Innholdsfortegnelse for Fall 2015 i Rotman Management

You have found that in a business environment that demands innovation, it is no longer enough to be a value creator. Please explain. The fact is, much more is expected from all of us today, because it takes more than ever to build a successful organization and sustain that success. The leaders we spoke to told us that it is not enough to be a value creator: you now have to be both a value creator and a ‘game changer’. Value creators know how to identify and close ‘performance gaps’ — the gaps between where you are now and where you should be; while game changers are able to close ‘opportunity gaps’ — gaps between where you are now and where you could be. We define innovation as ‘creating something…

FRESH OUT OF UNIVERSITY, along with a group of fellow engineers, I started up Teralytics, which uses Big Data to offer deep insights into human behaviour. In the beginning, we did just about everything ourselves. I spent the first six months in our data centre — sometimes sleeping there. We began with ten people, and now there are almost 50, from 21 nationalities. In contrast with leaders who come into a huge, existing organization, I consider myself very lucky, because I get to choose who I work with. One thing that all of our people have in common is, they are extremely smart and hungry — and that creates very specific challenges in terms of leading them. I have discovered that it all boils down to problem solving. When we…

OVER THE PAST TWO DECADES, the importance of sustainability as a business issue has grown steadily. Most businesses now understand that their sustained success depends upon the economic, social and ecological contexts in which they operate. The problem is, the stability of those contexts can no longer be taken for granted: the physical environment is becoming increasingly unpredictable; a more interconnected global economy is altering social conditions; and technological innovation is transforming the nature of both consumption and production. As a result, corporate sustainability has evolved from expressing good intentions to addressing critical business issues involving a complex network of strategic relationships and activities. As sustainability issues become more pivotal to success, leading-edge companies realize that they can’t go it alone. Through strategic networks, a business can — and arguably…

“I CAN’T CODE; AND I’M NOT VERY TECHNICAL,” acknowledged Sheryl Sandberg, COO of Facebook and, at the time, the lone woman on the company’s board of directors. She was addressing a techsavvy audience gathered at the Grace Hopper Celebration of Women in Computing conference. Sandberg had come not to opine on the future of social media, but to encourage the women in the audience to think differently about their work, their personal lives, and, more generally, the growing importance of technical skills. The 42-year-old leader owned the stage, her voice commanding respect, even as she admitted her own deficiency: “I would be better at my job if I were more technical.” The speech was an inspiring mix of stories and statistics, ranging from the dearth of women in corporate leadership…

A KEY CHALLENGE facing entrepreneurial ventures—and any company with a game-changing new offering — is to reduce audience uncertainty about the quality of a new product or service. Thankfully, recent studies indicate that certain types of communications are more effective than others in achieving this goal. For example, in an IPO prospectus, narrative content that portrays a firm as ‘an aspiring leader with a track record’ has been shown to reduce uncertainty, as reflected in issue-valuation premiums. Researchers have also found that press releases emphasizing the factors that differentiate a firm from its competitors attract the most attention from analysts and mainstream media, thus increasing the chance that investors will provide resources. Currently, however, we lack insight into the potential impact of the stream of brief communications conveyed via social…

WITH THE PASSING OF NELSON MANDELA in 2013, the world celebrated a remarkable life. But the spotlight on Mandela’s accomplishments relegated to the shadows much of the reason that he has had such a lasting impact — in South Africa and beyond. Above all, Mandela embodied a ‘system leader’: someone able to bring forth collective leadership. In countless ways, he undertook interventions aimed at bringing together the remnants of a divided country to collectively face common challenges and build a new nation. At no time in history have we needed such leaders more. The systemic challenges we face are beyond the reach of existing institutions and their hierarchical authority structures. Problems like climate change, destruction of ecosystems, growing scarcity of water, youth unemployment, and embedded poverty and inequity require unprecedented…

Many people use the terms management and leadership interchangeably, but you believe they are very different. Please explain. These are very different roles, covering completely different functions. Management involves all the processes associated with operational planning, budgeting, structuring systems to execute those plans, staffing them and setting up metrics to measure whether you’re achieving the plan. It also entails being able to spot when things go off track, and problem-solving to get back on course. Done well, great management can take a large group of people — even if they are geographically dispersed — and enable them to produce a particular product or service with a high degree of reliability and efficiency. Leadership is completely different. It is associated with creating a vision, and with the step after that, which is creating a…

