Meetings are notoriously one of organizational life’s most insufferable realities. U.S. companies spend more than $37 billion dollars a year on them. Employees in American companies spend more than one-third of their time in them. And 71% of senior managers view them as unproductive. In one global consumer products company that I work with, my firm’s organizational assessment revealed an unusually intense degree of frustration over how much time was consumed by meetings, leaving “only evenings to do our day jobs,” according to one interviewee. In a meticulous inventory, we calculated the hours spent in meetings by directors and above across the enterprise (a population of about 500). They collectively spent more than 57,000 hours per year in recurring meetings. That’s the equivalent of six and a half years!
Better meeting techniques, like distributing agendas, holding stand-up meetings, or enforcing a no-device policy, are all well-intentioned practices. But none of them will salvage a meeting that shouldn’t be happening in the first place.
Meetings are productive and meaningful when the people in them have a clear reason to be there, have a definitive contribution to make, and advance strategic priorities together. Any standing meeting, whether it’s of a departmental leadership team, a cross-functional group owning a process like innovation or talent management, or a task force managing a six-month transition to a new technology, should be designed and linked to a broader governance plan. Together, standing meetings should synchronize the entire organization in a meeting cadence that executes strategy and delivers results. But too often, meetings are disconnected from the intentional distribution of decision rights, resources, and priorities across the organization, making them unnecessary.
Meetings that aren’t part of effective governance design take on two destructive pathologies: they become meetings as source of power or meetings as bottleneck.
When meetings become a source of power, being in charge or included affords you disproportionate degrees of influence and status. They justify their existence with lengthy presentations that most attendees find boring and irrelevant while nodding eagerly in a feigned sense of importance. In the consumer products company I mentioned above, one interviewee told us, “People would get to meetings 30 minutes early to make sure they sat near the executive they wanted to be seen with.” This kind of politicization leaves most leaders in meetings disempowered, employees disengaged, and meetings dysfunctional. Meetings should serve to distribute power, not concentrate it at the top. When they do, leaders are more inclined to use power responsibly.
When a meeting becomes a bottleneck, decisions or resources are passing through people who likely have little or nothing to contribute, usually because “they’ve always been involved.” Standing meetings like these are often like layers of old wallpaper pasted over one another; they’ve far outlived their usefulness. At the consumer products company, many of the standing meetings were of groups that had been formed years prior and had never been dissolved as the organization evolved and shifted strategies. In fact, there were six different groups managing two different processes governing product development. Many of those groups had been formed decades earlier, each one gripping tightly to their claim over determining which projects in the pipeline moved forward with what investments. The wars between departments doubled the time required to bring a new product to market because teams were often given conflicting directions.
These are just symptoms, however. The underlying problem is bad governance. To fix these issues in your organization, establish the following three elements.
1. A clearly articulated mandate with defined decision rights. Regardless of the type of meeting, the scope must be clearly defined, and narrowed to a few key areas. In another multinational company I work with, the executive team, the business unit teams, the regional teams, and the country teams were painfully duplicating work — everything from P&L management to key hiring decisions to customer relationship management. Meetings became war zones, as each group complained about how one of the other groups was undermining what they believed was theirs to do. In a holistic redesign, we created charters for each level so that they were focused on the work they could uniquely execute. Strategy and priorities were set at the executive team level. The business unit teams focused on talent, customer segmentation, and marketing. The regional and country level teams were responsible for P&Ls, customer relationship management, and geography-specific priorities. With these responsibilities set, they could create meeting agendas focused on what they needed to be doing (and publish them weeks in advance), and all of the requisite decision rights and resources were allocated accordingly.
2. A synchronized cadence. It may seem obvious, but a meeting’s frequency and allotted time must be commensurate with its charter and decision rights. Teams and task forces governing near-term priorities will need to meet more frequently for shorter durations of time, while those focused on longer-term priorities should meet less often for longer durations of time. In the multinational example above, the cadence of meetings was choreographed to keep each level appropriately linked and informed. Each group met monthly for two hours: the executive team on the first Monday of the month, the business units on the second Monday, the regions on the third Monday, and the countries on the fourth. Any inputs or outputs from one to the other were immediately sent on to the next group. This also allowed each team to keep their respective organizations up to speed on progress, shifts in priorities, and their counterparts’ work.
