Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
TRANSFORMING THE PRACTICE OF MANAGEMENT AND LEADERSHIP
Volume 5 Issue 2 | Spring 2017 | quarterly.insigniam.com
FORPITNEYB...
“When executive teams are
coordinated in the actions
they take, they are better
positioned to pivot in the face
of disrupt...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 1
In 1952, Boeing’s then-president, Bill Allen, made a game-changing
decisio...
Contents
COVERSTORY
STAYTHECOURSE
For Pitney Bowes CEO Marc
Lautenbach, decision-making is
all about the follow-through. T...
“My job is not to predict the future
and have it come out right. It is to help
others see things coming and make
sure the ...
lectric cars are taking off. And Toyota wants in.
At the end of 2016, 2 million electric vehicles (EVs) were
predicted to ...
Top 5 Best-Selling Electric Vehicles
Source: EV-volumes.com Note: Rankings reflect global sales numbers through the first ...
6 INSIGNIAM QUARTERLY | Spring 2017
THE
TICKER
What happened to integrity in the
workplace?
For many companies, it has see...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 7
The best CEOs in the
world focus on the
long game and they
stick around, a...
8 INSIGNIAM QUARTERLY | Spring 2017 quarterly.insigniam.com | INSIGNIAM QUARTERLY 9
FORKS IN THE ROADThere is no shortage ...
10 INSIGNIAM QUARTERLY | Spring 2017 quarterly.insigniam.com | INSIGNIAM QUARTERLY 11
Sources: Corporate Visions, Losses a...
12 INSIGNIAM QUARTERLY | Spring 2017
BROWSER
HISTORY
FRAMEOFMINDA roundup of books, apps and other resources from and for ...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 13
BRAINMASSAGE
Break out of unhealthy mental habits—check out these apps to...
14 INSIGNIAM QUARTERLY | Spring 2017
Over the course of 18 months ending in
October, German retailer Hugo Boss saw
the val...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 15
THISISYOURLIFE:BALANCINGACT
The average CEO works 10 to 11 hours per day,...
SHARPENINGSABRE
Wade Jones was given a tall order at Sabre
Travel Network: help push an already good
company to become gre...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 17
but did not add real value. To catalyze a leap
in the Travel Network busi...
18 INSIGNIAM QUARTERLY | Spring 2017
“Our
customers
are very
good at what
they do, but
our role as
a business-
to-business...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 19
new approach,” he says. Employees quickly
saw the value, for instance, of...
20 INSIGNIAM QUARTERLY | Spring 2017
INSIGHT
FROM THE
BOARDROOM
hen a boardroom is
little more than an echo
chamber for th...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 21
is retired). And while it’s probably useful to
have a retired government ...
22 INSIGNIAM QUARTERLY | Spring 2017
Goldman Sachs before retiring four years
ago. But the majority of her experience was
...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 23
C-suite decisions should not be limited to
times of obvious trouble. Boar...
24 INSIGNIAM QUARTERLY | Spring 2017
StaytheCourseFor Pitney Bowes
president and CEO
Marc Lautenbach,
making a decision
me...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 25
INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVE...
26 INSIGNIAM QUARTERLY | Spring 2017
itney Bowes could have easily been wiped
out by the digital revolution. But when Marc...
vices that define the organization and make
it tick. The decisions Mr. Lautenbach made
from then on built upon that founda...
28 INSIGNIAM QUARTERLY | Spring 2017
way the units spent money to make money.
Did the company really need dozens of dif-
f...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 29
1. How do you stay on top of
industry trends?
I read a tremendous amount....
30 INSIGNIAM QUARTERLY | Spring 2017
says, attendees tempered their comments.
Eventually, however, after Mr. Lautenbach
sh...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 31
“To a degree, decision-making and strategies are the
easiest part of the ...
32 INSIGNIAM QUARTERLY | Spring 2017
INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED.
CONFIDENT...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 33
On a flying trapeze, the
success—and survival—of
the troupe relies on per...
34 INSIGNIAM QUARTERLY | Spring 2017
That kind of coordinated action does not
happen on its own, however. Instead, you can...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 35
You can instill,
inspire and empower
the right actions
by defining roles,...
36 INSIGNIAM QUARTERLY | Spring 2017
Therefore, as part of the charter, it is best
that leadership team members answer a f...
drafted and agreed upon, the CEO will often
reconvene with the executive leadership team
to outline which mission-critical...
38 INSIGNIAM QUARTERLY | Spring 2017
T
oday’s executives are awash
in data.
Some have successfully
navigated the deluge, l...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 39
“It’s about having extra
intelligence to run the
business, create new
are...
40 INSIGNIAM QUARTERLY | Spring 2017
n Is it possible to tap into any or all aspects of
the data?
Taking a more holistic a...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 41
sumers,” Dr. James says. RB, which owns
brands such as Lysol, Scholl and ...
42 INSIGNIAM QUARTERLY | Spring 2016
B A L A N C E O F
GAME
CHANGERS
INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC...
quarterly.insigniam.com | INSIGNIAM QUARTERLY 43
As deputy CEO of
BC Hydro, Chris
O’Riley knows how to
build support for b...
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision
Upcoming SlideShare
Loading in …5
×

IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision

340 views

Published on

IQ Insigniam Quarterly is our award winning magazine. We showcase thought leadership by executives for executives who are dedicated to transforming the practice of management and leadership.

Published in: Business
  • The "Magical" Transformation That Happens When You Combine Two Of The Best Brain Reprogramming Technologies ➤➤ http://t.cn/AiuvUMl2
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • The "Magical" Transformation That Happens When You Combine Two Of The Best Brain Reprogramming Technologies ★★★ https://bit.ly/30Ju5r6
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Fact: Penis Enlargement CAN Work. Here's How. ▲▲▲ https://tinyurl.com/yy3nfggr
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • The Only Holistic System In Existence That Will Show You How To Cure Your Acne, End The Breakouts, Regain Your Natural Inner Balance and Achieve The Lasting Clear Skin You Deserve! ▲▲▲ http://scamcb.com/buk028959/pdf
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Did You Get Dumped? Do you still want him back? If you act now, I can help you. ♥♥♥ http://goo.gl/FXTq7P
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Be the first to like this

IQ Insigniam Quarterly® Spring 2017 — Making the Big Decision

  1. 1. TRANSFORMING THE PRACTICE OF MANAGEMENT AND LEADERSHIP Volume 5 Issue 2 | Spring 2017 | quarterly.insigniam.com FORPITNEYBOWESCEOMARCLAUTENBACH,MAKINGA DECISIONMEANSSTICKINGWITHITFORTHELONGHAUL PAGE24 MAKINGTHE BIGDECISION ALEADERSHIPCHARTER UNEARTHSAGILITYAND COORDINATEDACTIONIN ANORGANIZATION PAGE32 HOWBCHYDRO’S DEPUTYCEOGARNERS SUPPORTEVENFORHIS UNPOPULARDECISIONS PAGE42 FORD’SFUTURIST HELPSEXECUTIVES COMBATBIASTOWARD THESTATUSQUO PAGE48 MAKINGTHEBIGDECISIONVolume5Issue2Spring2017quarterly.insigniam.comINSIGNIAMQUARTERLY INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  2. 2. “When executive teams are coordinated in the actions they take, they are better positioned to pivot in the face of disruption and capitalize on new opportunities.” —SHIDEH SEDGH BINA, FOUNDING PARTNER, INSIGNIAM, AND EDITOR IN CHIEF, INSIGNIAM QUARTERLY Over 30 years ago, Insigniam pioneered the field of organizational transformation. Today, executives in large, complex organizations use Insigniam’s consulting services to generate breakthroughs in their critical business results. Insigniam’s innovation consulting enables enterprises to identify and cross into new strategic frontiers to rapidly generate new income streams. Insigniam provides executives of the world’s largest companies with management consulting services and solutions that are unparalleled in their potency to quickly deliver on strategic imperatives and boost dramatic growth. Insigniam solutions include Enterprise Transformation, Strategy Innovation and Innovation Projects, Breakthrough Projects, Transformational Leadership and Managing Change. Offices are located in Philadelphia, Laguna Beach, London, Paris and Hong Kong. For more information, please visit www.insigniam.com. INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  3. 3. quarterly.insigniam.com | INSIGNIAM QUARTERLY 1 In 1952, Boeing’s then-president, Bill Allen, made a game-changing decision to launch the 707. It was a bold, bet-the-company move. Boeing had no orders in hand and at the time was known for warplanes, not commercial jets. Mr. Allen, however, was not deterred. Instead, he was convinced that the future of air travel lay in commercial. So, with a $16 million budget in hand, he built the first U.S. transatlantic commercial jetliner—and changed the course of a company. Mr. Allen’s move exemplifies the impact executives can have by doing what they do every day: making big decisions. By going against the grain or exploring the path less traveled, they can change the course of an entire organization or the makeup of an industry. That impact, however, goes both ways. For every transcendent decision made by an executive, there are the ones that fizzle, that flop and that possibly even fold a company. The examples are plentiful. Take Western Union’s then-president, William Orton, who in 1876 had the opportunity to purchase the patent for the telephone. He ultimately passed, defending his decision by calling the invention a toy, rather than technology. Not every decision an executive makes will turn out to be the right call, but the big ones define not only careers but legacies. While the Jack Mas and Steve Jobses of the business world are likely to be renowned for the good decisions they make, the opposite must be said of the John Stumpfs and Elizabeth Holmeses. Game-changing decisions do not occur by happenstance. They are not made on a whim or peddled with luck. They are bold and strategic and purposeful. And ultimately, their success or failure falls at the feet of the leaders at the top. To succeed—and stomach it—these leaders must possess not only the right combination of brains and guts, but also an iron will and a daring heart. As Peter Drucker once said, “Wherever you see a successful business, someone once made a courageous decision.” DECISIONTIME LETTER FROM THE EDITOR Shideh Sedgh Bina Founding Partner, Insigniam EDITOR IN CHIEF Shideh Sedgh Bina sbina@insigniam.com EXECUTIVE DIRECTOR Nathan Owen Rosenberg Sr. nrosenberg@insigniam.com CHIEF FINANCIAL OFFICER Jeff Mullican jmullican@insigniam.com MANAGING DIRECTOR OF INSIGNIAM QUARTERLY Natalie Rahn nrahn@insigniam.com PUBLISHER James Meyers jmeyers@imaginepub.com EXECUTIVE VICE PRESIDENT & CHIEF CONTENT OFFICER Kim Caviness EXECUTIVE VICE PRESIDENT, DESIGN Douglas Kelly VP, EDITORIAL DIRECTOR Cyndee Miller CONTENT DIRECTOR Kelley Hunsberger EXECUTIVE EDITOR Jeremy Gantz EDITORS Becky Maughan Julie Ortega SENIOR ART DIRECTOR Hugo Espinoza CONTRIBUTING WRITERS Jonathan Ball, Sarah Fister Gale, Samuel Greengard, Joseph Guinto, Tegan Jones, Novid Parsi, Kate Rockwood Insigniam Quarterly is a thought leadership publication committed to transforming the world of business by offering content relevant to the C-suite and their executive teams at large, complex, global enterprises. Insigniam Quarterly is published by Imagination, 600 W. Fulton St., Suite 600, Chicago, IL 60661, (312) 887-1000, www.imaginepub.com. No part of this publication may be reproduced in any form or by any means without prior written permission of the publisher and Insigniam. Printed in the U.S.A. Magazine patents pending. For subscriptions, please visit quarterly.insigniam.com. Insigniamanditspublisher,Imagination,distributethis editorialmagazine toshare theopinionsand insightsof companies andtheirleaders onimpactful globalbusiness issues.InsigniamQuarterly’sinclusionofacompany orindividualdoesnotindicatethatthey are aclientof Insigniam.Remunerationisnotprovidedforeditorial coverage.IndividualsappearinginInsigniam Quarterly havedone sowith directconsent,orprovidedconsentbya designatedauthorizedagentin addition tobeingdisclosed onthemagazine’saudience andpurpose.The INSIGNIAM QUARTERLYmarkisaregisteredtrademarkintheUnited States,EuropeanUnion, andotherforeigncountries. For every transcendent decision made by an executive, there are the ones that fizzle, that flop and that possibly even fold a company. INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  4. 