“Intelligence is the ability to adapt to change” – Stephen Hawking Companies capable of thriving in the new world of work are managed with agility, resiliency, and the ability to upskill their workforce at the speed of disruption. How well—and how quickly—can your organization adapt? MIT Sloan Executive Education offers 90+ courses to help you transform your leadership strategy, pivot your business model, and turn information into insight. Choose from live online, self-paced online, and in-person course formats. Upcoming courses include: Accelerating Corporate Innovation Breakthrough Customer Experience (CX) Strategy Closing the Gap Between Strategy and Execution Creating High Velocity Organizations Implementing Industry 4.0 Innovating in Existing Markets Questions Are the Answer Learn more about our short courses, (cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:38)(cid:72)(cid:85)(cid:87)(cid:76)(cid:287)(cid:70)(cid:68)(cid:87)(cid:72)(cid:86)(cid:15)(cid:3)(cid:38)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:3)(cid:51)(cid:85)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:86)(cid:15)(cid:3) and enterprise accounts for organizations. executive.mit.edu/sb e d i t o r ’s l e t t e r Working in new ways 1 The way that we’re working is of work,” page 42), leaders from Change is afoot in the way we changing, and I’m not just talking fields as diverse as aviation and ad- work here at strategy+business, too. about learning how to add cool vertising weigh in on the manifold From the time the first issue ap- Zoom backgrounds. Rather, the work and talent issues they face. peared, in 1995, we have chronicled way we think about what work The disruptions to the physical disruptions and energetically partic- means, and how to maintain bal- workplace have highlighted the im- ipated in them—launching a web- ance and health while doing it, is a portance of the human connections site, a digital edition, and a social hot topic of conversation. The pan- that people make on the job. In an media presence—always striving to demic has a lot to do with this re- excerpt from her new book, Rede- meet our readers where they are. But assessment. But so, too, do forces signing Work, Lynda Gratton of the we’re mindful of our environmental such as technology, globalization, London Business School delves into footprint and eager to connect more and evolving consumer habits. the importance of the weak and directly and urgently in the fast- At work, disruptions and in- strong ties formed between col- changing world. novations tend to pile up ceaselessly leagues—and how they can in- This 107th issue of s+b will be (fax, email, conference calls, the fluence innovation (“Maintaining the last quarterly print issue. We’re web, remote work) and people adjust network connections,” page 50). going to be picking up the pace. on the fly. But the organizational Elsewhere, clinical psychologist And we’re deploying our editorial contexts in which people operate— Dana Gionta and Liz Sweigart, a resources and ingenuity to create the the ways we organize, and the bu- former PwC principal, note the successor: a new, free, all-digital reaucracies and systems we set up to importance of establishing psycho- publication that will continue to de- get the work done—tend to evolve logical boundaries (“How healthy liver the essential business perspec- much more slowly. boundaries build trust in the work- tives our readers have come to ex- It’s incumbent upon us, as lead- place,” page 20). pect. You can sign up to receive each ers and readers, to get ahead of sys- Climate change is one of the new digital issue of strategy+business temic changes. Our cover story by forces creating an urgent need for directly to your inbox by visiting Bhushan Sethi, Blair Sheppard, and change in the way we live and strategy-business.com/alldigital. u r a t Nicole Wakefield of PwC, “Meet work. In our Thought Leader inter- It all means more timely in- e e L the four forces shaping your work- view (page 66), author Elizabeth sights, delivered more frequently s r a force strategy” (page 32), provides Kolbert argues that for all the ob- and efficiently. And we can’t wait to L y b a compelling guide to resetting pri- stacles we face, the reservoirs of hu- get to work. n o orities. In one of our periodic man ingenuity are sufficiently deep ti a r excerpts from conversations with that they may potentially power Daniel Gross t s u l CEOs (“Navigating the new world meaningful progress. Editor-in-Chief l I leading ideas 6 Leaders should revisit the works 6 of three corporate culture pioneers Jon Katzenbach and Carolyn Black A trio of 20th-century thinkers yields insights into how to align culture with strategy and energize employees today. Why human resources chiefs are 8 reaching the corner office James Ashton The ability to manage people at scale is more relevant than ever to the CEO role. Feeding the future 12 Enel Sintonen and Laura W. Geller Annikka Hurme, CEO of the Finnish dairy company Valio, on innovating for growth and sustainability. Are you really working on a team? 15 Benjamin Tarshis and Jonathan Roberts Hybrid and remote work are complicating many of the collaborative challenges that were present long before the pandemic arrived. 