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Will the Huawei Arrest Influence the U.S.-China Trade Talks?

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The arrest of Meng Wanzhou, chief financial officer of China’s Huawei, by Canadian police upon the request for extradition by the U.S. Federal Bureau of Investigation has resulted in confusion regarding U.S.-China trade negotiations.

Some believe hardline national security elements of the U.S. government ordered the extradition request in order to sabotage the trade talks or at least to disregard them in the historic tradition of U.S. national security agencies putting their concerns above trade issues.

Some believe that President Trump ordered the extradition request as a way of bringing pressure to bear on Chinese President Xi Jinping for further trade concessions.

Some believe the U.S. has a vendetta against Huawei and senselessly got carried away by its hatred in a way that may undermine the trade discussion.

As it happens, the truth is almost certainly much less exciting.

Let’s start with the last issue. It is true that the U.S. government has a deep concern regarding Huawei. But that concern is not entirely without foundation. Huawei is the world’s largest telecommunications-equipment maker. Its founder came from the People’s Liberation Army  and has had a continuing close relationship with the PLA as well as with other security agencies of the Chinese government. It has been the beneficiary of extensive government subsidies, contracts, protection, and, some say, government-sponsored hacking of foreign technology companies and of the U.S. government.

The U.S. government has charged Huawei with illegally selling U.S. components to Iran, and the FBI has been tracking Huawei executives for some time for purposes of making an arrest. It was fortuitous that Meng happened to be in Canada when she was, but the FBI move was not made in a sudden fit of anger. The warrant for arrest had been out for some time.

Did a group of hawks deliberately try to sabotage the trade talks? The Chinese probably wouldn’t mind if this view were widely believed, but it seems unlikely. In the first place, the real hawks are the administration’s trade negotiators led by U.S. Trade Representative Robert Lighthizer and Assistant to the President Peter Navarro. They certainly didn’t want to sabotage themselves. Moreover, since the timing of the arrest was fortuitous, it was not something that could have been purposely arranged to sabotage the trade talks.

If it’s true that Trump and Lighthizer did not know of the arrest in advance, it does raise the issue of why no one told them. There are two possible explanations. One is that the FBI was focused on its case and simply didn’t think of the arrest in the context of the trade talks. However, National Security Adviser John Bolton was informed but did not pass the information on to the president. Informing the national security adviser would be a natural thing to do in this kind of a situation.

Why didn’t Bolton inform the president? One possible answer is that he saw it was a case of the FBI simply doing its job and thus there was no reason to interrupt the president who was in the midst of discussions with President Xi. Another is that Bolton is a national security hawk who might prefer a breakdown in trade talks that might relieve pressure within the U.S. government to take more vigorous defense measures with regard to China. Or maybe it was a combination of the two. Take your pick.

What about the notion that the president ordered the arrest precisely in order to wring more trade concessions from Xi? This is unlikely. First, the timing was unpredictable, and the president could not have known in advance that an arrest was even possible. Second, intertwining the arrest with the trade talks would be more likely to undermine the talks than to lead to greater concessions.

Of course, the president subsequently has thrown doubt into the equation by stating that he would intervene to halt proceedings against Meng if he got a really big trade deal from Xi. But the fact is that the president does not have the authority to intervene in the legal proceedings against Meng. So his statement seems to be something he thought of subsequent to, rather than before, the arrest.

A key part of the equation is Lighthizer’s strong insistence that the talks and the arrest are two completely different and unrelated activities. He knows the Chinese would probably like a public perception of some kind of relationship because that would weaken his negotiating hand. So he is emphasizing that the talks and the arrest are not at all entangled. Since Lighthizer would be the big loser in the case of any entanglement, it is easy to believe he was not part of any nefarious scheme.

In summary, it’s highly likely that Meng’s arrest and the new U.S.-China trade talks were not initially related. The degree to which the Chinese government and the Trump administration allow them to become part of the negotiations remains to be seen. I just hope that the Trump administration keeps them separate. Too many times in the past, the U.S. government has needlessly sacrificed crucial trade priorities to the goals or concerns of national security agencies. It would be a shame for that to happen again.

Case Study: Should a Direct-to-Consumer Company Start Selling on Amazon?

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Sitting in his office, Mark Ellinas frowned at his computer screen. It was filled with row after row of electric bikes, from expensive models to cheap knockoffs that seemed held together by spit and a prayer. Though they varied in style and price, the bikes did have one thing in common: where they were being sold. The website he was looking at, flush with options, was Amazon.

As the CMO of PedalSpark, a small maker of high-end electric bicycles, Mark was considering strategies for selling the company’s new ride. The market for electric bikes had exploded in the past few years, especially in China, and it showed no signs of slowing down. PedalSpark’s signature bike, a $4,000 luxury model available only through the company’s website, was selling well and had been named to a few “best e-bike” lists. Now PedalSpark was about to introduce a cheaper, entry-level model, which it hoped would have broader appeal. The bike was targeted at price-sensitive riders, people who were willing to trade higher battery life and motor power for a lower price tag.

Editor's Note

This fictionalized case study will appear in a forthcoming issue of Harvard Business Review, along with commentary from experts and readers. If you’d like your comment to be considered for publication, please be sure to include your full name, company or university affiliation, and email address.

Two years ago PedalSpark had hired Mark away from his marketing position at a children’s bicycle maker. That company had sold exclusively on its own site, and Mark’s expertise had served PedalSpark well with its first product. He was excited by the challenge of selling the new bike in an increasingly crowded market, but the question was how to do it.

His two direct reports were split. Gideon Bear, the sales manager, tended to favor aggressive approaches. He wanted to sell the new model on Amazon, which had, as he’d put it, “a few more customers than our site.” But Tamar Nourse, the product manager who’d recently come on board, was worried about whether the bike would stand out on Amazon. She thought that keeping the new model on PedalSpark’s site, where their team could control the entire sales process, would be better over the long term.

Bzzt. Mark glanced at his phone and saw a text from the CEO: Where are we on the online channel strategy? Looking forward to your presentation. The new model was almost ready, and the CEO wanted a decision soon. With the presentation scheduled in two days, Mark still had some time to think—but not much.

Giving Information to the Enemy

Mark closed his laptop and walked down the hall to Tamar’s office. He knocked on the open door. “Hey, got a minute?”

Tamar looked up and adjusted her thick-rimmed glasses. “Hi, Mark. What’s up?”

