Innholdsfortegnelse for Winter 2023 i Rotman Management

IMAGINE YOU ARE IN A ROOM with the leaders of the G20: the president of the United States, the prime ministers of Canada and India, the chancellor of Germany, the president of China, the king of Saudi Arabia and the leaders of the other 14 largest economies in the world. You ask them: What indicators do you follow most closely? All leaders use indicators to measure progress. If you asked CEOs this question, they would probably say ‘revenue growth’ or ‘share price.’ With world leaders, it’s harder to know. Would they say GDP? Unemployment? The poverty rate? Maybe the Saudi king would say oil prices? I am not sure what their answer would be, but I do know what they would not say: none of them would mention happiness. As…

BY NOW, MOST READERS ARE FAMILIAR WITH BLOCKCHAINS — the shared ledgers that facilitate the recording of transactions and tracking of assets. Although most of these assets to date are directly related to blockchain-native applications and use cases, in principle they can be tokenized representations of anything tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). The ability to exchange tokens on blockchains is a central function of these networks. In this article I will review the two categories for trading blockchain tokens and highlight some of the risks and opportunities in this space. Centralized Trading Platforms A centralized trading platform is one where all trades occur and are recorded on a single, proprietary system that has only an external connection to the blockchain. There are…

INCREASED STAKEHOLDER EXPECTATIONS, a rapidly changing workforce and digital dominance are just a few of the elements making leadership as challenging today as it has ever been. Through a decade of study, observation and practice — plus hands-on engagement with a wide range of executives — I have explored the question of what leaders need to do differently to be successful in these extraordinary times. One thing is certain: What got us here — instinctual, command-and-control, non-reflective leadership — is no longer effective. Being intentional about renewing one’s approach is now the gold standard. My work and teaching has enabled me to identify eight core capabilities that, together, define ‘intentional leadership.’ The discovery and exploration of how the ‘Big 8’ fit within leaders’ roles was debated and agreed-upon through 25…

INTEREST IN THE METAVERSE has exploded. Global Google searches for ‘metaverse’ skyrocketed 7,200 per cent last year, and metaverse online gaming platform Roblox reportedly hit over 55 million daily active users in February 2022. Meta committed more than US$10 billion to its Reality Labs division, which makes metaverse-related hardware such as VR goggles. And Microsoft said its planned $69 billion acquisition of gaming company Activision Blizzard would “provide building blocks for the metaverse.” Total metaverse-related investment is also proving to be significantly larger than it was for AI, which attracted $39 billion in investment in 2016 — arguably a similar stage in its development trajectory to the metaverse today. While total VC and PE investment is somewhat comparable — AI was $6 billion to $9 billion in 2016; the metaverse…

Employee engagement has been defined in many different ways. How do you define it? Very often, the definitions of employee engagement sound more like definitions for ‘organizational commitment’ or ‘job satisfaction’. Engagement is not those things. The best definition comes from the first major study on the topic by William Kahn at Boston University’s Questrom School of Business. The paper came out in 1990, but it wasn’t until the 2000s that people started to pay attention to it. According to Kahn, engagement is “the extent to which people employ and express themselves physically, cognitively and emotionally when performing a task or job.” We often say that when people are engaged, they bring all aspects of themselves into the performance of whatever it is they are doing. Overall, it is a…

When you joined Fortune magazine in 2000, describe the culture you encountered. I was really lucky to get that job straight out of college. I was assigned to work for an experienced editor at large, so I had a built-in mentorship situation, which was amazing. Before long I did notice that the younger reporters were pretty balanced in terms of male and female, but when it came to senior editors, there were very few women. One of my dear male friends started at Fortune around the same time as me, and I saw him being invited to play tennis with our senior editors and going out for drinks afterward. He had all of these natural opportunities to pitch stories to our bosses, while I stayed late at the office figuring…

In the innovation process, why is it so important for innovators to view people as human beings rather than consumers? An innovator who sees people as consumers is going to prioritize every imaginable tool to sell them something and make them consume it. In contrast, an innovator who views people as users focuses on the creation of positive functional and emotional value. The next level up is innovators who see people simply as human beings. These people make their fellow human beings’ happiness the priority, and everything they do gravitates around that single goal. Describe the challenge that large companies, especially in the consumer goods arena, face today. Many large corporations are in the midst of a general strategic crisis as they seek to understand how to generate a culture…

WHEN I STARTED OUT AS A SCIENCE AND TECHNOLOGY JOURNALIST in 1995, Google and Facebook didn’t exist, the human genome hadn’t yet been fully sequenced and phones were for talking to other people. I couldn’t know that I was about to witness (and help chronicle) two-plus decades of astonishing technological change, much of it driven by venture-backed startups in software, mobility, the Internet and biotech. As a side effect of my work, I developed a belief that most world-changing innovations come from small, early stage companies. I rarely wrote about giants like IBM or GE or GM; once corporations grow too old or too big, it seemed to me, they become timid and territorial. The exception that proved the rule was Apple. In many ways the iPhone is this century’s…