After discovering that a regulatory loophole had created the conditions for pervasive predatory high-frequency trading, former RBC trader Brad Katsuyama launched IEX, an alternative stock market, in 2012. He describes his journey to Rotman Management. We have to go back a few years to understand your story: a turning point for the U.S. stock market came in 2007, with the introduction of Reg NMS. What was this regulation intended to do, vs. what it actually did? Prior to Reg NMS, we had what were called ‘trade throughs’, which means that a trade was happening on one exchange at a price that was inferior to the best price on another exchange. Reg NMS was intended to harmonize markets and prevent trade throughs — to deliver the best price available in the…

You have spoken and written about the Millennial generation’s ‘pragmatic idealism’. How do you define this term? Idealism is the belief that we should adopt moral principles, even if they have negative effects on our lives. The idealist is willing to suffer in order to do what she thinks is right. Pragmatism, on the other hand, is a rejection of idealism. If the Idealist’s principles get in the way, the Pragmatist does whatever is deemed as practical, with no concerns for morality. For a very long time, we have looked at pragmatism and idealism as lying at opposite ends of a spectrum. We’ve gone through periods where we’ve been deeply idealistic as a country and as a society; and periods when we’ve been deeply pragmatic. Today, it has never made…

Leading-edge innovators like Airbnb, JetBlue and Starbucks leverage a distinct way of thinking. Please describe it. These companies all leverage some variant of a clear and repeatable process that has its roots in design. This process follows four steps. The first step entails seeking signals from the marketplace by spending time with communities and observing their behaviour directly — instead of looking at some report filled with summary data. The signals you get from this will not tell you what to create; instead, market signals give you ‘provocations’. Most business schools teach students to listen to customers, but the ‘listening’ often involves a questionnaire or a survey. I have found that companies that are successful in driving innovative products have spent time watching groups. The second step is conducting ethnographic…

TIME AND AGAIN, through my own eyes and those of my students, I have seen the impact of poor leadership. Indeed, it has become somewhat fashionable to lament the state of leadership today, and part of the reason is that as our political, social and institutional environment has become increasingly volatile, we have developed new expectations of how leaders should act. The old model of ‘leading by taking charge and issuing instructions’ has lost its luster. Today’s most effective leaders do much more than get results: they also develop the capabilities of the people around them and build effective teams and systems, so that unimagined results can be achieved, both in the moment and after they are gone. If this sounds like a tough job, that’s because it is; and…

EVERY ORGANIZATION — regardless of industry, mission or location — shares a common quest: they are all in the business of changing human behaviour. For-profit companies try to convince consumers who currently purchase a competitor’s product to switch to theirs; governments want to convince citizens to pay their taxes on time or renew their driver’s license online; and a welfare organization might want to encourage families to sign up to receive tuition support for their childrens’ education. Yet if you think about what people actually do in organizations from day to day, the bulk of their efforts are spent on what I call ‘first-mile problems’. These include the efforts devoted to thinking through the competitive landscape; developing strategies to address it; designing processes of innovation; and coming up with new…

I HAVE SPENT CLOSE TO 40 YEARS helping senior leaders answer, questions like, ‘How can I be more innovative? and, ‘How can I get my people more engaged?’ In particular, my conversations with young leaders — people in their 30s and early 40s — have really struck me. I remember speaking to one young man, who was clearly very successful in the eyes of his company’s leaders. They were investing a lot in him, sending him to all kinds of leadership development programs. We got to talking about the executives at his company, and he said to me, “Tammy, I don’t know why anyone would ever want to do what those guys do.” I replied, “Well, don’t you think they think that you want to do what they do?”“Maybe so,”…

“Have you heard about ______ ?” “You’ve got to check out ______ !” SUCH PHRASES ARE THE STUFF OF EVERYDAY LIFE. They’re how we learn about new things from our friends and colleagues, and how we spread the word about exciting things we’ve come across. Traditionally, such ‘cool hunting’ ended with the name of a band, a restaurant or a movie. But in the digital age, sentences like these frequently end with the name of a website or a new gadget; and lately, they often refer to a smartphone application. The two major technology platforms in this market — Apple’s iOS and Google’s Android—have more than 500,000 ‘apps’ available. Not long ago Matt Beane, a doctoral student at MIT and a member of our Digital Frontier team, gave us just…