4. Contents COVERSTORY STAYTHECOURSE For Pitney Bowes CEO Marc Lautenbach, decision-making is all about the follow-through. The company’s current transformation effort is a case in point. By Joseph Guinto GAMECHANGERS BALANCEOFPOWER High-dollar decisions are part of daily life for BC Hydro Deputy CEO Chris O’Riley. To make the right calls, he avoids relying on his gut. By Sarah Fister Gale ALLTOGETHERNOW Trust, accountability, coordination. A leadership charter helps these three essential pieces fall into place, setting the stage for breakthrough results. By Shideh Sedgh Bina DOYOULEADWITHINTEGRITY? Harvard Business Professor Michael Jensen delves into the philosophy of integrity and why all strong leaders must honor their word—even if they cannot keep it. Interview by Karen Christensen TAMINGBIGDATA Avoid analysis paralysis. Deriving strategic value from big data starts with asking the right questions—and engineering initiatives around desired outcomes. By Samuel Greengard 24 42 32 54 38 FEATURES SPRING 2017 PHOTOBYNICKHAGEN INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  5. 5. “My job is not to predict the future and have it come out right. It is to help others see things coming and make sure the company is never blindsided.” —Sheryl Connelly, futurist, Ford Motor Company On the Cover Marc Lautenbach, CEO of Pitney Bowes, Stamford, Connecticut, USA Photo by Christopher Beauchamp Q&A:THEFUTURISTISHEREPAGE48 04 THETICKER News and trends affecting the C-suite 08 NUMBERS Decision-making by the numbers 12 BROWSERHISTORY Apps to ease your mind, making time for family and more 68 IQBOOST The key to driving a powerful transformation in an organization is to inspire and enroll others to join the cause. 16 BLOOD,SWEAT&TEARS Wade Jones would not settle for “good enough.” Instead, Sabre Travel Network’s SVP of marketing and strategy devised a plan to reach the company’s true potential—and prove its critics wrong. 20 FROMTHEBOARDROOM Groupthink and complacency in the boardroom can spell disaster for a company. Cultivating an outspoken board with a diversity of expertise is the antidote. 64 PERSPECTIVES Executives from around the world gathered with Pope Francis and Fortune in December to discuss how the private sector can help combat poverty and advance sustainability. DEPARTMENTS INSIGHT INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  6. 6. lectric cars are taking off. And Toyota wants in. At the end of 2016, 2 million electric vehicles (EVs) were predicted to have hit the roads worldwide, with a steadily upward trend projected. The surging market, especially in China, has fueled renewed interest—and a possible strategic shift—from one of the world’s biggest automakers: Toyota. Toyota has said, according to Fortune, that it would reserve EVs for short-distance commuting, and instead promoted hydrogen fuel cell vehicles (FCVs) and plug-in gasoline-electric hybrid cars as the best bet for long- to medium-range commuting. But FCVs, which have yet to transition into the current mainstream fleet of cars, may fail to reach the critical mass Toyota was betting on. According to a new study from IHS Automotive, by 2027 annual fuel cell vehicle production will surpass 70,000 units— less than 0.1 percent of all vehicles produced that year. The biggest roadblocks for these vehicles are the lack of public hydrogen fueling stations available and the expense of building them. According to IHS Automotive analyst Ben Scott, today’s market simply does not justify the price. “[T]hat market needs to be created to encourage investment in upstream hydrogen production capability,” he said in the study. This, along with improvements to the lithium ion batteries EVs rely on, seems to be spurring Toyota’s reported pivot. According to a report by Japanese newspaper Nikkei Asian Review, Toyota has plans to establish a team in early 2017 devoted to developing electric cars that can travel more than 300 kilometers (186 miles) on a single charge. With a goal of pushing the cars to market in Japan, California and China by 2020, the automaker aims to act fast. It will face stiff competition. Volkswagen, Nissan and Tesla have already bet big on EVs. The Renault-Nissan partnership, for example, is launching an effort to build a low-cost EV to put on the market in China possibly in the next two years, according to CNBC, while Volkswagen has announced plans to unveil 30 all-electric cars by 2025, according to the BBC. Will Toyota be able to catch up? E THE TICKER TOYOTA’SNEWBET PHOTOCOURTESYOFTOYOTA INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  7. 7. Top 5 Best-Selling Electric Vehicles Source: EV-volumes.com Note: Rankings reflect global sales numbers through the first half of 2016. 1 32 4 5Nissan Leaf Tesla Model S BYD Tang SUV BYD Qin Chevrolet Volt The Toyota C-HR Hybrid was recently introduced in Europe. INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  8. 8. 6 INSIGNIAM QUARTERLY | Spring 2017 THE TICKER What happened to integrity in the workplace? For many companies, it has seemingly been lost in the mix and mire of greed or pressure to perform. In 2015, scandals rocked Volkswagen and Toshiba. Last year, there was Wells Fargo and Theranos, just to name a few. It seems as if no industry or country is exempt. According to the 2016 Global Business Ethics Survey produced by the Ethics & Compliance Initiative (ECI), a company’s risk of an ethical breakdown correlates to how integrity ranks in the corporate culture. The survey, which included responses from 1,000 employees in each of the reported countries, highlighted four key metrics that “provide insight into the ethics environment by highlighting the risks that emerge from lapses of workplace integrity”: 1. The pressure to compromise organizational standards: This is an important warning sign of future workplace misconduct. DOTHE RIGHTTHING Percentage of Reporting Employees Who Have Experienced Retaliation 2. Observed misconduct: This is an indicator of whether or not employees follow the rules and live out the company’s core values. 3. The reporting of observed misconduct: Silence around observed misconduct is an indicator that wrongdoing will continue and potentially worsen. 4. Retaliation against reporters (including verbal harassment, demotions, undesirable assignments or even violence): Perceived retaliation will erode trust and often deters employees from reporting misconduct, which in turn allows bad behavior to broaden. So which countries have the worst integrity track record, according to employees working in those countries? Here is how several stack up against each of the ECI’s metrics. Percentage of Employees Who Have Felt Pressure to Compromise Standards Percentage of Employees Who Have Observed Misconduct Percentage of Employees Who Have Reported Misconduct They Observed Brazil India Russia France Italy Germany South Korea United Kingdom United States China Japan Mexico Spain Russia Brazil India China Italy France Mexico United States United Kingdom South Korea Germany Spain Japan India United States United Kingdom Brazil Mexico Japan Italy France China Germany Spain South Korea Russia India United Kingdom United States Germany Spain Brazil South Korea Italy Japan Russia France Mexico China 74% 37% 45%47% 43% 50% 34%24% 34% 63% 29%22% 63% 41% 43%40% 37% 53% 33%22% 34% 64% 28%20% 53% 46% 40%33% 36%59%33%22% 33% 71% 26%15% 50% 50% 34%30% 35% 61% 30%22% 31% 76% 21%13% 29% 82% 15%10% Silence around observed misconduct is an indicator that wrongdoing will continue and potentially worsen. ILLUSTRATIONBYDANEMARK/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  9. 9. quarterly.insigniam.com | INSIGNIAM QUARTERLY 7 The best CEOs in the world focus on the long game and they stick around, according to Harvard Business Review (HBR). On average, the 100 executives on HBR’s best-performing CEOs list have been with their companies for 17 years and have generated a 20.2 percent annual return. The CEOs who made the cut undoubtedly face what HBR calls “the lure of short-termism.” Their ability to nevertheless deliver strong multiyear results is what puts them ahead of the pack. The top 10 CEOs of 2016 are: ON TOP OF THE WORLD Last year was, for all intents and purposes, a disaster for South Korea-based Samsung. In August, several of the company’s popular Galaxy Note 7 smartphones started to spontaneously combust. After diagnosing the problem as a battery malfunction and switching vendors, Samsung recalled 2.5 million phones worldwide, exchanging about 60 percent in South Korea and the United States with replacement phones. Soon, however, reports began to surface that the replacement phones were also becoming too hot to hold or catching fire, and Samsung, which had approximately $170 billion in revenue in 2015, was forced to kill the Galaxy Note 7 line entirely. The cost of the recall will total $5.3 billion through the first quarter of 2017, the company reported. To make matters worse, in November Samsung recalled nearly 3 million of its top-loading washing machines after it was discovered that “vibrations during the spin cycle could cause parts to fail or separate, causing injuries or damaging property,” according to Consumer Reports. The same month, South Korea’s government raided Samsung headquarters as part of an ongoing corruption probe of the country’s president. What might revive the beleaguered company’s fortunes? New and improved smartphones, maybe. In November, the SAMSUNGSEEKSREDEMPTION company announced plans to equip its Galaxy S8 smartphones with a Siri-like voice-enabled digital assistant called Viv. The new push is mostly possible due to the company’s recent acquisition of Viv Labs, the startup company formed by the creators of Siri. According to the Daily Express, Viv takes Siri to the next level by being contextually aware and having the ability to answer follow-up questions. “Samsung is setting its sights on becoming a major player in software and services, and specifically AI,” said Viv Labs CEO Dag Kittlaus. The company has “installed a new cadre of senior [software-]savvy management stretching all the way to the top with a mission.” RANK CEO COMPANY INDUSTRY COUNTRY 1 Lars Rebien Sørensen Novo Nordisk Health Care Denmark 2 Martin Sorrell WPP Consumer Services United Kingdom 3 Pablo Isla Inditex Retail Spain 4 Herbert Hainer* Adidas Consumer Goods Germany 5 Roberto Egydio Setubal Itaú Unibanco Financial Services Brazil 6 Jen-Hsun Huang Nvidia Information Technology United States 7 Bernard Arnault LVMH Consumer Goods France 8 Elmar Degenhart Continental Automobile Germany 9 Benoît Potier Air Liquide Materials France 10 Jacques Aschenbroich Valeo Automobile France *Herbert Hainer stepped down in August 2016. “Samsung is setting its sights on becoming a major player in software and services, and specifically AI.” —Dag Kittlaus, CEO, Viv Labs A Samsung Galaxy Note 7 ad in Bangkok, Thailand PHOTOBYWACHIWIT/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  10. 