Harvard Business Review January/February 2020

For over 80 years, Harvard Business Review magazine has been an indispensable and unrivaled source of ideas, insight, and inspiration for business leaders worldwide. Each issue contains breakthrough ideas on strategy, leadership, innovation and management. Now, newly redesigned, HBR presents these ideas in a smart new design with improved navigation and rich infographics. Become a more effective leader by subscribing to Harvard Business Review.

United States
Harvard Business School Publishing
6 Issues

in this issue

1 min
the real deal on data

CUSTOMER DATA AND analytics are an enormously potent combination. We all know the drill: The more customers you have, the more data you can collect and analyze to create ever better products that attract ever more customers. Conventional wisdom holds that this virtuous cycle confers a nearly unbeatable competitive advantage. Not so fast, say Andrei Hagiu of the Questrom School of Business and Julian Wright of the National University of Singapore. They argue that it’s a mistake to assume that the benefits of data-enabled learning are as powerful or as enduring as those of network effects, wherein the value of an offering—say, a social media platform—keeps rising as more people use it. “In most instances,” they say, “people grossly overestimate the advantage that data confers.” To attain the strongest competitive position,…

2 min

Many were surprised when the United States banned exports to the Chinese tech giant Huawei, throwing the telecom sector into chaos. Henry Farrell, a political scientist at George Washington University, says the move shouldn’t have been shocking. He believes that businesses have taken for granted the informational, logistical, and financial networks that make the international economy work. “It’s a global system of connections that have been out of sight and out of mind,” he says. In an article in this issue, Farrell and his coauthor seek to remedy that oversight by examining this new form of political risk. 124 Choke Points Maryam Kouchaki was a physics major in Iran when she took a course in the social sciences. “I fell in love with the idea that you could study how people behave,”…

5 min
why boards should worry about executives’ off-the-job behavior

IN THE MID 2000S the United States was reeling from a wave of corporate scandals: Think of World-Com, Enron, Tyco, and AIG. For Aiyesha Dey, then an assistant professor of accounting at the University of Chicago, those episodes fueled a question: Did leaders’ lifestyles affect outcomes for their firms, and if so, how? “There were all these articles about how executives at those companies were throwing parties for millions of dollars,” Dey recalls. So she and colleagues embarked on a series of studies linking leaders’ off-the-job behavior with their actions at work. In deciding what behaviors to focus on, the researchers drew on findings in psychology and criminology. They settled on two: a propensity to break the law, which is tied to an overall lack of self-control and a disregard for…

2 min
“everything is scrutinized”

Justus O’Brien coleads Board and CEO Advisory Partners at Russell Reynolds Associates, a global leadership advisory and search firm. He recently spoke with HBR about how he and his clients assess CEO candidates’ off-the-job behavior. Edited excerpts follow. How do boards conduct due diligence on candidates’ personal lives? We urge companies to have a specialized third-party firm do a full legal background check. You need the candidate’s consent, and it’s not cheap—it averages $10,000. About 85% of clients do this as a final step before making an offer; the others have an in-house process. What typically comes up? Past or pending legal matters. Issues with credit. Traffic violations. Restraining orders. Securities and Exchange Commission investigations. Everything is scrutinized. If you find an issue, you can ask the investigators to do a deep dive. How do…

1 min
being bored can lead to better results

The negative effects of boredom in the workplace have been well documented: For example, it can lead people to make mistakes, break rules, or spend company time surfing the web. A new study finds an upside: Being bored can make people more creative on subsequent tasks. The researchers recruited 101 undergraduates and told them they’d be working on a color perception task for 30 minutes. Half were told to sort a bowl of beans by color, one at a time and using only one hand—conditions meant to maximize monotony. The other half, who served as a control group, were asked to create a piece of art. All the students were then given an idea generation task in which they were asked to list reasons someone could give for being late to…

1 min
when consumers consider dissimilar options, they’re less likely to buy

It’s well-known that when people are contemplating a purchase, thinking about other ways they could spend their money decreases the chances they’ll follow through. But most research has focused on alternatives that are similar to the target item. What about when the alternatives are different? Across 10 studies involving items ranging from color printers to movie tickets and massages, considering dissimilar options (wireless speakers and button-down shirts, say) reduced purchase intent for the target item far more than considering similar options (wireless speakers and headphones) did. This held true for both utilitarian and hedonic items and regardless of whether the alternatives were generated by the consumer or suggested by the marketer. It happens, the researchers say, because the decision to buy a given product rests in part on the importance of…