He sat down across from her. “So, about the bike. In the meetings with Gideon it feels like you’ve been holding something back. We have to make a decision, so I need you to tell me what you aren’t telling me.”

She took a deep breath. “Mark, I’m still new here, and I don’t want to rock the boat. But I really think selling on Amazon would be a terrible move for us.”

“Why, though?”

“The day we put the bike on sale, Amazon will start vacuuming up information about our customers, our margins, and the market’s potential. If it ever decides to get into the e-bike business, we’ll have hand-delivered all the data it needs to squash us.”

“I know worrying is part of your job, but is it possible you’re being a little paranoid here?”

“You should ask my B-school classmate Marta.”

“Who is she?”

“A few years ago she was the founder and CEO of a successful start-up. She’d had an idea for a new kind of tablet stand. She spent a year developing a prototype and finding a manufacturer in China that would work with her. Then she started selling on Amazon. Now she’s the former CEO of a company that doesn’t exist anymore.”

“Wow. What happened?

“For about a year the tablet stand got great reviews and sold well at $40 each. During the back-to-school season, she was moving a few thousand a month. Then a bunch of copycat products started popping up. She had to fight them off as best she could. She complained to Amazon, but it didn’t do anything, of course. Then AmazonBasics debuted its new tablet stand. It was a lot like hers, though different enough to avoid a lawsuit. It was also half the price.”

“E-bikes are a lot more complex than tablet stands, though. What are the chances Amazon will make one of its own?”

Tamar’s lips curled into a small smile. “I don’t know, but if we went head-to-head against Jeff Bezos, would you put your money on us? Amazon’s private-label products are projected to hit $25 billion in sales by 2022.”

Mark shuddered. “A dark thought to have before lunch. How do you figure our chances against the existing competition?”

“We do have great bikes, but quality isn’t enough on Amazon. Whatever your product is, there’s always a cheaper version, and usually that’s the one people buy. It’s a never-ending, anything-goes price war there. I’m guessing that isn’t what we want people to associate with our brand.”

Nodding slowly, the CMO rubbed his chin. “Good point, and I don’t disagree. Gideon is pretty keen on the Amazon idea, though.”

Tamar adjusted her glasses again. “I get why—more customers and more visibility. That may help us sell bikes in the short term, but what about the long term? If people buy the new model on Amazon, will they be loyal to the maker or to where they bought it? We built the PedalSpark brand by selling the luxury bike on our website. Why try to fix what’s already working?”

Trying Something New

That afternoon, Mark asked Gideon to meet him in the cafeteria for coffee. The sales manager poured milk into his steaming cup and swirled it around with a straw. “Amazon, Mark. You know what I think. What are you thinking?”

“Undecided. There’s a lot of risk in selling the bike there, but a lot of upside, too.”

“Yes! I’m glad you see that. Amazon Prime has over 100 million members, and it’s growing. Imagine the sales if a fraction of them ordered the new bike—and imagine how many of them will if two-day delivery is available. Someone gets excited about e-bikes on a Wednesday, and by Friday she has one of her own to ride. The possibilities are endless.”

“It’s fun to daydream about, Gideon, but are we set up to handle higher volume and a shorter fulfillment window? Orders that come through our site have a shipping time of two weeks. I’m nervous about promising something we can’t deliver—and to a bunch of new customers, no less.”

“But that’s the beauty of Amazon,” Gideon said, his voice rising in excitement. “We have options. I know I’m telling you your job right now, but we can sell product to Amazon for it to resell, or sell the bikes ourselves and let Amazon handle the warehousing and shipping, or list them on Amazon and ship them on our own. You’re always talking about the value of running small, controlled experiments, so let’s try one and see what happens. If it doesn’t work, we’ll switch tactics and adapt as we learn.” He grinned. “Everyone in this company agrees we have a great new product. All I want is to get it to as many people as possible.”

“There are three options, yes, but they don’t give us a lot of wiggle room if things go badly. We may be able to play with the bike’s price a bit, but we can’t lower it that much or we won’t make any money—and it could make us look cheap, too. I do think a higher price point is fair for the bike we’re selling. Even luxury brands that sell on Amazon today hesitated about it for a long time, and it would be a good idea for us to think about why that is. The jury is still out on whether luxury brands benefit from being on Amazon.”

“You know who sells on Amazon? Apple. Versace. Rolex. Jimmy Choo, Mark—Jimmy Choo. And more will follow. Whichever companies don’t will be on the wrong side of retail history.”

“We aren’t Versace, Gideon. Besides, a lot of those brands sell a very small subset of their products on Amazon—and usually not their flagship ones. They save those for their own sites or stores, where they can control the buying experience. We’re trying to raise our profile as a high-end brand, right? How would we look if we were one of dozens of e-bikes in Amazon’s listings?”

“Sure, but we already have the luxury bike selling well on our site. I agree, we shouldn’t change anything there. But the new bike is for everyone. And everyone is on Amazon.”

Mark took a sip of coffee, thinking.

“Look, I get it, you have some concerns,” Gideon continued, “so let’s talk numbers. Based on what our competition is doing, I figure if we put the new bike on Amazon, we can reasonably expect to sell 10,000 units a year.”

“At what price point?”

“$899. That’s a little higher than we’ve been talking about, but it gives us some room to go lower when we need to.”

“And what are the latest numbers for luxury bike sales on our site?”

“Last year we sold 2,000 units at $4,000 apiece. Remember, the new bike won’t be only on Amazon. We’ll sell it on our site, too.”

Mark scratched his head. “What we really need is a way to quantify the risk that Amazon will enter the e-bike market. It would make this so much easier.”

“That’s the big mystery. Amazon will have all the consumer data, and we’ll have very little of it. But look at it this way—there are already a lot of e-bikes on Amazon, so they’re already watching the market. Even if they do make their own bike, that could be years away. We might as well find new customers while we can. People can’t buy our bikes if they don’t know about them.”

Mark stared at Gideon for a long moment. “Let me ask you something. How are you so sure about all this?”

Gideon laughed. “In my moments of doubt, I think of Instant Pot. It’s a quality appliance—not quite luxury, but good—that has a cult following and that made its name on Amazon. At one point, 90% of its sales were from there. Do you know how many Instant Pots were sold on Prime Day this year?”

“No, but I’m a little surprised you do.”

“I cook a lot. The number, Mark, is 300,000. In just 36 hours. I think we could be the Instant Pot of e-bikes.”

The CMO stirred his coffee. “You may be excitable, but I’ll admit it’s kind of contagious. I just can’t shake the feeling that once we open the door to Amazon, there will be no closing it.”

