrestha

Cynthia Ramos just wanted to grab her pasta salad from the communal refrigerator and eat at her desk, but instead she got sucked into another exchange with Jim Miller. Since she’d joined MainFrame as a software developer, six months earlier, every conversation with Jim had been about what a hindrance the company’s project-management system was. On her very first day—in a roomful of new colleagues—he’d asked whether her former employer had used Scrum.1 When she’d said no, he’d chuckled and said, “You might regret leaving to come here!”

Now Jim shouted a greeting: “Hey, Ramos, how’s your sprint going?” He and his tablemates—Adnan Persaud, and Wai Quon—burst into laughter. “Fine,” Cynthia replied, smiling and grabbing her lunch. As she left the room, she heard Jim whisper, “I know she hates Scrum as much as I do.”

Cynthia didn’t love Scrum, but she did enjoy working at MainFrame. Her prior employer, Ambitious Computing, a start-up focused on artificial intelligence, was more technologically advanced, and her colleagues had been happier, but MainFrame was one of the three leading hardware and software companies in the world. It had been in business for 40 years, and it paid her almost 50% more than Ambitious had.

The hardest change had been to go from working in a much quicker, more loosely structured manner to adjusting to MainFrame’s more methodical and deliberate pace. Cynthia’s nine-person team included developers in India, Australia, the UK, and the United States. They operated on a follow-the-sun model that maximized productivity by ensuring that work proceeded continuously, with team members in one time zone handing off work to colleagues in another from day to day. Clear cross-team communication was essential.

Following the Scrum process,2 each MainFrame software team’s work was divided into two-week sprints with a major code release each quarter. The code would be tested and integrated with clients’ real-time critical systems—such as military equipment, satellites, autonomous vehicles, and medical devices—that had to perform with zero failure.

At the end of each two-week sprint Cynthia would send a batch of code to a testing team and gather her own team to reflect on how things had gone and what they would like to change for the next sprint.3 She would also review the backlog— a prioritized list of projects that the testing team had identified for her team to work on next, such as features to support or bugs to fix. The list and the associated product road map were generated and approved by a management team high above her pay grade. Cynthia’s team typically completed 10 stories (or tasks) during each sprint. MainFrame wanted everyone to complete at least 12. Despite his complaints, only Jim Miller ever hit that quota.

Cynthia, Jim, Adnan, Wai, and the other “Scrum masters” reported to Emma Burger, the manager responsible for gathering detailed user requirements from the business side and conveying them to the software teams. Emma reported to Chris Patrick, the director of manufacturing, who supervised 34 reports, including technical project managers, software development engineers, and release managers in the United States and around the globe.

Cynthia enjoyed working for Emma and wanted to make her life easier, not harder. But she agreed with Jim: MainFrame’s processes were too cumbersome. That’s why, when Jim followed her out of the canteen to her cubicle, sat on her desk, and asked her to help him change things, she listened and ultimately agreed to meet with him later to discuss a plan.

Jim’s Request

“I’ve been waiting for someone like you to join MainFrame,” Jim said. “They’ll listen to you.”

“What do you want me to do?”

“Working in small batches, with these tight cadences, limited by management in what we’re able to do, we’re never going to be as productive as they want us to be,” he said. “It takes so damn long to finally release even the smallest update. We need a different system. Have you used Flow? My daughter is a software developer too, and that’s how her team works.”

Not only had Cynthia used Flow analytical tools and techniques when she was at Ambitious Computing, but she’d earned a diploma in the method. She hadn’t really wanted to take the course, but her boss and mentor at the time had insisted. “This is where the industry is headed,” she’d said.

“I used Flow at Ambitious,” Cynthia told Jim.

“So you know it’s better,” he said. “There’s no continuous and unnecessary starting and stopping, no siloed workflows, more freedom.4 No more redundant daily 9 AM stand-up meetings that my team in Mumbai has to join at 6:30 PM their time. We set the release date. We leverage predictive analytics, using AI rather than asking for extended deadlines.”

Cynthia agreed with Jim on those points, but she also knew that not everyone liked working with Flow. For example, the AI-based tools Jim referenced were great for predicting errors and impediments to the smooth flow of work, but that was only because all work was being monitored and managed transparently in real time. Teams working in Flow—and their managers—could see the development process laid out on digital screens in their offices—which was maybe great for collaboration in distributed teams, but nerve-racking for less-confident developers.5

Furthermore, MainFrame was a technology stalwart, one of the first companies ever to produce commercial software. Cynthia wasn’t sure that after only six months at a company that had been successful for 40 years she could ask its leaders to change the way they were doing business.

