September–October 2019

The CEO of Canada Goose on Creating a Homegrown Luxury Brand

After working at his family’s coat manufacturing company for a few years, the author realized that high-end coats made in Canada could become a luxury product globally. Targeting European consumers first, he introduced the brand and then marketed it in innovative ways, including outfitting polar explorers and TV and film crews who were shooting in remote cold-weather locations. Perhaps most important, he committed to domestic manufacturing and opened factories across Canada along with training centers for sewers. This paved the way for phenomenal growth and a successful IPO.

Today the company has stores in 12 cities around the world and runs an international e-commerce business. Its focus on delivering an exceptional experience inspired the creation of “cold rooms” in the stores where shoppers can test products in temperatures as low as –25 Celsius before they make a purchase.

As Canada Goose expands organically and through acquisition, Reiss says, the company will continue to make its coats in Canada and other products wherever it can get the highest-quality products at the scale it needs.

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How Dual-Career Couples Make It Work

In her study of more than 100 couples around the globe, the author found that dual-career couples tend to go through three transitions when they are particularly vulnerable: when they first learn to work together as a couple; when they go through a midcareer or a midlife reinvention; and as they reach the final stages of their careers. Those who communicate at each transition about deeper work and personal issues such as values, boundaries, and fears have a better chance of emerging stronger from each one, fulfilled both in their relationships and in their careers.

One Couple’s Perspective

Tamar Dane Dor-Ner, a managing partner at Bain, and her husband, Dan Krockmalnic, general counsel for the Boston Globe, talk in a Q&A with HBR editors about how they support each other, how they divide child care and other domestic responsibilities, the benefits each realizes from the other’s job, and what challenges the future might hold.

The Spouse Factor

When the author, a professional recruiter with Korn Ferry, speaks with candidates about potential job opportunities, one of the first questions she asks is whether there’s anything in their family situation that she should know about—meaning, Will the family make a candidate reluctant to relocate for a new job? Here she describes how candidates’ spouses who have their own demanding careers can be a factor in job searches, how she approaches this challenge, and how she has managed the trade-offs in her own dual-career marriage.

Living Apart for Work

In an interview with HBR executive editor Ania Wieckowski, Lindemann, a sociologist at Lehigh University and the author of Commuter Spouses, describes the lifestyles of “commuter couples” who choose to live apart to further their careers. She highlights the factors that go into making that choice and some ways that couples deal with their separation: how they stay in touch, manage conflict, and reunite after time apart. She also discusses the personal as well as professional benefits of their living situation.

The complete Spotlight package is available in a single reprint.

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Don’t Let Metrics Undermine Your Business

Every day, at almost every company, strategy is being hijacked by numbers. Because strategy is abstract, employees often mentally replace it with the hard metrics meant to assess whether the organization is succeeding at it. This tendency is called surrogation, and it destroys a lot of value. Take Wells Fargo. Executives there decided to track cross-sales to customers to measure performance on the bank’s strategy of building long-term customer relationships. The focus on cross-selling goals led employees to open 3.5 million accounts without customer consent, which, with brutal irony, severely damaged the long-term relationships the bank sought.

Though it’s easy to fall into the surrogation snare, firms can take steps to avoid it. For instance, they can involve the people who’ll implement a strategy in its formulation, so they’ll be more likely to grasp it and less likely to replace it with a metric. Tying financial incentives to a metric is usually a mistake: It only increases the focus on the numbers. Using multiple yardsticks is very helpful, however; that highlights the fact that no single metric captures the strategy and makes people less apt to surrogate.

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Put Purpose at the Core of Your Strategy

Eight years ago, Malnight, Buche, and Dhanaraj launched a study of high growth in companies, looking at three strategies known to drive it: creating new markets, serving broader stakeholder needs, and rewriting the rules of the game. To their surprise, they discovered a fourth driver they hadn’t considered at all: purpose.

Companies have long been building purpose into what they do, but usually it’s seen as an add-on—as a way to, say, give back to the community. The high-growth companies in the study, in contrast, had made purpose central to their strategies, using it to redefine playing fields and reshape value propositions. The purpose of Mars Petcare, for instance—a better world for pets—guided its expansion from pet food into the larger ecosystem of pet health. The purpose of Securitas—contributing to a safer society—led the firm to redesign its offering to include not just physical guards but electronic services and predictive solutions.

This article explains how executives can develop and implement a purpose at their organizations. It also describes the benefits they’re quite likely to see once they do: a more unified organization, more-motivated stakeholders, broader impact, and more profitable growth.

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The Dangers of Categorical Thinking

Human beings are categorization machines, taking in voluminous amounts of messy data and then simplifying and structuring it. That’s how we make sense of the world and communicate our ideas to others. But according to the authors, categorization comes so naturally to us that we often see categories where none exist. That warps our view of the world and harms our ability to make sound decisions—a phenomenon that should be of special concern to any business that relies on data collection and analysis for decision making. Categorical thinking, the authors argue, creates four dangerous consequences. When we categorize, we compress category members, treating them as more alike than they are; we amplify differences between members of different categories; we discriminate, favoring certain categories over others; and we fossilize, treating the categorical structure we’ve imposed as static. In the years ahead, companies will have to focus attention on how best to mitigate those consequences.

