Innholdsfortegnelse for Winter 2021 i Rotman Management

ONE OF THE WEST’S GREAT STRENGTHS has been its talent for reinvention. Just when everything looks hopeless, it succeeds in regenerating itself, spurred on by new ideas, new technology and the threat of competition. Woken up, the West could do a lot, quite quickly. Our hope is that the pandemic, by exposing so many weaknesses, will force Western governments to embark on a sustained period of reform. Any renewal must involve three ingredients: basic modernization; luring talented people back into public service; and focusing the state on what it does well. They are linked. An unmodernized state that tries to do everything (and therefore does lots of things badly) will never get good people to work for it — and without better people, the public sector doesn’t have a chance…

Organizations in the midst of a crisis are faced with a flurry of urgent issues across what seems like innumerable fronts. Resilient leaders zero-in on the most pressing of these, establishing priority areas that can quickly cascade. Based on our analysis of business-continuity planning and emergency management within leading Chinese companies, we have identified several actions leaders can take: Launch and sustain a crisis command centre. Leading companies in China established emergency response teams right away in order to assess the risks and formulate response strategies after conducting robust scenario planning, which significantly improved epidemic response mechanism and toolkits. Support talent and strategy. After the initial outbreak, companies began implementing flexible work arrangements for middle- and back-office staff in order to minimize onsite work while meeting basic operational requirements. With…

IT WAS EARLY SEPTEMBER 2017. Victoria Maskell, based in UNICEF’s Panama office, was sitting in an emergency meeting about Hurricane Irma, looking at a terrifying swirl of red, yellow and green with blue edges moving towards the Caribbean. The hurricane, which had strengthened into a Category Five storm, would do considerable damage once it hit landfall, and Maskell was looking for ways to support emergency preparedness for local populations that might be otherwise unreachable. Her thoughts soon turned to U-Report, a mobile empowerment platform created by UNICEF that provides children with access to health and education. UNICEF had created the platform to take advantage of its reach in close to 200 countries, using social messaging and SMS channels on mobile phones to gather opinions on topics of interest to its…

IT TURNS OUT, we’ve been looking in the wrong place. For years, we’ve looked for more and more transparency about companies’ environmental, social and governance (ESG) behaviour to help us better understand risk-mitigation strategies and even related opportunities. Given the lack of anything better, we’ve focused on annual reports, expense budgets and sustainability reports, looking for exposure to risks like climate change, lack of diversity or shocks like COVID-19. Ratings organizations like MSCI and Sustainalytics have appeared on the scene to collect and sell this data. Nevertheless, companies have still surprised investors, regulators and customers with unforeseen ESG — and fundamental core business — performance failures. In this article we will argue that a company’s contribution to society is most powerfully expressed by its capital commitments, or what we call…

You have said the global pandemic is forcing firms to rethink their innovation strategies. Why is that? A major event like the pandemic changes consumers’ priorities, their preferences and their needs. As a result of COVID-19, people care a lot more about their safety and avoiding the spread of the virus. Understanding these new preferences and responding to the changes in consumer risk perception should be a priority for every organization as it designs and develops new products and services. You have studied one type of innovation in particular. How do you define a ‘risk-mitigating technology’ (RMT)? RMTs are technologies that reduce the probability of negative events or the severity of their consequences. For example, windshield wipers reduce the likelihood of car accidents, while seatbelts and airbags mitigate their severity.…

Forecasts indicate that even if the economic recovery is uninterrupted, it won’t be until the end of 2021 before anything returns to pre-crisis activity. What are we in for in the coming months? I would divide Canadians into two groups: People who have been able to continue to work from home and for the most part, have uninterrupted incomes; and people who have had their incomes interrupted or are required to go out and work in the community, and are therefore more exposed to the virus. For this latter group, there will be lots of challenges over the next two to three years. The most optimistic estimate by the OECD is that it will be the end of 2021 or the beginning of 2022 before we get close to where…

THE COVID-19 PANDEMIC has triggered the deepest economic downturn in Canada since World War II. GDP dropped at an annualized rate of 38.7 per cent between April and June of 2020 — the worst on record since 1961. While federal fiscal policies remain supportive to the overall trade and business ecosystem, investor sentiment continues to be fragile, and with good reason. The Canadian government’s one-to-three-year bond yield curves remain low, plunging from a high of around 1.5 per cent in February of 2020 to just 0.25 per cent in September, 2020. This has been mostly due to subdued inflationary pressures and pandemic-induced economic uncertainty. The result: Canada is now staring down a state of ‘stagflation’, just as Japan did in its Lost Decade — a sustained period of economic stagnation…

AT SOME POINT, the COVID-19 pandemic will be behind us, whether that’s due to a vaccine, a two-minute test, or herd immunity. But if you want to thrive in the post-COVID world, you’ve got to start working on operational improvements now. After all, if you’re walking to the starting line while your competitors are already settled into the blocks, you’ll never catch up. Value-Stream Mapping is a tool that can help you become faster and more nimble — both now, and in World 2.0. Value-stream maps (VSMs) show both the material and the information flow in any kind of end-to-end process, such as ‘order to cash’, or ‘new product to introduction’. By revealing the handoffs that take place along the way, the delays, and the defects within and between processes,…