17 The bullies are back Linda Rodriguez McRobbie The pandemic has encouraged some bad behaviors that leaders need to look out for in the new hybrid world of work. essays ORGANIZATIONS & PEOPLE 20 How healthy boundaries build trust in the workplace Dana Gionta and Liz Sweigart 58 Boundaries clarify responsibilities and expectations. Both employers and employees need to identify, set, and maintain them to keep people engaged and deliver strong performance. TECH & INNOVATION 24 The real value of video content 50 Kim David Greenwood, Kate Kennard, and Chris Mowry As spending on streaming content skyrockets in the entertainment and media industry, a new formula is needed to drive a sustainable return on investment. LEADERSHIP Great feats require crucial decisions 28 Brad Borkan CEOs can hone their decision-making skills by studying leaders who directed world-changing projects. features ORGANIZATIONS & PEOPLE THE THOUGHT LEADER Meet the four INTERVIEW 32 Elizabeth Kolbert 66 forces shaping your Amy Emmert Human ingenuity has gotten workforce strategy us into a global environmental crisis. According to the Pulitzer Bhushan Sethi, Blair Sheppard, and Nicole Wakefield Prize–winning author, it also Specialization. Scarcity. Rivalry. Humanity. has the potential to get us out. Companies that understand—and harness—these forces will have an edge in creating vibrant 72 BOOKS IN BRIEF workforces capable of achieving sustained, Business needs to adjust its positive outcomes. political antennae Deborah Unger INSIDE THE MIND OF THE CEO Navigating the new 74 Follow your S curve 42 Theodore Kinni world of work How the Fed came through 76 Whether they run organizations in telehealth, the pandemic advertising, or aviation, CEOs around the globe Mike Jakeman are facing common challenges in finding, hiring, and developing talent. A guide to growing older 79 Daniel Akst ORGANIZATIONS & PEOPLE Maintaining network To err is human, to regret, divine 82 50 Tom Ehrenfeld connections ENDPAGE: STRATEGY SHOP Lynda Gratton Leaders need to be good writers, too 84 As we redesign work for the hybrid future, Adam Bryant it is vital to understand the ways that information Effective management requires strong communication flows and networks form within organizations. skills, including writing. LEADERSHIP It’s time to challenge 58 Cover illustration by Miguel Montaner the status quo at family businesses Peter Englisch Next-generation leaders need to prioritize environmental, social, and governance issues to build their own legacy. Issue 107, Summer 2022 www.strategy-business.com Published by PwC EDITORIAL Editor-in-Chief Editorial Director Digital Content Director Managing Editor Daniel Gross Tom Fleming Michael Reeves Elizabeth Johnson Senior Editor Senior Editor Senior Editor Senior Editor Senior Editor Laura W. Geller Deborah Unger Amy Emmert Jakob von Baeyer Paul Barbagallo Deputy Managing Editor Deputy Managing Editor Deputy Managing Editor Editorial Chief Copy Editor Sally Law Errico Michael Guerriero David McAninch Operations Manager Victoria Beliveau Natasha Andre Art Director Designers Contributing Editors David Lancefield John Klotnia Laura Eitzen Daniel Akst Paul Leinwand Opto Design Leigh Jagareski Elizabeth Doty Eric J. McNulty Jennifer Thai Sally Helgesen Jeffrey Rothfeder Jon Katzenbach Blair Sheppard Theodore Kinni Thomas A. 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M ORE s, m r fi r e b ms. meail s et td of ier ore urth r mor f e oe f O FTEN. nr ou r ct ou d/tr ns k am/ ro oc wc. tw nep C w. ww Pw e e he ts o e s tas re C refety. Pl wnti Pe d. al eg ve ere l st ea rr hts epa gs ria wC. All hich is Stoc saing nh eurpe. Pw 2 of 02h 2c ©a e l e a L eading d i n g i d e a s Ideas 6 Leaders should revisit the a certain thing, but your actions do not line up with that belief, you will works of three corporate feel uneasy until you modify either your beliefs or your actions (or both). culture pioneers In contrast, acting in accordance with your beliefs achieves resonance, or positive feelings about what you A trio of 20th-century thinkers yields insights are doing. into how to align culture with strategy and energize Why his ideas are still relevant: employees today. Understanding Festinger’s theory and ensuring that words and actions by Jon Katzenbach and Carolyn Black form a foundation for successful cul- align gives leaders the metaphorical A tural alignment and evolution. Sim- grease for motivating employees. s consultants, we’ve been ply put, these “oldies” are goodies For instance, organizations today working in the world of that have worked for decades—and have caught on to the idea of ener- corporate culture