3. The right composition and metrics. Too often leaders let hierarchy define who comes to a meeting; if you are a direct report to the leader calling the meeting, you attend. Which makes everyone feel compelled to bring something to say. This is how meetings devolve into useless status updates. Worse, under the guise of making people feel “included,” meetings balloon into U.N.-like summits with dozens sitting in a room wondering why they are there. The composition of a meeting should be defined by its charter, and only those who have something specific to contribute — expertise, authority over resources, responsibility to execute — should be included. Anyone else who has a stake in the meeting outcome should be informed. For example, if a meeting charter has significant implications for finance, one person from finance can attend and keep their colleagues informed.
There should also be metrics assessing how well a meeting is executing its charter. For example, if a customer success team composed of sales, customer support, on-site technical assistance, and engineering is tasked with effectively implementing new technology for customers, then customer complaints, speed of adoption, open ticket time, and overall product satisfaction should be tracked so that the team — and its stakeholders — know if it’s contributing as intended.
In my experience, meetings being ineffective is often an indicator that they shouldn’t be occurring. To test this, I ask groups, “If you stopped meeting, who besides you would care?” If they struggle to respond, I have my answer. If you want to give your organization a great gift, immediately shut down recurring meetings that don’t meet these criteria. The cheers will be deafening.
A major debate has unfolded around India’s economic prospects. On the one hand, you have Prime Minister Modi declaring at the 2018 World Economic Forum that India’s economy, already the fifth largest in the world, will double, to $5 trillion, by 2025. On the other hand, you have the media pointing out the country’s shallow middle class, growing inequality and joblessness, and a trail of multinationals frustrated by the lack of China-like success in India.
While India remains a challenging market, there are at least three reasons global firms cannot overlook the country without consequences.
India has seen growth in infrastructure spending. The country has been increasing its spending on infrastructure such as airports, cities, hotels, ports, roads, bridges, hospitals, and power plants. During the past three years, for instance, the newly formed Andhra Pradesh State has made massive investments in building out its infrastructure. India has expanded its solar generating capacity eightfold since 2014 and achieved the target of 20GW of capacity four years ahead of schedule. India plans to catalyze $200–$300 billion of new investment in renewable energy infrastructure over the next decade.
Industrial companies like JCB, Cummins, AECOM, and General Electric and investors like Brookfield have successfully capitalized on India’s infrastructure investments. In fact, JCB makes half its global profits in India. It’s been estimated that India needs $5 trillion in infrastructure investment to sustain its economic growth, but local Indian companies lack the competencies needed. This means significant growth potential for multinationals who have core competencies in high-tech infrastructure solutions such as jet engines, turbines, CT scanners, and satellite communications.
India’s emerging middle class is strong. It’s true that India’s business environment poses challenges for all companies in the consumer economy. All the same, some global consumer companies, such as Unilever, Xiaomi, Suzuki, Hyundai, Honda, LG, Samsung, and Colgate, have been able to overcome challenges and constraints to do spectacularly well in the middle of the economic pyramid.
Consider two success stories in India’s consumer economy: Amazon and Renault’s ultra-low-cost Kwid car. Amazon entered India in 2013 when two local Indian companies, Flipkart and Snapdeal, had already established themselves as market leaders in e-commerce — and still rose to become the number one online retailer in India. The country has added new customers at the fastest rate for Amazon in its history of operations across the world, including the U.S.
Similarly, when Renault entered India and introduced Kwid in 2015, Maruti and Hyundai had almost 70% of India’s large and fast-growing subcompact car market. In a short two years, Kwid gained 15% of the market. More important, Renault has taken Kwid to many other markets, including South America.
Three things allow firms like Amazon and Renault to succeed in India’s consumer market. First, their CEOs have a strategic and long-term commitment to the market. Amazon CEO Jeff Bezos and Renault CEO Carlos Ghosn are in India for the long term, as a hub for middle-of-the-pyramid innovations that can serve all emerging, and even developed, markets. Second, they build strong local teams in India and shift resources and decision-making authority to India. Amazon’s India CEO Amit Agarwal and Renault’s India CEO Sumit Sawhney have considerable autonomy to innovate in India. Third, they evolve their business models and make products that are appealing, affordable, and accessible to the emerging middle class. Renault’s Kwid and Amazon’s e-commerce model are totally customized for the needs of the Indian middle class.
For comparison, this is the opposite of what Apple is doing in the world’s second-largest smartphone market. Apple’s iPhone has a 2% market share, while Samsung and Xiaomi lead the market with 23% each. One reason why is that Apple seems to be waiting for Indians to get wealthier and fit its business model, while competitors Samsung and Xiaomi are offering products and pricing customized for Indian consumers.