“How can I help you with this?” she asked.

“I want you to pitch Flow to the higher-ups,” Jim said.6

A Pilot Project

Against her better judgment, Cynthia agreed to attend a meeting with Emma and Jim. He did most of the talking, explaining his vision for what a pilot program would look like and how he thought Cynthia could present it to Chris Patrick at the annual process-improvement review.

Emma was skeptical. “Cynthia, what do you think?”

“Flow worked very well at Ambitious,” Cynthia said. “I’m not sure it’s what we need here, but I’m happy to help pilot it.”

“Would you be willing to present the results to the board?” Emma asked. Cynthia shrugged.

“Cynthia has an Ivy League degree,” Jim said. “She worked for a future unicorn. She has a diploma in Flow. If anyone can demonstrate and communicate the need for this change to Chris, it’s Cynthia.”

Cynthia was taken aback by how much Jim knew about her but also pleased by his esteem. Since joining MainFrame, she’d kept her head down and tried her best to hit the unrealistic deadlines set for her by her supervisors. Maybe it was time for her to speak up and take a risk.

“OK, as long as you all meet your quotas, I don’t care how you do it,” Emma said. “But if there are any signs of problems, I’m going to shut it down.”

Over the next few months Cynthia reviewed academic research papers and consultancy reports to compare techniques and challenges in Flow with those in Scrum and other software development methods such as Extreme Programming (XP) and feature-driven development. She reread Stop Starting, Start Finishing and similar books. She then told Emma she was ready to work with a vendor to launch a pilot project on its AI-powered Flow software, which, unlike their current system, had digital Kanban Board functionality for better team communication and could automatically generate metrics, such as cycle time and lead time, which teams in Scrum needed to log and track themselves.

In sprint planning meetings, now scheduled for half a day rather than squeezed into an hour, Cynthia’s team discussed the product backlog, divided projects into tasks, and planned for future sprints to deliver on prioritized requirements. In some instances Cynthia had to devise a combination of Scrum and Flow techniques, especially at the beginning of projects.7 The frequent-delivery approach of two-week sprints was a MainFrame requirement. That rule couldn’t be changed until everyone was working in Flow.

The pilot was a hot topic in the canteen. On the day Cynthia announced that her team would be experimenting with Flow coordination, Wai spoke to her directly for the first time. “Thanks for doing this!” he said. “I can’t wait until we all get it!”

One Year Later

After the pilot had run for a year, Cynthia was proud of the results. Her team had maintained its 10-story-per-sprint production but was now continuously deploying code with no critical errors, and team morale had improved. Jim had cheered her on the whole way.

“You really did it,” he told her. “We’ve got AI choosing and prioritizing your projects rather than some corporate nitwit who has never written a line of code. It’s catching defects and bottlenecks before your people do. The bosses can see exactly where the team is in its projects and exactly how little time they’re giving you!”8

But Emma soon burst their bubble. “I previewed what we’re doing for Chris,” she said on a video call with Cynthia and Jim from London, where she’d traveled for a senior planning meeting. “We got into a big argument. He’s never used Flow. The first thing he asked was how many stories Cynthia’s team averaged each sprint. When I told him productivity basically stayed the same, he rolled his eyes.”

“So is that it?” Cynthia asked. “Do we still present to the process-improvement board? Can we keep the pilot going?”

“Chris said it was our decision, but he’s confident that we’re going to get roasted by the committee—especially the older members, who don’t have a software background. Honestly, Cynthia, you have the expertise, and you ran the pilot, so it’s your call. Do you believe this will improve our productivity in the long run? And are you strong enough in that conviction to stand up in front of these guys and say so?”

That night, as she was leaving the office, Cynthia ducked into the canteen to grab her unopened Tupperware container. She hadn’t been hungry for lunch that afternoon. Her stomach had been tied up in knots. Wai, Adnan, and Jim were leaving the office for happy hour and asked if she was ready to present Flow. She said she had a bad feeling.

“Don’t worry, Ramos,” Jim said. “You’ll do great.”

The Experts Respond: Should Cynthia present Flow to the process-improvement board?

