Harvard Business Review (HBR) March 2013 - SaMeep104

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MARCH 2013

\i9 90 Organizational

Culture

The Case for Stealth Innovation Paddy Miller and Thomas WedeU-WedeUsborg 44 The Big Idea

Big-Bang Disruption Larry Downes and Paul F. Nunes 117 Managing Yourself

Do You Play to Win, or to Not Lose? Heidi Grant Halvorson and E. Tory Higgins

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How big data is transforming the art of persuasion PAGE 59

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COMFORT IN NUMBERS SUPPORT IN NUMBERS INNOVATION IN NUMBERS KNOWLEDGE IN NUMBERS HEALTH IN NUMBERSsM

... INNOVATION

You've always had to keep an eye on her, but it hasn't always been easy to watch out

for yourself. With so much noise about health and health care, it's easy to just tune out. That's why UnitedHealthcare provides you with information that matters to you. Youget your own individual health profile, not random statistics. And you even get rewarded for addressing your health risks. At nitedHealtheare, we're using our experience and a vast range of health care information to make health care simpler and more responsive. So you can keep up with her, no matter what. We're more than 78,000 people looking out for more than 70 million Americans, that's

HEALTH IN NUMBERSIM•

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March 2013

hbr.org

ontents

Advertising Analytics 2.0 Advertising touch points no longer work in isolation. If your company doesn't analyze how they interact dynamically, it will be left behind. Wes Nichols

ABOVE DETAIL Mark Hansen &

70 For Mobile Devices, Think Apps, Not Ads Peopledon't like advertisements on their screens-but apps that provide value or entertainment can drive sales and build long-term engagement with brands. Sunil Gupta

560 vacuumfluorescent display screens

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76 Advertising's New Medium: Human Experience Marketers can make their ads welcome in the four spheres of consumers' lives: public, social, tribal, and psychological. Jeffrey F. Rayport 86 Creative That Cracks the Code Six campaigns provide assurancethat the creativity of advertising will never cease. Julia Kirby

Ben Rubin Moveable Type

HBR.ORG Interact with the creative that cracks the code hbr.org/ insights/futureof-advertising

March 2013 Harvard Business Review3

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Features March 2013

44

THE BIG IDEA

Big-Bang Disruption A new kind of innovator is creating-and destroying-whole markets overnight. And when competitors can come out of nowhere and instantly be everywhere,the old rules of strategy no longer apply. Larry Downes and Paul F. Nunes

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The Case for Stealth Innovation The corporate spotlight can be a dangerous place for unproven ideas. Often, a better strategy is to innovate under the radar. Paddy Miller and Thomas Wedell-Wedellsborg

RogerMartin describesthe

Why "Fair Value" Is the Rule The answer lies in the changing makeup of the Financial Accounting Standards Board. Karthik Ramanna

Do You Really Want to BeaneBay? It often makes more senseto operate as a traditional reseller in order to maintain control over buyer-seller transactions. Andrei Hagiu and Julian wright

39 HOW I DID IT

Encyclopced ia Britan nica's President on Killing Off a 244-Year-Old Product A world-class reference source transitions from bound volumes to digital learning products. Jorge Cauz 110 THE GLOBE

Making Sustainability Profitable In emerging markets, visionary enterprises are proving that environmentally responsible approaches can lead to big financial rewards. Knut Haanaes, David Michael, Jeremy Jurgens, and Subramanian Rangan 4 HarvardBusinessReviewMarch 2013

Organic techniques can lower a farm's costs.

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Departments March 2013 MARY ROBINSON

lO From the Editor

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Interaction

Idea Watch

FUNNY BONE

21 MARKETING

30 VISION STATEMENT

The Multitasking Paradox

28 DEFENDYOURRESEARCH

When in Chinatown, You Really Do Think More Chinese We are all chameleons, adopting the ideas and behaviors of cultures we're exposed to.

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page 21

Why It Pays to Be a Category Creator Companies that combine new products with new business models see much faster growth. PLUSHow early competition strengthens start-ups, and the optimal length of CEOtenure

"Womentend to be problem solvers" page136

Build elite shortterm teams focused on category creation.

A day in the life of two workers 32 STRATEGICHUMOR COLUMNS 34 RICHARDA. D'AVENI 3-D printing will revolutionize manufacturing and change the world. 36 CHRISTOPHERMEYER The industry-not the company-is the proper unit of analysis.

Is multitasking counterproductive? page30

Personalitymatters. page117

~:e.:~~~nce Do You Play to Winor to Not Lose?

Understandwhich incentives best motivate you and your team. Heidi Grant Halvorson and E. Tory Higgins

123 CASE STUDY

Fighting a Government Threat A cosmetics company faced with a big tax hike considers how hard to push back. Francesca Gino

6 HarvardBusinessReviewMarch 2013

Hearmorefrom this month's Life'swork interview blogs.hbr.org/ audio

130 SYNTHESIS Why are men so silent about their changing role in the workplace?Alison Beard 132 EXECUTIVESUMMARIES 136 LIFE'S WORK Mary Robinson The former Irish president on courage, influence, and leading as a woman

Enterour monthly cartoon captioncontest hbr.org/ strategic-humor A NEWCLASSIC

Theninethings successful peopledo differently,by HeidiGrant Halvorson blogs.hbr.org

THE MORE WE KNOW THE MORE WE WANT Today we are capturing more data about more things more quickly than ever before. The sheer facts of big data-2.5 quintillion bytes are created daily-present outsized challenges, and opportunities. As our analytical prowess grows,we are using it to create a series of powerful, even disruptive transformations: of our organizations, our industries, even our individual roles.