Ken Corts: Many people have spent the last few months asking, ‘When will things return to normal?’ But rather than hoping for a return to normal, both of you have talked about the need to ‘build back better’. Please explain. Sarah Kaplan: One thing that both the COVID-19 crisis and the Black Lives Matter protests point out is that our previous state of ‘normalcy’ was not that great for many people. If you think about who has suffered the most during this crisis, frontline workers are at the top of the list. And the fact is, in most cases these are people who haven’t had the same opportunities and privileges that many of us have enjoyed. Going forward, the goal can’t be just ‘to get back to where we were’.…

The COVID-19 pandemic has had enormous impact in Canada and around the world. Globally, over a million people have tragically lost their lives to the illness. The pandemic has also had powerful economic consequences and securing the future of Canada’s economy is now top of mind for Canadian residents—whether they have lost their job, shuttered their business or are serving as frontline workers in essential services. 2020 marked the 25th anniversary of the Beijing Declaration and Platform for Action, the most comprehensive set of globally agreed-upon recommendations to advance gender equality. What might have been the moment to reflect on how far we have come as an international community may be seen as the year that the gains to advance gender equality over the last few decades unravelled. Without attention…

SHORTLY AFTER MIDNIGHT ON MAY 30, 2018, less than 24 hours after a racist tweet had led ABC to strip Roseanne Barr of her popular TV show, the actress took to Twitter once more and blamed Ambien, the sleeping pill made by French pharma company Sanofi, for her lapse of judgment. Soon thereafter, the company tweeted its blockbuster response: “People of all races, religions and nationalities work at Sanofi every day to improve the lives of people around the world. While all pharmaceutical treatments have side effects, racism is not a known side effect of any Sanofi medication.” This short statement was retweeted almost 100,000 times and featured prominently in leading news outlets like CNN, USA Today and the New York Times. “This one tweet generated more kudos internally than…

OVER THE PAST CENTURY, improved hygiene, better nutrition, antibiotics, vaccines and new technologies have contributed to tremendous progress in global health. Recent innovations have led to dramatic improvements in survival rates for people with certain types of cancer, heart disease and stroke in many countries. Improvements in health have extended lives and improved quality of life, contributing to the rapid expansion of the labour force and labour productivity in the second half of the 20th century, which were key factors behind strong economic growth over that period. As countries grew richer, they invested in better food and safer environments, creating a virtuous cycle of improved health and higher incomes. Economists estimate that about one third of economic growth in advanced economies in the past century can be attributed to improvements…

MANAGING UNCERTAINTY has always been part of the executive challenge. But rarely have leaders been forced to tackle volatility in so many areas all at once. The COVID-19 crisis has underscored just how interconnected people, markets and events have become. As the novelist Nadeem Aslam wrote, “Pull a thread here and you’ll find it’s attached to the rest of the world.” In an interlocked global economy, triggering events can quickly set off a chain reaction. Before April 2020, for example, few would have predicted that the price of a barrel of oil would fall below zero. But as the pandemic forced communities around the world into lockdown, the cessation of air and road travel lit a match to kindling that was ready to burn, with a growing oil glut, simmering…

2020 will go down in history as a time of public health, economic, and societal crisis. Less acknowledged is the significant toll it has taken on mental health. How would you describe this toll? There are so many layers to it, but overall, COVID-19 has had a massive impact on our mental health. Government responses to the pandemic have touched us all, ranging from border closings, to physical distancing, to funding relief, so it makes sense that mental health — along with addiction issues — have been significantly impacted. Certain sectors of the population are more vulnerable than others: Youths aged 18 to 22 are particularly vulnerable, given that they are on the verge of adulthood; women and people living in poverty have been shown to be more vulnerable; and…

The title of your book [Reimagining Capitalism in a World on Fire] indicates that the world is on fire. Please explain what you meant by that. At the most basic level, I meant that the world was literally on fire. When I finished the manuscript in early 2020, both Australia and California were burning and many of our societies were on fire with rage, anger and indignation. Months later people said to me, ‘How did you know?’ — but it has seemed to me fairly clear for at least the last 10 years that, unless we start to focus on our environmental and social problems, the situation will become increasingly dire. Sadly, many business leaders still view issues like climate change, inequality and institutional collapse as things that have nothing…

How do you define the Low-Touch Economy? Our society and the global economy have been permanently altered by COVID-19. Reduced physical interactions between employees and consumers are one of the most noticeable constraints on business-as-usual, which is why we coined the term ‘Low-Touch Economy’. My colleagues and I believe the pandemic is shaping a new era of consumer behaviour, and that successful companies will be those who adapt their business models to work with the different health measures and other challenges that COVID-19 presents. The current disruption is changing how we eat, work, shop, exercise, manage our health, socialize and spend our free time. Even the post-pandemic era will have an economy shaped by new habits and regulations based on reduced close-contact interactions and tighter travel and hygiene restrictions. Who…