Gideon held up his coffee for a toast. “To opening the door—just a crack—and seeing what’s behind it.”

Searching for Answers

Back in his office at the end of the day, Mark was staring at his computer again. Tamar and Gideon seemed so sure of what to do, but the CMO was struggling to make up his mind. Both ways forward had their merits.

The screen of his laptop still showed the Amazon site, with its rows of e-bikes. Sighing, Mark opened Google and typed “What are the dangers of selling on Amazon?” into the search bar. The query returned almost 250 million results.

“Hard to tell whether there are more horror stories or more success stories,” he muttered. “Well, this bike isn’t going to sell itself. I have to decide something, one way or another.”

Question: Should PedalSpark sell the new bike on Amazon?

Tell us what you think in the comments below. If you’d like your comment to be considered for publication, please be sure to include your full name, company or university affiliation, and email address.

How One CEO Creates Joy at Work

Richard Sheridan, CEO of Menlo Innovations, says it took him years to learn what really mattered at work and how to create that kind of workplace culture. As a company leader today, he works hard to make sure both his job — and the jobs of his employees — are joyful. That doesn’t mean they are happy 100% of the time, he argues, but that they feel fulfilled by always putting the customer first. Sheridan is the author of Chief Joy Officer: How Great Leaders Elevate Human Energy and Eliminate Fear.

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Holidays Can Be Stressful. They Don’t Have to Stress Out Your Team.

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The festive spirit is everywhere during the holiday season. For some, each day feels like waking up to a holiday song — “children laughing, people passing, meeting smile after smile.” But, for others, it can be the loneliest and most stressful time of the year. According to a 2015 Healthline survey, 44% of people say that they are stressed during the holidays, with more than 18% reporting that they’re “very stressed.” Almost half the respondents cited finances as the main culprit for their tension, while being over-scheduled, choosing the right gifts, and remaining healthy also contributed to people’s holiday woes.

“The holidays are filled with both joy and stress,” shares Ellen Braaten, PhD, in Harvard Medical School’s blog, On the Brain. Dr. Braaten blames our increased multi-tasking during the holidays as the reason the brain’s prefrontal cortex goes into overdrive. Long-term, this high-level demand on the brain can decrease memory, halt production of new brain cells, and cause existing brain cells to die. On the bright side, seasonal stress is acute, so it can be remedied. But preventing it all together should be the real goal.

Coping with personal stress is already challenging, but when combined with workplace stress, it’s no wonder holiday cheers soon devolve into holiday sneers. The American Psychological Association found that 38% of people say their stress increases during the holidays — only 8% of people say they feel happier. Employees are often contending with shortened deadlines, meeting expectations for the end of the fiscal year, and coping with stressed-out customers, which are just a few of the reasons for their increased anxiety. The resulting costs for employers can be quite significant.

Based on an analysis by Peakon of more than 15,000 employees across the U.S., the UK, the Nordic countries (Sweden, Norway, Finland, Denmark, Iceland) and Germany, 7-10% of people reported reduced productivity for the entire month of December, with 30-40% reporting a fall in productivity by mid-December. Dr. Chris Rowley, Professor Emeritus at the University of London Cass Business School, writes in his article, “Festive Celebrations: Human Resource Impacts and Costs of Christmas,” that nearly one-half of the workforce hits “festive fizzleout” by December 18th, where they spend more time worried about the holidays than about work. Rowley claims that more than two-thirds of workers were less productive throughout December, with nearly one-half admitting that they did 10-20% less work. Reasons for reductions in output included a combination of exhaustion, lack of motivation, and even hangovers. Women tend to be hit the hardest, with nearly twice as many women reporting that they are more stressed about Christmas than men.

Unfortunately, the tools most employers use to improve company culture are backfiring. The annual holiday party is a great example. According to a 2017 survey by global outplacement consultancy Challenger, Gray & Christmas, Inc., 80% of companies plan to host a holiday party. However, according to new research from MetLife Employee Benefits, 37% of employees decline to attend the company Christmas party. The most cited reason for not attending was that the holiday parties, which are typically held in the evenings, clash with family duties at home. And, for those who do attend the holiday party, there is a 77% drop in productivity the next day, with more than half of the staff wasting the first four hours of the following day because they’re recovering from the night before — which is slightly better than the 20% who call in sick. And the U.S. isn’t the only country that struggles with this dynamic. For example, the festive fallout from employee stress and lost productivity cost U.K. companies roughly £11 billion in 2016.

So how can managers help combat stress and keep both productivity and spirits up during the holiday season? Here are a just a few ways:

Reach out. Ask your staff how they want to celebrate the holidays at work this year. Poll your team — there are plenty of online tools that make it easy to do a simple survey, such as Survey Monkey or Typeform.

Be inclusive. In an interview I conducted with Ben-Saba Hasan, SVP and Chief Culture Diversity & Inclusion Officer at Walmart Inc., he shared that leaders must recognize the different ways people celebrate the holidays. “As leaders, we need to create an environment where our team members feel comfortable and safe, so that we foster greater awareness among those in the dominant culture for those whose holiday observances look different from their own.”

Mini Khroad, Chief People Officer at Khan Academy, told me in a recent interview: “The holidays should always be an important time at companies. Ensuring that employees have the ability to recognize national or other holidays, at work and in their personal lives, helps to make the workplace enjoyable for everyone.”

Protect personal time. Why not offer one extra day off leading up to the holidays for employees to attend to personal needs like gift shopping, family demands, or down-time to regroup — whatever they need.  One mandatory day off can make all the difference in employee stress levels. These small but much-appreciated gestures increase loyalty and gratitude on your staff and offer long-term payoffs. Why does this matter? Research has proven that grateful staff are more engaged, community-minded, and happier at work.

Rebalance workloads. Competing demands sit at the top of employees’ stress lists. Work and home pressures converge at this time of year, and time seems highly compressed. Plan a review of the workload and see if some project deadlines can be extended into next year. “Periods of high stress such as the holiday season represent an opportunity for managers to treat employees as individuals by understanding and appropriately responding to their specific needs,” says David Almeda, Chief People Officer at Kronos. In a recent interview I had with him, he suggested that “tactics such as rebalancing workload among team members, or allowing atypical works hours for a set period of time, will deliver results, increase employee commitment, and materially decrease employee stress.”