10. 8 INSIGNIAM QUARTERLY | Spring 2017 quarterly.insigniam.com | INSIGNIAM QUARTERLY 9 FORKS IN THE ROADThere is no shortage of concerns and techniques that drive executive decision-making. Types of risks that most concerned them: Their top strategic priorities over the next three years: TOP CEO CONCERNS 86% of CEOs worry they lack the time to think strategically about the forces of disruption and innovation shaping their company’s future. TORCHBEARERS VS. FOLLOWERS** Those at each end of the spectrum have different strategic priorities and approaches. For example, torchbearers are more ambitious … **In this survey, companies with strong reputations as innovators and strong financial track records are labeled “torchbearers.” Companies with much lower market profiles (in the opinions of the executives who head them) and far less financial success are labeled “market followers.” Emerging technologies Strategic GeopoliticalRegulatory Fostering innovation Cybersecurity Stronger client focus Implementing disruptive technology Talent development/ management Stronger marketing, branding and communications 30% 28% 26% 25% 24% 21% 19% 18% 18% 17% 0 5 10 15 20 25 %%%%%777711118%118%1%%%%%%9999111 30% 78% 62% 45%of more experienced* CEOs adopt a more strategic approach to innovation, compared to 25% of less experienced CEOs. of more experienced CEOs believe it is important to foster a culture of innovation, compared to 63% of less experienced CEOs. 77% 59% 68% 50% … and more adaptable: Torchbearers prefer more decentralized decision-making: 67% 57% 100% 66% 67% 46% Torchbearers Market followers Torchbearers Market followers Torchbearers Torchbearers Market followers Torchbearers Market followers Market followers Torchbearers Market followers Explore new delivery channels Reassess and alter customer segments Embrace agility Experiment extensively or somewhat Enter new geographic markets *In this study, more experienced means more than five years. NUMBERS INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  11. 11. 10 INSIGNIAM QUARTERLY | Spring 2017 quarterly.insigniam.com | INSIGNIAM QUARTERLY 11 Sources: Corporate Visions, Losses and Gains: Does Loss Aversion Influence Executive Decision-Making?, 2016; Heidrick & Struggles and Saïd Business School at the University of Oxford, The CEO Report, 2015; IBM Institute for Business Value, Redefining Competition: Insights from the Global C-suite Study – The CEO perspective, 2016; Redefining Boundaries: Insights from the Global C-suite Study, 2015; KPMG, Now or never: 2016 Global CEO Outlook, 2016. 63% of CEOsbelieve they use data and analytics (D&A) effectively, but 59% do not fully trust the accuracy of their D&A activities. LEVERAGING DATA AND ANALYTICS THE POWER OF UNCERTAINTY If you sometimes doubt yourself, you are not alone. LOSS AVERSION Executives are more likely to take a risk if it seems like a way to avoid a loss. Top company uses for D&A: 71%of CEOs say they have doubted themselves. 10%say they do not, but they do use techniques to reduce uncertainties. 19%say they never do. When a decision was framed by its potential gains: 74% chose the safe plan of action 26% went for the riskier plan When the same decision was framed by its potential losses: 55% said they would play it safe 45% would take the riskier action PREDICTING THE FUTURE Executives use these techniques to foresee what is next in their industries: Nearly all CEOs emphasize the pace or speed of change as a complicating factor in their decisions.94% Driving process and cost efficiency: 44% Driving strategy and change: 44% Finding new customers: 43% Developing new products and services: 43% Predictive analytics: 63% Brainstorming: 80% Simulations: 51% Prescriptive analytics: 46% Crowdsourcing: 23% Cognitive computing: 13% This is a 73% increase in selection of the risky plan when framed by possible losses. NUMBERS INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  12. 12. 12 INSIGNIAM QUARTERLY | Spring 2017 BROWSER HISTORY FRAMEOFMINDA roundup of books, apps and other resources from and for the C-suite. How Women Decide: What’s True, What’s Not, and What Strategies Spark the Best Choices by Therese Huston. Houghton Mifflin Harcourt, 2016. “Society has been underestimating women’s abilities to make astute choices for years.” This is just one of many declarations Ms. Huston, a cognitive psychologist, makes in How Women Decide. Her goal is to smash gender stereotypes about female managers and their decision-making processes, while offering practical advice to help readers gain confidence in their own decisions. While Ms. Huston’s frequent use of social science examples throughout the book may drive some readers away, How Women Decide is truly a book for everyone—including men. Sustaining Capitalism: Bipartisan Solutions to Restore Trust & Prosperity by Steve Odland and Joseph J. Minarik. The Conference Board, 2017. Capitalism has created unparalleled prosperity, yet there is a growing crisis of confidence in both business and the economic system. In this book, Mr. Odland and Mr. Minarik—veteran leaders of corporate America and U.S. politics, respectively—argue that today’s executives and policymakers need to deliver more value to more people. The authors identify reforms to both public policy (including health care and education) and corporate-specific practices (such as rejecting short-termism) that can lead to long- term prosperity. The main takeaway is clear: The system can be fixed. Managing in the Gray: Five Timeless Questions for Resolving Your Toughest Problems at Work by Joseph L. Badaracco. Harvard Business Review Press, 2016. If only all business decisions were black and white, with options that were clearly good or bad. But of course, more often than not we are faced with the gray areas of decision-making. In Managing in the Gray, Mr. Badaracco, the John Shad professor of business ethics at Harvard Business School, presents a framework of five questions to help managers tackle their hardest decisions. Sometimes analytics are not enough, he asserts; human judgment must come into play. Mr. Badaracco finds time in the book to cover everything from groupthink to character, offering dozens of solid case studies. Managing in the Gray will not solve all your problems, but it may help you handle them better. PHOTOBYDTOKAR/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  13. 13. quarterly.insigniam.com | INSIGNIAM QUARTERLY 13 BRAINMASSAGE Break out of unhealthy mental habits—check out these apps to help you focus, stay calm and wake up more refreshed. Stop, Breathe & Think provides customized meditations based on your current state of mind. Developing a sense of mindfulness can help you stay focused, present and calm, according to stopbreathethink.org. It can offer vital support while making tough business decisions. Available on: iOS, Android, Web The music on focus@ will is specifically selected to facilitate intense focus. The songs have no lyrics, and their sequence aims to induce what the site calls a flow state—which is why it has no pause button. Available on: iOS, Android, Web Grogginess can result from waking up in the wrong sleep phase. To avoid this, Sleep Cycle analyzes your sleep and wakes you up during your lightest sleep phase. The goal: to feel refreshed when you get out of bed. Available on: iOS, Android TUNE IN Need a new podcast to follow? Check out Rationally Speaking. Every two weeks, the series hosted by Center for Applied Ratio- nality co-founder Julia Galef explores a different angle of decision-making with a thought leader. In a December episode, for instance, Stanford University Professor of Health and Policy John Ioannidis discusses evidence-based medicine, a movement that advocates for doctors to use quantitative methods when determining treatments rather than intuition or prevailing common wisdom. PHOTOBYROBTEK/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  14. 14. 14 INSIGNIAM QUARTERLY | Spring 2017 Over the course of 18 months ending in October, German retailer Hugo Boss saw the value of its shares fall by almost 50 percent. The primary culprits? A devaluation of the brand (which has seen prices cut in department stores as well as much of its merchandise moved to discount shops) and poor performance in China. Leadership had some tough decisions to make. Fortunately, CEO Mark Langer— who was promoted from CFO in the middle of the fray—has been unafraid to make them. In October, he announced the brand would no longer pursue the luxury market (and move away from womenswear), instead returning to its premium men’s clothing roots. “The effort to make in-roads in the luxury market didn’t prove to be particularly helpful for our business,” he told German newspaper Handelsblatt. BROWSER HISTORY NEWBOSS,NEWSTRATEGYATHUGOBOSS Mark Langer, CEO, Hugo Boss A Boss Store window in London INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  15. 15. quarterly.insigniam.com | INSIGNIAM QUARTERLY 15 THISISYOURLIFE:BALANCINGACT The average CEO works 10 to 11 hours per day, according to a survey by CEO.com and software company Domo. That does not leave much time for family. Here are some balancing tricks top CEOs recommend. 1 Keep track: Pat Gelsinger, CEO of Dell subsidiary VMware, has his secretary maintain a family-time balance sheet with point accruals, he told The Wall Street Journal. Coming home at 5 p.m. earns him two points, while a 6:15 p.m. arrival wins him one point. Points are deducted any time he spends weekend days away from his family. Similarly, Bloomin’ Brands CEO Liz Smith uses a “time bank account,” according to Joann S. Lublin’s book Earning It: Hard-Won Lessons From Trailblazing Women at the Top of the Business World. Her goal is four hours a day with her sons. If work causes her to fall short, she makes up the deficit the following week. “Some days, I would cancel my meetings that morning because I was in the hole to them,” she said in the book. 3 Meet in the airport: Traveling is a large part of being a successful executive, so why not make the most of your time in the airport? For example, because Ms. Smith of Bloomin’ Brands and her husband both travel frequently, in the past they have arranged catch-up meals at New York’s John F. Kennedy International Airport, according to Earning It. “I was flying out and he was flying in. We would see each other in passing,” she recalled. 2 Be ruthless with your calendar: In Earning It, former Yahoo and Autodesk CEO Carol Bartz recalled saying to her assistant during one scheduling rendezvous, “I don’t care if the pope comes to audit us. I am going to [my daughter’s] Christmas Sing.” Eric Poirier of investment management software company Addepar told The Wall Street Journal he marks dedicated family time on a calendar that everyone in the company can see so they know he has a life outside work—and they should too. Ms. Lublin suggested regular family meetings to organize schedules, sometimes a year in advance, so everyone’s needs can be addressed. OPPOSITEPAGE:TOPPHOTOBYANDREASBASTIAN/ALAMYSTOCK.THISPAGE,CLOCKWISEFROMTOP,SZEFEI,POBA,RAWPIXEL/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  16. 