IN THE MIDST OF THE WORST INFLATION seen in 40 years, not all prices are rising. In the 1970s, the cost of taking a kilogram of water to space was $20,000 in today’s dollars. Now, it is more like $2,000 — a tenfold reduction, and as SpaceX’s Starship has $20/kg in its sights, there is a real possibility of another hundred-fold reduction in the cost of space access. If this happens, access to space will open up like never before, creating a flood of new business opportunities. The space industry includes a wide range of markets: space hardware (e.g. satellite manufacturers and modules), launch services, flight and delivery, space tugs, satellite operators (remote sensing, connectivity), drones and unmanned aerial vehicles, ground terminals, security and storage, data platforms, location and mapping…

BY NOW, MOST PEOPLE ARE AWARE that women earn less money relative to men for the same work. What some may not know is that this gender pay gap is a pervasive pattern worldwide. One recent estimate suggests that comparing differences in average annual pay globally, women earn 57 per cent of what men make. This gender pay gap exists even at the highest levels of business as well: Female executives at S&P 1500 firms earn on average 45 per cent less than their male counterparts. Researchers have explored several explanatory factors as to why the pay gap exists, ranging from ‘likelihood to negotiate,’ to ‘divisions of labour within a family,’ to a ‘lower likelihood of promotion.’ While there has been a longer-term trend towards reducing the pay gap in…

VIRTUALLY EVERY COMPANY out there is trying to capitalize on the promise of data and analytics — or should be. While leading firms like Amazon and Alibaba seem to have cracked the code, most are still finding their way and many remain unsure where to start. A 2021 study by NewVantage found only 39 per cent of executives believe their organizations manage data as an asset, and even fewer (24%) view their companies as being data-driven. Likewise, in its 2021 survey, Venture-Beat found that just 13 per cent of executives believe their organizations are delivering on their data strategy. These underwhelming findings are consistent with earlier studies by McKinsey, Deloitte and BCG that revealed a large majority of senior leaders are not satisfied with the outcomes delivered through analytics. What…

TRADITIONAL PRINCIPLES of business strategy are derived from military warfare — the art of winning battles and conquering enemy territory. These principles have served many firms well. Corporations that mastered them developed a sustained competitive advantage and dominated. In the past two decades, however, incumbents have seen a new breed of competitor gradually occupying top spots in the most-successful company rankings. Admired companies such as Airbnb, DoorDash, Spotify and Alibaba reinvented the rules of strategy by deploying a new model: the business ecosystem. An ecosystem can be defined as ‘a dynamic group of largely independent economic players that create products or services that together constitute a coherent solution.’ Traditional companies have started to understand the threat, embrace the opportunity and launch their own business ecosystems. For example, agriculture machinery manufacturer…

How do you define ‘eco-anxiety’? Eco-anxiety is an emotional response to the environmental crisis, and in addition to anxiety it includes other challenging emotions such as grief, anger, sadness, fear and depression. This phenomenon is showing up in a wide variety of people who are particularly impacted by the crisis. This includes those on the front lines of weather disasters, who are already experiencing these hazards and fear what will come next; people whose work focuses on the crisis, from environmental journalists to scientists and anyone else who has their eyes open to the implications of the science day in and day out; and young people around world, whose futures will be deeply affected. Many young people feel abandoned by adults, who in their view are not doing enough to…

THE TRANSFORMATION OCCURRING TODAY in the world of business is nothing short of a fourth industrial revolution. I refer to it as a ‘digital tsunami,’ and it is increasing in intensity by the minute. The question is, how many of today’s businesses will survive? In recent months I have been working alongside Google’s former Chief Evangelist Nick Darveau-Garneau and Rotman School Guest Lecturer to understand how boards are reacting to the tsunami — and what concrete steps they can take to help their companies survive. One of the first things Nick and I did was look at the average age of directors on today’s boards. We were immediately inspired by Walmart, whose board and C-suite have deemed that their main long-term competitor is Amazon, not another grocery or homewares chain.…

TODAY’S COMPANIES ARE INCREASINGLY expected to explain their purpose beyond economic prosperity. Yet for many business leaders, this remains unfamiliar territory. Many wonder, ‘Is it worth our time and effort to wrangle with issues that complicate the already tricky job of making a profit?’ A growing body of evidence shows that it is. The promise of two approaches—corporate sustainability strategy and sustainable finance—has been delivered over the past 30 years. Research shows that both are good for business and better for society. In this article I will take a deep dive on the former approach, sustainable finance, and show that it stands up even in a time of social and environmental strife. Sustainable finance is not new. For centuries, investing practices have sometimes been led by considerations relating to specific…

You have spent three-plus decades on Wall Street. Describe how leadership has changed in that timeframe. As an investment banker, I’ve had a front-row seat to observe the changes. I’ve executed hundreds of deals and had the opportunity to work closely with countless CEOs from a wide range of industries. During the 1980s and 90s — and frankly, for the 30 years before that — it was an organization’s leaders who defined its agenda. They called the shots and decided what needed to happen and when. For a long time, this ‘my way or the highway’ leadership mindset was considered effective. There was no war for talent in this period, and production and volume were valued over innovation and convenience. Today’s environment is very different. Innovation has become the dominant…

