Innholdsfortegnelse for Winter 2024 i Rotman Management

32 years: Growth of the average life expectancy at birth of Americans since 1900, from 46 to 78 years. 19-25 years: The average life left at age 60 for Americans, Europeans, Latin Americans and Asians. 13-17 years: Years of life left at age 60 that will be lived in good health. 8: Number of generations sharing the world stage nowadays. 18 per cent: Proportion of American households that constitute a nuclear family with two married parents and at least one child under the age of 18 (2021), down from 40 per cent in 1970. Also 18 per cent: Proportion of Americans living in multigenerational households, with three or more generations living together (2021), up from seven per cent in 1971. 10-15 per cent: Highest proportions by country of people age…

WHEN OPENAI REVEALED CHATGPT in late 2022, people clambered to test it. They asked complicated, open-ended questions, requested long-form narrative, and often got impressive results. Not even four months later, the company released GPT-4, the next generation of its AI software, which can respond to both image and text inputs and more nuanced instructions. Even before ChatGPT came along, text-to-image generators like Stability AI’s Stable Diffusion and OpenAI’s DALL-E 2 stunned people by responding to written prompts with photorealistic images. ‘Two kangaroos waltzing in the style of Monet’ would get you pretty much that. Not surprisingly, arguments over the ethics of mimicking artists’ styles, legal risks and the impact on people’s livelihoods have flared. While the impact on the art industry is clear, many leaders in other fields continue to…

A TURNING POINT OCCURRED just as we were finishing up our book, The AI Dilemma. New digital tools — mostly based on natural language processing (NLP) systems and deep learning models — were released in rapid succession for free to the public. These generative AI programs include apps like DALL-E, ChatGPT and GPT-3 from OpenAI, along with natural language search engines from Microsoft and Google. Suddenly, it is easy to create and alter images, text and interactive media within seconds. Millions of people have shared their assisted creations through social media. It is clear that these new tools are already changing habits. Some creative people regard the new AI systems as threatening. “These generators are created using thefted artwork, and in turn, undervalue the work of the original artists,” wrote…

LENDING AND BORROWING MARKETS are vital to the economy, providing individuals, businesses and governments with access to capital for investments, expansions and innovative projects. Without borrowing, economic growth would be severely limited; and without lending facilities, there would be no borrowing. As a digital value management tool, the blockchain is often considered to be the financial infrastructure for the digital economy. Unsurprisingly, lending and borrowing markets have emerged within this ecosystem and evolved through several stages. Initially, centralized services led by trading platforms dominated the market, followed by the development of decentralized solutions that use the blockchain’s ability to execute code. In a recent paper, we explored how incentive programs being offered by lending protocols to attract users are impacting the parameters and volumes of deposits and loans, as well…

WE’VE ALL HEARD STORIES of cringe-worthy cultural faux pas in the world of business. It could be a Western business executive who accepts a business card from a Japanese counterpart and proceeds to put it in his back pocket — an action that is seen as highly offensive in Japan. Or a male executive travelling to an Islamic country who reaches out to shake hands with a woman who is wearing a hijab — which is considered, to say the least, inappropriate. It’s not just individual executives who are subject to such cultural errors. Large, sophisticated multinationals are not immune. In 2018, Dolce & Gabbana posted three videos on Chinese social media to promote its latest fashion show. The videos showed Asian women dressed lavishly in D&G clothing eating pizza,…

We are well into what climate experts are calling ‘the decisive decade’ for sustainability and Net Zero commitments. And yet, significant action and momentum are missing in most organizations. Even in companies that have made bold commitments for 2030 and beyond, sustainability hasn’t filtered into daily decision-making processes. Bringing these priorities into our daily work can feel like an extra job — not a simple ask of a workforce that is still recovering from the massive tumult of a global pandemic. The first step is for organizations to adopt a new way of thinking: the regenerative mindset. A regenerative mindset goes beyond sustainability to consider how we can do more good for people and planet, rather than limiting ourselves to doing less harm. This mindset acknowledges the scale and complexity…

PROMPT 1: “Generate 15 original start-up ideas that could be a good fit for Y Combinator” (Zero-shot approach) Results: 1. An app that provides real-time translation for conversations: Use AI and speech recognition to offer live translation during in-person conversations. 2. VR physical therapy: Offer immersive and gamified physical therapy through virtual reality. 3. Automated grocery shopping: Enable fully automated grocery shopping by having users input preferences and recipes. 4. AI reading companion: An app that summarizes books and generates thoughtful discussion questions. 5. Smart garden sensors: Internet-connected sensors that monitor soil, light, moisture for houseplants. 6. AR interior design: Allow users to visualize virtual furniture and decor in their actual rooms via augmented reality. 7. Wearable health insights: A smartwatch app that provides personalized health advice and goals based…