Marketers used to see you as a "segment" Now tbey see you as you.

Until recently, marketers saw consumers only as vague demographic blots. So it's no wonder so much marketing missed its audience, or bored it, or annoyed it. A generation of CMOs, however, is applying new analytical rigor to vast pools of transactional and social data. This allows them to develop deeper profiles of individuals, and to design marketing that is more relevant, more personal and, ultimately, more like a service than before.

SMART IS A VERB.

Across the world, a distinct group of leaders is emerging, who possess both a wealth of data and an acuity of analytical insight that their predecessors never had. So they feel freer to act-with a calculated boldness-to lead the big shifts that are reverberating through their organizations, their industries and beyond.

LET'S CHANGE THE WAY THE WORLD WORKS.

TO CHANGE EVERYTHING. City leaders used to bejudged by bow well tbey responded to a crisis. Now tbey are judged by bow well tbey anticipate one.

This may explain the sound you've been hearing so often lately: the crashing of one convention after another to the ground.

Mayor Eduardo Paes of Rio de Janeiro has adopted a proactive approach to the safety of the city's 6.3 million people. From a single integrated operations center, city officials now monitor and coordinate information from 30 public agencies. During the annual rainy season, this has

helped improve response times to flooded areas by 30%. More promising still, officials have begun using predictive analytical models to pinpoint high-risk areas before flooding occurs-and to evacuate residents before rescue is too dangerous or too late.

IBM works with leaders across the world to put data and analytics at the heart of their organizations. We've observed that among these leaders a distinct group is emerging, whose talents are enabled by technology but go beyond it. They are making bold decisions and advancing them on the basis of rich evidence; they are anticipating events, not merely reacting to them; and they are toppling the conventions that stand in the way of thinking and working smarter. ibm.com/changingroles

LET'S BUILD A SMARTER PLANET.

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IBM, the IBM logo,ibmcom, Smarter Planet and the planet icon are trademarks of International Business Machines Corp, registered in many jurisdictions worldwide. A current list of IBM trademarks is available on the Web at www.ibm.com~egal/copytrade.shtml. © International Business Machines Corporation 2012.

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The Sweet Success of Smell

Jorge Cauz, president of Encyclopredia Britannica, talks about killing off a 244-year old product. hbr.org/

A.G. Lafley describes how P&G turned an acquisition into one of its core competencies-fragrances.

INSIGHT CENTER

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multimedia/audio

How advertising will change in the future hbr.org/insights/future-of-

advertising

BOOK Irrelevant factors can have profound consequences on your behavior. Identify them with a free chapter from Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan by Francesca Gino. hbr.org/chapters/gino

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WEBINAR Join motivational psychologist Heidi Grant Halvorson to learn nine things suc-

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cessful managers do differently, on February 7 at 12 PM ET. hbr.org/ multimedia/webinars

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From the Editor Advertising Is an Artand a Science illiam Bembach, one of the giants of American advertising in the 1960s and 1970s (the period -piece TVshow Mad Men often refers to him), famously said of his profession, "Advertising is fundamentally persuasion and persuasion happens to be not a science, but an art;' That may still be true. But the case for advertising as a science is surely getting stronger. This month's Spotlight on the Future of Advertising takes a look at the industry's dramatic transformation and highlights some of the approaches and campaigns that have been most successful. The biggest change, of course, is the explosion of data now available to advertisers as they try to connect with consumers across a multitude of platforms. The big question: How do managers make sense of all those metrics? In "Advertising Analytics 2.0;' Wes Nichols, cofounder of MarketShare, shows how firms can craft strategies that use new mathematical modeling to generate more sales. Companies, he says, now can achieve a far more sophisticated understanding of how their messages touch consumers, and can change their strategies, if necessary, on the fly.Getting it right can mean lifting marketing performance by as much as 30%. In an accompanying piece, Jeffrey Rayport, managing partner of digital strategy firm MarketspaceNext, explains what companies need to do to get their message heard in an era where interruption and repetition are no longer effective. And Sunil Gupta, of Harvard Business School, demonstrates how top marketers are mastering the smartphone-not with tiny ads, which no one seems to like or even notice, but with apps that provide customers with real value. And be sure to look at our review ofrecent ad campaigns that truly stand out. Bembach would no doubt be impressed. "Illt would be easy to conclude that advertising has flipped to all science and no art;' writes HBR'sJulia Kirby. "But then along comes fresh creative to show us what really sells;'

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Adi Ignatius, Editor in Chief

10 Harvard Business Review March 2013

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Polycom, Inc.

A single property insurance solution designed to help reduce coverage gaps and overlaps. Polycom, a global leader in telepresence solutions, needed a financially strong carrier that could make complex insurance coverage easier, Zurich provided a custom solution that's as simple as it is seamless, integrating property with liability coverage all under one policy, It's an example of how Zurich delivers the help businesses need when it matters most. Watch the video to learn more, www.zurichna.com/stories7

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