Sonali Raut is a senior data scientist at Munich RE Automation Solutions.

Cynthia should wait to present Flow to the process-improvement board. First she should meticulously craft a proposal delineating the rationale behind this initiative, including well-researched data and evidence-based arguments. That will improve the prospects of successfully implementing the methodology.

Her biggest error was failing to include Chris Patrick on the Flow project from the start. As an established company with a track record of success, MainFrame won’t introduce a new project-management system without his support.

But make no mistake: Adding Flow to the company’s processes would absolutely improve project structure, adaptability, efficiency, administrative overhead, and productivity. It’s Cynthia’s responsibility to bolster her proposal with data, research findings, and pertinent case studies.

Now that Chris finally knows what Cynthia and Emma are doing, they should walk him through everything the team has accomplished. Knowing that he’s focused on stories-per-sprint as a key metric, and that her team failed to improve on that during the pilot, Cynthia should highlight the transparency provided by the digital Kanban board, the improved teamwork, and the higher morale.

She should emphasize that an unchanged story-per-sprint metric is actually a positive indicator: Her team was able to sustain productivity during the pilot even as it transitioned to continuous code integration and deployment, improved oversight, and made developers happy. As the team becomes more adept at the new system, speed and efficiency will only increase.

Cynthia must strive to make Chris understand that other metrics—such as enhanced product features and reduced development costs—matter too. Perhaps she can offer an example of an improvement made during the pilot that delighted customers, or an error caught by developers that they would have missed without using Flow. She should also show Chris case studies from other companies that have transitioned to Flow and explain how her previous employer uses it.

Finally, she will have to detail the business case for switching. Does she know how much the transition will cost? Does she have a budget in mind for the project? How long will it take? How much money will the company gain or save by improving productivity, collaboration, and transparency? That is, what’s the ROI?

Only after Chris is on board, and she, he, and Emma have settled these issues, should she make her presentation to the process-improvement board. I’m confident that Cynthia can persuade MainFrame to switch to Flow from Scrum, but she’s not ready to make her case yet.

Alex Estevam is a technical program manager at Mastercard.

Cynthia is ready to present. One of the five key values of Scrum is courage. The Scrum Guide, which was written and amended by the originators of the Scrum framework, says that people who use Scrum methods should be comfortable enough with colleagues to speak up for what they believe in. That’s what Cynthia must do here.

She has good reason for wanting to introduce Flow processes to MainFrame. Scrum methods require a top-down approach. Senior management chooses what developers work on and tells them how long they have to work on it, which developers don’t like. Flow, by contrast, gives developers the ability to show management what needs to be fixed and when. Also, many of her colleagues want Flow—and Cynthia seems to as well. So she should present it.

Of course, no matter how effectively she presents Flow to the board, some managers and even some developers will resist it. Although I know some developers who absolutely hate those daily stand-up Scrum meetings—which they regard as a waste of time and believe that managers conduct only because they have to—others think they’re essential, allowing everyone to collectively prepare for the day ahead.

Nonetheless, Cynthia knows that a transition to Flow is the right long-term move for MainFrame. That’s why it’s critical for her to present to the board. Whether she succeeds will probably depend on how well she educates the board members. She has already proved that her team can maintain productivity, continuously rolling out new code with no major errors. That’s a victory.

She should also find a financial justification for the switch. She should make it clear that she can expand the pilot and start collecting data to demonstrate that the processes have improved and that those improvements will ultimately save MainFrame a lot of money.

If no one has the courage to present Flow, management may never learn enough about it to understand how well it works. Cynthia’s colleague is right. She’s the person best placed to persuade skeptics like Chris.

One other thing I want to note: The Scrum Guide says courage should be bilateral. That means that if Cynthia is brave enough to present Flow to the board, Chris must have the courage to listen to her argument and, if she makes a good one, admit that he was wrong about Flow.

HBR’s fictionalized case studies present problems faced by leaders in real companies and offer solutions from experts. This one is based on a case taught by Nien-hê Hsieh, the Kim B. Clark Professor of Business Administration at Harvard Business School.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Can We Make Middle Age Less Miserable?

New books and a podcast offer insight and advice.