You believe that a whole new approach to running companies has emerged in recent years. Please describe it. Think about a start-up, but at scale. An archetypal tech start-up is an egalitarian band of people on a mission. It’s not terribly hierarchical — people do whatever needs to be done, but they’re all pointed in the same direction. They keep iterating and trying things out to ensure they have the right product-market fit. This has always been the typical ‘Silicon Valley way,’ and until recently, the rest of the business world has been saying, ‘That’s fine for tech start-ups, but it wouldn’t work in our industry, or at scale.’ They think this approach is too chaotic and that you have to plan every move really carefully. But what I refer…

LOOKING BACK OVER MY CAREER, I sometimes I think of a roller-coaster as an analogy for the relative arbitrariness of a career: there are ups and downs, not necessarily related to personal effort or work. Today’s success does not guarantee tomorrow’s victory. Luck, moreover, plays an important role. Because things rarely turn out as we plan or imagine them, a measure of humility and modesty is essential for keeping a level head over the years. And yet humility is not a virtue that is typically thought to characterize powerful people, whether politicians, business leaders or intellectuals. The traditional definition of humility associates it with prudence, conformism and submission, which is why leaders often reject it and people tend to associate it with the also-rans of this world. Aristotle placed humility…

IN THE CURRENT ENVIRONMENT, ESG risks pose one of the greatest threats to public companies’ abilities to deliver predictable results. A recent Bank of America study calculated that 24 ESG incidents in the period 2014–2019 cost U.S. public companies over $500 billion in market value. Given the threat posed by ESG risks, some argue that superior risk management is a leading indicator of future financial performance, while many lenders and institutional investors view the firm’s ability to successfully navigate ESG risks as a proxy for management quality. And there is growing evidence that companies judged by investors to effectively manage ESG risks are rewarded with lower costs of capital and higher valuations. ESG risks are potential environmental, social or governance hazards that can keep companies from achieving their stated objectives.…

LIKE SO MANY THINGS IN RECENT YEARS, the fundamental role of the C-suite has changed. In the past, the leadership team’s job was to keep the existing machine humming, optimizing for efficiency and profitability. But now the challenge goes beyond delivering results to driving transformation — in effect, building a new machine that will thrive in the future as well as the present. The demands placed on senior leaders of organizations have grown exponentially. Not only are they required to be constantly reinventing their company but they must also navigate the growing expectations of employees, investors and other stakeholders who believe corporations and their leaders should play a larger role in addressing broader societal issues that have historically fallen outside of the purview of business. And given that relentless disruption…

EMPLOYEE BURNOUT has become a global concern. In a survey of over 1,000 respondents by Deloitte, 77 per cent said they had experienced burnout at their current job, while a whopping 91 per cent said unmanageable stress or frustration impacts the quality of their work. When stress begins to accumulate, people can find themselves in a state of feeling emotionally worn out and drained. Work-related emotional exhaustion (EE) can be defined as ‘the experience of feeling emotionally over-extended and exhausted by one’s work.’ And not surprisingly, it has negative implications for employee well-being and effectiveness. In this article I will summarize recent research conducted with Faith Lee (University of Akron), James Diefendorff (University of Akron) and Megan Nolan (West Chester University). In this work we studied how EE changes throughout…

DAY IN AND DAY OUT, employees carry the torch for the values and mission of their organization. They are the facilitators of every moment that matters — all of the positive connections and the negative pain points encountered by both customers and their fellow employees. While many leaders recognize the impact of seamless customer experience (CX) on an organization, the role played by employee experience (EX) has yet to be fully appreciated. It’s time to change that: My research shows that an increased focus on employee experience can increase revenue by more than 50 per cent, and profits by nearly as much. Companies with high CX and high EX exhibit a three-year compound annual growth rate almost double (8.5 per cent) those with low CX and EX (4.35 per cent).…

ACCORDING TO CNBC, more than one third of new investors are using social media to research investment advice. If such advice is independently produced by different contributors, it can benefit investors, because research shows that averaging independent judgments generally improves accuracy. This is known as ‘the wisdom-of-the-crowd effect.’ However, social media platforms disseminate information using engagement algorithms that are influenced by popularity bias — which means popular items are recommended more frequently than other items. And as such, they do not guarantee independent information aggregation. In one study, researchers found that financial social networks can serve as a platform for users to consume information that reinforces their pre-existing beliefs, resulting in ‘echo chambers’ that can undermine wisdom-of-the-crowd effects. In a recent paper, we examined how information from three social media…