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Can China Avoid a Growth Crisis?

In 2018, Fortune’s Global 500 ranking included 111 firms headquartered in China—just a handful fewer than the United States’ 126. In 1995, only three Chinese firms made the list; in 2018, three were in the top 10. No wonder some observers predict that China will soon overtake the U.S. as the home to the highest number of Global 500 firms.

It’s entirely possible that this could happen, but the triumph may be fleeting. In the late 1990s, Japanese firms came close to outnumbering U.S. companies on the list, until a combination of a graying workforce and declining productivity caused them to slide back off. Japan’s experience, which is similar to that of China today, provides an uncomfortable precedent for the consequences of a slowdown in domestic growth.

To keep their places on the Global 500, Chinese companies will have to develop a global mindset more characteristic of multinationals from small countries like Switzerland, a transformation that has to date eluded most Japanese businesses.

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Back Channels in the Boardroom

The agendas of company boards are so packed that it’s hard to get to every question and concern during regular meetings. So between meetings, directors do what members of a team always do in this situation: They start having conversations on the side.

Conducted properly, side discussions allow directors to work together efficiently—to trade opinions, share information, and exert influence. But conducted improperly, they encourage political maneuvering, marginalize members with key expertise, foster inappropriate alliances, and lead to poor decisions. They shut out diverse input, and they make boards dysfunctional.

The authors started examining side conversations three years ago as part of a larger study of board dynamics. In this article they share what they’ve learned about how directors should approach them. High-functioning boards, for instance, set clear rules of engagement and regularly review whether they’re following them. They create onboarding processes, help directors form personal relationships, and take measures to maintain trust—such as ensuring that every member is briefed on all relevant information before formal discussions restart.

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A New Approach to Contracts

In an era when businesses increasingly have to depend on their suppliers to lower costs, improve quality, and drive innovation, traditional contracts don’t work. They often undermine the partnerlike relationships and trust needed to cope with external uncertainty.

The remedy is to adopt a totally different kind of arrangement: a formal relational contract that creates a flexible framework designed to foster collaboration in complex strategic relationships over the long term. These contracts, which are legally enforceable, specify mutual goals and establish governance structures to keep the parties’ expectations and interests aligned.

They are especially useful for complex purchasing arrangements, outsourcing, strategic alliances, joint ventures, franchises, public-private partnerships, large construction projects, and collective bargaining agreements.

Crafting a formal relational contract involves five steps: laying the foundation, cocreating a shared vision and objectives, adopting guiding principles, aligning expectations and interests, and creating systems for staying aligned.

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In the Ecosystem Economy, What’s Your Strategy?

In many contexts, the firm is no longer an independent strategic actor. Its success depends on collaboration with other firms in a designed ecosystem spanning multiple sectors. In these cases, traditional strategy frameworks are of little help. Instead, the author says, companies should focus on five questions:

Can you help other firms create value? Success is as much about helping other firms innovate as it is about innovating yourself.

What role should you play? You don’t necessarily need to be the chief architect of your ecosystem; sometimes you’re better off sharing the role or being a complementor.

What should the terms be? There are two key governance choices: who can access the ecosystem, and how exclusively attached your partners must be.

Can your organization adapt? Customers’ needs and complementors’ desire and ability to collaborate can shift dramatically, requiring changes in your allocation of resources.

How many ecosystems should you manage? Some successful orchestrators head up multiple ecosystems—each covering a different part of the business, and each leading to a different path for expansion.

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Learning to Work with Intelligent Machines

Although companies spend billions on formal training for employees, most of the skills needed to perform a specific job can be learned only by doing it. This on-the-job learning (OJL) has long depended on mentorship, with experts coaching apprentices. But today OJL is under threat from the headlong introduction of sophisticated analytics, AI, and robotics into many aspects of work. These technologies are moving trainees away from learning opportunities and experts away from the action. The author describes the “deviant,” rule-breaking work-arounds—“shadow learning”—that surgeons in training, police officers, M&A analysts, and others are figuring out on their own to overcome these obstacles and suggests how companies can benefit from studying them.

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Coaching for Change

Whether you’re a boss, a colleague, or a friend, you can help the people around you make important life-enhancing changes. But the way to do that isn’t by setting targets for them and fixing their problems; it’s by coaching with compassion, an approach that involves focusing on their dreams and how they could achieve them. Instead of doling out advice, a good coach will ask exploratory, open-ended questions and listen with genuine care and concern. The idea is to have coachees envision an ideal self (who they wish to be and what they wish to do), explore the real self (not just the gaps they need to fill but the strengths that will help them do so), set a learning agenda, and then experiment with and practice new behaviors and roles. The coach is there to provide support as they strive to spot their learning opportunities, set the groundwork to achieve change, and then see things through.

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