Give time instead of gifts. Research by neuroscientists Dr. Jordan Grafman and Dr. Jorge Moll demonstrates that we are instinctually made to give. When the subjects donated to what they considered worthy organizations, brain scans revealed that parts of the midbrain lit up — the same region that controls cravings for food, and the same region that becomes active when money is added to people’s personal reward accounts. Ben-Saba Hasan connected this thinking back to his team as they bonded over volunteering in their community this season. “I believe one of the best ways to manage stress and care for yourself is when you turn your focus toward caring for others first.”

What is important for employees themselves to remember is this: most holiday-related stressors are self-imposed and preventable. Financial stress can be avoided by purchasing less, overcommitting can be averted by saying no, multitasking brains can be managed with reprioritization, and exclusion can be prevented by reaching out. Start today. Ask someone how they’re doing. Listen with compassion, empathy, and kindness. If needed, offer help.

As we head into the busiest part of the holiday season and stress levels increase, remember:  many of us are feeling this anxiety, and much of it can be made more manageable with the tactics above. Bringing more awareness to the increased pressure your employees are feeling at home and at work during the holiday season can go a long way toward helping to keep both productivity and employees’ spirits up.

What Companies Can Do to Help Employees Address Mental Health Issues

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In November, Prince William joined a discussion on working in high-pressure environments at “This Can Happen,” the UK’s largest annual conference on mental health. Drawing on his experience as an air ambulance pilot, he noted that he had “worked several times on very traumatic jobs involving children” and that one in particular “took me over the edge.” His key to dealing with the incident: talking it through with colleagues. He pointed to the important role that leaders can play in supporting mental health by sharing their own stories — and making it safe for those who work in their organization to be open about their mental health challenges.

We at Accenture agree. We believe — and our research conducted on behalf of “This Can Happen” bears it out — that the number of people affected by such challenges is much greater than suspected or previously reported. For example, two-thirds of the UK workers we surveyed said they have experienced or are currently experiencing mental health challenges or have even had suicidal thoughts or feelings. And the vast majority, nine in 10, said they had been touched by mental health challenges in some way — affected either by their own health or by issues faced by a family member, friend, or colleague.

People are increasingly waking up to the magnitude of this issue and its importance in the world of work. It’s especially critical that people feel they can bring the issue out into the open without fear. But we see that change is slow. Just a quarter of workers said that they had seen any positive change in their workplace’s efforts over the past two years to show that mental health is important for everyone.

This matters not only for the individuals who are struggling but also for the organization. When employers create a culture that supports mental health, workers are more than twice as likely to say they love their job. They are also more likely to plan to stay with their employer for at least the next year.

What can companies actually do to take on this challenge? Research points to three keys.

Signal “it matters.” There’s a lot of concern about “opening up” at work. Many fear that doing so could limit their opportunities, get in the way of promotion, and generally be seen as a sign of weakness.

Senior leaders can make significant inroads in changing this perception by starting the conversation — talking about their own experiences and the company’s desire to actively help. In a study we completed earlier in 2018, just 14% of respondents had heard a senior leader talking about the importance of mental health. Just one in 10 had heard a senior leader talk about being personally affected.

Senior leaders can also ensure that employees at all levels are made aware of the services and support the company offers.

Raising awareness through training. It can be very hard, for both the speaker and the listener, to have a conversation about a mental health problem and then to know what to do next. Training in all forms is essential. Tools that the arsenal should contain include online training classes to help employees recognize signs of stress or mental ill health in themselves and in others, and webinars led by senior leaders.

Our own Mental Health Allies program includes both classroom-based and online training. In the UK alone, we have trained more than 1,700 employees — some 15% of Accenture’s UK workforce — to be “allies”:  colleagues others can approach in the knowledge that their discussion will be kept completely confidential. Each ally first took a short online course and then participated in a half-day classroom-based training session to increase his or her understanding of mental health challenges while building the confidence and skills to address common issues through role playing and scenario training. This training also explores the boundaries between the responsibilities of line managers, who must proactively intervene, having a duty of care to their people, and the role of a mental health ally.

Even small steps toward creating a more accepting and receptive culture can have a significant, positive effect. We found that most people who were able to talk to someone at work about the issues they faced were met with a positive reaction (one of empathy, support, kindness) from the first person they told. These individuals reported decreased levels of stress, decreased feelings of isolation, and increased confidence.

Curate and improve online tools. Most people are prepared to turn to online tools and applications for information and advice about mental health. It makes sense: They are available 24/7 and can be used anonymously. At Accenture UK, all employees have access to “Big White Wall,” a confidential, professionally managed chat environment in which they can remain anonymous.

Even companies with scarce resources to dedicate to these kinds of benefits can offer employees a curated list of the most trusted publicly available sources and provide access to those sources where possible. But it is one thing for an individual to seek support; it’s another for a company to shoulder the responsibility for curating (read: implicitly recommending) those resources to employees. More rigorous independent testing of available digital resources is needed; this would better enable companies and individuals to select those that are best suited to their needs.

The recently launched Mental Health at Work site is one exciting new resource that’s particularly valuable to smaller organizations that may not be able to offer a full range of support in-house. In one place, employers can find advice on everything from how to train line managers in mental health awareness to how to structure a full program of support.

One risk to bear in mind is the chance that an employee may over-rely on a tech resource when more direct and professional treatment is warranted. Business leaders need to ensure that they are also moving forward with in-person training and other initiatives that support mental health. And employees should understand what needs can be met online and when it’s important to get help from a medical professional.

Most employees we surveyed already actively manage their mental health and consider it at least as important as their physical health. Such a positive attitude toward managing mental health suggests that employees, and in particular millennials, are likely to welcome and embrace training and initiatives at work that help them thrive and recognize when they need help.

Much remains to be done. As Prince Williams says: “There’s still a stigma about mental health. We are chipping away at it, but that wall needs to be smashed down.”

As the lead for our mental health program in the UK, I love to run the training sessions for our new allies. As we explore the topic, one by one people tell their stories: a manager who has struggled with depression since his teens, an intern whose classmate at school took his own life, a new graduate living with a friend who has acute anxiety. A new joiner who had been caring for his girlfriend who has anorexia nervosa described being able to open up as an “utter relief” and “life changing.”

When I look around, I see how mental health challenges touch us all in some way at some time in our lives. As employers we have the power to help. To make it easier for people to talk, to help them get the support they need in the way that works for them, and to help them be their best selves at home and at work.

The author thanks Agata Dowbor, Dominic King, Dave Light, and Regina Maruca of Accenture Research for their contributions to this article.

