strategy+business Summer 2018

Consumers are often creatures of habit. They follow paths of least resistance, drifting into patterns of behavior that feel comfortable, familiar, and effortless. Media users return to the same apps, websites, and sources day after day. Shoppers frequent familiar locations. This consistency has long been the basis of many media and retail business models. But now new paths are opening up that offer even less resistance. People can call out their intended purchases to voice-activated home devices; they can pick up items at their local store without leaving their car; they’ll soon have personal shoppers whose advice is augmented by artificial intelligence. And as John Maxwell and Claire-Louise Moore of PwC and Denise Dahlhoff of Wharton’s Baker Retailing Center explain in “Competing for Shoppers’ Habits,” no one yet knows which paths…

At most companies, the profile of a large-scale technology initiative has looked astonishingly similar over the last several decades. The initial pledge of US$30 million and two years soon balloons to $50 million, and two years becomes four. And this pattern of heavy investment shows no sign of slowing down: Gartner predicts that global spending on enterprise software will grow 9.5 percent in 2018, reaching $389 billion — up from $355 billion in 2017. We can think of these traditional IT initiatives as “big” automation, with a nod to their big budgets, big timelines, and big functional agendas. Enterprise resource planning (ERP) platforms, customer relationship management software, and product life-cycle management software, among other systems, have helped companies streamline functions and track data. However, many of these automated systems still require…

In 1996, the carpet tiles produced by Interface Inc. — the world’s largest modular carpet manufacturer — had an estimated carbon footprint of 37 pounds of CO2 per square yard. That’s equivalent to the amount of carbon dioxide released by burning a little less than two gallons of gasoline. Today, Interface has developed a carpet tile prototype, called Proof Positive, that can be produced while removing 3.7 pounds of CO2 from the atmosphere with each square yard produced. And because Interface utilizes a closed-loop recycling pro-gram, through which it works with regional recyclers to collect old carpets and reprocess them into new ones, the carbon it removes could remain out of the atmosphere for generations. The Proof Positive carpet tile is not yet ready for the market. But as Erin Meezan,…

How do you really get to know another person? More specifically, how do you know what type of employee that person will be? To help answer this question, many firms have incorporated personality tests into their applicant screening or employee training and development processes over the last several decades. According to a 2015 analysis by the Society for Human Resource Management, such assessments — of which there are thousands — combine to create an industry with annual sales of US$500 million. But as Taya Cohen explains it, one of the critical problems with many personality tests is that they overlook moral character. Cohen, an associate professor of organizational behavior and theory and the Carnegie Bosch Junior Faculty Chair at Carnegie Mellon’s Tepper School of Business, argues that this should be a…

A s Haier’s chief executive, I been aware of the pressure that the Internet has placed on the business models of large companies since at least 2000. That year, I attended the World Economic Forum’s annual meeting in Davos. One major topic of discussion was the new economy that the Internet was creating. Like many others at that time, I sensed that industrial society was approaching a great turning point — moving toward an Internetbased economy. Only by changing their way of thinking could business leaders catch up. Today, the world has, of course, passed that turning point. No longer do successful companies compete through their brands. Instead, they compete through platforms — or, put another way, through linkages among independent enterprises, aligned via their interoperable technologies and their creative efforts. Another…

In late 2017, amid a barrage of public debate and media attention, U.S. President Donald Trump signed into law the most sweeping U.S. tax legislation in more than 30 years. The move sparked a phenomenon in which practically everyone was thinking, and talking, about taxes. An attention-grabbing event such as the passage of the Tax Cuts and Jobs Act provides opportunities to bring an often overlooked but essential discipline to the forefront of the corporate leadership agenda: integrating tax considerations into business decisions. If there are two enduring certainties for companies, they are restructuring and taxes. And although restructuring, reorganizing, realigning — or whatever other term you assign it — is central to corporate life, taxes are often rendered an afterthought. And that can be a costly mistake. Already, too many executives…