Apr 11 at 01:00am
| FROM Insead Admissions Blog: How Firms Can Effectively Engage Stakeholders |
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Despite their best efforts and desire to “do good”, firms are often primarily focused on financial returns and rarely give stakeholders a seat at the table. This is because firms often lack a genuine understanding of the values that diverse stakeholders can bring and the unique needs and interests they seek. In this INSEAD Knowledge podcast, Lite Nartey, a Visiting Professor of Strategy at INSEAD, discusses how firms can identify key stakeholders based on their power and the legitimacy and urgency of their claims. She reveals the most effective ways to manage vast stakeholder networks and how to effectively engage with important players to create joint value. As with any relationship, the way a firm communicates with a stakeholder is a crucial factor in determining whether the relationship will be positive or negative. Essentially, firms can enhance cooperation and reduce conflict by understanding the different elements of successful stakeholder communication. Equally critical is the notion of joint value creation. The business environment today is characterised by different types of values – those sought by the firm as well as by different stakeholders – that need to come together for businesses to operate. |
Apr 12 at 11:00pm
| FROM Insead Admissions Blog: How Corporate Thought Leadership Drives Business Success |
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In a world driven and dominated by digital communication, online thought leaders have never been more critical. Much like individual social media influencers, organisations are now leveraging their profiles on professional networking platforms such as LinkedIn to establish themselves as thought leaders. This grants them the power to mobilise and influence followers and enhance business outcomes. While the influence of individual thought leaders is well documented, little attention has been given to the role of organisations as opinion leaders. A company can be considered a corporate opinion leader when it is a trusted authority in its field, shaping thinking about the company and the wider industry. In a recent study, my co-authors* and I found that corporate opinion leadership on professional social media platforms like LinkedIn is positively associated with company revenue. Essentially, companies that position themselves as thought leaders have a larger following, and as that following grows, so does their revenue. This finding is important considering some companies prioritise popular social media platforms like Twitter or Instagram and neglect the potential benefits of online professional networks. However, given that LinkedIn followers provide data on their employment history, skills and interests, they are arguably more reliable than followers (including fake accounts and bots) on platforms like Twitter and Instagram. LinkedIn followers are therefore more likely to serve as potential customers, job candidates or business partners. Being a thought leader is good for business Our study investigated the impact of thought leadership on a company’s financial performance, as well as the factors that facilitate an organisation becoming an opinion leader. We examined 310 companies, chosen from the S&P 500 list, with active profiles on LinkedIn. The sample comprised 99 sectors, which we grouped into eight broad categories: services, basic materials, consumer goods, finance, healthcare, industrial goods, technology and utilities. First, we collected data on the number of followers and company revenue to examine the relationship between opinion leadership and business performance. Our results showed that firms with 1 percent more followers on LinkedIn have 0.5 percent higher revenue on average. Prior research suggests that organisations can leverage their social media accounts to inform their followers about products and services, which can lead to increased engagement and sales. Our study confirmed that industry thought leaders can influence followers with suggestions and advice, resulting in product purchases and use of services. Next, we focused on the factors that determine whether a company is a thought leader by analysing the content generated by companies, users and employees. Our findings indicated that job posts, user reactions to posts and employee profiles are positively related to opinion leadership. Put differently, content created by organisations, users and employees facilitates the perception that a company is a thought leader in its respective industry. Corporate opinion leaders have an impact not only on followers and prospective clients but also future job candidates. This is because professional networking platforms allow companies to communicate with candidates and improve their business performance through talent acquisition. How to make your business a thought leader Our research provides valuable insights into the strategies that companies can adopt to establish themselves as corporate opinion leaders on professional social media platforms. Companies need to stimulate user reactions by producing unique and innovative content, such as