The 5 Things All Great Salespeople Do

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The best salespeople know they’re the best. They take pride in their art form. They separate themselves from the rest of the pack regardless of circumstance. So how do they do it? What’s their secret? Are you one of them?

I’ve spent 16 years in technology sales, with most of that spent in sales leadership at Salesforce and other technology companies. I’ve had the luxury of observing great sales professionals in tech and beyond and have observed that the top performers share some of the same patterns, habits, and characteristics. I’ve distilled them down into five major categories and have begun integrating them into my work life — practicing them, honing them, teaching them. As a result, my teams have finished consistently at or near the top of the leaderboard year in and year out. Here’s what I’ve observed:

The best salespeople own everything. I used to give a speech to new salespeople, earlier in my career, titled the “It’s your fault speech.” It was very raw and full of overconfidence (chalk it up to leadership in your twenties) but the point was simple: Your success depends on you. The sales profession exists within a meritocracy. Statistically, it is not a coincidence that the same people are at the top of the leaderboard year in and year out. Some may think it’s because certain people have it easier, or are given this, or fall into that. We all have our starting points. Regardless, the most significant difference between perennial top performers and everyone else is attitude. Elite salespeople approach their goals with a total ownership mindset. Anything that happens to them, whether or not it was their doing, is controlled by them. It may not be their fault, but it is their responsibility. In the research, psychologists call this the internal locus of control. That’s a fancy way of saying that you think the power lies inside of you instead of externally. And you know what they found? Having an internal locus of control correlates with success at work, higher income, and greater health outcomes.

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This area has been the hardest to coach in my career because it seems to be so deeply rooted in one’s personality. The best way to self-assess is this: Take your current situation — your accounts, your role, your earnings — and ask yourself these questions: How did I get here? Did I build the right relationships? Did I put in the extra work? Did I speak up? Did I blame others for my failures but take credit for my successes?

You must own everything.

The best salespeople are resourceful. MacGyver was a popular show when I was in fifth grade. My friends and I would try to emulate MacGyver by turning a paperclip into a knife or a key or something, but we basically just twisted it around until it broke — we weren’t exactly aspiring engineers. But if you remember watching MacGyver, the premise was that the lead character was put in an impossible situation with few to no tools or weapons or resources, with very little time, and had to get out of the situation using only his wits and whatever he could find in his pocket or laying around near him. MacGyver didn’t stop and complain about how he only had a paper clip to work with, while other people had a blowtorch. He didn’t lament how hard his position was. He simply assessed his strengths and resources and made something happen. Every week, he figured it out. And every week he saved the day.

The best sales people I have seen are like modern day MacGyvers, sans the life and death scenarios. They’re often faced with difficult situations and time pressures, having to negotiate seemingly arbitrary obstacles armed with only their wits and their phones. Elite salespeople almost always figure it out. Resourcefulness is as much a mindset as it is a skill. If you don’t start with the MacGyver mindset, then you will never fully develop the skills associated with being resourceful. As an exercise, seek out or fully embrace the next ridiculous or impossible situation you find yourself in and then put your phone down, close your computer, re-focus, and apply your energy to find multiple alternative routes to your desired destination. Find a colleague and draw it all out on a whiteboard.

Embrace your inner MacGyver.

The best salespeople are experts. Sales is less about selling and more about leading, which requires high levels of confidence, which in turn requires knowledge and experience. This concept can be expressed mathematically as Knowledge + Experience = Confidence to Lead. You can control the first part of the equation; the second comes with time. Gaining industry knowledge and a strong point of view about the products they’re selling should be the top priority for any aspiring salesperson.

Study. Learn. Form an opinion. Expertise leads to confidence, which leads to trust, which leads to sales.

The best salespeople help others. Regardless of where you are in your career, there is someone else you can help. There is something you know about a product, a process, or an industry that someone new or less tenured does not. The best salespeople I have observed regularly pass their knowledge on to less tenured or less experienced sales people with no expectation of anything in return. Coincidentally or maybe ironically, the act itself becomes a catalyst for building confidence within one’s self. And others take notice as well. Shawn Achor, author of Big Potential, found that people who are social support providers at work (“work altruists”) are a whopping 40% more likely to receive a promotion.

The best salespeople move quickly. The best salespeople don’t move recklessly, but they do have a sense of urgency. I’ve often been amazed throughout my career when I’ve encountered salespeople who were slow in getting back to their clients or customers — who delayed in delivering contracts or materials needed to make a decision. Most elite salespeople get things done, to quote Norton in The Shawshank Redemption, “not tomorrow, not after breakfast, now!”

Look at the top salespeople in your own company and see if they possess most if not all of these characteristics. My bet is that they do. And I also bet that they’d be willing to share their strategies with you.

How Western Multinationals Are Responding to the Escalating U.S.-China Trade War

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The furious reaction from China to the arrest of Huawei’s chief financial officer, Meng Wanzhou, in Canada at Washington’s request immediately raises the prospect of like-for-like retaliation against executives from North American companies, a fear reinforced by the arrests of a former Canadian diplomat-turned-NGO-researcher and a Canadian businessman.

Western business people are ensnared in low-level court proceedings in China far more regularly than is reported in the West, the risk remains low of a retaliatory move against a Western executive of similar status to Meng. It would undercut the high-ground that Beijing has occupied as self-appointed defender of “the rules-based international order.”

However, there are other ways for Chinese authorities to take reprisals against Western multinationals operating in China should they so choose. Day-to-day business operations can readily be interrupted through inspections, audits, and other tourniquets of red tape, and by the selective application of the letter of Chinese civil, administrative and criminal law. There’s also the possibility of travel bans on executives (including on those under unresolved court proceedings), and good, old-fashioned intimidation.

Add to this the current trade tensions between the U.S. and China and Western multinationals — such as the big U.S. technology companies — that use China as a source of assembly, semi-manufactures or components have an additional vulnerability: their value chain.

For every such company, especially those critically reliant on Chinese sub-contractors, their value chain is now actively at increased political risk. Local suppliers and their sub-contractors are susceptible to pressure to behave “patriotically” when authorities convey the message, however tacitly, that lack of cooperation with foreign multinationals is in the national interest. Something similar has occurred when Chinese consumers have on earlier occasions read the signals for when they were meant to boycott Japanese and South Korean products.

There are many ways to apply informal pressure along the value chain from delaying delivery to the easing of quality standards.  Suppliers and subcontractors could find themselves suffering sudden and “unexpected” shortages of inputs and disruptions from labour.