16. SHARPENINGSABRE Wade Jones was given a tall order at Sabre Travel Network: help push an already good company to become great. By Novid Parsi ometimes good is no longer good enough. Sometimes it is a sign of complacency, and in order to avoid future obsolescence, a shake-up becomes necessary. Such was the case for Sabre Travel Network. Although the company’s top-line business had been consistently profitable, in 2015 the CEO of parent company Sabre Corp. decided that to drive long-term growth, the $3.2 billion technology company needed to reassess and sharpen its value proposition. Sabre Travel Network would be a key contributor to that growth. For decades, Sabre Travel Network has connected travel buyers (corporate travel departments, travel agents, individuals) with travel sellers (airlines, hotels, car rental companies) through its global distribution system (GDS). Whenever someone makes a reservation on Expedia, for example, Sabre is the behind- the-scenes platform that makes that transaction possible. The Southlake, Texas-based company has offices on five continents and handles around 100,000 data transactions per second; it is the leading provider of air bookings in North America. Sabre’s executive team was convinced Sabre Corp. was not reaching its true potential and had grown complacent. The CEO wanted to put to rest any doubts about the value of its GDS: Some naysayers called it a “dumb pipe,” mere middleware that facilitated transactions S INSIGHT BLOOD, SWEAT & TEARS “Just because our results were good didn’t mean we shouldn’t aspire for better.” —Wade Jones PHOTOCOURTESYOFSABRE INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  17. 17. quarterly.insigniam.com | INSIGNIAM QUARTERLY 17 but did not add real value. To catalyze a leap in the Travel Network business and help Sabre Corp. fulfill on the opportunity in front of it, Wade Jones was brought on in 2015 to identify how Travel Network ought to transform itself and then be the change-maker that pushes the company toward bold financial goals. “Just because our results were good didn’t mean we shouldn’t aspire for better,” says Mr. Jones, Travel Network’s senior vice president of marketing and strategy. “We were under- leveraging the assets we had—meaning we could be bigger and more profitable. We wanted to make sure we weren’t complacent.” “Wade brings new thinking to an already strong organization,” says Scott Beckett, a partner with Insigniam who works closely with Sabre. “His ability to see new horizons and opportunities was a real complement to Sabre’s innovative and growth-minded culture.” In his almost three-decade career, Mr. Jones had often helped organizations in crisis make immediate and radical changes to survive. Such companies had “a burning platform” for change, he says. But the situation at Sabre was different—and that attracted his interest. “What appealed to me about Sabre when I walked into it was that it was a very successful company that had a desire to drive more growth using a profitable underpinning,” Mr. Jones says. Not too long after joining the company, Mr. Jones’ direct boss—and the president of Travel Network—retired. Sabre named Sean Menke, a longtime and highly successful airline executive, as the new president of the division. Mr. Menke and Mr. Jones quickly found common ground. The pair knew they had time, but not much, to make things happen: Sabre had given them just a three-year window to make the necessary transformational changes, whatever they might be. “Nobody was prescriptive about how we should go about doing it,” Mr. Jones says. “To me, that’s where the fun work is.” A THREE-POINT PLAN To determine where exactly the organization needed to go, Mr. Jones and his strategy team first had to understand where it was. To start, he went on a listening tour, meeting with employees throughout Sabre as well as its customers. Mr. Jones asked two simple questions: What is Sabre doing well, and what could it do even better? “I didn’t look for anyone to be held accountable for what was wrong. But you have to get the truth out on the table,” he says. After just one week of these conversations, Mr. Jones identified three key things Sabre needed to do: better leverage its data and analytics, break down its organizational silos and develop a clearer sense of its purpose and value proposition. “Sabre is the clear market leader in several critical segments, and with such success comes competitors desperate to steal share and topple the leader from its perch,” Mr. Beckett says. Sabre has a treasure trove of data and analytics, Mr. Jones says, “but we weren’t turning that into insights and taking action based on it.” So he decided to push the company to deepen its understanding of exactly how customers use its platform and how their activity creates the most value and profit. Then Sabre would be armed with the right insights to decide how to improve features and how to price them. The company’s ability to optimize product investments to power growth hooked directly to Mr. Jones’ next goal: breaking down silos. The organization’s three distinct business units were obstacles to strategic innovations, in his view. He spotted a major opportunity: “We could collaborate more effectively, particularly with our colleagues in technology, product development and sales,” he says. Sabre had been divided into three product areas: The first was responsible for managing the content sold through the network, the second for making that content available to customers and the third for fulfilling customer transactions. While those units remain, Mr. Jones recommended restructuring them to drive interactions. QUICKHITS The Challenge: Despite a track record of profitabili- ty, the leadership at Sabre Corp. was concerned the technology company had grown complacent and needed a shake-up to drive future growth. The Plan: The executive team decided to drive growth via the Sabre Travel Network division and hired Wade Jones to do so. He was given three years to chart a course for transformational change within Travel Network. The Execution: With insights from a listening tour of customers and employees, Mr. Jones identified a three-point plan: better leverage data and analytics, break down organizational silos and develop a clearer value proposition. The Result: Two years into the three-year transformation, teams are interacting more closely, Travel Network has a clear value prop- osition and Mr. Jones is consistently building buy-in and engagement with the strategy from employees. INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  18. 18. 18 INSIGNIAM QUARTERLY | Spring 2017 “Our customers are very good at what they do, but our role as a business- to-business partner is to help them be more successful.” —Wade Jones right buyer at the right time. They wanted automation of non-value-adding platform features. Travel consultants wanted to spend more time doing what they are good at: selling travel. Building off the clear need to boost those capabilities, Sabre’s new purpose and value proposition came into focus. Ultimately, it was about deepening the commitment to customers’ success, Mr. Jones says. “Our customers are very good at what they do, but our role as a business-to-business partner is to help them be more successful.” THE ART OF CHANGE-MAKING With the course forward charted, the real challenge for Travel Network was now at hand: Sabre’s recent rosy performance contributed to a good-enough mentality, at least among some employees, Mr. Jones says. “When you’re actually outperforming prior expectations, there can be a mindset of, ‘Well, why do we have to do better?’” But from his perspective, the stakes could not be higher. “If people are predicting your demise, that should be a motivator to make sure you are innovating and driving value,” he says, referring to critics saying Sabre’s market-maker business model needed to be disrupted. “You have to expand your value from just core services so that you protect the future of the business model.” While support for the transformation of Travel Network from the CEO and the rest of the executive team was indispensable, it alone could not bring adequate buy-in for change. “Any time you’re trying to drive change, you have some people who aren’t on board with it, some who are on the sidelines with a wait-and-see mindset and some who are totally on board,” Mr. Jones explains. To drive more people into the latter category, Travel Network executives looked to get some early wins. “That can make the highly engaged people almost like disciples for the “They now have to work across the three parts of the value chain,” he says. Whereas before a product team would hand off requirements for a new feature to the technology team, those teams now work closely together. “Everybody should feel like they have skin in the game on behalf of our customers,” Mr. Jones says. To further break down divisions within the company, Travel Network handed decision- making powers around product capability and marketing to regional offices. Mr. Jones admits, “I don’t believe in the ivory-tower thinking that innovation comes only from headquarters or the product team.” “One of Sabre’s key assets is its relationship with its customers and its awareness of the realities happening in the markets of its customers,” Mr. Beckett adds. “Sabre’s challenge was to leverage scalability without forsaking the necessary customization appropriate to its customers and their markets.” Breaking down silos set the stage for the third piece of Mr. Menke’s and Mr. Jones’ transformational playbook: refining Sabre Travel Network’s purpose, strategy and vision for the future. In the past, the organization had primarily focused on making sure its platform’s offerings kept up with competitors and pleased all customers. The downside to that approach was that “when you make everybody a little bit happy, no one’s happy,” Mr. Jones says. The solution: Rather than trying to provide everything to everyone, Sabre needed to be more selective and strategic, with a laser focus on features that drive value to customers. To learn what was most important to customers, Sabre conducted interviews with hundreds of them around the world over 12 months. This process revealed that both travel agents and suppliers wanted greater personalization of merchandise—that is, the ability to get the right travel product to the INSIGHT BLOOD, SWEAT & TEARS INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  19. 19. quarterly.insigniam.com | INSIGNIAM QUARTERLY 19 new approach,” he says. Employees quickly saw the value, for instance, of more fine- tuned data and analytics and more disciplined product governance. Travel Network further secured buy-in from employees by not taking on too much too soon. Mr. Jones focused his strategy rollout plan around the three defined areas rather than trying to optimize every corner of the company. “That way, rather than overwhelm ourselves,” he says, “we built organizational muscle memory we could then use on the next set of building blocks.” CRAFTING THE TEAM Throughout the process, Mr. Jones has not shied away from ensuring the right people are on board to meet new demands. Empowered by Mr. Menke to build a world-class team, Mr. Jones knew he needed to make changes if employees did not have the necessary skill set to help move the organization forward. While letting some employees go and hiring others, Mr. Jones made a point of assuring his steadfast workers they were doing well. “It’s really important to make sure that those who remain don’t feel rattled or uncertain,” he says. “You want to give them as much clarity as you can so they’re motivated.” By shaking up his own group first, Mr. Jones intended to set an example for his peers, including the heads of finance and technology. “I made a lot of changes within my own area that were influenced by the feedback I got from people in other areas,” he says. “People saw that I wasn’t taking an arrogant point of view—that making change was everybody else’s problem.” “Wade’s leadership in first focusing on his team demonstrated his awareness that Sabre needed to change everywhere, and he was not going to ask others to do what he would not do himself,” Mr. Beckett says. Reward and recognition have been a big part of driving change—the “fastest way to change any organization,” Mr. Jones says. “I’m a big believer in rewarding your best people disproportionately. That motivates the ones doing well to do even better and spurs the ones not yet at that level of performance by letting them know exactly what they need to do—and what they have to gain by doing it.” Two years into the three-year journey, Mr. Jones remains clear-eyed about the transformation Travel Network is undergoing. Recently, Mr. Menke was promoted to lead the whole of Sabre Corp., leaving the team in Travel Network to go forward vigorously, as planned. “Transformations never go as fast as you want them to,” says Mr. Jones. “I’m always amazed when people say all they need is a clear strategy. You can have a great strategy, but if you don’t have a plan and you don’t execute it, strategy doesn’t matter.” IQ Postscript: As of January 1, Sean Menke now serves as president and CEO of Sabre Corp. Wade Jones has been named the interim president of Sabre Travel Network. “I don’t believe in the ivory-tower thinking that innovation comes only from headquarters or the product team.” —Wade Jones “People saw that I wasn’t taking an arrogant point of view—that making change was everybody else’s problem.” —Wade Jones PHOTOBYRYANLANE/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  20. 