March–April 2022

The CEO of Roblox on Scaling Community-Sourced Innovation

When Roblox launched, in 2004, its user base was made up of friends, family members, and about 100 tech enthusiasts recruited via Google ads to serve as impartial advisers. The idea was simple but ambitious: create an online space where people from anywhere in the world could do anything—construct buildings, run businesses, battle enemies, play sports, attend concerts—together. Everyone agreed that user-generated content (UGC) would be the key to making the platform great. Sixteen years later Roblox boasts nearly 50 million active daily users and millions of developers, who have created experiences such as Let’s Be Well, a game about recovering from depression, and Royale High, a virtual high school. Thanks to their own creativity, Robloxers can now walk fashion show runways, experience an eagle’s flight, or figure out how to flee natural disasters with friends. The company’s decision to embrace UGC opened it up to a whole new world of innovation, well beyond what its employees could envision or manage. Roblox achieved it with a culture that values long-term thinking, employees with a founder’s mindset, a laser focus on end users, and an organizational structure that helps them stay creative and engaged.

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What Is the Purpose of Your Purpose?

“Despite its sudden elevation in corporate life,” the authors write, “purpose remains a confusing topic.” They argue that a primary cause of this confusion is that the word is used in three senses: Cause-based purposes (such as Patagonia’s “in business to save our home planet”) tend to receive the most attention. Competence-based purposes (such as Mercedes’s “First Move the World”) express a clear value proposition to customers and the employees responsible for delivering that value. Culture-based purposes (such as Zappos’s “To Live and Deliver WOW”) are effective at creating internal alignment and collaboration with key partners. The authors offer advice about identifying what sort of purpose will best suit your company without misrepresenting it.

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The Messy but Essential Pursuit of Purpose

Most forward-thinking executives have embraced the notion that purpose-driven companies can solve social and environmental problems while also generating wealth, creating win-win outcomes that benefit everyone. But ideal solutions are rare. Many purpose-driven companies revert to a profit-first strategy if the going gets tough. Others doggedly pursue purpose but then find that their businesses are unsustainable. Using case studies on Etsy, Livongo, and other diverse companies, the author offers practical examples that leaders can use to think creatively about how to deliver as much benefit as possible to all their stakeholders.

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Use Purpose to Transform Your Workplace

Is keeping pace with the future of work incompatible with using purpose to guide the organization? Unilever is stretching its well-known commitment to purpose for a new and daunting challenge—the transformation of its workforce of more than 149,000 employees. Its Future of Work program involves purpose-focused workshops for all employees that are designed to help them choose their future jobs, whether with the company or elsewhere. Many organizations assume that workforce transformations require painful layoffs. Unilever believes that such an approach represents a missed opportunity and is ultimately counterproductive. It has pledged to undertake a workforce transformation guided by its commitment to decency and sustainability.

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Purposeful Business the Agile Way

Record numbers of employees are quitting their jobs, and others are hitting picket lines to demonstrate a growing conviction that life is too short to waste on demoralizing work. Concern about social inequities and environmental damage is escalating. Executives see these problems, but few know how to transform a profit-maximizing system into a purpose-driven one without jeopardizing the future of their businesses and their own careers. Agile ways of working can help, turning squishy debates about corporate purpose into real actions and results.

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Managing a Polarized Workforce

One of the toughest challenges leaders face is managing diverse perspectives—and given heightened tensions over politics and movements such as #MeToo and Black Lives Matter, that’s more difficult today than ever before. At the same time, productive disagreement and engagement with opposing views are crucial to high-functioning teams and organizations. So how can leaders both foster passionate debate and preserve collaboration and trust?

Drawing from work conducted with scholars of psychology, sociology, and management, Harvard’s Julia A. Minson and Francesca Gino offer advice for leaders on approaching disagreements productively and helping employees at all levels do so. Tactics include training that defuses fears of disagreeing (it’s usually not as unpleasant as we expect); encourages people to cultivate a receptive mindset by, for instance, intentionally considering information from the opposing perspective; teaches people to choose words carefully, hedge claims, and emphasize areas of agreement; and fosters a culture of tolerance through actions and tone. Honing these skills takes time and practice, but the resulting decrease in frustration and negativity is well worth the effort.

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Data-Driven Diversity

Many companies today recognize that workforce diversity is both a moral imperative and a key to stronger business performance. U.S. firms alone spend billions of dollars every year to educate their employees about diversity, equity, and inclusion (DEI). But research shows that such training programs don’t lead to meaningful change. What’s necessary, say the authors, is a metrics-based approach that can identify problems, establish baselines, and measure progress.

Company managers and in-house lawyers often worry that collecting diversity data may yield evidence of discrimination that can fuel lawsuits against them. But there are ways to minimize the legal threats while still embracing the use of metrics.

The authors suggest first determining your risk tolerance and then developing an action plan. You will need to track both outcome metrics and process metrics and act promptly on what you find. Starting with a pilot program can be a good idea. You should also build the business case for intervention, control expectations through careful messaging, and create clear protocols for accessing, sharing, and retaining DEI data.

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Robots Need Us More Than We Need Them

Research shows that companies that are investing heavily in digital technologies to harness the power of human-machine collaboration are dramatically improving their bottom lines. But it takes people to conceive of and manage the innovations, and the authors are convinced that success in the future depends on a human-centered approach to artificial intelligence (AI).