Challenging as India is, the bigger challenge for most global companies is learning to adapt their approaches to other markets rather than copying and pasting their developed market models across the world. To succeed in India, companies must be willing to take a clean sheet of paper and start designing to the middle of the pyramid.
The country is in a tech startup boom. The biggest reason why India should continue to matter to global firms is not the size of the market per se, but the opportunity to participate in one of the richest tech startup innovation ecosystems in the world. The startup ecosystem, now the world’s third largest, is maturing rapidly and is no longer dominated by copycat e-commerce companies. In fact, tech startups have attracted over $20 billion in the past three years.
Three factors are driving this boom. The first is India’s investment in its technology infrastructure. Government agencies and tech volunteers have come together to create “India Stack” — a set of APIs giving governments, businesses, startups, and developers a common digital infrastructure on which they can build and deliver presence-less, paperless, and cashless services. For example, telecom companies and banks are now able to open new accounts in five minutes without a single paper document. Digital payments using a free API called UPI (Unified Payment Interface) have already exceeded all credit card transactions in little over a year. Internet wireless access has dramatically increased recently, especially after Reliance Jio’s 4G rollout (Reliance alone added 160 million new users in a year). Aadhaar, a 12-digit unique identity number issued to Indian citizens based on their biometric data, has 1.2 billion enrollees and was used to authenticate 9 billion transactions in 2017. The country has over 350 million smartphones, and this number is growing 25% CAGR.
The second factor is India’s vast number of consumers and its large, highly educated, and young talent base. In sheer numbers, India is hard to beat. India’s 10,000 engineering institutes produce more engineers than China and the U.S. combined, and India adds 10–12 million youngsters to its workforce every year.
The third factor is that India’s problems cannot be solved without leveraging technology. For example, India has a huge shortage of hospital beds and medical professionals relative to its population base of 1.2 billion. The education sector similarly suffers from too few teachers and universities. And in the legal system, it might take 30 years to clear the backlog of pending legal cases. Financial services, education, health care, justice, and several other services can only be delivered by effectively leveraging technology. This means huge opportunities for tech startups in these sectors, and we’re already seeing innovative tech companies enter the Indian market.
In conclusion, India is a paradox: mega opportunities and mega headaches. The mega headaches include: bureaucratic rules and regulations, strong labor unions, corruption, underdeveloped institutions, inadequate physical infrastructure, and difficulty in acquiring land. But if a company can overcome the challenges, the prize is huge. We’ve given several examples of multinationals that have cracked India’s code. More should follow their lead.
Self-driving vehicles, once a science fiction technology, are rapidly becoming a reality that promises to transform our lives – making it safer and more efficient to move people and goods, while reinventing our thinking about transportation.
Arizona, one of the leading cities for autonomous vehicles, is the proving ground for this transformative innovation.
This fleet of driverless cars — 600 Chrysler Pacifica mini-vans, operated by Google’s Waymo — can be seen today daily on the streets where companies like GM and Ford also are testing autonomous innovations. Arizona startup Local Motors developed “Ollie,” the self-driving bus here. And ride-sharing companies like Lyft and Uber have scaled their operations while deploying their own self-driving vehicles.
Under Governor Doug Ducey’s direction, the state has played a leading role in this dramatic evolution of mobility – and it’s done so by getting out of the way. Arizona’s focus on encouraging innovation, while ensuring public safety, has created an environment where the testing and development of this technology can thrive.
Led by the Arizona Commerce Authority, the state is advancing an economic development strategy focused on the idea that while technological advances are the keys to prosperity, the support of an innovation ecosystem that includes private industry, state government and academia, is crucial.
So as the debate about testing and regulation of driverless cars arose in several other states, in 2015, Governor Ducey stepped forward and signed an executive order instructing state agencies to “undertake any necessary steps to support the testing and operation of self-driving vehicles on public roads within Arizona.”
“The state believes that the development of self-driving vehicle technology will promote economic growth, bring new jobs, provide research opportunities for the state’s academic institutions and their students and faculty, and allow the state to host the emergence of new technologies,” the order said.
Upon signing the order, the governor announced that Uber would be forming a partnership with the University of Arizona (UA) to support research and development of state-of-the-art lenses and sensors, which help autonomous vehicles navigate.
In addition, UA researchers and the Maricopa County Department of Transportation have received funding from the U.S. Department of Transportation to test new technology in Anthem, Arizona, that connects traffics signals and cars. This will provide real time information about driving obstacles to improve driver safety.
