Innholdsfortegnelse for Fall 2023 i Rotman Management

Steve Paikin: In March of 2023, an open letter was released by technology leaders calling for a six-month pause on AI development. Elon Musk signed it, as did Apple co-founder Steve Wozniak. It said, in part: AI systems with human-competitive intelligence can pose profound risks to society and humanity…recent months have seen AI labs locked in an out-of-control race to develop and deploy ever-more powerful digital minds that no one — not even their creators — can understand, predict or reliably control. Soon after, Geoffrey Hinton, known as the Godfather of AI, announced his resignation from Google, saying: “Look at how it was five years ago and how it is now. Take the difference. Propagate it forwards. That’s scary.” Gillian, how would you characterize this moment in history for AI?…

AS A BASIC BUSINESS PRINCIPLE, every organization should generate more money from its data than it invests in producing and managing it. Yet the idea of turning data into money is often associated with sneaky tactics or ‘going too far’ with unacceptable exploitation of data. As a result, some organizations, especially non-commercial ones, have little appetite for the term ‘data monetization.’ We believe in neutralizing the heat around the term. It helps to have clear, shared language that more people can use in discourse and debate. We use the term ‘data monetization’ to convey the concept of generating financial returns from data. Most people immediately think of selling data as the only viable approach, but in fact, there are two additional approaches that your organization may already engage in but…

IN THE REALM OF CYBERSECURITY, an important concept is that of ‘digital crown jewels’ (DCJs). These are your organization’s most precious digital assets, and the analogy to priceless national ceremonial objects such as the Crown Jewels of the United Kingdom is apt: These assets must be protected at all costs from nefarious interference. DCJs consist of, in part, an organization’s data, and more specifically the data that a firm possesses, processes and passes on that allows it to operate and deliver on its strategy. These data might include customer records, purchasing histories, employee records, finances and intellectual property information about proprietary products and services. Such data are extremely valuable, and even more so when they contain personally identifiable information (PII) and personal health information (PHI). Data, however, are not the…

I’LL START THIS ARTICLE OUT with some words to live by: If you want to solve a big problem, it’s often best to start out thinking small. That advice might sound backward, but it is informed by my decades of experience in this space. To illustrate, let’s take a really big problem: the elimination of segregation and racism in the United States. Dr. Martin Luther King once said, “I have a dream that my four children will one day live in a nation where they will not be judged by the colour of their skin but by the content of their character.” Dr. King imagined a world where race no longer mattered. This was a lofty dream that, sadly, he did not achieve in his lifetime. But what he did…

HEIGHTENED AWARENESS AROUND ENVIRONMENTAL, social and governance (ESG) issues has led to enhanced demand for ESG-related information from companies and resulted in the passage of mandatory disclosures in numerous countries. Whereas previous research has looked at how mandatory ESG disclosure impacts a firm’s valuation and profitability, we felt that it might also be creating incentives for firms to make particular operational decisions with respect to their supply chain. Put simply, we felt that some firms might be changing suppliers based on the disclosure requirements in their own country and/or the rules in the supplier’s country. For decades, multinational corporations have adopted global outsourcing strategies to minimize production costs and optimize profit margins; sometimes at the expense of human rights. Nike, for example, was accused of unethical sourcing practices in the…

LEADERSHIP TEAMS AROUND THE WORLD have been operating in a highly volatile and uncertain environment — first having to cope with the COVID-19 pandemic and then with the ensuing economic slowdown, soaring inflation and geopolitical disruption. In such an unsettled period, it is no surprise that efforts to strengthen short-term resilience have dominated the agenda at many companies. Less obviously — but no less importantly — business leaders are having to address a range of organizational shifts that have significant implications for organizational structures, processes and people. Depending on how organizations address them, these shifts are both challenging and harbingers of opportunity. With this in mind, we have launched McKinsey’s “The State of Organizations Report,” an ongoing research initiative that both pinpoints the most important people, procedural and structural shifts…

Curt Nickisch: In late 2022, people started talking about how ChatGPT was poised to change work as we know it. What is so special about this technology? Ethan Mollick: ChatGPT-3, which is the base generation of this technology, was around for about a year, and it was okay. It worked at or near the level of a D-minus student. But we have since crossed a threshold of ability that has made ChatGPT incredibly useful. It can now achieve the output of a B-minus student. And if you use a more advanced model like the one on Microsoft’s Bing search engine, you can achieve the level of an A-minus student. This represents radical progress in a very short period of time. We have some early results on how these tools affect…