BE REAL: Act with Authenticity by Clarifying What’s Important 1. Know what matters: You know how important each of the different aspects of your life is to you. 2. Embody values consistently: You are able to be yourself wherever you are, wherever you go. You act in ways that are consistent with your core values. 3. Align actions with values: You make choices about how to spend your time and energy in ways that match what you really care about. 4. Convey values with stories: You tell stories about the key people and events that have shaped your values in a way that binds you to others. 5. Envision your legacy: You have a vision for where you are headed and the legacy you want to leave. 6. Hold yourself…

BOARDS OF DIRECTORS HAVE ALWAYS represented the shareholders in publicly-traded companies, validating financial results, protecting their assets, and counseling the CEO. It’s a tough and demanding responsibility, requiring individual directors to learn as much as they can about a company and its operations so that their insights and advice can stand up alongside those of executives. That, at least, is the ideal. One litmus test of whether or not the ideal is coming anywhere close to being the reality these days is the growth and involvement of ‘activist investors’. Simply put, if boards were doing their jobs, there would be no activist opportunities. That’s according to David Beatty, Conway Chair of the Clarkson Centre for Board Effectiveness at the Rotman School of Management. However, they are apparently doing badly enough…

WHEN WE THINK OF LEADERSHIP, we often focus on the what: external characteristics, practices, behaviour, and actions that exemplary leaders demonstrate as they take on complex challenges. While this line of thinking is a great place to start, we won’t reach our potential as leaders by looking only at what is visible. We need to see what lies underneath to understand how remarkable leaders lead — and that begins with mindsets. Indeed, because of the underlying power of a leader’s mindset to guide an organization towards positive change, any effort to become better a leader should start with recognizing the thoughts, feelings and emotions that drive us. In this article, we will share four simple exercises adapted from our book, Centered Leadership. These approaches will enable you to start making…

Not unlike Apple’s Tim Cook, you took over the helm of an organization that had enjoyed unprecedented growth under an iconic leader. What have been the key challenges of your first year? I would highlight two. The first one was figuring out, What’s next for Rotman? Roger Martin set a bold vision to grow the School to a global scale and to lead with outstanding scholarship, and that vision has been realized: today, we have more than 1,000 MBA students across three programs; a unique undergraduate Commerce program; and innovative new programs like the Master of Finance. This year, our faculty’s research was ranked fourth in the world, as was our PhD program. That puts us alongside Harvard, Stanford, Wharton and NYU Stern. So, now what? Of course, this is…

‘Constraints’ have a bad rap with most people; but you see them as ‘catalytic forces that stimulate new possibilities’. Please explain. A constraint is a limitation imposed by outside circumstances — or ourselves — that materially affects our ability to do something. So, of course, most people think of constraints as limiting. But in our work with challenger brands and entrepreneurs over the past 15 years, we’ve seen many of them turn limitations into opportunities, ultimately finding better solutions than they might have if they’d been unconstrained. For example, Zappos, the online shoe retailer, faced a huge constraint from the beginning: people couldn’t try on the shoes before buying them. That limitation spurred them to introduce free shipping both ways, on unlimited pairs of shoes — two signature elements of…

Amidst all the diverse opinions in our world at the moment, most people can agree on one thing: we will not be able to solve 21st century issues with 20th century ways of thinking and acting. The inherited organizational vocabulary around leadership and the ‘windows’ that it opens up in our minds are insufficient to face the complex challenges of our times. In this article we will introduce an approach that invites each of us — regardless of gender, race or education level — to become a Shaper of the future. The fact is, in today’s interconnected world, you no longer have to hold a leadership title in order to take a stand, do something important, and make an impact on society. ‘Shapership’ is our term for the art of…

How does Harry Rosen Inc. continue to be so successful? We’ve been in business for 60 years now, and businesses that last that long have to keep reinventing themselves, so that they are relevant again for new generations. I’ve watched so many businesses die out, because they simply aged with their current clients and didn’t do anything differently. We plan to be around when we’re 100 — and even 150; and to do that, change and innovation must be part of our DNA. What leadership skills are required to leverage change? One is the ability to think strategically, versus tactically. If you ask me who I think is going to go farthest on our senior management team, it’s the forward-looking people, because they are able to look at the bigger…