Other industry-leading companies like Ford and GM have also moved their driverless car operations to the state. GM operates an IT Innovation Center in Chandler and the Cruise Automation facility in Scottsdale. Waymo, which partnered with Intel to design, build, and test its autonomous vehicles, is testing its autonomous car fleet on the streets of Phoenix.
While testing and research are underway on driverless cars, policymakers also took important steps to explore the impact on community safety and infrastructure.
For example, they have established the Arizona Self-Driving Vehicle Oversight Committee, a team of transportation, policy, and public safety experts who will help the state conduct research on self-driving technology. The committee will work closely with both the Department of Transportation and the Department of Public Safety, advising the agencies on the safest ways to roll out driverless cars on public roads.
As exploration of these innovations moves rapidly forward, the social and economic impact of this new era of transportation is just beginning to be understood.
For instance, autonomous vehicles have the potential to dramatically reduce fatalities and increase safety, because they will never drive distracted, tired, or impaired like human drivers. Daily commutes could be more productive for millions of people who now spend their time behind the wheel on the way to work.
And self-driving cars also hold the promise of increasing mobility and efficiency in transportation. They could also offer new independence for people, young, old, and those with disabilities, who can’t drive a car. Self-driving cars in ride sharing fleets also have the potential to provide affordable, on-demand transportation for people who cannot afford to own a car, or live in communities with limited transportation options.
And as car ownership moves from something personal to something people think of as a ride-sharing service, these vehicles have the potential to ease traffic congestion, reduce pollution and have a major impact on transportation infrastructure.
The potential offshoots of this technology seem almost limitless – and Arizona’s commitment to developing this industry has ensured it will have a leading role in creating a new road map for transportation.
Cyberattacks are on the rise, with over 1,000 data breaches occurring at U.S. organizations in 2016 alone, most often through hacking or external theft. And it isn’t only violated firms that are hurt by these incidents. Studying hundreds of data breaches, our research has found that they create significant ripples that affect other companies in the industry.
Our research shows that sometimes a breach creates spillover, where investors perceive a guilt-by-association effect that harms the breached firm’s close rivals. For an example of competitor harm due to these spillover effects, consider the July 2012 Nvidia data breach, which affected 400,000 user accounts. Its rival Advanced Micro Devices (AMD) lost about $48 million on the event day (-1.4% drop in stock price) from the spillover effects of Nvidia’s breach, controlling for overall market effects. That is, when removing from our analyses all other events that could have influenced AMD’s stock drop, such as dividend declarations, contract signings, earnings information, or mergers and acquisitions, we find that clear and significant harm occurred from Nvidia’s data breach.
In fact, the spillover effects across our sample evidenced a drop in stock price that averaged more than $8 million in losses for rival firms where no such data breach occurred. Our results show the financial hit to these rivals’ stock prices can be detected for several days after the data breach before eventually stabilizing.
Yet a breach can sometimes help a close rival, creating beneficial competitive effects. Consider the massive Anthem data breach in February 2015, which affected as many as 80 million customers. The high severity of this breach led rival Aetna to gain about $745 million (2.2% increase in stock prices) on the event day due to competitive effects, again controlling for overall market effects. In this situation, a data breach of this scale makes investors worry about customers mass defecting to competitors, thus providing a positive boost to a close competitor’s stock price.
Our research shows that the severity of, or number of customers affected by, a breach is a key to understanding whether close rivals will be harmed or helped by their competitor’s bad fortune. As the number of customers harmed by the breach increases, stock market effects for the firm’s rivals go from negative to positive, as competitive effects become more dominant. This suggests that smaller breaches signal that others in the industry may also be vulnerable to hacking. However, large data breaches create the impression that the breached firm is in a unique amount of trouble. Our research shows that in large data breaches, customers increasingly desire to leave the breached firm. Expected switching behavior ultimately benefits the breached firm’s competitors, as captured in their stock returns.
The good news is that firms are not powerless against these data breach effects. There are actionable strategies they can use to protect or inoculate themselves from their own or a rival’s breach. Using studies querying hundreds of customers that we recruited on Amazon Mechanical Turk, coupled with stock data analysis of hundreds of companies over the past decade, our research finds that firms can protect themselves from data breach harm by implementing two important privacy-focused practices that benefit customers.