Alison Beard 1 Jan, 2024

From the Magazine (January–February 2024)

Antonio Sortino

Today is my 47th birthday. This morning I got up at 6:45, made oatmeal for my 15-year-old, located my 13-year-old’s skating bag, cleared my husband’s wet towel from the banister, folded one load of laundry and started another. My parents called and asked the same question they’d posed the past few times we’d talked: How would I celebrate? My (unchanged) answer: A day of work, three hours of kid chauffeuring, and back-to-school night. Happy birthday to me!

As you can perhaps tell, I’m at the nadir of what sociologists call the U curve of happiness—absent the high energy and expectations of youth, mired in serious job and family responsibilities, and awaiting the upswing of joyful appreciation for life that apparently comes with old age. All my friends are in the same spot. And why wouldn’t this season of life make us sad? Our faces wrinkle and sag. Our bodies jiggle and ache. Our careers plateau. Our marriages settle, go stale, or fail. Our kids grow up and leave. Our elders deteriorate and pass away.

But does midlife have to be so miserable? Several new books and a podcast acknowledge all the reasons it can be—particularly for women, who typically play caregiving roles and face increasingly unrealistic beauty standards. And yet these works also offer plentiful advice on how to improve the experience. So I decided to read and listen and then write this article to share what I learned.

Two titles caught my eye because they hit on exactly how middle-aged ladies like me are often made to feel. Hags, by the UK-based writer Victoria Smith, investigates how our cohort is usually ignored but also vilified. Revolting Women, by the leadership coach Lucy Ryan, surprised me by focusing not on how unappealing we’re deemed to be at a certain age (assuming no fillers or crazy workouts) but on how professional women over 50 are fighting back against a corporate system that undervalues them.

Both books call out those who hold ill-informed views about how women can or should act in midlife. But they also call on us to stand up for ourselves. We “do not have to represent, include, or step aside for every other person before we claim space,” Smith writes.

The podcast Wiser Than Me, hosted by the always funny Julia Louis-Dreyfus, addresses similar themes in a lighter, more personal way. “Why the hell don’t we hear more from older women?” was the question that prompted her to launch the show and the problem that she wanted to rectify. She interviewed 10 famous, fabulous women, from Jane Fonda on the three “acts” of her career to the author Amy Tan on apologies.

It’s a fun and inspiring listen; and Hags and Revolting Women offer compelling arguments and useful recommendations, especially for organizational leaders keen to do a better job at making the most of experienced female talent. But all three ignore one key thing about middle age: Men struggle mightily with it too.

Take it from Chip Conley. A hotel industry entrepreneur and later an adviser to Airbnb, he not only endured his own midlife crisis (as his romantic partnership and business faltered) but also lost five men friends in their forties or fifties to suicide. That’s partly why he founded the Modern Elder Academy—an institution that helps people embrace and plan for midlife transitions—and wrote Learning to Love Midlife.

While the book presents a jumble of mixed metaphors (in just the introduction middle age is described as a chrysalis where we transition from consumptive caterpillar to pollinating butterfly, “a bridge over troubled water,” and an atrium addition to the house of life that changes its blueprint), Conley offers some sharp insights. For example, the busyness of managing teenage kids, aging parents, and big jobs isn’t our only problem. Rather, he writes, “midlife is when we begin to worry that life isn’t turning out the way we expected.”

We need a mindset shift, he argues. Yes, we’ve chosen certain paths, so others are no longer accessible. (Sorry for a fourth metaphor.) But many more are still open to us. Yes, we’re swamped, but it’s often with people and activities we value. Yes, our muscle tone, eyesight, and recall for details are diminished. But we’re becoming “wiser, less reactive, more generous.” We’re “masters at pattern recognition” and “more self-aware.” We have higher-quality friendships, and “our capacity for empathy soars.” He notes that Aristotle believed the body was perfect at age 35, the soul at 49.

Conley now sees middle age as a time for honing, or making peace with, our physical, emotional, mental, vocational, and spiritual selves. He set out 10 commitments to ensure that he would both enjoy this time of life and become a better person through it. The first you’ve no doubt heard a version of before, but it bears repeating: “I commit to living a life more focused on my eventual eulogy than my current résumé.” My personal favorite? “Show up [so that] people will notice my energy more than my wrinkles.” But perhaps the most pertinent for HBR readers is this: Stop believing you are what you do (achievement), what others say about you (image), what you have (status), and what you control (power). Instead, ask, “What do you stand for, who have you helped, what seeds have you planted, and how do you want to be remembered?” And then, for the long second half of your life, invest your time and energy accordingly.

