Harvard Business Review July/August 2019

LATELY, THE NEWS has been filled with stories of embezzlement, bribery, and other kinds of corporate corruption. In a 2018 survey, PwC found that nearly half the 7,228 participating organizations had experienced economic crimes or fraud in the previous year—up from 30% in 2009. So it’s no exaggeration to say that white-collar crime is a growing problem. And it’s one that has considerable costs: It destroys shareholder value, drains management resources, and tarnishes brands, sometimes irredeemably. The same PwC survey also found that more than half the whitecollar criminals were “internal actors”—a phenomenon that Paul Healy and George Serafeim of Harvard Business School explore in “How to Scandal-Proof Your Company” (page 42). They argue that the cause isn’t weak regulations or compliance systems. At firms hit by scandals, they say, “a…

Paul Healy’s interest in corporate crime was sparked by the scandals at Enron and Worldcom in the early 2000s. “I was intrigued,” says Healy, a professor at Harvard Business School. “I wanted to understand why such seemingly successful companies and executives had become embroiled in wrongdoing.” The result was years of research—much of it conducted with his HBS colleague and coauthor George Serafeim—on the causes of corporate wrongdoing and how leaders can combat them. Their article in this issue shares their findings. 42 How to Scandal-Proof Your Company Daisy Wademan Dowling first noticed the struggles working parents face while she was running global talent-development efforts at two Fortune 500 companies. She is now the founder and CEO of Workparent, a training, coaching, and advisory firm for working parents and the organizations that…

COMPARED WITH SOME other activities of business leaders, such as hiring the right talent and setting strategy, changing corporate culture can be especially challenging. Culture is amorphous; there are no direct levers for shifting it in one direction or another. Indications are that CEOs are putting a higher priority on this aspect of leadership than in the past. According to a study by the research and advisory firm Gartner, CEOs mentioned culture 7% more often during earnings conference calls in 2016 than in 2010. In surveys both CEOs and CHROs say that “managing and improving the culture” is the top priority for talent management. But the data suggests that there’s lots of room for improvement: Each year companies spend $2,200 per employee, on average, on efforts to improve the culture…

In 2012 the Guatemalan family-owned conglomerate CMI hired Oscar Rivera as its first-ever chief culture officer. Since then he has led a cultural transformation process to adapt how the firm’s 37,000 employees work. Rivera spoke with HBR about the challenges of the effort and how he measures success. Edited excerpts follow. What about CMI’s culture needed fixing? We are a highly diversified conglomerate, with six businesses that were very siloed. The company had been taking steps to create more synergies, such as implementing a companywide IT system, transforming the HR function, and consolidating purchasing efforts. Those projects had trouble getting traction, and our family owners concluded it was a cultural issue that CMI needed to resolve. What did you do first? We needed to hear what employees thought and help them find…

Remember the marshmallow test, in which children were given a treat and told they could have a second one if they delayed eating it? That experiment measured self-control, which both research and intuition suggest is vital to achieving goals. A new study finds another factor that informs who reaches the finish line: the type of goals people set. The researchers conducted three surveys involving more than 800 people in all. In the first, subjects listed recent goals, rated how well those goals aligned with their “true selves,” and indicated their progress toward them. The more closely a goal aligned with a person’s sense of self—what the researchers call goal authenticity—the greater the progress. In the second survey, subjects indicated their progress toward goals that made them “feel like they are really…

Professional networks are critical to career success. New research compares those of high-achieving men and women and finds an important difference. The study drew on 4.5 million anonymized email exchanges among a subset of MBA students graduating from a top U.S. business school in 2006 and 2007—some 728 people in all, 26% of whom were women. By identifying who emailed whom and how frequently, the researchers mapped each student’s network and assessed his or her centrality—that is, not just how many direct contacts each had but whether those contacts were in touch with lots of other people, providing second-degree connectedness to a wider group. The researchers also looked at students’ interactions with their “inner circle”—their two to four most frequent contacts. They then examined how each person fared in the job…