short videos, infographics, product launches, feature enhancements and company achievements. For instance, HubSpot has successfully established itself as a thought leader on LinkedIn by creating eye-catching graphics and photos that highlight the organisation’s values and culture, as well as industry trends. While companies often use paid job advertisements to reach candidates on LinkedIn, we found that they can reach a wider audience by posting job advertisements as visual posts directly to their LinkedIn feed. Visual content tends to be more engaging and memorable, allowing companies to showcase their strengths, differentiate their firm from competitors and establish themselves as opinion leaders in their respective industries. It further highlights the company's focus on talent acquisition and development, which is an essential component of being a thought leader in any industry. Additionally, companies should motivate employees to set up LinkedIn profiles to broadcast their skills and employee experience to other users. Although LinkedIn serves as a head-hunting tool for many recruiters and there is a risk that employees will receive job offers from other firms, our study shows that employees make great online advocates and can further facilitate their employer’s image. Companies can also use humour and pop culture references to grab attention on professional social media platforms and establish strong connections with their audience. HubSpot, for example, playfully used the “Barbie” movie filter to showcase its key leaders on LinkedIn. Featuring employee profiles and highlighting their knowledge on specific topics not only helps establish the company's thought leadership, but also provides employees with an opportunity to showcase their expertise, which can lead to increased engagement and job satisfaction. Another example is Airbnb, which has established itself as a thought leader in the hospitality industry by promoting its hosts and showcasing real-life examples of how the platform has positively impacted people's lives. For instance, Airbnb shared a heart-warming story on LinkedIn of a former host who met his wife via the platform. This approach underscores the company’s commitment to providing unique and memorable experiences for its customers and helps build a community of loyal users and brand advocates who can contribute to the company's continued success. Becoming a thought leader in the digital age requires a multifaceted approach. It involves creating and distributing high-quality content on professional social media accounts, fostering employee engagement and participation in online conversations and leveraging user-generated content to build brand credibility and relevance. By focusing on these key strategies, companies can establish themselves as trusted authorities, enhance their online visibility and reputation and cultivate a loyal following of customers and advocates. To achieve this, companies need to adopt a strategic approach to social media marketing, using data and analytics to track engagement and measure the effectiveness of their content, as well as investing in employee training and development to empower workers to share their expertise and insights with their online networks. In addition, companies should actively seek out and engage with followers and users, respond to comments and feedback and showcase user-generated content that highlights the unique value and impact of their products and services. *Jordi Paniagua, University of Valencia and University of Notre Dame, and Grzegorz Mazurek, Kozminski University. |
Apr 14 at 05:00am
| FROM Insead Admissions Blog: Maximising Entrepreneurial Potential: Governance as Insurance |
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Tech entrepreneurs today move at much greater speed and scale, making it increasingly necessary to anticipate rapid change and potential chaos. In this video, tech executive and serial entrepreneur Yann Lechelle sits down with INSEAD professors Theos Evgeniou and Ludo Van der Heyden to discuss the hard lessons he has learned. “I've founded or co-founded five or six companies, all of which have been sold,” says Lechelle. “But each of them in some way has been a failure.” Lechelle emphasises that it took him two decades of trial and error to identify governance as a crucial driving force in his various endeavours. Looking back, he realises that good governance could have prevented value destruction along the way. The aim of this discussion is to help today’s entrepreneurs maximise their impact from the outset so that they don’t spend 20 years making the same mistakes. Good governance is crucial for entrepreneurs to create long-term value and ensure start-ups don’t hit major roadblocks on their journey. Unfortunately, many tech entrepreneurs misunderstand, neglect or even avoid governance altogether. In complex, fast-paced environments, tech entrepreneurs should seek the external help governance provides from day one. One problem is that entrepreneurs often do not want to relinquish power, explains Lechelle. A question an entrepreneur should ask him or herself is: Am I willing to forego absolute power for the benefit of the mission and the business? In the early