Karen Walrond is another crusader for better middle age. In Radiant Rebellion, the lawyer, leadership coach, and activist recounts the “bizarre disquiet” she felt as she approached her 55th birthday, 20th wedding anniversary, and daughter’s departure for college. However, rather than wallow, she joined “the fight against ageism” (and the $37 billion global antiaging industry) and vowed to move forward more “gratefully, soulfully, and purposefully.”

Like Conley, she wants midlife to be a time of “evolution,” not “impending decline.” She, too, emphasizes the importance of connecting with oneself and a community, echoing Conley’s notes on emotional truth and the long-term benefits of meaningful relationships. Finally, she suggests envisioning the future you want with a “spark statement.” Hers ends with “May I model living an expansive life, by accepting all opportunities for cultivating growth, play, and…adventure.”

She concludes the book with another metaphor, borrowed from a friend: “I love the idea of a kaleidoscope as a symbol for the way we…age:…experimenting with slight adjustments, fully expecting a new revelation of a beautiful image.”

This project has indeed left me feeling more hopeful about finding delight in the days and decades to come. Kaleidoscope or chrysalis, second act or atrium, bridge or winding path, maybe middle age isn’t so bad after all?

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Life’s Work: An Interview with Norma Kamali

The fashion designer talks about leading a creative life, running her own business for 56 years, and being “wildly excited” about AI.

Alison Beard 1 Jan, 2024

From the Magazine (January–February 2024)

Mark Mann/August

With 1970s and 1980s fashion hits, including the Diana dress, the sleeping-bag coat, the first outfit deemed “athleisure,” and the red swimsuit that made Farrah Fawcett America’s top-selling poster girl, Kamali became known for innovative yet affordable, comfortable clothes that captured the zeitgeist. She has run her eponymous brand as the lead designer and sole proprietor for 56 years—what she describes as controlling her own destiny in a career she loves. Now 78, she says she’ll keep at it for a few more decades.

HBR: What drew you to fashion?

Kamali: I wanted to be a painter. But when I was 11, my mother said, “Norma, women have to learn how to support themselves, so they can marry the men they love, not the men who take care of them.” And that stuck in my head. How would I take care of myself as an artist? I got a scholarship for fashion illustration and went to the Fashion Institute of Technology.

When did you start designing?

I had a really bad experience during my first fashion job interview. The man I met with was eating a tuna sandwich and had his feet up on his desk and told me to put my portfolio down and turn around for him. I knew that this—the Garment District, the industry—was not where I wanted to work. I needed to travel and figure out what I did want. So I started working in the office at Northwest Airlines, which allowed me to fly round trip to London every weekend for $29. I did that for four years. This was in the ’60s. I started bringing clothes back, and then I opened a store, and then I began designing. That’s how I found what it was I was supposed to be doing.

What were your ambitions back then?

My dream was to lead a creative life. I thought I knew everything, so I was fearless. Being born and raised in New York, you have these survival instincts. And I learned how to make it through retail, how to make a pattern, how to run a business—all on the job. When you’re young, you hang the “Ignorance is bliss” motto on the door. I don’t think I would have been as brave had I had all the facts and figures about what was involved. There were very few women running businesses, so I didn’t have many role models. It was pure instinct.

How did you navigate the ups and downs of start-up retail?

Well, I needed to sell clothes so that we could buy more fabric to make more clothes and pay the rent. We would count the dollars at the end of each day and hope that we had enough to get through the next one. There was always the chance that we wouldn’t stay in business. I was aware that I had to make clothes that I loved but that would also fit people and sell. Having a retail store was a tremendous learning experience because I could see the way the clothes fit people, and make sure I was getting it right, and that the clothes were comfortable, and all the things you aren’t thinking about as a creative spirit. I was fortunate to control my own destiny. Many young designers are so focused on survival that they depend on other people’s money, but that makes it even harder because you’re not in control.

Your husband was initially your business partner, but after you divorced you became the sole owner. How did you handle that transition?

At that time there were very clear roles for men and women, and the man was typically in charge of the money. But not every man is good with money. He was incredible at selling whatever I made. He was a big fan, always charged much more than I thought the clothes were worth and would convince everyone to buy. But he wasn’t necessarily a businessperson. I recognized that if I didn’t learn the business part of things, I wouldn’t be able to have a creative life. And then I realized I really loved it.