much still do. gizing employees around a shared longer than it has been popular to So, who are these folks, and purpose or mission. But for employ- do so. Over the past ten years, cul- how is what they said years ago still ees to sustain energy for any change ture has become a regular topic of relevant today? related to that mission, leaders need discussion among leaders, and writ- to ensure employees can act out ing on the topic has exploded. And Leon Festinger the promise of the mission. If words yet, even with these new and some- Festinger (1919–89) was an Ameri- and actions cannot align, it will times very insightful voices to draw can psychologist and professor at the dampen the impact of the compa- from, we find ourselves repeating Massachusetts Institute of Technol- ny’s message and breed discontent. the wisdom of three 20th-century ogy and the University of Michigan, PwC’s Global Culture Survey 2021 thinkers: Leon Festinger, Frederick who was best known for developing identifies the negative impact of a Herzberg, and Daniel Goleman. the theory of cognitive dissonance disconnect between what organiza- We assure you, we’re not just in the 1950s. tions say about culture and what 7 0 1 stuck on “the oldies.” Rather, we’re What he said: Festinger’s theory employees experience. For example, e u s s pointing you to classics. These au- proposes that a mismatch between a financial institution that touts is s e n thors put forward clear, pragmatic beliefs and behaviors causes psycho- its customer-centricity but doesn’t si u b + insights that have stood the test of logical tension (i.e., cognitive disso- give its call center workers the lati- y g e at time. Used together, these ideas help nance). In other words, if you believe tude to forgive a late fee for loyal r st l e a d customers yields frustrated, dissatis- vation—the drive to perform and there an opportunity for feedback i n g fied employees and customers. achieve—lies not in external drivers that can inform more experimenta- i d Making the necessary changes (whether incentives or punishments), tion? The people one works with also e a to align your culture with your busi- but instead in making the actual have a significant impact on employ- s ness goals is gradual work. Some- work itself more satisfying. ees’ feelings toward the work (just as times finding behaviors that resonate Why his ideas are still relevant: much as, if not more than, the per- with existing mindsets but nonethe- In a time when many employers are son one works for). This is because of less move the organization in a new, trying to figure out what combina- the contagious effect of how others desired direction can create powerful tion of perks, pay, and purpose will feel about the work. Great, one might say—if leaders Motivation—the drive to perform and achieve— could ensure mindsets and actions line up (Festinger) and enrich each lies not in external drivers, but instead in making employee’s job (Herzberg), they the actual work itself more satisfying. could unlock immense stores of pos- 7 itive energy for the organization. momentum. We often work in an help them combat the “great resig- But how can any large entity do iterative dance, starting with behav- nation,” many are overlooking Herz- this? That’s where Daniel Goleman iors, then coming back to mindsets. berg’s simple message: it’s not all comes in. that stuff but the work itself—and Frederick Herzberg employees’ emotional connection to Daniel Goleman Herzberg (1923–2000), another it—that drives employees. A longtime New York Times science American psychologist, taught at According to Herzberg, the key journalist and the author of numer- Case Western Reserve University to motivating workers is enriching ous books, Goleman, born in 1946, and the University of Utah. He be- their jobs by giving them enough re- is most celebrated for his ground- came one of the most influential sponsibility, control, and data to fa- breaking work on “emotional intel- figures in management thinking, cilitate growth and “play,” or exper- ligence,” detailed in his 1995 book and is best known for developing the imentation. Today’s leaders and of the same name and in many sub- concept of job enrichment and for managers should ask themselves: Do sequent works. the motivator hygiene theory, devel- employees have a view of and con- What he said: Goleman identi- oped in 1964. trol over their work, from inputs to fied that, contrary to what was then What he said: The most impor- impact? Can they take on new but the popular belief, traditional intel- tant motivator is the work itself! surmountable challenges? Is there ligence, or IQ, cannot fully explain Herzberg demonstrated that moti- room for them to make mistakes? Is an individual’s success and impact. Rather, a critical determinant of suc- cess lies in what Goleman termed emotional intelligence, or EQ. He defined EQ abilities across five cat- egories: self-awareness, self-regula- tion, motivation, empathy, and