stages, governance can be flexible and informal, allowing founders to learn from and lean on experienced executives. As a start-up progresses, alignment at all three levels – owners, board members and business leadership – becomes critical for value creation. Shifts in shareholding inevitably trigger changes in power, and hence of mission, board membership and governance practices. Appropriate governance at each stage can help manage these transitions. “Entrepreneurs typically want to change the world,” says Lechelle. “To change the world, they need to ensure longer-term value creation, capture and distribution.” Implementing better governance practices from the outset can increase the chances of successfully bringing a venture to its desired destination. “Proper governance is insurance to protect value creation when things become complex. And I guarantee you, things become complex.” |
Apr 16 at 08:00pm
| FROM Insead Admissions Blog: How Will ChatGPT Shape Business, Society and Employment? |
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In the last 200 years, we’ve seen productivity growth of 1.5 to 2 percent per year on average, with the emergence of general-purpose technology such as the steam engine, electricity and computer driving rapid growth in the years following their introduction. However, productivity growth has slowed in advanced economies in the last 10 to 15 years. “Could artificial intelligence (AI) be the next general-purpose technology to drive productivity?” asked Morten Olsen, Associate Professor of Economics at the University of Copenhagen. Together with Theodoros Evgeniou, a Professor of Decision Sciences and Technology Management at INSEAD, and Phanish Puranam, the Roland Berger Chaired Professor of Strategy and Organisation Design at INSEAD, Olsen was speaking at INSEAD Tech Talk X webinar about how the next generation of AI systems will shape business, society and employment. Chess grandmaster Garry Kasparov wrote in Deep Thinking that a (weak) human working with a machine, with a strong process to work together, can produce better outcomes than when AI and humans work alone, said Evgeniou. According to Kasparov, building a better process at the human-machine interface requires humans to be informed. In other words, we need to know the technology to understand its potential, limits and challenges. Unpacking ChatGPT ChatGPT is a specific product in a class of technologies known as large language models (LLMs) – an application area of machine learning (ML), itself at the heart of modern AI. Like all ML algorithms, ChatGPT looks at a large amount of data, finds “patterns” – namely regularities with high enough probability – in the data and uses these patterns to make predictions such as about what word to generate next given the previous ones, explained Puranam. In school, we may have sat for tests where we were shown a sequence of shapes such as a triangle, a circle, a star and a triangle, and asked to predict what comes next. In simple terms, that's what machine learning does, he said. The term “GPT” is derived from the phrase generative pre-trained transformer. It is “generative” as it generates text as a prediction of what users are likely to find useful based on their questions or instructions. It's pre-trained by an algorithm called a transformer using a large corpus of text. In a nutshell, said Puranam, LLMs such as ChatGPT are complex ML algorithms that find patterns in very large volumes of text generated by people in the past and use them to predict what specific users might find useful based on their inputs. The complexity is evident, with an estimated 175 billion parameters in ChatGPT and an estimated 170 trillion parameters in GPT-4, an advanced version of ChatGPT. To appreciate the potential of LLMs such as ChatGPT, said Evgeniou, it is important to understand that they are not necessarily products, but foundation models. Since foundation models are used in different downstream applications, what we are seeing is just the tip of the iceberg. Foundation to a myriad of applications ChatGPT is most commonly used to synthesise or summarise text, translate text to programming language (such as R and Python) and search. In the business context, Puranam provided examples of applications such as copywriting for marketing materials, customer interaction, synthesising large legal documents, writing operational checklists and developing financial summaries. Due to ChatGPT’s ability to generate text from different viewpoints, it can widen perspectives and improve creativity potentially beyond human imagination, said Evgeniou. For example, you can generate short summaries of text such as your company’s mission statement from various perspectives, say a European, American, Chinese, 10-year-old or 80-year-old person. It’s already being used in business to enhance creativity and business success: Coca-Cola, for instance, used AI effectively to engage its customers in its recent marketing campaign. But creativity is not limited only to creative fields, stressed Puranam. The technology can leverage human creativity by generating alternatives for business plans, business models and so on. However, humans ultimately need to evaluate the quality