20. 20 INSIGNIAM QUARTERLY | Spring 2017 INSIGHT FROM THE BOARDROOM hen a boardroom is little more than an echo chamber for the will of a single voice or an unwavering mission, complacency—and failure—often follow. Take the rise-and-fall saga of blood-testing startup Theranos. Led by CEO Elizabeth Holmes, the Silicon Valley company—once valued at $9 billion—had a meteoric rise on the biotech scene, garnering an abundance of buzz and money alike. Ms. Holmes landed Theranos a high-profile partnership with Walgreens and became a darling of the business world, gracing SAYGOODBYETO GROUPTHINK Diverse and outspoken boards prevent passivity— and prime companies for better decision-making. By Sarah Fister Gale W magazine covers and landing a slot on Time’s Most Influential People list. But the kingdom came crashing down when The Wall Street Journal published a 2015 report discrediting the validity of Theranos’ technology. More than 32,000 of the company’s blood tests were declared void, Walgreens filed a suit and the company’s valuation bottomed out. What went wrong? One big factor was the company’s lack of transparency—its technology was never peer-reviewed or fully verified by the U.S. Food and Drug Administration. But fault has also been placed with the company’s board, which was packed with big names like Henry Kissinger yet lacked expert representation from the life sciences or health care community. Without that, the board failed to fulfill key functions of its role, including pushing back on strategy and scrutinizing data. “There are no sitting chief executives [from] other companies—a basic tenet of board best practices,” wrote Fortune senior editor Jennifer Reingold about the company’s board at the time. “There is but one still-licensed medical expert, Bill Frist ([William] Foege, age 79, PHOTOBYDUTKO/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  21. 21. quarterly.insigniam.com | INSIGNIAM QUARTERLY 21 is retired). And while it’s probably useful to have a retired government official or two to teach and offer good leadership skills, when there are six with no medical or technology experience—with an average age, get this, of 80—one wonders just how plugged in they are to Theranos’ day-to-day activities. Nor is there anyone with formal accounting or auditing expertise or legal expertise, which may now become an issue, based on the questions raised in the [The Wall Street Journal] article.” Since the scandal erupted, the board has undergone a major restructuring, but the original incarnation seemed to largely follow Ms. Holmes’ lead. It succumbed to groupthink, not an uncommon board affliction. Enron, Olympus, Volkswagen and Toshiba all suffered major scandals, and in each instance their respective boards were criticized for unquestioning conformity. One powerful bulwark against groupthink: a culture that embraces cognitive diversity. WANTED: SPRING CHICKENS Diversity of thought starts with diversity of people. An overly homogeneous board, made up of like-minded people of a similar age, experience and ideology, is insulated from the wider world and lacks objective viewpoints, according to Fause Ersheid, an economist and senior corporate governance analyst and researcher at the Abu Dhabi Center for Corporate Governance in the United Arab Emirates. And with such uniformity comes great peril. “Homogeneous groups run the risk of narrow-mindedness and groupthink (i.e., premature consensus) through misplaced comfort and overconfidence,” lead author Adam Galinsky and colleagues wrote in a 2015 report published by the Association for Psychological Science. “Diverse groups, in contrast, are often more innovative and make better decisions, in both cooperative and competitive contexts.” Much has been made about the business value of gender and racial diversity. A report from nonprofit Catalyst, for example, found that Fortune 500 companies with the highest representation of women board directors attained significantly higher financial performance, on average, than those with the lowest representation. But age diversity also matters in dismantling groupthink. The average age of all S&P 500 independent directors rose to 63 between 2010 and 2015. This does not bode well for the many companies trying to appeal to young customers in a rapidly evolving, technology- driven business environment, Mr. Ersheid says. ROCK THE BOAT Simply establishing a diverse board guarantees nothing unless members are empowered to point out flaws and missteps. And that culture must be defined from the top. When Jane Chwick joined the board of directors at Voya Financial, an $11 billion investment and retirement firm, in 2014, she was asked to join the finance committee. It made sense: Ms. Chwick spent 30 years at “As a board member, it’s your responsibility to take action, even if it’s difficult.” —Jane Chwick, board of directors, Voya Financial INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  22. 22. 22 INSIGNIAM QUARTERLY | Spring 2017 Goldman Sachs before retiring four years ago. But the majority of her experience was based in technology, not finance. Yet she soon discovered she had among the strongest financial backgrounds of anyone on the committee. “I knew enough to ask the right questions, but I also knew we needed to add depth,” she says. So she brought her concern to Voya CEO Rodney O. Martin Jr. “He was incredibly receptive to that input,” Ms. Chwick says. He immediately added two new members with deep financial experience to the board. Mr. Martin’s willingness to acknowledge shortcomings not only helped plug potential holes, but also nurtured an environment where criticism is not just heard, but valued and acted on. A board that cannot communicate dissent has a real problem, says Beth Stewart, a former board director for CarMax, General Growth Properties and AV Homes Inc. “The main thing boards need are people confident enough to be willing to speak up when it really matters,” says Ms. Stewart, CEO of New York-based Trewstar Corporate Board Services, a search firm that focuses on placing qualified women on Fortune 500, mid-cap and private equity boards. Creating an environment that encourages everyone to express opinions—which describes Voya’s board—is critical. This becomes more complicated, however, when the board has a dominant leader accustomed to being in charge, Ms. Chwick says. But such pressures are not an excuse for board members to be complacent. “If the CEO won’t listen to the board’s advice, it’s the board’s job to fix the situation,” she says. “If you can’t make people pay attention when you see a problem, then maybe you should question your value on that board.” A critical examination of strategy and INSIGHT FROM THE BOARDROOM “If you can’t make people pay attention when you see a problem, then maybe you should question your value on that board.” —Jane Chwick INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  23. 23. quarterly.insigniam.com | INSIGNIAM QUARTERLY 23 C-suite decisions should not be limited to times of obvious trouble. Board members must be willing to question the status quo even when things seem great. “During the global financial crisis, everyone in the financial services industry knew bundled subprime mortgages were very risky, but no one raised a flag,” Mr. Ersheid says. “Because of groupthink, board members closed their eyes. No one wanted to rock the boat when everyone was making a profit.” No doubt, board members must walk a fine line. “If a company is doing well, you don’t want the board to be constantly raising alternative ideas just because they think it is part of the job description,” Ms. Stewart says. “However, there needs to be a balance. Board members must be knowledgeable and willing to engage when companies are faced with critical decisions— for instance, about things like executive hiring and compensation, mergers and acquisitions or strategic operational issues.” THE LIMITS OF LIMITS Some organizations are introducing term limits to ensure boards avoid the same old, same old syndrome. “New board members bring a fresh perspective that can break the groupthink mentality,” Mr. Ersheid says. Term limits can also help independent directors stay that way—and continue to battle groupthink by taking a more objective stance, he says. In France, for example, directors are no longer considered independent if they have served on a company’s board for more than 12 years. And in the United Kingdom, publicly traded companies must either terminate a director after nine years of service or make an argument as to why the long tenure has not compromised his or her independence. This practice is less common in the United States. Only 13 S&P 500 companies have imposed term limits for non-executive directors, according to the 2015 Spencer Stuart Board Index. However, 69 percent say they have a strategy to encourage regular board refreshment. Companies opposed to term limits often argue that changing the board every few years means they lose the benefits a tenured board brings to decision-making. A 2015 study from Sydney, Australia-based University of New South Wales found companies with a higher proportion of experienced directors were: n More likely to change CEOs when performance faltered n Less likely to misreport earnings intentionally n Less likely to make acquisitions, which often expand a CEO’s power while diminishing shareholder value Ms. Chwick, however, argues term limits for boards are often simply “an easy way out of having tough conversations.” Boards need to create an environment where everyone is comfortable calling out members not performing effectively—whether that person has been on the board for two years or 10. “As a board member,” she says, “it’s your responsibility to take action, even if it’s difficult.” IQ “The main thing boards need are people confident enough to be willing to speak up when it really matters.” —Beth Stewart, former board director, CarMax, General Growth Properties and AV Homes Inc.; CEO, Trewstar Corporate Board Services INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  24. 24. 24 INSIGNIAM QUARTERLY | Spring 2017 StaytheCourseFor Pitney Bowes president and CEO Marc Lautenbach, making a decision means sticking with it for the long haul. BY JOSEPH GUINTO PORTRAITS BY CHRISTOPHER BEAUCHAMP INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  25. 25. quarterly.insigniam.com | INSIGNIAM QUARTERLY 25 INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  26. 26. 