so- cial skill. He provided tools for how to identify individuals with superior k vi ö EQ. He also pointed out that orga- b r a nizations not only fail to prioritize k S e these characteristics in hiring and s s a promotion, but often unwittingly L y b screen against them. Goleman didn’t n o argue against the value of data-driv- ti a r en analysis and rational influence. t s u l Instead, he called to light the still l I l e a d i overlooked emotional side of man- they help employees and peers con- Why human n g agement and success. struct fulfilling roles. It’s through i d e Why his ideas are still relevant: AILs’ insights and way of being that resources a s Many leaders are overlooking the we unlock resonance and self- people most critical to their organi- sustaining motivation within an or- chiefs are zation’s success. Many organizations ganization—and ultimately drive do now consider EQ, particularly transformation. reaching in hiring. But they inadvertently fil- ter against it. Self-awareness (can- Putting it all together the corner dor) is often seen as highlighting Understanding the ways in which weakness, self-regulation (restraint) the work of Festinger, Herzberg, and is often seen as lack of passion, and Goleman overlaps is critical to office empathy (awareness of others’ feel- achieving the high-performing cul- 8 ings) is often seen as an inability to tures that organizations now finally The ability to manage make hard decisions. Promotions see as so important to their success. are most often based on people’s It takes first realizing the power of people at scale is more performance in their current roles as what Festinger and Herzberg detail, relevant than ever to opposed to demonstrated capabili- then seeing that you need the type of the CEO role. ties for the management roles they help Goleman describes to imple- might step into. ment those ideas. But emotionally intelligent peo- These three authors, read to- by James Ashton T ple, whom we at PwC’s Katzenbach gether, provide an understanding of Center call authentic informal lead- why successful cultural interven- he sharp focus placed on the ers, or AILs, are the key to putting tions work. But they also give people agenda over the last the concepts of Festinger and Herz- achievable, time-tested strategies for two years has also put a berg into action at scale. AILs un- how to get started on your own cul- spotlight on those who lead the hu- doubtedly exist throughout your or- tural transformation. Armed with man resources function within ma- ganization, at all levels and in all this knowledge, you can drive dra- jor companies. During the pandem- departments. You can find them matic change. Begin with a pilot. ic, many chief human resources through simple surveys, crowd- Pick one team or department and officers (CHROs) were lauded for + sourced nominations, and inter- give it a try! taking broader management respon- views. When working with clients, sibility when staff safety and remote we sometimes use organizational Jon Katzenbach working quickly forced changes to [email protected] network analysis, which allows com- strategy and outlook. is an advisor to executives for Strategy&, panies to construct maps of complex So it should come as no surprise PwC’s strategy consulting group. He is a man- internal social relations using email aging director with PwC US, based in New that those leaders are now being pro- York, and founder of the Katzenbach Center, and instant message statistics, as well pelled to new heights. In December Strategy&’s global institute on organizational as meeting records. On the most ba- 2021, Leena Nair, Unilever’s CHRO, culture and leadership. His books on orga- sic level, you can simply ask employ- nizational culture, leadership, and teaming was named as the next leader of include The Wisdom of Teams: Creating the ees, “Who do you look to within Chanel, swapping Dove soap and High-Performance Organization (with the organization when you are hav- Douglas K. Smith) and The Critical Few: Magnum ice cream for suits, luxury Energize Your Company’s Culture by Choos- ing a problem?” Patterns will emerge. handbags, and perfumes. A month ing What Really Matters (with James Thomas Finding AILs is at the heart of later, the 2,000 employee–strong and Gretchen Anderson). our work. They have an innate un- UK sandwich chain Greggs an- 7 0 Carolyn Black 1 derstanding of Festinger’s and Herz- nounced that Roisin Currie, for e [email protected] su s berg’s theories and a knack for ap- is an independent consultant and executive many years its group people director, is s e plying them. They help identify coach based in New York. She has worked would become CEO in May 2022. sin u closely with Jon Katzenbach and the Katz- +b behaviors that align with an organi- And before both, Anne Jessopp led y enbach Center since 2016. eg at zation’s objectives and beliefs, and the way in 2018, when she was r st