of the content generated. In more advanced applications, Olsen stated that innovation is typically driven by fundamental and corporate research. The more AI can help in these processes, the faster we can see real innovation, just as how using AI in biomedical research has reduced the time taken for drug discovery and protein-folding predictions to a mere fraction of the time taken by a human. The fact that it is a foundation model means that ChatGPT is the foundation to a plethora of applications. Evgeniou believes that AI can augment human intelligence, leading to the creation of new needs that we didn’t even know of and creating new companies, products, markets and jobs at a much faster pace. What does ChatGPT mean for business? While ChatGPT brings new possibilities, we need sound processes to enable humans and AI to work together effectively. One of the most important lessons in technology adoption, said Evgeniou, is that organisational change is needed to implement and get value out of it successfully. In addition, trust is a necessary ingredient in technology adoption. But trust is a double-edged sword – when users place too much trust in technology, it can lead to overconfidence in decision-making or narrative fallacy, where people make up stories based on the narratives generated by LLMs. In high-risk applications, it can even jeopardise their safety. Trust is also associated with the question of liability, as Evgeniou noted: If professionals such as doctors, lawyers and architects make mistakes as a result of prioritising AI’s decisions over their own judgement, are they culpable? Would they be covered under malpractice or professional liability insurance? From the perspective of consumer trust and safety, the exponential growth of content made possible with technologies such as ChatGPT has made content moderation – a critical issue for our online trust and safety – more challenging for online platforms. Moreover, the role of AI in creating information filters and bubbles has been put in the spotlight. Families of the Paris terrorism attack victims are suing Google for the role of its AI recommendation algorithm in allegedly promoting terrorism. The Communications Decency Act (Section 230) is being challenged in the United States Supreme Court for the first time, which raises the alarm on the potential dangers of recommendation algorithms and opens other online platforms that employ AI to litigation risks, said Evgeniou. Talent development is another consideration. Puranam cautioned that over-reliance on LLMs can atrophy our skills, particularly in creative and critical thinking. Companies should avoid the myopic view of automating lower-end work just because technology allows for it. “In some professions, you can't be a partner without having been an associate, and you can't be a full professor without having been a research assistant,” he said. Therefore, automation without due consideration for talent development can disrupt the organisation’s talent pipeline. Evgeniou proposed that companies put in place guidelines to ensure that AI is harnessed safely, specifying who, when and how it should be used. “In AI adoption, we need to put humans in the driver’s seat to monitor the behaviour of AI,” he said. Is society ready? While some people are understandably concerned about being replaced by ChatGPT, technological unemployment hasn’t happened in the last 150 years, said Olsen. AI is not expected to lead to massive unemployment in the next five to ten years, he assured, so the more relevant concern is how it would affect income distribution. New technologies can bring about two effects: productivity and substitution. Productivity effects will only be apparent in productivity statistics over time, as economist Robert Solow observed. As for substitution effect, it affects individuals to different extents depending on their skill level. In the 1850s, low-skill-biased technological change saw the displacement of skilled shoemakers by unskilled workers who mass produced shoes in factories. On the other hand, the skill-biased technology that enabled factory automation in the 1980s to 2010s favoured those with university degrees over low-skilled factory workers. Currently, it is unclear which group will benefit from LLMs. At a more fundamental level, there is the question of whether LLMs can be truly unbiased and inclusive. Understanding how it learns reveals why it can be inherently biased. ML algorithms such as ChatGPT build knowledge by unsupervised learning (i.e. observing conversations), supervised learning and reinforced learning where experts “train” the models based on users’ feedback, explained Puranam and Evgeniou. This means that ChatGPT “learns” from individuals who train and use it, and the machine adopts their values, views and biases on politics, society and the world at large. Therefore, while ChatGPT can be democratising, it can also be centralised depending on the experts who train it, said Puranam. Moreover, the risk of misinformation is heightened due to the speed of content being proliferated and how content can be weaponised to threaten democracies and institutions. It is even now expected to influence election campaigns, said Evgeniou. Puranam