IT’S A TALE AS OLD AS TIME — or at least, as old as the history of public companies. Shareholders want and expect companies to maximize shareholder value. But the risks involved in public ownership are many, and one of the most widely recognized is ‘agency costs.’ In any relationship between a ‘principal’ and an ‘agent’, the agent is given powers to make decisions on behalf of the principal. Examples include shareholders (principal) vs. management (agent); voters (principal) vs. politicians (agent); and financial institutions (principal) vs. rating agencies (agent). The root of principle-agent problems is the fact that the two parties often have different incentives and generally, the agent has more information. In most cases, the principal cannot directly ensure that its agent is always acting in its best interests,…

EXCITEMENT ABOUT ARTIFICIAL INTELLIGENCE (AI) is on the rise among business leaders and investors, and for good reason: AI has the potential to transform business and the economy. But are businesses embracing it yet? If so, to what extent? Very little evidence exists about which technologies have actually been adopted thus far, who the adopters are or where they are located — which has made it difficult to understand AI’s true economic and managerial implications. In a recent paper, I and my colleagues Erik Brynjolfsson (Stanford University), J. Frank Li (UBC) and Zachary Kroff, Emin Dinlersoz, Lucia Foster and Nikolas Zolas of the U.S. Census Bureau set out to fill in some of the blanks. Our study sheds light on the rate and direction of AI diffusion and the influences…

WHAT DOES IT TAKE TO SUCCEED as an entrepreneur? I mean really succeed, like Elon Musk, Michael Dell and Phil Knight have. And do these wildly successful founders have attributes that set them apart from other successful business leaders? I myself am a veteran of three entrepreneurial ventures — with one win, one loss and one draw to my name. I have studied entrepreneurs extensively and have taught and learned from close to 2,000 of them in executive programs at leading business schools and elsewhere. As a result, I’ve observed first-hand the differences between entrepreneurs and other successful businesspeople. It’s their mindsets, I’ve discovered. A couple of years ago I set out to codify these mindsets to help people everywhere — not just start-up founders — become more entrepreneurial. The…

MOB MENTALITY. Groupthink. Pack behaviour. General strikes. Sports events. All are forms of herd behaviour, which occurs whenever a large number of unconnected people act in the same way at the same time — sometimes with direction from others, sometimes not. Fuelled by fear, greed or a desire to be part of a particular group, individual judgment and opinion-forming processes shut down as people automatically follow the group’s behaviour. Herd behavior can have both positive and negative effects, depending on the situation. For example, it can lead to increased efficiency and safety in a group. But it can also cause people to make irrational or dangerous decisions. In the realm of investing, herding results when investors copy the behaviour of other investors. And like many forms of herd behaviour, the…

Why is belonging such a critical concept right now? I think for many of us, the dramatic shift over the past few years in how we’re living, working and leading has given rise to all kinds of new insights. With the increased spotlight on inclusion and equity, we’ve done some deep soul searching around who we are, what we want out of life, and how we want to work and lead going forward. What has been revealed is that for a long time, we haven’t felt accepted for who we are. We’ve struggled to be seen and to bring our differences to bear in our interactions — both in our personal and professional lives. And what we’ve ultimately realized is that we’re searching for belonging. We want to be honoured…

MORE THAN A DECADE after the publication of Nudge, the organizational relevance of insights from Behavioural Science is no longer questioned. But in terms of applying these insights, two challenges remain. The first relates to creating organizations that truly understand the science and embed it deeply within their structures and methods. The second challenge is one of scaling: How can we ensure that the results of experiments and pilots successfully scale into interventions that reliably improve consumer welfare? In this article, we will focus on the latter and identify three specific scaling challenges. First, one of the biggest themes from the research is the notion of context dependence. We now know that numerous elements in a given context (e.g., the medium of the message, the time of day, information framing…

DEAR EXECUTIVES, We have two requests for you. First, stop relegating your cultural change programs to HR. Start adding them to the top of your leadership agenda. And second, stop blaming others if your attempts at culture change don’t stick. Start shifting your focus to how you and your colleagues behave. In our work with leading organizations, we are seeing a growing divide between the rhetoric of leaders and their actual behaviour. In their words, they are ‘eager to abandon the conventional, command-and-control model.’ They want to change the narrative. They use popular words like purpose, psychological safety, empowerment and tolerance for failure. But in practice, these buzzwords are frequently not reflected in their daily actions and attitudes. Recently, an executive of a large utility company praised the importance of psychological…

As the founding CEO of the Indigenomics Institute, how do you define ‘Indigenomics’? Indigenomics draws on the ancient principles that have supported Indigenous economies for thousands of years and works to implement them as modern business practices. Collectively, it is a response to the systemic exclusion of Indigenous peoples from the economic table over time and a platform from which we can work together to design economic reconciliation for Indigenous peoples. The goal is to address the Indigenous socio-economic gap by moving away from a narrative of ‘happened to us’ and towards a ‘designed by us’ approach. Many Canadians still perceive Indigenous peoples as being on the cost side of the economic equation. But going forward we will be focused on creating ‘own source revenue’ — revenue that our nations…