Companies need to take urgent steps to measure their potential exposure. Doubling up value chains, including alternatives outside China, would mitigate the risk of political and regulatory disruption. (It would also have the added benefit of providing insurance against ever-more-frequent natural disasters.)  In our analysis and consulting work, we have come across some forward-looking companies that have started to reconfigure their value chains where possible – particularly those who are vulnerable to U.S. national security concerns because they incorporate Chinese technology into their end products.

Doing so is neither necessarily easy nor cheap. China has accumulated a vast manufacturing ecosystem servicing foreign companies, encompassing everything from hard infrastructure to soft skills. Its growth has accelerated in recent years as China has embraced automation as way to offset rising wages that could make it less competitive as an offshoring center.

For that reason, building up a parallel value chain is not simply about shifting to another low-wage country. Both the quality and quantity of China’s manufacturing skills, particularly in the areas of automation and robotics, deter companies from relocating from China to elsewhere in South or Southeast Asia. Lower-wage countries like Vietnam and Cambodia have little spare production or skilled human capacity left, even in relatively low-skilled sectors like textiles and garments, let alone the advanced precision tooling, materials handling, and process engineering and development skills that a U.S. technology company needs. Nor do those countries have the resources to develop them rapidly.

Tim Cook, chief executive of Apple, a company so committed to manufacturing in China that it labels many of its products, “Designed in California. Assembled in China” recently noted that if he called a meeting of all the tooling engineers in the U.S., he wouldn’t fill a room, whereas in China he could fill multiple football fields.

Regardless of these impediments, and even before the heightened trade tensions between China and the U.S., there was business logic to the case for value-chain diversification — and a parallel process of value-chain reconfiguration already underway in some sectors with a regional focus. Production of end-products and components — ranging from bicycle parts to computer hard drives — has started to relocate, with low-tech production shifting from China to Indonesia, Cambodia, Bangladesh, and India, and higher-tech ones moving to South Korea, Taiwan, Singapore, and Malaysia. Vietnam straddles the two.

Burgeoning middle-classes in South and Southeast Asia provide a growing market for China’s consumer and industrial goods, especially for non-luxury goods that do not need the cache of a U.S. or European brand. Countries such as India, Indonesia, Malaysia, the Philippines, and Thailand are all forecast to be among the 20-25 largest economies during the second quarter of this century. Moving production nearer to those markets makes sense.

At the same time, for other Asian nations, China is starting to look like the “market of last resort” for selling what they manufacture. The U.S. has been that market been since the Second World War. But the Trump administration’s “America First” policy, with its emphasis on domestically produced goods, seems to put that in doubt.

Chinese companies, too, will be compelled to seek alternatives to the U.S. in response to Trump’s tariffs, especially those that have become U.S.-reliant, further accelerating the changes to regional trade and the value chains that support it.

The overall effect will be that more value chains will begin and end in China rather than beginning in China and ending in the U.S. There will be fewer global value chains and more regional ones.

Regional value chains do have an advantage: they are shorter than global ones. As global value chains have gotten longer and leaner, they have also grown more fragile, just as the pressures on them are increasing from technological change — particularly AI, robotics and big data, shifting relative labor costs, environmental concerns, such as carbon footprints, and reputational exposures.

The Trump administration’s trade policies will provide new impetus to the developing patterns of multiple, shorter regional value chains, but the transformation will not happen overnight. Value chains cannot be reconfigured any more quickly than a manufacturing plant can be rapidly rebuilt. Companies will hesitate to jump into new developing markets where investment laws can be unclear or nascent — like Myanmar, Cambodia, or Vietnam — and where labor and environmental standards lax. Nor will it be easy to replicate established relationships with factories, suppliers, and governments.

Complicated electronics value chains, in particular, are so entrenched in China, it is unlikely that all business will shift away from the country as a result of the new tariffs alone. For its part, China itself is still dependent on specific imported technologies such as chipsets and sensors. This constraint will ease as China develops, with some urgency, local capacities in these technologies, not least because the U.S. is set on preventing the export of crucial U.S. technologies and blocking Chinese companies from gaining access to them through inward foreign direct investment.

One scenario is that the current U.S. counter to China’s “strategic competition” — tariffs and technology export and investment controls — will further fracture value chains as it will lead to a dual global technology world with one part running U.S. technology on U.S. technical standards and another running Chinese technology on Chinese standards.

There would be no certainty that the hardware, software, and services of these two worlds would be interoperable, and, once a market is locked into one or other of the systems, it would be difficult for users to switch. This would add complexity to value chains, making it more likely they would default to specializing regionally.

You Can Be a Great Leader and Also Have a Life

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Tesla and Space X CEO Elon Musk tweets that no one changed the world working 40 hours a week. He rarely sleeps or sees his kids and had a famously public meltdown. Apple’s Tim Cook is on email before the sun rises. And billionaire Mark Cuban worked until 2 am launching his first business and didn’t take a vacation for seven years.

These intense work styles are often celebrated as the only way to get to the top and be a super-productive leader. Indeed, surveys show that managers and executives describe the “ideal worker” as someone with no personal life or caregiving responsibilities. And a majority of leaders themselves — the ones who set the tone for organizations and model behavior for everyone else — think work-life balance is “at best an elusive ideal and at worst a complete myth.” In an interview, three CEOs rated as top performers by HBR said the job was 24/7 and admitted they weren’t great role models.

But does it have to be that way?

That’s a question Jessica DeGroot sought to answer nearly 20 years ago when she started the nonprofit ThirdPath Institute, an organization dedicated to helping people find time for work, family, and life. She formed a group of about two dozen men and women in senior management at law firms, public and financial service entities, small businesses, and Fortune 500 companies like Booz Allen Hamilton, Eli Lilly, Marriott, IBM, and Ford who wanted to challenge the notion that work-life balance is impossible for leaders. “We all wanted to do work and life differently,” DeGroot told me. “But weren’t sure how.” They had no role models. And few people she talked to, she added, thought they could.

In regular phone calls and meetings for nearly two decades, as well as a biennial Pioneering Leaders summit, the group has been helping each other figure out how to work more effectively so they could have time for their lives, sharing successful strategies and learning from failures. During one of their monthly webinars I observed, the group began by sharing photographs of their families and talking about their lives outside of work. Then the group launched into an intensive discussion of boundaries, episodic and chronic overwork, and how they’re managing their work-life balance in the face of work or life emergencies — and sometimes both. One man, juggling work with caring for a sick child, said he’s now reaping the benefits of all the years he’s communicated and modeled how work-life balance is one of his core values. “It’s enabled me to have a bond with my daughter now that’s really amazing,” he said.