September 2, 4:00-5:00pm, Toronto Speaker: Richard Nisbett, Newcomb Distinguished University Professor of Psychology, U of Michigan & Author Topic: Mindware: Tools for Smart Thinking (Doubleday, 2015) September 16, 5:00-6:00pm, Toronto Speaker: J.P. Pawliw-Fry, President, Institute for Health and Human Potential & Author Topic: Performing Under Pressure: The Science of Doing Your Best When It Matters Most (Crown Business, 2015) September 16, 5:30-6:30pm, Toronto Speaker: Jonathan Haidt, Cooley Professor of Ethical Leadership, Stern School of Business, New York U & Author September 23, 5:00-6:45pm, Toronto Speaker: Dilip Soman, Corus Chair in Communications Strategy, Rotman & Author Topic: The Last Mile: Creating Social and Economic Value from Behavioral Insights (Rotman–UTP Publishing, 2015) September 25, 8:00-9:00am, Toronto Speaker: Jane McGonigal, Director-Game Research and Development, Institute for the Future & Author Topic: SuperBetter: A…

In Becoming a Manager, Harvard Business School Professor Linda Hill writes that a manager’s role—and by extension, any leadership position—is characterized by overload, ambiguity and conflict. Successfully navigating such challenges requires distinct sets of cognitive, emotional and behavioural skills enabled by regulatory mechanisms that are housed in specific regions of the brain. Understanding the processes by which these skills develop, are utilized, and are sometimes inhibited, can enable leaders to gain mastery over their roles and responsibilities. This topic is the subject of a relatively new discipline called Neuroleadership, which is partly informed by recent advances in functional MRI (fMRI)—a brain imaging technique that enables researchers to observe the normal brain responding to various types of situations, such as being criticized or performing problemsolving tasks. Following are four mindsets that…

Herminia Ibarra Professor of Leadership and Learning, INSEAD THE AGE-OLD DISTINCTION between management and leadership is that management entails ‘doing today’s work as efficiently as possible within established goals and procedures’; while leadership is aimed at ‘creating change in what we do and how we do it’ — which requires working outside of established goals and procedures. When doing leadership work, you are asking, ‘What should we be doing, instead of what we’re currently doing?’ Leaders spend their time exploring things that might not have any immediate payoff — or might not pay off at all. The definition of great leadership has evolved over time, and the pendulum currently seems to be swinging away from egocentric, inspirational ‘stagecraft’ towards steady, competent execution. For example, Intel CEO Brian Krzanich’s roots in…

IN 2005, HCL WAS IN A HORRIBLE STATE: We were losing mind share, market share and talent share, and the question staring at us was, ‘How can we turn this around to create a high performance organization with a competitive advantage?’ Most companies answer this question by tweaking their strategy on the ‘what’ axis, in terms of what product and services they sell. Instead, we decided to innovate on the ‘how’ axis, in terms of how we ran the company. We basically turned our culture into our competitive advantage by putting employee empowerment and satisfaction at the heart of everything. This was the birth of a concept we called Employees First, Customers Second. As is true with everything, if a great idea is not executed well, it will not work.…

DESPITE ALL THE HOOPLA AROUND BIG DATA these days, the fact is, there is nothing dramatically new about having data at our fingertips. Businesses and governments have always collected data to varying degrees. What is new is that modern technology has increased the types of data that can be collected and made it cheaper, easier and faster to collect, store and analyze that data. An immediate and obvious implication is that with better data and faster technology, businesses can ‘do analytics’ better and faster. A less obvious, but more important implication, is that, with better data and new technologies, businesses should do analytics differently. A Scientific Approach to Business About 25 years ago, the health care industry adopted what is now known as ‘evidence-based medicine’. This approach recognized that patient…