26 INSIGNIAM QUARTERLY | Spring 2017 itney Bowes could have easily been wiped out by the digital revolution. But when Marc Lautenbach was brought on board as president and CEO, he made a commitment to accelerate the transformation of the multibillion-dollar organization into what is now billed as a “global technology provider.” It is the stuff of leadership legend, and yet Mr. Lautenbach says the true test of his—and any executive’s—big decision comes in the follow-through. “Many large organizations tend to employ the same strategies when they pursue change or have change thrust on them by market forces,” he says. “Success is not so much a question of decisions on strategic choice as it is a question of your capability and fortitude to stay on the new course you’ve chosen.” For more than 90 years, Pitney Bowes has been synonymous with postage meters, sup- plying its more than 1 million customers (in- cluding 90 percent of global Fortune 500 com- panies) with mailing services. But as customers transitioned many of their communications efforts from paper to online, the company needed to make its own transition. That evolu- tion began in full force shortly after Mr. Laut- enbach arrived at the company’s headquarters in Stamford, Connecticut, in December 2012. The transformation process can be chal- lenging, however, with revenues falling in four of the last five years. Even as net income spiked from $143 million in 2013 to $408 mil- lion in 2015, revenues fell from $3.9 billion to $3.6 billion during the same period. Many executives might start doubting their decisions. But Mr. Lautenbach remains stead- fast in his mission to make Pitney Bowes a ma- jor player in e-commerce. “We have continually decided to choose the alternative that creates the most long-term val- ue, even if it creates short-term disruptions,” he says. “And in today’s world of the equity mar- kets, that’s something that’s challenging. I think mostcompaniesbowtothatpressure,andthat’s why most companies don’t end up transform- ing themselves. They make decisions thinking something is the right long-term bet and then, when things start going the wrong way, they don’t have the fortitude to stick with it.” New Directions Transformationdoesnotalwaysrequirewhole- sale reinvention. As he looked to make Pitney Bowes a relevant digital player, Mr. Lauten- bach aimed to build on its core strengths and identity, redefining it for a new context. The process began by examining the com- pany’s true north—the vision, values and ser- INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  27. 27. vices that define the organization and make it tick. The decisions Mr. Lautenbach made from then on built upon that foundation. “As you’re thinking about transforming a company, or at least as I thought about trans- forming Pitney Bowes, you try to realize those cores, those gems that you have that you can pivot off of to create that next chapter,” he told Fortune. “We have been and continue to be a mail company, but there’s other germs of that business that we can begin to create our new future.” Under Mr. Lautenbach, for example, Pit- ney Bowes added an entirely new but related business unit focused on digital tools and ser- vices, including mobile apps, that now delivers more than $1 billion of annual e-commerce business. Online marketplace eBay, for one, uses Pitney Bowes software to automatically determine where any given package can be shipped internationally and how much the duty on that item will cost. Another piece of Pitney Bowes software pinpoints the locations of 1.2 billion users of social media for the likes of Twitter, Zillow and other social platforms. Such high-profile customers have helped bring digital services up to 10 percent of over- all revenue at Pitney Bowes, with digital sales jumping 29 percent in 2015. As Mr. Lautenbach told The Wall Street Journal in 2016: “Very few things are quite as profitable as a mail meter. But software is one of those businesses that ac- tually has very attractive margins, and it makes this equation a lot easier to close.” To create a new future for a company, however, leaders cannot simply consid- er what it could be—they must also know what it will never be. Mr. Lautenbach, for example, is quick to point out that Pitney Bowes is not a logistics company. He does not see Pitney Bowes as a competitor to the likes of UPS or FedEx. Instead he sees them “Success is not so much a question of decisions on strategic choice as it is a question of your capability and fortitude to stay on the new course you’ve chosen.” —Marc Lautenbach, president and CEO, Pitney Bowes Marc Lautenbach introducing the Pitney Bowes Commerce Cloud in April 2016 in New York City as partners, with Pitney Bowes enabling their efforts. “We solve a problem that starts with the cart and the cart management and consumers buying online, all the way through the ship- ping,” he told Fortune. “So, there’s a bunch of complicated stuff in the middle of those transactions—customs, duties, who the right shipper is—and Pitney Bowes solves all that. If you think about the core of that solution, where we started, it was online postage. We’ve just moved left and right. And that to us is the recipe for how you transform a company. You take something that you’re really good at, you move left and right and you create something that is very differentiated.” But the transformation wasn’t all about moving in new directions. To regain its footing, Pit- ney Bowes also needed to breathe new life into its leg- acy business. So Mr. Laut- enbach worked to break down business as usual. That included cutting ex- penses by changing the PHOTOSCOURTESYOFPITNEYBOWES quarterly.insigniam.com | INSIGNIAM QUARTERLY 27 INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  28. 28. 28 INSIGNIAM QUARTERLY | Spring 2017 way the units spent money to make money. Did the company really need dozens of dif- ferent billing systems? No. Did it really need weeks to turn over its leased inventory? No. Did salespeople need to make all of their sales calls the old-fashioned way—in person? Defi- nitely not. “I rode around with a salesman in London who had 500 clients and was doing it all face to face,” Mr. Lautenbach said in an in- terview with Barron’s. To boost efficiency, the sales team has pulled back on some of that face time, bringing online interactions and phone calls into the client interaction mix. Tell a Good Story Mr. Lautenbach’s decisions for both revamp- ing the legacy business and building up new business have been met with trepidation by some in the organization who could not see past the upheaval these developments caused. And that ties back to his point about executive decision-making: Making the right call is just the start. Executives must follow through to overcome any opposition and make the new future seem like the only one. “To a degree, decision-making and strat- egies are the easiest part of the process,” he says. “How you communicate the decisions, how you manage the change, how you drive those decisions, is the difficult part.” Mr. Lautenbach says his secret to success is storytelling. “We remind people over and over again why we’ve made this decision and why we are making these changes, because they will forget and will just focus on the dis- ruption,” he says. At the executive level, these conversations are a regularly occurring part of the process. Every 90 days, Mr. Lautenbach meets with his executive team to share what has happened during that period and make a plan for what the next 90 days should look like. At first, he “If you can be structured in how you make decisions and transparent about why you made the decision you did, that allows people to follow the logic.” —Marc Lautenbach INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  29. 29. quarterly.insigniam.com | INSIGNIAM QUARTERLY 29 1. How do you stay on top of industry trends? I read a tremendous amount. I put aside about a half day each week just to read. I wander out to Silicon Valley and visit with venture capital compa- nies and small startups to see where the industry is going. Just try to open yourself up to as many different apertures as you possibly can. 2. What is the best piece of advice you have ever received? Stay true to yourself. That has worked out for me. I’ve read a lot of books on leader- ship and authenticity by Bill George, the former CEO of Medtronic [includ- ing 7 Lessons for Leading in Crisis, True North, Finding Your True North and Authentic Leadership]. I think Bill’s got it right. If people believe you’re authentic, they may or may not subscribe to your particular form of authenticity, but inevitably you’ll get people that do. It’s the method actors who have problems. 3. How do you take your mind off work? I’ve got two dogs and a great family, so I’ve got a lot outside the office. I also play golf. 3QuestionsWith MarcLautenbach INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  30. 30. 30 INSIGNIAM QUARTERLY | Spring 2017 says, attendees tempered their comments. Eventually, however, after Mr. Lautenbach showed that these meetings were a safe space to share the good and the bad, the team start- ed opening up. And not just to him. “All of a sudden, they’re telling the stories to one an- other,” he says. Mr. Lautenbach, however, is not naive enough to believe that storytelling will bring everyone on board in every instance. “You also have to resign yourself that not everyone is going to buy into the changes that you are making,” he says. But in the face of that sharp disagreement, it is still possible to garner respect by showing a decision was not impulsive, but rather the result of real thought. “Even if you think you’re making the right decision, putting down on a piece of paper all the alternatives at a very simple level, with the pros and cons, is a healthy thing to do to make sure you don’t overlook a particular option,” he says. That kind of process helps executives com- municate the rationale behind their decisions, Mr. Lautenbach says. The reply from employ- ees may be, “Wow, that makes sense.” Or it may be, “No, you missed an alternative or you didn’t judge the pros and cons correctly.” Ei- ther way, talking people through a sound ex- planation helps builds trust and buy-in. “That’s a problem with people who are in- stinctive about making decisions,” Mr. Laut- enbach says. “It’s hard for them to get people to follow because they can’t really explain how they arrived at their decisions. If you can be structured in how you make decisions and transparent about why you made the decision you did, that allows people to follow the logic.” Gut Check Pitney Bowes’ transformation has not hap- pened as quickly as executives would hope. In addition to a slight drop in revenue in re- cent years, the company’s stock has also lost value from more than $22 per share early in Mr. Lautenbach’s tenure to around $13 a share more recently. And yet, Mr. Lautenbach does not plan to change course. “When you make a change, there are cer- tain underlying assumptions you make— how clients want to buy, the capabilities of an organization to execute the change, the economics of the change, etc.,” he says. “You should stay with the change as long as you The Pitney Bowes stand at drupa 2016, the international trade show held in Düsseldorf, Germany, every four years INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  31. 