It is part shared confessional with peers and part trading research, strategies, tips and lifehacks that DeGroot collects and analyzes for best practices. For instance, DeGroot noticed that a handful of the pioneering leaders were really good about taking vacation, being able to turn off work, connecting with their families and friends, and returning refreshed. Their strategies have since become the “Vacation Checklist” DeGroot shares with others at the nonprofit. Some of the most effective strategies, they’ve discovered include planning vacations, where possible, around the seasonality of work; delegating and reviewing essential team work two weeks before leaving; creating a “what can wait” list one week before vacation; and avoiding scheduling meetings and phone calls one day before and one day after vacation to concentrate on essential priorities.

She’s done the same for strategies to create concentrated quiet time to focus on priorities at work rather than be in constant firefighting mode of responding to e-mails, meetings and emergencies, for managing email overload, for setting priorities and other thorny issues. “We kept trying. We kept tweaking,” DeGroot said. “Then we started to see, ‘Oh, this is not only a better way for me to work, this is a better way for everybody to work.’ And when you get leaders to behave differently, it sends a signal to the rest of the organization that they can behave differently, too.”

For leaders to stand up to status quo pressures and make work-life balance a priority, DeGroot discovered, these pioneers had to cultivate skills around three relationships: learning to work differently with their teams at work, making a plan with their families to put home and family first, and shifting their own mindsets to not only believe change is truly possible, but to give themselves permission to try, and speak up about it.  The stories of three leaders exemplify how this can be done.

Learning to Work Differently. Like many men of his generation, Ivan Axelrod, 72, a managing director of a financial management firm in LA, spent most of his life climbing the corporate ladder as a work-focused primary breadwinner. It wasn’t until he became a grandfather that he decided to change. His own parents had died when his children were young and never knew them. He wanted something different for his own grandchildren. “I wanted them to know their grandfather.”

So, when his daughter began lining up child care and preparing to go back to work after a three-month leave, the two grandmothers offered to take two days a week each. Axelrod volunteered to be the caregiver for the fifth day. He had to sell the idea to both his family and the other managers at work. “I said, ‘I have good people here. I’m going to push more responsibility onto them, which should help them develop faster. I believe it’s going to work,’” Axelrod said. “Reluctantly, they said OK to me. That was in 2008. And I’ve been doing it ever since.”

As a result, Axelrod has worked to create a culture where everyone can have time for work and life, promoting flexible and remote work and opening an office closer to where people live to cut down on commutes – efforts which have reduced turnover and recruiting and training costs, and increased employee morale and productivity. “If you have a structure that allows people some flexibility, they will produce better results for the organization. I see it all the time,” He said. “The bottom line increases when you make these changes.”

On Mondays, Axelrod takes his two grandchildren, now 11 and 9 years old, to school, works at home, picks them up afterwards and takes them to activities like swimming lessons. “I’m heavily involved in their lives. It has been huge for me, and terrific for them,” he said. “When I’m gone, they’re going to have a lot to remember.”

Believing in Your Plan and Speaking up. With few role models, and cultural expectations arrayed against them, someone like Axelrod had to first imagine something new: how he really wanted to combine work and life. Then he had to believe that not only was it important enough to try, but also — through a series of trials and errors — actually possible to sustain over the long-term.

This was also true for Michelle Hickox. In 2004, Hickox was a certified public accountant in Texas and at a crossroads in her career. She loved her work and wanted to make partner, but the only role models she had were men with at-home wives, and one woman with round-the-clock nannies, all of whom worked all the time and rarely saw their families. “I didn’t want that,” she told me.

When her eldest daughter turned five, the transition from year-round child care to the traditional nine-month kindergarten schedule forced Hickox to think hard not only about how to manage child care in the summer months, but what she really wanted out of work and life. Her own parents had been teachers, and she loved the summers the family spent together. So she imagined something no one else had: taking summers off and staying on the partner track. She negotiated an 80% schedule and took 11 summers off in a row while her daughters were growing up, and still made partner. “I’m not sure when I first asked if I thought it would be successful,” said Hickox, now CFO of Independent Bank in McKinney Texas. “I learned I needed to speak up. That just because something didn’t exist meant maybe nobody had ever thought about it.”

None of this is easy. Like all leaders, Hickox has hit a wall. A few years ago, when her work had been intense and she was feeling completely out of balance, she almost didn’t come to the pioneering leaders summit I attended and first interviewed her for this piece. “I had such guilt. I thought, ‘Wow, I’m supposed to be one of these pioneering leaders and I have totally sucked this past year. I shouldn’t even be at this conference,” Hickox said. “But that’s when you need this stuff the most.” What she has found – and behavioral science research reinforces — is that having a supportive, like-minded network of peers via the summit and their regular conference calls makes it more likely for behavior changes to stick.

Hickox, now 51, has since become the kind of role model she was looking for. Flexible work, remote work, paying attention to performance, rather than when people come and go in the office have become the norm. When she discovered the bank didn’t have a paid family leave policy, a word to the CEO changed that. “The culture in the bank’s accounting and finance team has changed totally since I got here,” she said. “I don’t think you have to work like a crazy person to get ahead. I just think, in the time you are working, you have to learn to be effective.”

Making a Plan to Put Family First. Imagining a different way to work and live also means adopting a mindset that recognized both work and family were important. Will Rowe, 59, a principal at Booz Allen Hamilton in Washington, D.C., and his wife Teresa, a pediatrician, began their marriage with vows promising to be equal partners and to put family, faith, friendships and flexibility first. They both wanted important, but not overwhelming careers. Rowe’s parents were workaholics, he said, who rarely saw each other and wound up divorced. So once Rowe and his wife started a family of their own, the couple committed to spending as much time with family as possible. Will worked four days a week, Teresa an alternate three, and a neighbor cared for their two children one day a week.

The flexible schedule has allowed him to be active in his neighborhood and faith community, and gave him the courage to ask his boss for a six-month sabbatical to travel the country with his family. As his kids grew and he rose through the leadership ranks, Rowe continued to work a flexible schedule, deftly juggling conference calls in the school pick up line, and “time shifting” his work to accommodate both his clients and his family. Being clear on family priorities, routinely talking them through and planning together as a family have been keys to making his work and family life work. “I sit down every week and color code my calendar. Family events and activities are in green. If I find it competes with my work, I will cancel, delegate or move work around,” Rowe said. “Some things in life are more important than work.”