Is it ever hard to be both the creative mind and the CEO?

It’s helpful. We just finished a meeting that filled me with information about how I can create the kind of clothes that I love and that will also sell. Having the ability to look at both sides of the business is such an asset. I believe strongly that designers should stop thinking that they can’t be good at business. It’s not true. You can do both. I’ve been doing it for 56 years.

You’ve said that you start fashion trends instead of following them. How do you know what will be popular?

I’ve been doing this for so long that I’m more aware now of how a new idea might become a trend. Let me give you an example. I did the Diana dress, the one that’s mid-calf length, for the first time around 1973, and it was very popular. Then in the late ’80s or early ’90s, I thought, You know, that dress feels for this time, too. So I did it again in a completely different fabric, in different colors, and it did really well again. And then, a couple of years ago, I thought, This would really be a great dress if I put a bodysuit inside with washable, easy-care fabric draping over it. It felt right for the moment yet again. By now we’ve done the Diana in I can’t even tell you how many colors and fabrics and lengths. We have a global customer base, and there are all these different body types looking awesome in it and keeping it popular. Each of those times, it was just an intuitive feeling.

How have you maintained brand cachet and affordable prices?

Throughout my career, I’ve done different types of collections, but I believe clothing should make your spirit come alive and add an extra something to your day. If the outfit is so expensive that it’s too precious to wear, then I haven’t done the right thing. If you have a garment that you can wear and feel good in as many times as you like and you didn’t spend more than your rent on it, I’ve done my job. I don’t need to be the richest or most famous designer in the world. That has never been my motivation. I’m living that creative life I wanted. I know my place, and it’s a happy one.

You’ve been credited with starting the athleisure trend. Why did tops and skirts in sweatsuit material make sense to you?

Well, we’d just had the ’70s Studio 54 era, with lots of sparkle, color, glam, shiny eyes, lips, hair. I understood that moment well; I made clothes out of swimwear fabric that you could dance and sweat in and could be washed. But I felt that the opposite—healthy, practical, gray—would be popular next. I love to swim, and I would wear my brother’s sweatshirts from the Army-Navy store after I got out of the water, so I decided to buy the gray terry fabric and make cover-ups. They looked so good that I decided to make a dress, and a gown, and a jumpsuit, and a jacket, and before I knew it, I had 36 pieces in gray sweatshirt material. I felt so good about it—I knew that it would be the next wave.

How do your ideas—like new uses for old fabrics—come to you?

I’ve been doing the sustainable reuse thing for quite some time. I’ve used blankets to make clothes, sleeping bags to make coats, and I’ve even made clothes out of parachute fabric. Halston’s assistant and lead designer was a good friend, but he had copied a swimsuit of mine for his collection, which ended up in Time magazine. He had betrayed me and knew I was upset, so he apologized and said he wanted to make it up to me. He brought me to Halston’s house that weekend and dropped a parachute from the balcony above to where I was standing in the atrium. He said, “I know you’re going to come up with wonderful things out of this.” And I immediately forgave him because I was so excited. I’ve made everything out of parachutes: wedding gowns, jumpsuits, dresses…

And you had your own swimsuit moment with Farrah Fawcett’s picture.

Yes, oddly enough I hated that swimsuit. I always tested new styles in my store—I’d do six pieces, see how they sold, then build on what worked—and I wasn’t going to do that suit again. But she bought it and used it for the poster, and lo and behold… Of course, Farrah herself was far more a part of the swimsuit’s success than the suit was. Still, I didn’t like how it looked and I never made it again. I did a better version.

In all that experimenting that you’re doing, do you have many failures?

Yes, you learn by trial and error. Sometimes you make decisions that are not in your best interest, and those lessons will be unforgettable. A life isn’t worthwhile unless you’ve experienced some failures.

How do you pick the people who work for you?

I like individuals who are motivated and passionate and understand their purpose. I also think each generation brings something different to the table. The first generation I worked with were Baby Boomers, and most recently, I’m working with Gen Zs. It’s not just about picking the people who are right for the company. It’s also about knowing what they offer, what positions in the company would benefit from those skills, and how we can integrate them into a multigenerational staff.