WHETHER RECOMMENDING A RESTAURANT, endorsing a brand or promoting a policy, it seems reasonable to think that the more arguments you can provide, the more persuaded your audience will be. Indeed, past research suggests that, assuming one has compelling points, providing many rather than few arguments generally promotes greater persuasion. Laypeople share this belief. When I asked 249 online participants whether giving a low or high number of arguments would be more persuasive, 59 per cent indicated that using a high number of arguments would be the better strategy. In contrast to this view, in recent research with Mohamed Hussein and Zakary Tormala of Stanford University’s Graduate School of Business, we posited that a high rather than low number of arguments might have conflicting effects on persuasion. And further, these…

WHETHER YOU’VE HEARD THE TERM OR NOT, you’ve probably already formed many of your own ‘management operating principles’ — the guidelines you use to make decisions and get work done. Knowing and understanding how these ‘guardrails’ influence your work can make you a better leader. Over time, I have refined the backbone of how I lead into four key principles, and I believe they form the foundation of my success: 1. Build self-awareness to build mutual awareness.2. Say the thing you think you cannot say.3. Distinguish between management and leadership.4. Come back to the operating system. These principles are about one thing: building trust. If you’re not self-aware, how can others trust your feedback about their own abilities and behaviour? If you’re not direct with your opinions and judgments, how…

LATELY, it’s as if we’ve been living through the aftermath of cataclysmic explosions: the release of generative artificial intelligence systems like ChatGPT and Midjourney, a fusion breakthrough that could someday generate zero-carbon energy, and AlphaFold’s protein-folding algorithms that predicted structures for nearly all catalogued proteins known to science, to name a few. These and other forces of change are colliding, resulting in an unfathomable amount of new signals — bits of change that, over time, will result in the trends that shape society. In this increasingly complex world, leaders who focus on the trends that matter and adapt to changing circumstances will make better decisions and see improved outcomes. Some of the trends featured in the Future Today Institute’s 2023 Tech Trends Report are new advancements on mature technologies, while…

You have noted a radical shift in the way value is being created today. Please describe it. It used to be enough for an organization to focus on getting better at what it does. Today, that isn’t enough; you need to get better at what you do and explore ways to reinvent yourself at the same time. It’s the classic balance between exploitation and exploration. It’s not that one is better than the other; every organization needs both cultures under their roof. The challenge is that the logic of experimentation is completely different. You might invest in 10 projects and only one will actually work out. As a result, you believe innovation needs to be measured in a whole new way. What needs to happen? It’s very simple. In the…

We’ve heard a lot about difficult conversations, but you believe all conversations are difficult. Please explain. In recent years we have heard a lot about so-called difficult conversations from the realm of academic research and in the public discourse. The focus has been on conversations like negotiations, delivering constructive feedback, giving hard advice or other things that we have come to think about as difficult. But what I’ve come to realize through my life, teaching and research is that even easy conversations are difficult. That’s because every conversation we have involves uncertainty and a lack of control. We are co-constructing this interaction right now, Matt. I don’t know what you’re going to say next; I don’t know what you’re thinking — and I can’t possibly know. I can’t control how…

You have studied innovation that is the result of mild deviance. How do you define these ‘workarounds’? A workaround is a flexible and creative problem-solving approach that defies the conventions around how problems are traditionally solved — and by whom they are solved. One of the analogies I make is the notorious Trojan horse story from mythology, where the Greeks seized the city of Troy. It represents the idea that there are ways to accomplish things that have never been thought of before. In this case, the Greek soldiers didn’t have to scale the walls of Troy or break through its gates to seize the city. They came up with an ingenious idea: they built a giant wooden horse that was presented as a gift to the goddess Athena celebrating…

What is the Future Normal? Will we like it there? When people talk about the future, it is often tinged with the fear that everything could go wrong. With this book, my co-author Henry Coutinho-Mason and I wanted to present an alternative perspective — because we can only build the future we can imagine. We do this through sharing a collection of emerging trends that are both positive and based on reality. We want people to be inspired by the world-changing innovations (and the instigators behind them) that we discovered while writing this book. I have been studying our shared culture to curate trends for more than a decade now, and I’ve learned how to anticipate the ‘likely.’ Henry and I often describe ourselves as reluctant futurists. We believe our…

George Lucas hired you to start the computer division at Lucasfilm in 1979. Seven years later, that division was sold to Steve Jobs and became Pixar. The rest is history. What was it like running Pixar in the early days? My leadership mindset actually started to form before that, at the University of Utah, where I studied computer graphics at the Graduate School of Computing. It was this totally open, sharing environment with a remarkably innovative, long-term vision that allowed me to combine my passions for animation and computers. We were on the frontier of an entirely new field, and those years had a profound effect on me. I knew I wanted to be in that kind of environment for the rest of my life. At Lucasfilm and then at…