31. quarterly.insigniam.com | INSIGNIAM QUARTERLY 31 “To a degree, decision-making and strategies are the easiest part of the process. How you communicate the decisions, how you manage the change, how you drive those decisions, is the difficult part.” —Marc Lautenbach still believe the underlying assumptions are correct. But when making transformative change, you need to continually check and recheck your assumptions.” And in instances when your decision was ultimately the wrong call, the best mea culpa is complete transparency. When he was at IBM, for instance, Mr. Lautenbach failed to communicate why cer- tain decisions made as part of a sales force re-engineering were hurting performance in his global small- and medium-business divi- sions. “I was operating for the first time on a closer proximity to senior executives, and it took me a while to get my footing in that environment,” he says. “That almost cost me my job. I quickly went from being one of the youngest officers at IBM to almost being one of the youngest officers to get fired.” Eventually, though, Mr. Lautenbach found his way. “Once you can clearly articulate prob- lems in a nondefensive way, and if you are au- thentic about those problems, people will rally around you,” he says. But communication is not one-size-fits-all. That is especially true at a large global enter- prise such as Pitney Bowes, with a board of directors overseeing top executives and share- holders conscientiously tracking results. “You have to understand how the stakeholders look at any key decision, because they don’t all look at it the same way,” Mr. Lautenbach says. “So in communicating any decision, you have to start with the frame of reference of whom you’re trying to communicate to.” At the same time, Mr. Lautenbach says ex- ecutives cannot run around terrified that ev- ery decision they make is going to cost them their job. “When you get to the point in a job or a career where you realize that the worst they can do is fire you, it is liberating to a de- gree,” he says. “Life will go on. You’ll likely find another job. Your dogs will still like you.” This fortitude, perhaps the most import- ant characteristic of Mr. Lautenbach’s deci- sion-making style, was honed during his 27- year tenure at IBM. “The major transforma- tions we’re making at Pitney Bowes are chang- es I’ve got firsthand experience with,” he says. “It’s one thing to say, ‘Here’s how to hit a golf shot.’ It’s another thing to say, ‘I’ve hit this shot before and I know how to make it.’” In 2005, Mr. Lautenbach received a pro- motion that had him working under current IBM CEO Ginni Rometty as general manager of IBM North America. It was a big advance- ment—and one fraught with risk. “My predecessor, for all the right reasons, had done a fairly substantial re-engineering of the sales processes,” Mr. Lautenbach says. “I in- herited that new sales model midflight. It end- ed up being the right thing to do, but it was in- credibly disruptive for about 12 to 18 months.” The model—which had the sales team shifting to a setup where specific client rela- tionships were assigned to salespeople based on geographic territories instead of sales chan- nel—was so disruptive, in fact, that many at IBM wanted to abandon the changes under- way. Mr. Lautenbach disagreed, and did not budge. “I decided that I was going to stick to my guns,” he says. “Organizations don’t adapt that quickly to new ideas. That’s why resolve is important after you’ve made key decisions.” And it is that resolve that continues to push him forward at Pitney Bowes. “This is a diffi- cult period for the company because we’re going through these changes,” Mr. Lauten- bach says. “But I talk with team members and they all say the same thing: ‘Stick with it, we’re doing the right things.’ We’re not necessarily achieving everything we want tactically this year, but people love that we’re doing the right things for our future.” IQ PHOTOCOURTESYOFPITNEYBOWES INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  32. 32. 32 INSIGNIAM QUARTERLY | Spring 2017 INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  33. 33. quarterly.insigniam.com | INSIGNIAM QUARTERLY 33 On a flying trapeze, the success—and survival—of the troupe relies on per- formers meticulously car- rying out their respective parts in a complex chore- ography of coordinated ac- tions. As one person soar- ing through the air releases the bar, another must time his or her actions to catch that person. If poorly co- ordinated, the act will not just fail; it could prove fatal. It is not that different for a business. The “performers” are the members of the exec- utive leadership team. As with the trapeze troupe, success or failure hinges on the group’s execution of coordinated action, with each person playing his or her role while committed to a common goal. All Together Now To drive powerful alignment across executive teams, start by crafting a leadership charter. BY SHIDEH SEDGH BINA ILLUSTRATION BY NEIL WEBB INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  34. 34. 34 INSIGNIAM QUARTERLY | Spring 2017 That kind of coordinated action does not happen on its own, however. Instead, you can instill, inspire and empower the right actions by defining roles, expectations, behaviors, account- abilities and parameters for the team in a formal leadership charter. Done correctly, a charter will become one of the most powerful weapons in your arsenal for driving alignment, communica- tionandcollaboration—exponentiallyincreasing the enterprise’s ability to execute breakthrough results and unlock competitive advantage. At the same time, by putting the leadership team fully in sync, a charter can unleash a powerful force across the organizational stra- ta: agility. When executive teams are coordi- nated in the actions they take, they are better positioned to pivot in the face of disruption and capitalize on new opportunities. Defining Your Purpose When an executive team initially gathers to dis- cuss developing a leadership charter, I like to reference the parable of the three stonecutters: A traveler came across three stonecutters and asked each what they were doing. The first re- plied that he had the worst job in the world: moving huge stones to make a living. The trav- eler gave him a coin. The second stonecutter did not complain, stating he was earning a living by doing the best job of stonecutting in the entire county. Again, the traveler gave a coin. When the traveler met the third stonecutter, he looked happy and was singing a cheerful song. The traveler was astonished and asked, “What are you doing?” The stonecutter looked up with a visionary gleam in his eye and said, “Can’t you see? I am building a cathedral.” As the parable illustrates, people will take pride in their work when they understand the greater purpose to which it contributes. John- son & Johnson is a great example of what re- sults can flow out of this broader vision. The multibillion-dollar company has a credo deep- ly rooted in a sense of purpose, containing such statements as: “We are responsible to the communities in which we live and work and to the world community as well.” That is not to say the company does not have obligations and commitments to employ- ees and shareholders (both are listed in the cre- do as well). But its mission transcends revenue and stock price. The payoff? Johnson & John- son is considered one of the most innovative companies in the world and ranked among “The 25 Happiest Companies to Work For in 2017” by CareerBliss. As with Johnson & Johnson’s credo, consider a greater purpose as the inspiration when char- tering leadership teams as well. Start the discus- sion with your leadership team by asking: n What cathedral is the team building? n Why will it exist? n Whom does it serve? Once the purpose is clear, more tactical questions can be defined, including: n What actions am I counted on to provide? n What are the most critical accountabilities relevant to my role? n What are the metrics that gauge my perfor- mance? It is also helpful to outline such details as meeting frequency, duration, protocols and other topics related to the operations and in- frastructure of the group within the charter. The Big Question Make no mistake, the true opportunity of a leadership charter—and for you personally, as a leader—is determined by how you are perceived by those around you. You might be the most congenial person in the world, but if others perceive you to be inconsistent or inef- fective, their actions—and interactions with you—will follow accordingly. PHOTOBYGLOBALSTOCK/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  35. 35. quarterly.insigniam.com | INSIGNIAM QUARTERLY 35 You can instill, inspire and empower the right actions by defining roles, expectations, behaviors, accountabilities and parameters for the team in a formal leadership charter. INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  36. 36. 36 INSIGNIAM QUARTERLY | Spring 2017 Therefore, as part of the charter, it is best that leadership team members answer a fun- damental question: “Who do we promise to be?” Consider committing to a series of be- haviors and recording them in the leadership charter. These are behaviors that you would want others to mention when describing you. From that point forward, members of the group can be held accountable by their coun- terparts to act in full accordance with these written behaviors. Otherwise, the credibility of the individual and the charter can quickly become compromised. The “R” Word No leadership charter will be meaningful until each member truly commits to being reliable. Resist the temptation to dismiss this as inconse- quential.Whenreliability,whichweatInsigniam refertoas“workingasyourword,”isestablished, agreed upon and upheld it can catalyze break- through results and agility across the enterprise. In its most basic form, this means doing what you say you are going to do, when you say you are going to do it—and then commu- nicating when it is completed. Inversely, in situations where you will be unable to honor your commitments, it is important to openly and immediately communicate this, as well as any associated risks that may result, to those who are counting on you. It is also important to accept that you are responsible for the repercussions of failing to deliver on promises. If you are not going to be there to catch the trapeze artist reaching out for your hand, make sure they understand how the situation has changed, long before they let go of the bar. And there needs to be a safety net in place to catch them. From Conversation to Negotiation Leadership charters become actionable through the alignment and execution of deci- sion rights. Once a leadership charter has been The true opportunity of a lea d you personally, as a leade r you are percei v No leadership charter will be meaningful until each member truly commits to being reliable. PHOTOBYALTINOSMANAJ/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  37. 37. drafted and agreed upon, the CEO will often reconvene with the executive leadership team to outline which mission-critical decisions he or she will retain and which each member of the team will own. This is the time when the conversation becomes a negotiation with the ultimate intent of establishing alignment across the group. This does not mean agree- ment, but rather coalescing around a set of be- haviors to which leaders commit themselves to acting in, consistently. This is where things get interesting. I have seen some of the most fascinating conversa- tions take place at this stage, especially in the midst of large-scale mergers and acquisitions. It is helpful to center any dialogue around the four actions of decision rights: 1. What are the critical decisions I must be em- powered to make? 2. Whom do I consult? 3. Whom will I inform? Whom will I need to enroll? 