Harvard Business Review - 2020.01,02.pdf

HB R.O R G J a n u a r yFebr u a r y2020When Data Creates Competitive Advantage76 The New An a lytics of Cu ltu r e6 0 Competin g in the Age of AI102 The Elemen ts of Good J u dgmen t.and when it doesnt94Januar y Febr uar y 202041SPOTLIGHT THE LOYALTY ECONOMY42 STRATEGYAre You Underval uing Your Cust omers?It s t ime t o s t ar t me as ur ing and managing t h e ir wor t h.Ro b Ma r k e y51PERFORMANCE MEASUREMENTHow t o Val ue a Company by Anal yzing It s Cust omersA guide t o cus t ome r-bas e d cor por at e valuat ion Da nie l McCa r thy a nd Pe te r Fa de r56CUSTOMERS“Over Time,t he Market Wil l Demand This Informat ion”Vanguar d ch air man e me r it us Jack Br e nnan on cor por at e dis clos ur eDa nie l McGinnCo n t e n t s“Managing for loyalty has gone from an intuitive idea to a conceptual goal to an operational practice.”PAGE 56COVER PHOTOGRAPHPotter/Getty ImagesBettmann/Getty ImagesHa r va r d B u sin ess R eviewJa n u a ryF ebru a ry 2 02 05Jan uaryFe bruary 202094STRATEGYWhen Dat a Creat es Compet it ive Advant age.and wh e n it doe s n tAndr e i Ha giu a nd Julia n Wr ight 102 LEADERSHIPThe El ement s of Good JudgmentHow t o impr ove your de cis ion-makingSir Andr e w Lik ie r ma n112 OPERATIONSTaming Compl exit yMake s ur e t h e be ne fit s of any addit ion t o an or ganizat ions s ys t e ms out we igh it s cos t s.Ma r tin Re e ve s e t a l.12 4ECONOMICS&SOCIETYChoke Point s Count r ie s ar e t ur ning e conomic infr as t r uct ur e int o polit ical we apons,and t h at pos e s a major r is k t o bus ine s s.He nr y Fa r r e ll a nd Ab r a ha m L.Ne wma n59FEATURES60TECHNOLOGYCompet ing in t he Age of AIHow mach ine int e llige nce ch ange s t h e r ule s of bus ine s sMa r co Ia nsiti a nd Ka r im R.La k ha ni68HEALTH CAREManaging t he Most Expensive Pat ient s A ne w pr imar y-car e mode l can lowe r cos t s and impr ove out come s.Ro b e r t Pe a r l a nd Philip Ma dvig76ORGANIZATIONAL CULTUREThe New Anal yt ics of Cul t ure Wh at e mail,Slack,and Glas s door r e ve al about your or ganizat ionMa tthe w Co r r ito r e,Amir Go ldb e r g,a nd Sa me e r B.Sr iva sta va 84HUMAN RESOURCESThe Transformer CLO Th e r ole of ch ie f le ar ning office r is n t jus t about t r aining anymor e.Ab b ie Lundb e r g a nd Ge o r ge We ste r ma nIllu stra tion by KEITH NEGLEY946Ha r va r d B u sin ess R eviewJa n u a ryF ebru a ry 2 02 0IDEA WATCHNe w R e s e a r c h a n d Eme r gi n g I n s i gh t s17LEADERSHIPWhy Boards Shoul d Worry About Execut ives Off-t he-Job BehaviorDUIs,t r affic t icke t s,and ot h e r fact or s can r ais e on-t h e-job r is ks.PLUS An ups ide t o bor e dom,a ne w way t o look at s pons or s h ip,wh y awar ds can be de mot ivat ing,and mor e32 DEFEND YOUR RESEARCHAdvert ising Makes Us UnhappyTh e mor e a count r y s pe nds on ads,t h e le s s s at is fie d it s cit ize ns ar e.DEPARTMENTS10FROM THE EDITOR12 CONTRIBUTORS148 EXECUTIVE SUMMARIESEXPERIENCEAd vi c e a n d I n s pi r a t i on1 71 35Jan uaryFe bruary 202035Photogra ph by MARY BETH KOETH135MANAGING YOURSELFBuil ding an Et hical CareerA t h r e e-s t age appr oach t o navigat ing mor al ch alle nge s at wor kMa r y a m Ko ucha k i a nd Isa a c H.Smith 140CASE STUDYGive Your Col l eague t he Rat ing He Deservesor t he One He Want s?Not all t h e me mbe r s of a h igh-pr ofile t e am ar e doing t h e ir s h ar e of t h e wor k.Antho ny J.Ma y o,Jo shua D.Ma r go lis,a nd Amy Ga llo146SYNTHESIS#MeToos LegacyLe s s ons fr om t h e move me nt,and wh at wome n want ne xtNico le To r r e s152 LIFES WORKSugar Ray Leonard35HOW I DID ITThe Founder of C on Finding t he Financing t o Achieve Scal eMor e e xcit ing t h an t h e companys mult ibillion-dollar s ale was t h e fir s t s ignificant inve s t me nt.Ry a n Co he n8Ha r va r d B u sin ess R eviewJa n u a ryF ebru a ry 2 02 0We r e pr oud t h a t t h e pa pe r w e us e i n our pr i n t ma ga zi n e i s c e r t i fie d un d e r t h e Sus t a i n a ble For e s t r y I n i t i a t i ve pr ogr a m,me a n i n g t h a t i t c ome s fr om r e s pon s i bly ma n a ge d s our c e s a n d i s a r e n e w a ble r e s our c e.Our Commitment to SustainabilityThe Real Deal on DataCUSTOMER DATA AND anal ytics are an enormousl y potent combination.We al l know the dril l:The more customers you have,the more data you can col l ect and anal yze to create ever better products that attract ever more customers.Conventional wisdom hol ds that this virtuous cycl e confers a nearl y unbeat-abl e competitive advantage.Not so fast,say Andrei Hagiu of the Questrom School of Business and Jul ian Wright of the National University of Singa-pore.They argue that its a mistake to assume that the benefits of data-enabl ed l earning are as powerful or as enduring as those of network effects,wherein the val ue of an offeringsay,a social media pl atformkeeps rising as more peopl e use it.“In most instances,”they say,“peopl e grossl y overestimate the advantage that data confers.”To attain the strongest competi-tive