I imagine that Gen Z is helping you on the technology front, but you’ve long been an early adopter of new tech, from fashion films to your website to online sales to barcodes on mannequins. How do you keep up with those trends?

When I was sitting behind a UNIVAC at my airline job, I realized that this piece of equipment could tell me so many things: Who was on the plane? Was it on time? Did it have a flat tire? How would it land? All this information was right there in the machine. It was mind-boggling. Ever since, I’ve been totally enamored with what the future can be. Right now, I’m wildly excited about AI. I just finished a course at MIT on applied generative AI. It was way over my head—I was the only designer among all these engineers—but I was on a high. I’m involved in two AI projects, and I needed to better understand how to take them forward.

Do you see a future in which there is AI-designed fashion?

Absolutely. I plan to live to 120, but on my 121st birthday, when I’m not here, AI can create new designs from my archive without me.

You still own your company. You haven’t sold it to a conglomerate, like so many small design houses do. Why?

As I said, I like having a creative life, and selling the company would change that.

As a female business owner, have you ever been treated differently by potential partners or investors, retail buyers, or even customers?

The question should be “How many times in a month?” At first I just took it for granted that women were spoken down to, as if we can’t accomplish things. You would think that would have changed by now, but it hasn’t, not 100%. Eventually, individually, everyone comes to understand who I am, what I’m doing, and my intentions. But I am very aware of the stereotype of a female fashion designer. Most people don’t understand how hard the industry is, how much work is involved, how much commitment it requires. It is a series of deadlines and challenges, and if you can put together four collections a year for many years, you can do pretty much anything.

What does your typical day look like? Are you still designing?

That’s the most fun part, so I’m not about to hand it over to other people. I have an amazing team, but I love designing clothes. I love the process. I love making patterns. It is very calming and satisfying, and I’m a really good patternmaker.

With that big archive and industry history, is it difficult to innovate?

I don’t think of it that way—that would be too great a challenge. I have lots of ideas. I often feel like some spirit puts them in my head when I’m sleeping. I sketch them and think about how I want to manifest them, and then I do it. We create new designs all year long and then compose them into a collection. That’s how the process develops.

What advice do you have for up-and-coming designers and entrepreneurs?

You have to really, really love your idea, your plan, what you do—beyond everything, as an extension of who you are. Sometimes that means that you’re hard at work while other people are going to parties, or traveling, or living what seem like glamorous lives. It has to be the most important thing to you, and that can impact relationships. I decided not to have children because I knew that the commitment and hours involved in being an owner and designer would mean neglecting those human beings. That doesn’t mean women can’t do both—I’m in awe of those amazing people who do it well—but being passionate about your work is key. And, if things go wrong, you’ve just got to get up really fast. You can’t drop and feel defeated. You keep going, no matter what. If that’s interesting and acceptable to you, then you’re a candidate for the fashion industry, or any entrepreneurial business.

You’re 78, razor-sharp, still running your business, gorgeous. What’s your secret?

My early interest in a healthy lifestyle was helpful. I don’t drink alcohol. Working out and finding the love of it—that feeling of getting better and better—is also useful. I think people who exercise are more productive, so every day here at 12 o’clock, the entire company works out. We put mats out and have a trainer come in. My staff members are strong, and in good shape, and they work really hard.

A version of this article appeared in the January–February 2024 issue of Harvard Business Review.

Table of Contents

Harvard Business Review: January–February 2024

From The Editor

Why It’s So Hard to Get Things Done

Idea Watch

Lessons from Large Family Firms About Choosing a CEO

Conservative CEOs Pursue Riskier International Deals Than Liberals Do

The CEO of Gérard Bertrand Group on Turning a Family Wine Business into a Global Brand

Spotlight

Leading in the Flow of Work

Leaders Must React

Why Real-Time Leadership Is So Hard

Features

How to Sustain Your Empathy in Difficult Times

Leading in a World Where AI Wields Power of Its Own

To Solve a Tough Problem, Reframe It

Should Your Nonprofit Charge Its Beneficiaries?

Rid Your Organization of Obstacles That Infuriate Everyone

Do You Need an External Talent Cloud?

Turn Generative AI from an Existential Threat into a Competitive Advantage

The Right Way to Build Your Brand

Experience

The New Rules of Executive Presence

Case Study: Should I Pitch a New Project-Management System?

Can We Make Middle Age Less Miserable?

Life’s Work: An Interview with Norma Kamali