Tom Tierney Tierney is chairman and co-founder of The Bridgespan Group and the former CEO of Bain & Co. Throughout his career, he has sought creative ways of fitting together the domains of his life — including learning from his children about what really matters — and has built organizations that encourage personal growth by, for example, rewarding results and not face time, and by motivating people with an inspiring vision of contributing to the greater good. Principles he personifies: Envision Your Legacy, Weave Disparate Strands, See New Ways of Doing Things Sheryl Sandberg As COO of Facebook, Sandberg has redefined what it means to be a leader. She is a powerful advocate for new models for women’s advancement in society, ideas she conveys with the confidence of a seasoned…

After more than 10 years of measuring and rating board effectiveness in widely-held Canadian publicly-traded companies, the Clarkson Centre for Board Effectiveness (CCBE) published a report in 2013 about the performance of family-controlled corporations. Our key finding surprised many people: over the 15-year period from 1998 to 2012, Canadian publicly-listed family firms outperformed the S&P/TSX Composite Index by a total of 25 per cent. Given that family-firm boards are run quite differently from those of widely-held companies, this outcome encouraged us to reconsider some of our core assumptions about what constitutes ‘good corporate governance’. We wanted to understand how that impressive performance was achieved, and we now believe the answer is that a longer-term perspective is quite literally baked into family firms’ DNA. Published annually, our Board Shareholder Confidence Index…

WHEN PAUL ALLEN AND I started Microsoft, we wanted to bring the power of computers and software to the people — and that was the kind of rhetoric we used. At the time, only big businesses could buy computers. We wanted to offer the same power to regular people — to democratize computing. By the 1990s, we saw how profoundly personal computers could empower people. But that success created a new dilemma: if rich kids got computers and poor kids didn’t, technology would make inequality worse. That ran counter to our core belief: that technology should benefit everybody. So we worked to close the digital divide. I made it a priority at Microsoft, and Melinda and I made it an early priority at our Foundation — donating personal computers to…

You have noted that there is no widely-accepted definition of the term ‘character’. How do you define it? I define character in two ways. First, there is the private version, which is the character you think you have, based on what’s in your heart and what your intentions are. The second version is the public version, which is how other people observe you and your behaviour. Abraham Lincoln once said that ‘character is like a tree, and reputation is like its shadow’. It would be wonderful if people judged us based on our intentions, but in fact, people judge us based on our behaviour, which, over time, adds up to our character. Think about someone you view as a person of strong character. It’s almost certainly because of the way…

You recently retired as CIBC’s Chief Operating Officer, where you were responsible for the global operations of Wholesale Banking, Technology and Operations, Strategy and Corporate Development, International Operations and Treasury. What were the key challenges of this multidimensional job? When I took on the role in 2008, it was a particularly difficult time for CIBC, due to the credit crisis. There was certainly no time to learn on the job: I had to start making decisions on the first day. The most important challenge for any senior executive is to form a strong management team, and in my experience, that takes up to a year — sometimes two. For a while, you’re running things on your own, and it can be a very lonely time. By January of 2009, I…

Describe the ‘accrual anomaly’ that you have studied, and its effects. The accrual anomaly relates to the negative association between accounting accruals (the non-cash component of a company’s earnings) and future stock returns. This anomaly has been recognized by researchers and practitioners alike for over 20 years, and was first highlighted in 1996 by Richard Sloan, who is now a professor at Berkeley. Prof. Sloan found that firms with high accruals (i.e. high earnings but lower cash flows) have weaker performance in future years, while firms with low accruals (low earnings but higher cash flows) have stronger performance in future years. This is predictable, and you can earn returns based on it. This was one of the most persistent stock market inefficiencies ever identified. It is referred to as an…

WE ARE ON THE CUSP of a radical shift in our understanding of the mind-brain interface and the mind-brain-behaviour nexus. ‘Brain mapping’—wearable sensing and remote integration of brain-body states, bio-feedback-based enhancements in self-awareness and the causal understanding of one’s environment—makes possible a whole new set of approaches to behavioural change and enhanced learning. In recent years, the range and sophistication of measurement scales and techniques for capturing the elusive phenomena of empathic accuracy, mental acuity, logical depth and informational breadth of reasoning and argumentation have increased dramatically, and as a result, by the end of this shift in our understanding of the mindbrain behaviour nexus, we will have un-learned much of what we have learned about cognitive and affective science. For instance, that brain function and IQ are ‘hardwired’; that…