IN THE FACE of pandemic-related challenges and risks, business leaders are rightly concerned about how their companies will be affected and what to do next. We have pooled the insights of Deloitte thought leaders around the world to provide practical insights for leadership teams in taking appropriate action. We believe that five fundamental qualities define resilient leadership — and that they will distinguish successful leaders as they guide their enterprises through the COVID-19 crisis and its aftermath. 1. Design From the Head and the Heart In times of crisis, it is essential to recognize the impact that uncertainty is having on the people that drive an organization. At such times, emotional intelligence is critical. In everything they do during a crisis, resilient leaders express empathy and compassion for the human…

IN MARCH 2018, Kathy Gillis, the CEO of Property Valuation Services Corporation (PVSC), saw an opportunity in the property assessment field to use artificial intelligence (AI). Having little experience in the topic, she and her Vice President of Strategy, Meredith Buchanan, decided to bring their idea to a three-day AI seminar at the Rotman School of Management. The two quickly realized that PVSC was among the first to consider applying AI to the property valuation field globally. Gillis brought the idea back to PVSC’s Chief Data Scientist, Dr. Ashley Wu, who was keen to pursue an AI approach. Within months, Wu’s team discovered they could use machine learning to predict property values faster, cheaper, and with more accuracy than any other technology. Now, Gillis needed to develop a strategy that…

1. Omics and Molecular Technologies These technologies — key components of the Bio Revolution — are therapeutics or diagnostics that harness the various types of molecules within cells (such as DNA, RNA, and proteins). Some omics and molecular technologies (for instance, genome editing) engineer these intracellular components or analyze them (such as proteomics and transcriptomics). 2. Next-Generation Pharmaceuticals Newer iterations of traditional chemical compounds (small molecules) and classes of molecules could be used as medicinal drugs, possibly with multiple and concurrent target structures. 3. Cellular Therapy and Regenerative Medicine Cellular therapy is a biological product, derived from living cells, used for therapeutic purposes to replace or repair damaged cells or tissues. Regenerative medicine has the power to restore diseased or injured tissues and organs, potentially decreasing reliance on transplantation. 4.…

You have observed a troubling tendency that often leads to the disruption of business models. Please describe it. All too often, business strategies fail to effectively account for external change in the world. When faced with deep uncertainty, leadership teams tend to focus on recognized variables. This practice lures them into a false sense of security and results in a narrow framing of the future — making even the most successful organization vulnerable to disruptive forces that then appear to ‘come out of nowhere’. Futurists call these external factors ‘weak signals,’ and they are important indicators of change. You have identified 11 such sources of external change that can sneak up on an organization. How did you go about assembling this list? As a quantitative futurist, my job is to…

THE CORONAVIRUS PANDEMIC has generated tremendous uncertainty for businesses everywhere. But while the scale of the crisis is new, uncertainty itself is not — it’s a natural condition of doing business, and numerous tools exist to quantify and mitigate it. Most strategies rely on accumulated knowledge from the past, whereby there’s a precedent on which to make sense of unknowns. COVID-19 smashes all of that. There is no precedent for how to respond to this moment, much less steer ahead. The biggest challenge to businesses right now isn’t uncertainty, but ambiguity — a condition in which the future is unclear, the past is no help, and we don’t even know what we don’t know. There is no predicting when the pandemic will end, nor what ‘business as usual’ will look…

WHEN PEOPLE ASSESS RISKS, they don’t just apply facts and data to the target risk. Research shows that they also apply their feelings. Therefore as emotions run high during a crisis like a global pandemic, people tend to perceive higher health risks and overgeneralize them, which exerts predictable influence on socio-political attitudes. COVID-19 provides a powerful illustration of this phenomenon because a) it is a salient, enormous threat; b) it is unfamiliar; and c) it is intertwined with xenophobia. Last summer Dr. Neil M. Ferguson, a British epidemiologist who is regarded as one of the best disease modelers in the world, produced a sophisticated model with a worst case scenario of 2.2 million deaths from COVID-19 in the United States alone. In the face of such a salient, enormous threat…

A GLOBAL RESURGENCE of the Black Lives Matter Movement was sparked on May 25, 2020 after the world witnessed the painfully horrific killing of a Black man, George Floyd, by white Minneapolis police officer Derek Chauvin. The viral video of Mr. Floyd being slowly suffocated by Chauvin’s knee on his neck while Floyd cried out for help was a raw display of anti-Black police violence that shook the world to its core. With this video, the terror of police brutality that Black people have been lamenting, protesting and resisting for decades finally penetrated public consciousness and conversation in a way that galvanized action from hundreds of thousands of citizens, government leaders, socialites and business leaders alike. The groundswell of public dialogue, action and protests in support of Black lives led,…