The Condensed March 2016 Issue

SARAH GREEN CARMICHAEL: Welcome to the HBR IdeaCast from Harvard Business Review. I am Sarah Green Carmichael. And I’m here today with Amy Bernstein, the editor of our magazine. Amy, thank you so much for joining us.

AMY BERNSTEIN: Great to be here.

SARAH GREEN CARMICHAEL: So as usual, today we are giving the executive summaries of some of the features in our March 2016 issue. And let’s start with the spotlight. This is a collection of articles on a theme, every issue always has a theme, this month it’s entrepreneurship.

This continues to be a very trendy topic in a lot of business thinking and commentary. So what’s new today here? What’s going on here now?

AMY BERNSTEIN: Yeah. So what we’re trying to focus on this month in this issue is startups that last, how do you preserve your startup mojo while creating a company sort of built for the long haul? That turns out to be an incredibly difficult transformation. And we have three articles in the package that look at that question from different perspectives.

The first one is called “Startups That Last.” And it’s a report on a very rigorous set of research into about 75 years of history looking at how startups actually become companies that last. And it looks at who you should hire, how you should organize the company, and the kinds of processes you need to put in place.

The second article is about “Lean Strategy.” And that’s a very cool piece of thinking. Because we all know about lean startups. And we all know that strategy is an important part of companies that last.

But this article by David Collis really marries to ideas that have never been married before. It looks at how you take that kind of energetic opportunism that characterizes the startup and marry it to the steady, I’ll use a word I hate, planful approach that characterizes strategy.

And then the final article is about “Reigniting Growth.” And it’s from an upcoming book by Chris Zook and James Allen that really looks at how complexity, creeping complexity, slows down companies. And you see it most dramatically in startups as they become ongoing concerns. And it talks about how to reverse stall out.

SARAH GREEN CARMICHAEL: So lots of interesting excitement there. An area that is sort of adjacent in my mind to entrepreneurship is social media. I think just because so many of these big startups are ending up being social media companies.

AMY BERNSTEIN: Or at least digital, yeah.

SARAH GREEN CARMICHAEL: At least digital in some way. Right. And I think that sort of brings me to mind of one of the other articles in the issue we wanted to touch on, “Branding in the Age of Social Media.” this is a topic that’s been out there for a while. I know you’ve done a lot on it on the web.

But this is a kind of big article in the magazine really planting a stake in kind of some practical advice for companies to really do this better. A sort of what we’ve learned thus far.

AMY BERNSTEIN: Yeah, exactly. It’s a really interesting piece of thinking that addresses the question, why does so much content branding, the stuff that brands are throwing out there on Facebook and Twitter and so forth, why does it fail? I mean when social media emerged, it was supposed to usher in this new age of branding.

And so we saw all kinds of brands throwing resources at developing online content, online movies about their brand, and all kinds of stuff that just hasn’t worked. And Doug Holt the author has a really interesting theory based on an idea he put out a while ago about crowd cultures. These are cultures that kind of coalesce online around specific interests and passions.

We see them around video gaming, for example. But they can arise over almost any kind of interest. And so he looks at a couple of examples of brands that really have been able to build their own relevance on existing crowd cultures, Axe being a very good example. It sort of tapped into an emerging Lad culture, for example, and has a great social presence, great in the sense that it is effective and has built a presence and relevance for itself that they can measure in important ways.

Similarly Dove, which kind of built on the anti-Lad culture, this women who really minded the kind of social pressure to be skinny. And we’re all familiar with this.

SARAH GREEN CARMICHAEL: Over-photoshopped images and stuff like that, right.

AMY BERNSTEIN: Over-photoshopped images exactly. And Dove has, just as Axe has, built a really effective branded presence for itself socially. Great, great piece of thinking.

SARAH GREEN CARMICHAEL: It’s interesting that we’ve sort of started out with the kind of digital companies, social media stuff, because the next article I want to talk to you about is totally different. This is the “How I Did It.” This is the first-person article by the CEO of Rio Tinto, Sam Walsh.

It’s about managing in a hyper-cyclical industry. And the industry here, of course, is mining. We don’t do a ton of stories from heavy industry like mining. But at the same time, commodity prices are on everyone’s minds right now. So what can we learn from this story?

AMY BERNSTEIN: Well, this is an interesting story about discipline. There was a commodity boom in the 2000s. Those are boom and bust businesses. And during that boom, Rio spent a lot of money on a couple of acquisitions that just failed. And the company was facing a serious, serious crisis.

They brought in Sam Walsh to run the company. And what he brought in was a kind of financial discipline that the company had kind of lost touch with. It had once been very disciplined.

And so what he did after these dramatic writedowns was he decided to focus on three areas, he and his CFO. They were very much arm-in-arm on this. They tightened up investment decisions.