also cautioned that people whose social lives exist only in online channels are at high risk, as they may fail to judge truth from falsehood. Olsen agreed that ChatGPT can perpetuate the views of individuals who are already siloed in their own informational bubbles online. The panellists were cautiously optimistic and agreed on the need for appropriate management and regulation to ensure ethical and responsible use of technologies such as ChatGPT. Learning to work together In practice, regulation will always fall behind tech innovation. The European Union Digital Services Act to safeguard online safety fell behind as soon as it was enforced in late 2022, since it only covers online platforms such as Facebook and Google but not ChatGPT, even though the latter aggregates online content. Similarly, although foundation models can be used in high-risk products downstream, they fall through the cracks in AI regulations. As big tech companies continue to develop new foundation models, this could unleash the proliferation of downstream products. If the foundation models remain unregulated, they may be the single point of massive, cascading failures. But regulating an emerging, evolving technology across different geographical regions comes with challenges. AI algorithms adopt values from the data used to train them, which can result in different AI culture across regions. This increases the complexity of regulation, said Evgeniou. Even if regulations are the same in different parts of the world, the implementations and results will differ not only because of different legal systems, but also different value systems. In spite of the challenges, a combination of actions by data scientists, businesses and regulatory bodies can improve tech trust and safety. Transparency and trust often go hand in hand, and it pays when businesses are transparent in their engagement with customers. For instance, they can inform customers when content is generated by ChatGPT and when customers are interacting with a machine instead of a human. An ongoing development to ensure that AI is more aligned with human values is the field of reinforcement learning with human feedback (RLHF), said Evgeniou. By incorporating human feedback, we can try to improve the quality of the AI’s output based on human values. However, according to Evgeniou, we are only at the beginning of solving the AI value alignment problem. In the meantime, while it is proven that AI can beat a human at chess, this is not the case in all fields. There is potential to leverage AI to complement humans, which requires a better understanding of the opportunities and limits of combining the two. As LLMs continue to evolve, all the panellists saw human-machine ensembling as a promising area to use AI to improve the quality of human thinking and identify the necessary conditions to achieve it. |
Apr 19 at 12:00am
| FROM Insead Admissions Blog: Beyond Salary and Benefits: Why Career Conversations Matter |
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A simultaneous surge of mass layoffs and unprecedented job growth in the United States has created a confusing, complex climate for companies. In such a paradoxical environment, organisations should seize the opportunity to retain talent instead of falling into a cycle of continuous turnover. By holding onto valuable employees and building on their skills and abilities, companies can create an environment of mutual success, leading to enhanced value for the organisation. Having career conversations with managers, in addition to formal performance reviews, is an effective way to ensure that employees feel valued, motivated and committed. A study from Right Management found that almost 90 percent of employees believe that they are, or should be, responsible for their career development, and two-thirds of individual performance drivers are tied to career conversations. Regular, meaningful discussions between employees and their managers or mentors can help foster a fulfilling work experience for both parties. Through these conversations, leaders can gain a better understanding of their employees’ core aspirations and help them plan their career and life trajectories more effectively. Managers can also derive a strong sense of fulfilment from understanding and developing others Career conversations are seldom incorporated into the mandatory talent management cycle. Non-HR executives may find the constant demand for formal evaluations and salary reviews to be burdensome enough. But a well-handled conversation is a powerful tool that benefits not only the company in terms of engagement and retention, but also the individual’s overall development and transformation. A single conversation can change an entire career path. Choosing the right boss Ensuring a good fit with one’s manager is crucial, particularly when transitioning into new roles. Jaya learnt this the hard way when she joined a tech giant after getting an MBA at Oxford University. Her first manager was incredibly supportive and had a genuine interest in helping her grow and succeed beyond her immediate remit. Monthly career conversations turned into strategising sessions on how Jaya could get the most “stretching” projects to best