Harvard Business Review January/February 2019

EVER SINCE ADAM SMITH noted the benefits of dividing up labor, efficiency has been management’s highest goal. Reducing waste and increasing productivity drove the Industrial Revolution and inspired “management science,” which holds that efficiency is fundamental to competitive advantage. “The belief in the unalloyed virtue of efficiency has never dimmed,” writes Roger Martin in this month’s Spotlight (page 41). Today, he adds, efficiency is “promoted in the classrooms of every business school on the planet.” What if that orthodoxy is wrongheaded and dangerous? Martin argues that it has led ineluctably to the intense concentration of wealth and power that creates many losers and far too few winners in business and society at large. We don’t have to accept that outcome, he says. His proposed remedy? Business, government, and education should focus on…

In 1994, after HBR published an article he cowrote on an apparel company’s novel approach to supply chain, Marshall Fisher got a call from a Wharton grad who’d founded a retailer. “He’d seen the piece and wanted me to help his firm improve performance,” Fisher recalls. “There was lots of data to work with, and for a quant jock like me, it was a dream job.” He has focused on retail operations ever since. This article, with Santiago Gallino and Serguei Netessine, looks at staffing and training. When Clayton Christensen asked Karen Dillon, a former editor of Harvard Business Review, to join him and Efosa Ojomo in examining the role innovation plays in lifting African nations out of poverty, she couldn’t say yes fast enough. Dillon and Christensen have written together…

It’s become all too clear in recent years: Catastrophic acts of nature—hurricanes, tsunamis, earthquakes, wildfires—are happening more frequently and causing more destruction. The annual inflation-adjusted global cost of natural disasters has increased sharply, with the average from 2011 to 2015 reaching four times the average from 1980 to 1985. The number of people affected is rising too, often exceeding 300 million in recent years. But traditional sources of funding for disaster recovery, from governments, nonprofits, and NGOs, have not kept pace. Corporations have stepped in to take up the slack. In 2000 fewer than onethird of the world’s 3,000 largest companies donated anything to disaster relief, but by 2015 the share had surpassed 90%, with the average donation having increased tenfold. Among the 500 largest U.S.companies, the share contributing to disaster…

What has UPS learned from years of responding to disasters? We focus not just on disaster relief but also on preparedness, postcrisis recovery, and supply chain logistics. We need to play to our strengths to have a multiplier effect. This is not sudden-onset activity that starts when there’s a disaster. We devote funding, expertise, and engagement to it year-round. UPS is a logistics company, so it’s obvious how it can help. What about an accounting or a consulting firm? Every private-sector company can play a role. Humanitarian relief agencies need consultancy and technology support. And companies operating in at-risk areas need to become more resilient. A study in New York City after Hurricane Sandy found that 30% to 40% of the small and medium-size businesses affected by the storm never came…

Attitudes toward risk are important at both the individual and the organizational level: Fear of a backlash may keep employees from raising concerns, say, while leaders’ willingness to take chances affects decisions about such things as product launches and acquisitions. Previous research has identified several influences on risk preference, ranging from character traits such as extraversion to situational factors such as mood and how issues are framed. A new study explores another variable: the relationship between two competitors. Researchers examined the play-by-play data for all regular-season National Football League games from 2002 to 2010, focusing on two high-risk scenarios: two-point attempts after touchdowns (instead of kicking for one extra point) and fourth-down attempts (instead of punting the ball downfield). Using data from sports analysts, Google searches, and fan input, they assessed…

Many managers decry activist investors as a divisive, distracting force that limits their ability to focus on long-term strategy and requires them instead to prioritize moves aimed at boosting the short-term stock price. A new study examining how investors fared when companies spun off assets—sometimes at the behest of activist investors, other times in the ordinary course of business—provides evidence to counter that view. The researchers analyzed all divestitures undertaken by Fortune 500 companies from 2007 to 2015—4,035 divestitures in all—using the corporate activism database SharkRepellent and other sources to determine which ones were activist impelled. Evaluating investors’ immediate responses to the divestiture announcements and calculating longer-term measures of shareholder value, they found that activist-driven spin-offs drove better results than those undertaken voluntarily, with the performance advantage lasting almost two…