TUCKED BETWEEN the Old Town Bar and ABC Kitchen in New York’s Flatiron District is a nondescript white door marked with the number 37. When you ring the bell, the door buzzes open, and a waiting elevator takes you up to the fourth floor. You’re now inside the Hive — a stunning loft space with soaring ceilings, soothing pastel colours, dozens of plants, and roughly a hundred humans buzzing around, ranging in age from 22 to 62. Some employees clack away at their computers. Others laugh and chat loudly — the Hive can get pretty noisy. Just outside the kitchen, a few people attend to a huge jigsaw puzzle. And beside the floor-to-ceiling windows, still other members of the Hive perch at one of the drafting tables surrounded by stacks…

IN RECENT YEARS, a growing number of business leaders have taken a public stance on important political and social issues ranging from inequality to climate change, gun control and immigration. And this is becoming less and less of a choice for them: Employees, customers and investors now expect corporations to speak up — and more importantly, to behave in accordance with their words. I recently worked with the Canadian Centre for the Purpose of the Corporation (CCPC) to explore the advantages and risks of taking a stand on sensitive issues. In this article I will share my key findings. For those interested, the complete report is available on the CCPC website. A World of Issues In 2020, in the wake of the death of George Floyd, a significant majority of…

DESPITE A NOTABLE UPTICK IN SOCIALLY RESPONSIBLE behaviour by corporations in recent years, irresponsible employment practices remain all too common. The challenge is especially difficult for firms that source products from overseas. Many large corporations, themselves committed to social responsibility, purchase inputs in emerging markets from small manufacturers that engage in practices that expose employees to harm. One of the most widespread practices is wage theft, whereby employers deny earnings and benefits that workers are owed. At the more extreme end of the spectrum, workers have been enslaved (e.g. by Nestle’s seafood suppliers in Thailand) and subjected to compulsory political and religious indoctrination (e.g. by suppliers to Adidas, H&M and Nike in China). When the Fair Labour Association audited the China operations of Foxconn, one of the world’s largest manufacturers…

You believe we are at a moment of heightened importance in the history of humanity. How so? We are facing a perfect storm of crises that will require our united efforts to overcome. Climate change is accelerating at breakneck speed; citizens are losing faith in their elected officials and institutions; and healthcare systems around the world have been pushed to the brink by COVID-19. In our communities, civic lives and workplaces, we are grappling with myriad forms of alienation and disenfranchisement. While we’re more connected than ever before thanks to technology, we are nevertheless living in an age of isolation that has created and fuelled toxic digital spaces, contributed to the rise of mental health challenges across the board—especially among young people — and has left us feeling lonelier than…

WITH THE 2015 PARIS AGREEMENT, governments the world over made a commitment to limiting global temperature increases. Then in 2018, the Intergovernmental Panel on Climate Change (IPCC) warned that global warming must not exceed 1.5°C above pre-industrial temperatures to avoid the catastrophic impacts of climate change. To achieve this, greenhouse gas (GHG) emissions must halve by 2030 and drop to net zero by 2050. Business has a vital role to play in building a zero-emission economy. To empower peer companies, suppliers and customers to follow suit, we need a race to the top, led by pioneering companies. And science-based targets are a critical part of the solution. In the realm of business, it is widely accepted that targets should be both challenging and attainable. However, the role of internal performance…

In your book, Jerks at Work, you outline four types of destructive colleagues. Who are they? The first type is the ‘kiss-up, kick-downer.’ This is a person who is really talented at work; they have the skills needed to get on their boss’s radar, and their bosses often value them because they are high performers. But behind the scenes, they will do things like insult the competence of team members or ask interns to do work so they can get ahead. If you work with them, you’re in this infuriating position. They sometimes sabotage you, but it’s hard to get the boss to want to intervene on your behalf because they are very effective at their job. The second type is the credit-stealer — someone you work closely with who…

You believe the pandemic has “lifted the veil” on the promise of our digital future. How so? For most of the past half century, we’ve been trained to focus almost singularly on digital technology and how our lives will be shaped by it. We’ve been promised a simple, carefree digital future where we can live, work, learn and play from the comfort of our homes. Instant communication would bring us together instantly, giving us more free time. Put simply, the more we could digitize something, the better off we would be. When the pandemic hit, almost overnight that future transformed into the present, and the reviews were very mixed. It turned out that leaving the house was highly underrated, and that instant communication often spreads anger better than joy. The…

BETWEEN MARCH 2020 AND DECEMBER 2021, the media reported a wide variety of perplexing behaviours. Day after day there was footage of people attending large indoor activities or going for dangerous high-speed joyrides on highways. Why, in the midst of a global emergency, would this happen? Despite extensive research on decision-making under risk, we know very little about how an extreme shock such as COVID-19 might influence people’s attitude toward risk in their daily lives. In a recent paper with Rotman PhD candidate Ying Zeng, we examined how the pandemic impacted people’s risk tolerance. We wondered: how might the general risk attitude differ between people who were severely impacted by the pandemic versus those less severely impacted? This topic is particularly relevant because looking ahead, misunderstanding or neglecting changes in…