In this article they present their IDEAS framework, which calls for attention to five elements of the emerging technology landscape: intelligence, data, expertise, architecture, and strategy. The authors discuss each of these in turn, examining how companies such as McDonald’s, Etsy, and the online grocer Ocado have implemented human-driven AI processes and applications to become leading players in their industries.

If you’re eager to transform your own business, the IDEAS framework can help you develop a road map for AI-enabled innovation.

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Managers Can’t Do It All

In recent decades sweeping reengineering, digitization, and agile initiatives—and lately the move to remote work—have dramatically transformed the job of managers. Change has come along three dimensions: power, skills, and structure. Managers now have to think about making their teams successful, rather than being served by them; coach performance, not oversee tasks; and lead in rapidly changing, more-fluid environments. These shifts have piled more responsibilities onto managers and required them to demonstrate new capabilities.

Research shows that most managers are struggling to keep up. A crisis is looming, say Gherson, a former corporate chief human resources officer, and Gratton, a London Business School professor. Some organizations, however, are heading it off by reimagining the role of managers. This article looks at three—Standard Chartered, IBM, and Telstra—that have helped managers develop new skills, rewired systems and processes to support their work better, and even radically redefined managerial responsibilities to meet the new priorities of the era.

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Creating High-Impact Coalitions

Traditionally, responses to crises and societal problems—the Covid-19 pandemic, natural disasters, racial inequities—are considered the responsibility of the public sector and NGOs. But addressing the world’s most critical problems requires leadership, resources, and skills beyond those of any single organization, industry, sector, or government. What’s needed, the authors argue, is high-impact coalitions—an emerging organizational form that reaches across boundaries of business, governments, and NGOs.

Although public-private partnerships have existed for some time in various forms, large cross-sector, multistakeholder initiatives are newly resurgent and not yet widely understood. They are more voluntary and relationship-based than formal organizations but more task-directed than networks. They connect otherwise disparate spheres of activity that bear on big problems by aligning powerful actors behind a purpose-driven mission. Once underway, they can harness and utilize capabilities quickly and flexibly.

This article describes the features of high-impact coalitions and sets out five principles that make the difference between success and failure.

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Customer Experience in the Age of AI

Companies across all industries are putting personalization at the center of their enterprise strategies. For example, Home Depot, JPMorgan Chase, Starbucks, and Nike have publicly announced that personalized and seamless omnichannel experiences are at the core of their corporate strategy. We are now at the point where competitive advantage will be based on the ability to capture, analyze, and utilize personalized customer data at scale and on how a company uses AI to understand, shape, customize, and optimize the customer journey. The obvious winners have been large tech companies, which have embedded these capabilities in their business models. But challenger brands, such as sweetgreen in restaurants and Stitch Fix in apparel, have designed transformative first-party, data-driven experiences as well.

The authors explore how cutting-edge companies use what they call intelligent experience engines to assemble high-quality customer experiences. Although building one can be time-consuming, expensive, and technologically complex, the result allows companies to deliver personalization at a scale that could only have been imagined a decade ago.

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The Real Secret to Retaining Talent

In today’s knowledge economy, employees with unique skills have a profound impact on organizations. It’s crucial to keep them happy. Many managers believe that compensation is the key (as the eye-popping rewards paid to employees in the upper echelon show). But truly talented people aren’t highly motivated by money. Feeling special is far more important to them. You must treat stars like valued individuals, not like members of a group, even an elite one. To do that, respect these three never-dos:

Never dismiss their ideas.

The Green Bay Packers learned this the hard way when they had a falling out with Aaron Rodgers because he wasn’t given a voice in decisions affecting his ability to lead his team to victory. The videoconferencing provider Webex made this mistake too; it gave no traction to a proposal for a phone-friendly platform made by star exec Eric Yuan, who got frustrated and left to start megarival Zoom.

Never block their development.

Enabling stars to keep growing will win their loyalty. But if they feel their way forward has been barred, they’ll take their skills to an organization they think will clear a path for them.

Never pass up the chance to praise them.

Extraordinary people spend all their time doing hard things. If they don’t get recognition, they will drift away or become resentful.

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A Better Way to Assess Managerial Performance

Total shareholder return (TSR) has become the definitive metric for gauging performance. Unlike accounting measures such as revenue growth or earnings per share that reflect the past, TSR is based on share price and thus captures investor expectations of what will happen in the future, which is its chief attraction.

The problem is that TSR conflates performance associated with strategy and operations with that arising from cash distributions (dividends and buybacks). In this article, the authors discuss the distortions embedded in TSR and propose a new metric, core operating shareholder returns, that emphasizes operational performance. It also provides a comprehensive assessment of the buyback revolution—and the verdict is quite damning.

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When to Cooperate with Colleagues and When to Compete

The ability to navigate workplace relationships can make or break your career. Though it’s easy to view them as simply negative or positive, virtually all are a mix of both and require careful thought to manage. The trick is to step back and dispassionately analyze what type of relationship you’re in—conflict, competition, independence, cooperation, or collaboration. Where on that spectrum you and your colleague fall will be determined by the degree to which your interests align—or clash. The more in sync interests are, the more positive a relationship is. Each type calls for a different set of tactics, but even the negative relationships, if handled appropriately, can still yield rewards.

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