At one time, employees primarily collaborated with colleagues from their own country, but today, many are part of global networks connected with people scattered around the world. What are the implications? Most managers have little understanding of how local culture impacts global interactions. Even those who are culturally informed, travel extensively and have lived abroad often have few strategies for dealing with the cross-cultural complexity that affects their team’s day-to-day effectiveness. Why does your Swedish colleague have so many problems leading his Chinese team? How do you foster a good relationship with your Brazilian suppliers while sitting at your desk in Europe? How do you navigate the tricky task of performance reviews when your American employees precede negative feedback with three nice comments, while the French, Dutch, Israelis and Germans…

Why did you decide to write a book about inclusive organizations? I wrote the book because many people still don’t understand what it means to create and foster an inclusive organization. I learned through research that, on average, companies spend US$8 billion per year on inclusion training, but that roughly 95 per cent of employees still don’t know how to drive inclusive efforts for organizational growth. Five per cent of employees say, ‘I am doing the hard work to drive inclusive efforts in my organization, but I’m not being recognized for my efforts.’ That five per cent comprises DEI leaders, HR professionals and employee resource group enthusiasts. But the vast majority of employees say, ‘I still don’t know how to drive inclusive efforts.’ If employers are spending so much on…

Since 2020, Deloitte Canada has been working to rebuild relationships between Indigenous and non-Indigenous peoples. Why is this issue so important to your company? We believe that every organization in this country has a responsibility to advance reconciliation. In June 2020, we released a Reconciliation Action Plan in response to the Truth and Reconciliation Commission’s Call to Action Number 92. It called on the corporate sector to do more, specifically around hiring of Indigenous Peoples, education of our shared history and meaningful consultation. We believe this is not only the right thing to do in terms of corporate citizenship, but that there is also a huge business case for it. Describe the origins of Deloitte Indigenous. We formed an Indigenous Leadership Committee at the firm in 2018-2019, where non-Indigenous and…

In both our professional and personal lives, we often say Yes to people, even when we know our honest answer is No. Why is that? No is such a simple two-letter word, but it’s really hard to say. Through my research, I’ve identified three main reasons for this and they all relate to other people. The first is our concern for relationships. We want to have, and keep, our friends and we worry that saying No will disappoint the people we care about. The second reason is our concern for reputation — how people view us and what they say about us when we are not in the room. We say Yes when we want to say No, when we are anxious that saying No will result in other people…

NO ONE WOULD argue that digital technologies are taking the world by storm. Spending on these technologies and services worldwide was US$1.85 trillion in 2022 — a 185 per cent increase over the last five years. Undoubtedly, digital tools have shifted the paradigm from traditional working methods to much faster, more efficient, high-quality operating models impacting firms’ bottom-line and value-creation opportunities. And yet, more than 70 per cent of digital transformations are failing. What is the recipe for a successful digital transformation? From an operational standpoint, digital technology interventions can be viewed in three stages: • THE READINESS STAGE. Crafting a digital strategy and preparing people, processes and existing technologies for a digital change.• THE DEPLOYMENT STAGE. Aligning behaviours, making investments and customizing solutions.• THE EXPLOITATION STAGE. Scaling up digital…

In your latest book you make a clear distinction between failing well and failing badly. Please describe the difference. There is so much rhetoric out there in business, especially in tech: Fail fast, fail often. Let’s have a failure party. It’s important to recognize that not all failure is alike. None of those tenets distinguish between the type of failure we should celebrate, and the kind we should not. In my work, I’ve distinguished three archetypes. Two of them represent ‘bad failure’ and one represents ‘good failure.’ The first type of failure is basic failure. These are single-cause, human-error-created failures that occur in known territory and could readily have been avoided through better practices, more vigilance or greater attentiveness. For example, sending an e-mail intended for your sister to your…

You believe the traditional ‘sequential model’ of living life is giving way to something quite different. Please explain. The old model of living life sequentially, from school to work to retirement, has always defined each generation of Boomers, Millennials, etc. But these divisions are based on assumptions about these groups that are disappearing. A revolution has begun that is creating a multiplicity of pathways that provide people with more choices. The fact is, there is nothing naturally preordained about what we should be doing at different ages. The sequential model of life is a social and political construction, built on conceptions of patriarchy and bureaucracy that classify people into age groups and roles. The confluence of rising life expectancy, enhanced physical and mental fitness and technology-driven knowledge and interaction fundamentally…