They were very disciplined about what projects they allowed to move forward and which ones they just cut off. This is a familiar problem for many organizations, right. They ran the organization for cash.

That’s pretty dramatic. And then they drove all kinds of efficiencies through the company by cutting costs and exiting businesses that weren’t performing well and rationalizing the workforce, which is a kind of bloodless way of saying that they laid off a bunch of people. But that’s what they had to do. It looks at how Rio Tinto got back to the discipline that had set it apart before the boom of the 2000s.

SARAH GREEN CARMICHAEL: Discipline, perhaps something we’ll be hearing more about in the years to come. Unclear.

AMY BERNSTEIN: It ain’t sexy unless it saves you from extinction.

SARAH GREEN CARMICHAEL: Exactly, yeah.

AMY BERNSTEIN: All right.

SARAH GREEN CARMICHAEL: So I want to ask now about an article that I think a lot of people will be delighted to see in this issue and that is the article by a very popular Wharton professor Adam Grant on building a culture of originality. And I think what’s really interesting, what caught my attention about this article, is that his argument that most innovative people don’t fit our stereotypes of creative types. And they’re actually more risk-adverse than usual, not less.

And his argument is that if you want to be more original, what you need to do is not hire a bunch of creative type people but actually make the organization safe for non-conformity.

AMY BERNSTEIN: He says–

SARAH GREEN CARMICHAEL: That’s fascinating.

AMY BERNSTEIN: –that most us most of us can be creative and visionary. And as you say, you need a culture that encourages it that doesn’t tamp it down through groupthink and so forth. He talks about giving employees the license to let their imaginations run wild. Because he points out that in order to be innovative, you have to have a flow of really good ideas.

And you really need a pretty big flow of good ideas. You have to encourage everyone. And he talks about how you do that sort of tactically.

But the part that I also think is equally important is once you’ve got that flow, how do you sustain it? Right. So he talks about how you balance these two forces that are essential to keep the ideas flowing. And that is cultural cohesion and creative dissent. You have to create an atmosphere that allows for both and encourages both. It’s really a nice article too.

SARAH GREEN CARMICHAEL: Yeah. I’m really interested to see how this one lands. What kind of impact it has.

AMY BERNSTEIN: Well, the part where anyone can be creative resonated for me. You don’t have to have the designated visionaries sitting in an open office together, slapping post-its on a wall to be creative. Everyone can do it.

SARAH GREEN CARMICHAEL: Yeah. And interestingly in some ways, it relates a little bit to our “Managing Yourself Article” in this issue as well, which is all about learning to learn. And this is a really interesting take by Erika Andersen, a consultant I believe, who talks about some strategies for boosting our ability to become lifelong learners. Tell us a little bit about those.

AMY BERNSTEIN: Well, we live in a world where our context is constantly changing. You can have the same job for 10 years but you won’t be doing the same job year to year. So you really have to be open to learning.

You have to have the curiosity, you have to have the vulnerability to say I don’t know this, now I have to go learn it. And so she’s identified four attributes of people who are lifelong learners that they have aspiration, as she says, they want to learn, right, self-awareness, curiosity, and vulnerability.

And this is interesting for a lot of reasons. But I’ve been noticing some articles, actually quite a lot of attention lately, to the question of how much reading do you do. I don’t know if you’ve seen these articles as well. But it turns out that the Mark Zuckerbergs and Warren Buffetts and Bill Gates of the world are voracious readers, which speaks to their aspiration and their curiosity. Right. And this, to me, it was the kind of tactical way of getting you to that point.

SARAH GREEN CARMICHAEL: Interesting, really interesting. OK. Now before we go, we don’t usually talk about the case study in this podcast. But this one was one that I just really wanted to ask you about because the central dilemma here, right, is whether an employee should be fired for a disparaging comment they posted on Facebook.

And literally as I was driving to work this morning, I heard yet another news story of this happening. So I was wondering if– without sort of giving away any answers, because I want people to enjoy the case– you could just talk a little bit about how this case developed and kind of what drew you to it.

AMY BERNSTEIN: It’s about a car dealership whose best salesperson wrote an unflattering comment about the dealership’s launch of a new model. And what I found interesting about it was we’ve all been there. We’ve had the employee who has said something kind of out of school, in the wrong place on social, or maybe we ourselves have sort of made that mistake.

And then the question is, how do you deal with it? Where’s the line between the public self and the private self? This is a question that persists. And no one has exactly the right answer yet.

But the answers– I won’t tell you what our commenters actually said– but I will say that one of them surprised me a lot because it got into some legal detail that I was not expecting. So I recommend this one.

SARAH GREEN CARMICHAEL: OK. Great thank you so much, Amy.

AMY BERNSTEIN: My pleasure.

SARAH GREEN CARMICHAEL: That was Amy Bernstein, the editor of Harvard Business Review. For these articles and more, go to hbr.org.