Correction: The Best of the June Issue

 

Are you having trouble viewing this email? If so, click here to see it in a web browser.

June 11, 2014 By Best of the Issue The Big Idea 21st-Century Talent Spotting Claudio Fernández-Aráoz The first era of talent spotting lasted millennia, during which people judged leaders on their physical abilities. If you wanted to erect a pyramid or fight a war, you naturally looked for the fittest, healthiest, strongest people (and we still do, unconsciously. Fortune 500 CEOs are on average 2.5 inches taller than the average American). In the second era, potential leaders were judged on their intelligence, experience, and past performance. In the third era, talent was evaluated according specific skills and personality traits found predictive of success in a particular role. But now we are at the dawn of a fourth era, in which, to deal with ever more uncertain and volatile business conditions, the criteria have shifted again. The question now is not whether employees have the right skills but whether they have the potential to learn new ones. Potential can be gauged through in-depth interviews and by mining candidates' personal histories for specific evidence of five critical character traits -- selflessness, curiosity, insight, the ability to engage others, and dogged determination. Watch Claudio Fernández-Aráoz explain what Jeff Bezos taught him about the questions that lead to business success in this video. Spotlight The Capitalist's Dilemma Clayton M. Christensen and Derek van Bever For time out of mind, capital was scarce. Good managers conserved it through careful attention to metrics like return on net assets, return on invested capital, and internal rate of return. These all being ratios, managers were free to maximize them either by increasing revenue or by decreasing costs. Since the latter was far easier, this naturally led to investment in efficiency innovations – those that help companies produce existing products more cheaply, often by cutting jobs. Today capital is cheap and plentiful, opening up the possibility of increasing revenue through capital-intensive market-creating innovations that attract new customers and expand employment. How to encourage that is the Capitalist's Dilemma, since so much business practice, and pressure from short-term investors, still pushes managers to conserve capital rather than put it to its most productive use. As a counterweight, companies could reward shareholder loyalty by giving long-term owners greater benefits, such as more voting rights or higher dividends. The government could impose a tax on high-frequency trading. Business schools could do a better job connecting finance to strategy and resource allocation processes to growth prospects. And managers could incorporate the current historically low cost of capital levels in their ROI calculations, which amazingly they are not currently doing, and develop better metrics for understanding their return on R&D investments. For more on this topic, listen to our Q&A with Sam Palmisano about how CEOs can balance the short term and the long term, or our conversation with HBS professor Gautam Mukunda on the price of the financial sector's power. Feature Mastering the Intermediaries Benjamin Edelman Retailers and service providers often pay a heavy toll to be connected to customers through digital intermediaries like Google, Amazon, or Kayak. But savvy suppliers that understand what leverage they have – or can create -- can press for better terms. An airline excluded from Kayak, for instance, may fear losing out on all those customers. But Kayak needs to offer a complete range of airlines for its "compare all offers to find the best deal" value proposition to work. That gives carriers both large and small a lot of clout if they refuse to be included. What's more, services like Yelp can exert pressure on powerful intermediaries like Google that may try to exclude them to better promote their own competing services by making public an intermediary's egregious attempts to game the system in its own favor. And some companies have enough clout to bypass intermediaries either by increasing efforts to sell directly to customers or by creating competing digital marketplaces of their own. Managing Yourself Women, Find Your Voice Kathryn Heath, Jill Flynn, and Mary Davis Holt A great many dynamic executive women struggle to make themselves heard in high-level meetings. This frustrates men and women alike, the authors found in interviews with hundreds of women executives, 360 feedback on over a thousand more, and interviews with dozens of top executives, both male and female. To the men, the research found, it appeared that women consistently failed to articulate a strong point of view, appeared defensive, and often wandered from the point. The women, vastly outnumbered and admittedly uncomfortable with conflict, reported feeling alone, unable to judge the right time to introduce their views, and unwilling to put a new spin on existing ideas -- as they often saw their male colleagues do. Organizations can do a better job by inviting more women to the table, giving them direct feedback about their meeting performance, and deliberately drawing them into the conversation. But by taking steps to sound out colleagues and gain allies before the meeting starts, coming prepared to lead the conversation through deft questions and more muscular language, and cultivating a more dispassionate view of conflict, executive women can go a long way toward remaining as dynamic at the table as they are everywhere else.

BEST SELLERS HBR's 10 Must Reads: The Essentials | HBR's 10 Must Reads Boxed Set | HBR Guide to Persuasive Presentations | HBR Guide to Better Business Writing | HBR Guide to Getting the Right Work Done

FEATURED PRODUCT The First 90 Days App for iPhone and Android MAKE YOUR NEXT CAREER TRANSITION A SUCCESS. Download The First 90 Days App today to help you stay ahead of the game. Download on the App Store Download on Google Play

FEATURED PRODUCT HBR Guide to Office Politics HBR Paperback Series EVERY ORGANIZATION HAS ITS SHARE OF POLITICAL DRAMA: Personalities clash. Agendas compete. Turf wars erupt. It can make you crazy if you're trying to keep your head down and get your job done. The problem is, you can't just keep your head down. You need to work productively with your colleagues--even the challenging ones--for the good of your organization and your career. How can you do that without crossing over to the dark side? By acknowledging that power dynamics and unwritten rules exist--and by constructively navigating them. "Politics" needn't be a dirty word. You can succeed at work without being a power grabber or a corporate climber. Whether you're a new professional or an experienced one, this guide will help you. Buy It Now

ADVERTISEMENT

HBR.ORG | THE MAGAZINE | BLOGS | BOOKS | CASES | STORE | SUBSCRIBE TO HBR UNSUBSCRIBE | NEWSLETTERS PRIVACY POLICY | CONTACT Copyright © 2014 Harvard Business School Publishing, an affiliate of Harvard Business School. All rights reserved. Harvard Business Publishing 60 Harvard Way Boston, MA 02163 CUSTOMER SERVICE: 800-545-7685 (US/Canada) 1-617-783-7600 (outside the U.S. and Canada)