News from Harvard Business School
“Recent research shows for the first time that diversity in venture capital firms not only spawns creativity and alternative viewpoints, but also improves financial performance.
“Paul Gompers, Eugene Holman Professor of Business Administration at Harvard Business School, summarizes his recent research in a new article in Harvard Business Review, ‘The Other Diversity Dividend,’ co-written with HBS research associate Silpa Kovvali.
“They focused on the venture capital industry, which provided a unique laboratory for investigating financial performance. Starting six years ago, Gompers began gathering demographic information on individual VCs to better understand if their gender or race influenced a firm’s performance.”
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The Downside Of Doing Good
News from Notre Dame University Mendoza College of Business
“A CEO who invests in corporate responsibility practices takes a risk, according to new research.
“In 2006, TIAA-CREF sold its 50 million shares of Coca-Cola stock after reports emerged of the soft drink giant violating labor and environmental laws around the world. With the motto, ‘We serve those who do good,’ TIAA-CREF bills itself as a socially responsible financial services firm. So when KLD Research & Analytics, which rates corporations on their social responsibility, dropped Coca-Cola’s ranking, TIAA-CREF decided to divest.
“Corporate Social Responsibility, or CSR, is a controversial subject. Since at least the 1970s, when Milton Friedman and a group of like-minded economists launched the ‘shareholder value’ revolution, most companies have viewed maximizing profits for their investors as their primary responsibility. In recent decades, though, critics have argued that shareholders are just one group among a corporation’s many stakeholders — including the firm’s employees, its customers and the communities where the firm does business. All of the stakeholders deserve to benefit from the firm’s success, this argument goes, not just the stockholders.”
Why Leaders Invest So Much In Failing Strategies
News from London Business School
“British retailer Marks and Spencer (M&S) was a high-street king in the 1980s, with more than 500 stores, 13 million weekly shoppers and a £1 billion+ annual profit. But the clothing, homewares and food seller has struggled more recently, with plans to close 100 of its 300 outlets by 2022, leading to thousands of job losses.
“What happened in two decades? M&S stuck rigidly to selling British-made garments as oversea competitors such as The Gap, Zara and Hennes & Mauritz (H&M) brought new fashions from around the world to the UK. The management also placed too much faith in its St Michaels brand – based on M&S founder Michael Marks – investing in print and TV adverts for new store openings rather than branding or new products.”
Advancing The Study Of Using Future-Self Images To Alter Behavior
News from UCLA Anderson School of Management
“The human desire to beat back the inexorable march of the aging process is big business. By one estimate, global producers of anti-aging lotions, potions and medical procedures raked in $250 billion in 2016, and are on pace to generate more than $330 billion in revenue by 2021.
“Fooling everyone else about one’s age may be fine, but fooling oneself can prevent one from taking steps to plan for the future. A driver of this dynamic is the difficulty of practicing delayed gratification; saving a dollar today for the future is a lot harder than spending that dollar, especially when you are working hard to stay disconnected to your future self.
“Behavioral research has begun to explore how to help us bridge our aging gap as a way to encourage us to make better choices for our future, older self.”
The Fine Line Between Stubbornness And Stupidity
News from INSEAD
“Stubbornness isn’t necessarily bad and can in fact be a virtue. Sometimes, as history has shown, people do the right thing by remaining steadfast to their beliefs. Take the example of Charles de Gaulle. General de Gaulle refused to admit defeat after France was overrun by Nazi Germany during World War II. Against overwhelming odds, he persuaded the French that they would ultimately prevail. His unwavering belief in the greatness of his country helped him turn his vision into reality. After the war, President de Gaulle managed to secure a permanent seat for France on the United Nations Security Council. His determination earned France respect on the global stage.
“At times, it is only by being stubborn that we can bring a great idea to life. Stubbornness makes us persevere. It helps us stand our ground when everyone else is trying to tell us that we are wrong. Used with discernment, stubbornness can be a strong leadership quality and a key determinant of success.”