4. Who can veto this decision? While making the decision is important, we often overlook that there are other actions that have to take place, including consulting and enrolling. For example, it is critical to con- sult the executive leading R&D when deciding on a new product-development strategy in marketing. Or, while CFOs have myriad deci- sions to make, if they fail to enroll the manag- ers and executives who have to execute those decisions, there is a low probability of success. Being consulted and enrolled are as much rights in decision-making as being the person who makes the ultimate decision. But, just as enrollment will make or break the power of your decision-making in an en- terprise, so will the lack of appreciation or bal- ance for the role with the veto power. There are certain critical decisions where someone in the organization may have veto a lea dership charter—and for leade r—is determined by how percei ved by those around you. quarterly.insigniam.com | INSIGNIAM QUARTERLY 37 power. Think of the head of regulatory affairs in a pharmaceutical company when a new drug is being developed, or the chief market- ing officer who owns “the brand.” In either case, there are situations in which a decision may be unacceptable because it threatens the boundaries for which these roles are account- able. If your organization has too many deci- sions with veto roles, you only have a pretense of decision rights. Have too few, and you risk compromising structural soundness. As you are working through these ques- tions, do not confuse a decision rights matrix with a responsibility assignment or RACI ma- trix. Whereas RACI is focused on accountability, decision rights are wholly focused on who is entitled to participate in making a decision. When handled in a facilitative setting, estab- lishing decision rights can afford an organization tremendous clarity. Decision rights can lead to profound and meaningful growth, increased ef- fectiveness and heightened morale. Conversely, if anindividual’sdecisionrightsarenothonored, the leadership charter becomes meaningless. Now or Never A leadership charter can quickly become the manifesto that guides the actions of an executive team or committee in their pur- suit of results and agility. Yet many enter- prises underestimate just how critically im- portant it is to formulate an actual, tangible leadership charter. Do not make that mistake. The ROI is clear. Those organizations willing to invest the time and effort to establish a charter can dramatically slash the time it takes for leader- ship teams to be effective and unlock powerful agility across the enterprise. IQ Shideh Sedgh Bina is a founding partner with Insigniam and editor in chief of Insigniam Quarterly. INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  38. 38. 38 INSIGNIAM QUARTERLY | Spring 2017 T oday’s executives are awash in data. Some have successfully navigated the deluge, le- veraging new insights to streamline operations and outpace the competition. But many are left treading water, struggling to trans- form information into ac- tion, says Michael Schrage, research fellow at the MIT Center for Digital Business and visit- ing fellow at Imperial College London. More data—or even better data—“don’t necessarily translate into business value.” The data surge will only continue: The amount of big data out there is expected to reach 247 exabytes (EB) by 2020, a near ten- fold increase from the 25 EB in 2015, accord- ing to Cisco’s Global Cloud Index 2016. The study also reported that big data alone will represent 27 percent of the data stored in data centers by 2020, up from 15 percent in 2015. To ensure all this data drives the deci- sion-making process rather than paralyzes it, executives need more than sophisticated data management and analytics tools. They have to ask the right questions, homing in on factors that will inform strategic assessments, says Janet George, chief data scientist at San Fran- cisco-based Western Digital. “It’s about having extra intelligence to run the business, create new areas of growth and achieve data insights that streamline operational efficiency,” she says. “It’s about becoming smarter, faster and more agile.” The Right Questions Deriving strategic value begins with gathering high-quality, relevant data. Companies that do not identify, access and analyze the right data end up wasting time and money. IBM, for ex- ample, estimates poor data quality costs the U.S. economy $3.1 trillion each year. The best big data initiatives are engineered around desired outcomes, Mr. Schrage says. They should not be an excuse to produce automated algorithms that allow executives to abdicate or subordinate managerial de- cisions. Instead, the initiatives should drive better decision-making by generating infor- mation that is measurably more relevant, ac- curate and customized. “Wehavetobeveryclearaboutwhatvaluewe want to derive from the data,” Ms. George says. To facilitate strategic data analysis and de- liver business insights at Western Digital, Ms. George asks big-picture questions, such as: n Do the data have clear signals, predictive val- ue or variables with high impact? n Are the data fundamentally free so they can be modeled and used by multiple applica- tions and tools? Executives can avoid analysis paralysis by knowing how to look for the right insights. BY SAMUEL GREENGARD Taming IMAGEBYGREMLIN/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  39. 39. quarterly.insigniam.com | INSIGNIAM QUARTERLY 39 “It’s about having extra intelligence to run the business, create new areas of growth and achieve data insights that streamline operational efficiency.” —Janet George, chief data scientist, Western Digital INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  40. 40. 40 INSIGNIAM QUARTERLY | Spring 2017 n Is it possible to tap into any or all aspects of the data? Taking a more holistic approach to data management can help executives avoid getting tunnel vision and ensure the organization has access to the right data at the right time. “Different dimensions of the data, when reviewed independently, can provide a rather skewed outcome,” Ms. George says. “Focusing on the insights and value data provide—and tapping into these insights as intelligence for the business—is what creates the difference.” Insights in Sight Ease of access also makes a difference. The ability to rapidly distill valuable insights from an ocean of information can give companies the competitive edge. Yet 73 percent of execu- tives feel their companies need better real-time data analysis to reach their full potential, ac- cording to CompTIA’s 2015 Big Data Insights and Opportunities report. To quickly act on hot market insights, many organizations are turning to more flexible data management tools, Ms. George says. Using ap- plications that pull relevant information from multiple sources gives executives a more de- tailed picture with which to work. The goal is to achieve a “360-degree view of the data to derive valuable insights,” Ms. George says. At consumer products firm RB, business strategy is deeply rooted in data-driven insights, says Sharon James, Ph.D., the U.K. company’s global head of R&D. Collecting in-depth, mul- tifaceted information about product perfor- mance during development and in the market- place helps the company decode consumer de- mands and uncover opportunities to innovate. “Big data offer an opportunity to go be- yond traditional consumer research methods and use wider data insights to develop more targeted, value-added solutions for our con- If organizations focus on seven key practices, they can take big strides through big data, says Michael Schrage, research fellow at the MIT Center for Digital Business. 1. Recognize that all data are not created equal. Create a strategy that puts only the right data to work in order to avoid analysis paralysis. 2. Determine whether the data can be trans- formed into value or monetized. 3. Know whether data fit a synchronous or asyn- chronous model. The former requires constant connectivity while the latter involves syncing or updating data periodically. 4. Create a governance framework that dictates how data are collected, managed, retained, reported and discarded. 5. Address security and privacy issues. 6. Build an IT framework that supports big data and deploy systems that allow data to flow to decision-makers. 7. Tap the expertise of data scientists and ana- lysts who can think through results and frame business opportunities. “Big data offer an opportunity to go beyond traditional consumer research methods and use wider data insights to develop more targeted, value-added solutions for our consumers.” —Sharon James, Ph.D., global head of R&D, RB Big Data Best Practices INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  41. 41. quarterly.insigniam.com | INSIGNIAM QUARTERLY 41 sumers,” Dr. James says. RB, which owns brands such as Lysol, Scholl and Air Wick, sorts through various patterns that emerge in sales or usage data, social listening data and historical records. This might translate into engineering new or better products, adding features to products or identifying emerging areas of opportunity for the company. RB also integrates data insights into a plat- form that interacts with users. Armed with information about consumer preferences and product use, the company can engage in more targeted relationships and promotions. The goal is to use data so that both the consumer and the company benefit. Thus, RB incorpo- rates feedback from customers to transform “insights into action,” Dr. James says. The Internet of Things (IoT) and small, low- cost sensors are game changers, she adds. “They enable us to collect whole health and lifestyle data.” This in turn allows RB to achieve a holis- tic view of consumer activity and monitor life trends that span science, medicine and technolo- gy. For instance, how do people behave and deal with different issues throughout the day? What common problems do they encounter? What products aid them? “With this information, we are able to discover and create safe, high-quality products that really work,” Dr. James says. But executives must also consider securi- ty and privacy issues, because collecting and holding highly personal information can put both systems and customer sentiment at risk. Even in instances when it is legal to collect data, it is not always wise to use it, Mr. Schrage points out. Data mining can become invasive and reflect poorly on an organization. One infamous example was when Target used purchasing data to predict which of its customers were pregnant. Coupons tailored to expectant mothers were sent to one young woman’s home and intercepted by her father, who was not aware of his daughter’s situation. Target’s data unintentionally revealed a secret her family did not know. Brave New World Although organizations are already harnessing and monetizing big data, the data revolution has only just begun. Soon, machine learning and artificial intelligence (AI) will disrupt to- day’s data processes, Ms. George says. “Over the next few years, the old methods of collecting, storing and processing data are going to be completely overhauled,” she says. “Today, we collect the existing data or unite different sources of data, then figure out how to label it all and train machine-learning algo- rithms for pattern recognition and predictions. However, it’s imaginable the data could be labeled and directly used for training using AI and neural networks.” Smarter computing systems will lead to further advances in big data and predictive an- alytics. This could include the ability to predict behavior, have situational awareness, adapt to changes and serve up information—from mar- keting promotions and financial data to health care and industrial information. These data streams, fueled by IoT sen- sors, social sentiment, crowdsourced data and more, will lead to greater insights, customiza- tion and personalization, Mr. Schrage says. “We are moving into an era where big data will deliver results even if we don’t understand the causal mechanisms,” he says. “This technol- ogy is already disrupting almost every industry and business.” IQ “We are moving into an era where big data will deliver results even if we don’t understand the causal mechanisms. The technology will revolutionize almost every industry and business.” —Michael Schrage, research fellow, MIT Center for Digital Business and visiting fellow at Imperial College London INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  42. 42. 42 INSIGNIAM QUARTERLY | Spring 2016 B A L A N C E O F GAME CHANGERS INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017
  43. 43. quarterly.insigniam.com | INSIGNIAM QUARTERLY 43 As deputy CEO of BC Hydro, Chris O’Riley knows how to build support for big decisions—even when they are not popular. BY SARAH FISTER GALE Downtown Vancouver, British Columbia, Canada PHOTOBYJAMESVANCOUVER/ISTOCK INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. SPRING 2017

×