First, they can clearly explain to customers how they are using and sharing their data. Transparent privacy practices tell customers what specific information companies capture and how they use it (for example, IP address, search history, promotions, information being sold to third parties). Second, firms can give customers ample control over the use and sharing of their data. Control is endowed through giving customer opportunities to opt out of the firm’s data practices (promotions, sharing with partners, selling). Together, these measures were perceived to effectively empower customers, giving them greater knowledge and the ability to have a say in business practices.
Why Study Privacy Policies?
When a firm had transparent privacy practices, customers in our studies felt they had the knowledge to make an informed decision about sharing their personal data. When a firm’s privacy practices offered control, customers knew they had the ability to change their preferences about what and how they share their information. In our studies, customers did not punish breached firms that provided both transparency and control. Empowered customers are more willing to share information and are more forgiving of data privacy breaches, remaining loyal after the fact, as we learned. Customers of firms that offer high transparency and control reported feeling less violated from big data practices, attested to being more trusting, provided more-accurate data to the firm, and were more likely to generate positive word of mouth.
Firms high on these two dimensions also were buffered from stock price damage during data breaches, either their own or rivals’. Yet only about 10% of Fortune 500 firms fit this profile.
To study how a firm implements practices that provide transparency and control, we needed to look at the documented ways in which companies explain their approach to customer data privacy. By studying their use of transparency and control in their privacy policies, we wanted to understand how protected Fortune 100 firms were from the negative effects of data breaches. Our research team combed the privacy policies of all Fortune 100 firms to gain insights.
Our findings show that some firms provide high levels of data transparency and control, and would be protected from data breaches. (See our ranking in the exhibit “How Good Are the Fortune 100’s Privacy Policies?”) Top-ranked firms such as Costco, Verizon, and HP would be shielded from spillover effects were a close competitor to experience a data breach. These firms clearly convey what information they capture and how they capture it, while offering their customers substantial control or say in that information’s sharing and use.
On the other end of the ranking are firms such as Citigroup, Morgan Stanley, and HCA. In 2011 Citigroup experienced a data breach of 146,000 customer records and suffered a $1.3 billion stock value loss. According to our analysis, if Citigroup had embraced practices of high transparency and high control, it would have suffered a loss of only about $16 million in stock value. That is, Citigroup might have saved about $820 million had it simply offered its customers high transparency and control. In response to this breach, Citigroup spent $250 million on cybersecurity systems and hired an additional 1,000 IT professionals. Yet our coding of its practices reveals that, as recently as 2016, Citi still was not providing high levels of transparency and control. Thus, while its enhanced IT safeguards may be sound, our research shows the company remains at risk should a competitor suffer a breach.
Company Ranking Methodology
We created transparency and control variables with procedures that employed a mix of automation and manual coding of companies’ actual privacy policies.
Specifically, for the textual coding procedure, we employed two research assistants who were blind to the study hypothesis. Prior to coding the privacy policies, the two research assistants were independently trained on a sample of privacy policies (that were not part of the final sample) to use the coding scheme. One of the authors checked to ensure the research assistants understood the coding scheme. After obtaining all the privacy policies, each research assistant independently coded them. Finally, after all the privacy policies were coded, the interrater agreement between the two research assistants was greater than 85%, and all disagreements were resolved through discussion with the first author.
To create our rankings, we compiled the summed scores of transparency and control for all firms. Rankings were achieved by summing the combined transparency and control scores. It follows that some firms had identical scores on both dimensions, and in such cases they appear according to alphabetical order in the ranking.
Looking across the rankings, other firms appear to offer one of these aspects to customers. For example, some firms provide transparency, but fail to give customers the ability to act on this information (low control). In our research, this approach was poorly received by customers.
Finally, firms that neither tell customers how they use their data nor offer any control are at the greatest risk of financial harm. Our privacy analysis showed that an overwhelming 80% of Fortune 500 firms fall into this category. In our study, firms that failed to explain their data privacy practices had a 1.5 times larger drop in stock price than firms with high transparency, while firms that provided customers high control had no significant change in their stock price after a data breach.
Ultimately, firms can use data privacy practices to protect themselves from the spillover effects of competitors’ privacy failures, but their efforts to do so need to be meaningful. They must clearly explain to customers the ways in which they will access, use, share, and protect customer information, and it must go hand in hand with giving customers control over these data uses. Failure to do so leaves a firm susceptible to risk from multiple harms.
Editor’s note: Every ranking or index is just one way to analyze and compare companies or places, based on a specific methodology and data set. At HBR, we believe that a well-designed index can provide useful insights, even though by definition it is a snapshot of a bigger picture. We always urge you to read the methodology carefully.