Great leaders are defined less by enduring traits and more by their ability to recognize and adapt to the opportunities created by a particular moment. They can sense the zeitgeist—the spirit, ideas and beliefs that define a period—and seize it. The zeitgeist, according to research by my Harvard Business School colleague Anthony Mayo and I, is shaped by six factors: global events, government intervention, labour relations, demographics, social mores and the technology landscape. Today, we are experiencing a zeitgeist shift, and individuals who can recognize shifts in these six factors and exploit them have what we call ‘contextual intelligence.’ The most recent leadership transition at Apple illustrates how contextual intelligence matters. During the 2000s, Steve Jobs helped the company prosper by stringing together a series of breakthrough innovations, including the…

In February 2023, researchers made global headlines when they announced that their four-day workweek experiment had been a success. Over six months, they had asked about 30 companies that collectively employed 1,000 people to give their teams an extra day off. Some opted to extend the weekend or had people take a day in the middle of the week off, while others opted to create a flexible schedule to accommodate client needs. But what they all had in common was a reduction in the number of hours employees had to work—without an associated reduction in pay. These companies were basically giving their employees a collective raise in the form of fewer hours; and it seems to have paid off. Rotman Professor of Organizational Behaviour John Trougakos was not surprised that…

IMAGINE A WORLD WHERE EVERYONE — regardless of race, gender or orientation — was accepted equally and provided with equal opportunity. It might sound like a pipe dream to some, but the fact is, there are people working on the ground every day to make it happen. These are the world’s change agents, and Charley Butler and Victor Tung are among them. The Rotman graduates work for the Ontario Teachers Pension Board (OTPP) and BMO, respectively — two organizations that count themselves among the growing number embracing a diversity, equity and inclusion (DEI) agenda. The collective goal: evening-out the playing field to ensure a pipeline of talent that is equitable and fair in all categories. The duo was among those recognized as 2023 Champions of Change by Women in Capital…

Karen Christensen: You believe we can shift the current economic paradigm to one that permits growth while protecting the planet. Please explain how. Steven Cohen: Those of us in the developed world have a far greater environmental impact than people in the developing world, but there is great political pressure in the developing world to increase material wealth, and that pressure will lead to increased environmental impact. Our political stability and security depend on the maintenance of material wealth where it exists and economic growth where people are poor. But to achieve those goals, we must learn how to construct a high-throughput economy that does not destroy our planet’s ecosystems. The good news is, we have the capacity to develop methods of production and consumption that are less damaging to…

AN ASTONISHING CHANGE is occurring in the landscape of human creativity: there is now evidence that AI can help make us more innovative — if we use it properly. The core irony of generative AIs like ChatGPT and Bing is that they were supposed to be all logic and no imagination. Instead, we get AIs that make up information, engage in (seemingly) emotional discussions and are intensely creative. And that last fact is one that makes many people deeply uncomfortable. To be clear, there is no one definition of creativity, but researchers have developed a number of tests that are widely used to measure the ability of humans to come up with diverse and meaningful ideas. The fact that many of these tests were flawed wasn’t that big a deal…

Mark Zuckerberg has a famous motto: Move fast and break things. Tell us how your preferred mantra, ‘Move fast and fix things,’ differs from his. We all want to accelerate progress within our organizations and in society at large. But Zuckerberg’s quote implies that a certain amount of wreckage is the necessary price we have to pay for inventing the future. We can either make progress or take care of people — one or the other. That quote gave speed a bad name. The other option is to go slow, which no one wants to do. So both options are unappealing and sub-optimal. The irony is, moving fast and breaking things actually slows you down, because you have to address all the wreckage along the way. But my co-author Anne…

IF YOU THINK about how creativity is changing in the 21st century, it’s impossible not to think about social media and platforms like TikTok, YouTube and Instagram. After many years with the CBC in 2020 I joined the leadership team at TikTok. Even before I joined the company, it was known for changing the way that storytelling and content have evolved in recent years. And I think I know why it has been such an unbridled success with users. But first, if you’ll indulge me, I’d like to start by taking us back in time to 1957. That’s the year when one of the greatest children’s books of all time was created — The Cat in the Hat by Theador Seuss Geisel, otherwise known as Dr. Seuss. One reason why…

IN GREEK, THE WORD EIDO means two things: ‘to see’ and ‘to know.’ In English, we use the term ‘intuition’ to describe the unique application of one’s observations and learned knowledge. Many business leaders and CEOs apply their intuition to make tough judgement calls and decisions. This is one of the many reasons why they are called to serve in the role. However, intuition alone has its flaws. Behavioural Science teaches us that it can be significantly influenced by cognitive biases. Yet alternatively, there are myriad business success stories illustrating how a CEOs’ intuition — not data and analytics alone — can generate revolutionary outcomes. Apple is one of the most well-known examples of the successful application of leadership intuition. Why is intuition sometimes spot-on, while in other cases, it…