showcase her abilities. Jaya was thriving and building deep relationships with others across the organisation. However, in her second role at the firm, Jaya had the opposite experience. She felt her new manager lacked the capacity to support her team and “career conversations” were tactical – like going through a shopping list of things she needed to do – and did little to encourage her growth. She said she was never offered any bridge-building opportunities or challenges to expand her scope, despite asking to take on more responsibility. In the face of pushback from her manager when she tried to take on more projects, she became pushier, and the situation descended into a passive-aggressive struggle. Jaya eventually decided to leave, and more than half of the team followed her lead soon after. Since then, Jaya has resolved to select her bosses more carefully and has joined another tech giant where she believes her manager is invested in her success. She is confident that she will build an increasingly exciting and fulfilling career in this open, committed environment. In contrast, Roxana had a positive experience from the outset when she started out in commercial and revenue management at a multinational beverage company. Her boss pushed her into a constant stream of projects and meetings that were outside the scope of her job description. Despite being out of her comfort zone, Roxana found these challenges enjoyable and relished the opportunities to experiment. In addition, her manager frequently inquired about her objectives and ambitions, encouraging her to think critically about her goals. When an interesting opportunity came up, her boss encouraged her to take the plunge and pointed out the transferable skills she possessed, despite her claiming to have no relevant experience. Essentially, her manager supported her in finding a new career path by promoting exploration without restriction and cheering her on from the sidelines. Roxana’s boss remains a role model for her as she continues to develop a successful career. Being the right boss Managers can provide daily opportunities for employees to grow and stretch beyond their current roles by having conversations about every aspect of their careers. Claude, who worked at a multinational pharmaceutical company, established a clear moral contract with his employees, explicitly telling them that he would only keep them for a short time and then push them towards their next opportunity. Claude fostered a comfortable and secure environment where employees were encouraged to seek help, advice or a nudge in a new direction. He helped an employee, Sven, realise that he had all the skills needed for a successful career in HR, despite initially wanting to pursue general management. With the support of Claude and other leaders, Sven was able to thrive in his new career path and catapulted from one HR leadership role to the next. The willingness of managers to engage in open and honest conversations with their employees about career possibilities can clearly have a transformative effect on their careers and lives. Encouraging individuals to explore all possible options and supporting them to arrive at the best conclusion is a hallmark of great management. Evidently, many leaders need to enhance their skills in this area. Part of the challenge is that many managers perceive career conversations as a complex task. These discussions can be emotionally charged, and leaders must handle them delicately to ensure that expectations and motivations are appropriately managed. Nevertheless, the barriers to these conversations are not insurmountable. How to have deep, meaningful conversations with others Sven, through his experience giving and receiving career conversations, shared a few pointers on how to have an effective discussion. Ideally, employees asking for feedback should initiate the conversation instead of waiting for managers to bring the topic up. These individuals should have a career plan so that the topics discussed can focus on aspects of that plan such as on-the-job learning, strengths to leverage, enlargement of experience base and next career opportunities. Managers should actively observe and offer feedback. A climate of openness, trust, courage and empathy is required from both parties. The conversation shouldn’t be structured as this makes it difficult to explore new or unexpected topics. Career conversations should be held in parallel with a couple of trusted individuals, so that the focus is not all on one manager. A career advisory board can be very helpful. Career conversations are not a check-the-box exercise, but rather a vital component of effective management. Mindful managers actively create an environment of possibility where employees feel empowered to discuss their career aspirations. By investing time and effort into these discussions, managers can help their team members become more self-aware, identify their strengths and areas for improvement and create a plan for their future growth. Ultimately, this benefits both the employees and the organisation as a whole, leading to higher job satisfaction, increased retention and improved performance. |
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