What we see — our role models — shape what we think is possible. And right now, so many of us are stuck in the workplace overworking because that’s all we see in our leaders. So perhaps, if we are to change, what we need are fewer breathless articles about inhuman and insane CEO schedules that ignore the costs to health, families, and ultimately, innovation and business productivity. And we need to hear more stories like that of Alexrod, Hickox and Rowe. More about CEOs like David Solomon, the new head of Goldman Sachs who takes yoga classes with his daughter, led an effort to reduce punishing work hours, calls colleagues when they’re working too much to tell them to stop, and regularly performs and records electronic dance music as DJ D-Sol. More about how leaders like YouTube’s Susan Wojicki can run a $100 billion company and still be home for dinner at 6 p.m. with her kids.

Perhaps the more we hear stories of leaders like these, the more the majority of us who tell surveyors that we want both time to do great work and live a great life, people may start believing it’s possible.

Fostering Employee Innovation at a 150-Year-Old Company

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Bayer’s mission is “Science for a Better Life.” We want to enable discoveries to promote health and secure food supply. To achieve that goal, however, we must innovate not only in terms of science and R&D, but also in how we run our business. This means shifting the way we work so we’re able to match the pace of change happening in the wider world.  With more than 100,000 employees and 150 years of history, there is only so much we can learn from the usual Silicon Valley exemplars. “We cannot be like Google, but neither do we want to be,” says Kemal Malik, the board member responsible for innovation, “We need to plot our own path.”

Our solution – one transferable to other organizations pursuing innovation – has been to create an agile network of volunteer ambassadors and coaches throughout the company who have taken collective responsibility for making innovation happen and steering our organizational culture in the right direction.

The innovation agenda

The origins of our agile network can be traced back to an online idea forum called WeSolve that we launched in 2014 as a way of challenging Bayer employees to contribute solutions to specific technical or commercial problems. To help its implementation we appointed 40 WeSolve coaches: people from different offices around the world who were excited by the initiative and prepared to devote some discretionary time to it. Within 12 months, WeSolve had attracted 1,650 contributors and 23,000 Bayer employees had visited the site.

Its success confirmed the power of an informal network for shifting behaviors in our large company. So, in August 2015 we secured board approval to create an innovation committee of 14 top executives and a full-time innovation strategy team of five people, to orchestrate the portfolio of specific initiatives that would create a new way of innovating throughout the company. The first priority was to inspire people with stories of successful internal innovators at Bayer.  We then offered people the opportunity to learn new innovation methodologies and apply them to real business challenges. A third priority was to build more platforms like WeSolve, to help people collaborate and exchange information across the organization. Most importantly, cutting across all these initiatives, we created the network of senior and mid-level managers to connect and inspire people to get engaged in  innovation.

Building an agile network

In 2016, country and function heads were asked to identify innovation ambassadors for each of the markets we’re in: 80 people senior enough to connect innovation to strategy and make things happen. They then helped us identify innovation coaches who would be responsible for bringing ideas to life in their respective business units. More than 600 were selected. Inspired by John Kotter’s dual-operating structure model, we asked all of these employees to maintain their “day jobs” within the established hierarchy, while also using 5-10% of their time to  work on fast-cycle, informal innovation projects  across  silos.

We gave them a three-day on-boarding program – a broad overview of the agenda plus deep insight into one technique (Systematic Inventive Thinking) they could immediately use to support their colleagues. We also provided webinars and conference calls to explain our other offerings and to share learning. What do the innovation coaches actually do? One popular activity is the fast session – a short, structured workshop to address a specific problem.  A manager might be struggling with an overly complex process or a new digital competitor. The coach would quickly assemble a team of four to six people and, using tools from their training, create a simple workshop to address the problem.  In 2018, we counted more than 50,000 fast sessions across the company.  We put on a further advanced training course for highly active coaches (who have run at least ten fast sessions), and 49 have so far done gone to this extra level.

Innovation ambassadors, meanwhile, oversee the coaches, ensure that the initiatives in their respective countries are aligned with the priorities of Bayer’s senior leaders, and serve as cheerleaders for collaborative innovation.

Extending the network

By creating this volunteer network, we were able to make dramatic progress in developing other aspects of our innovation agenda.

For example, in 2017 we created the CATALYST fund, a combination of professional support (using Lean Startup principles) and money to explore larger business opportunities across the company.   By asking the innovation ambassadors, we were able to identify 120 specific challenges within two weeks. We put €50,000 behind 28 of them and by early 2018 we had three pilots: a new business model in animal healthcare, a digital solution for clinical operations, and a gamified education app.  We have also built on and reinforced the agile network through other activities, for example by getting them to run local innovation events, involving them in our open innovation funding platform, and our co-working Live Hubs in Boston, Berlin and Singapore.

The key point is the network has now reached a critical mass, making our job at the center much easier.  We have a waiting list of about 200 people who want to become innovation coaches. This allows us to be selective about who takes on the role. We get them involved informally at first and talk to their line managers to make sure they can add this work to their existing responsibilities.

We now have around 80 ambassadors and 700 coaches across 70 countries, and more than 80% are actively engaged, even though their innovation work is in goes beyond their official job. They in turn have mobilized others:  more than 5,000 people have taken part in innovation events, 5,000 have taken part in webinars and innovation training events, and more than 38,000 people are using Youniverse, the online hub for all our innovation activities.

Three key insights

Our experience in changing the way we work to hasten innovation has given us three key insights:

Innovation is a social activity, and connectivity is an asset. The image of the lone inventor is alluring, but almost always wrong.  Innovation actually happens in teams, in cross-functional workshops, and through the involvement of many.  It is also a highly contagious.  After we introduced the fast session concept, there were some countries where it took off, with fast sessions every week, and everyone wanting to get involved.   This happened not because of a central directive, but because of the energy and skills of a few key individuals.

The dual-speed model needs a new mindset.  The notion that people should spend 5- 15% off their time working on fast-cycle projects, while the rest of their work is conducted at a slower clock-speed, is attractive but requires a lot of adjustment. Fast-cycle work is about experimentation, tolerance of ambiguity, and openness to failure, and these qualities do not come naturally to those who have spent their entire working lives at Bayer.  This isn’t a challenge we have completely resolved. We are still working on defining the right metrics, putting the right leaders in place, and building the necessary level of understanding across the company.

Volunteers need to be refreshed and reinforced.  Now that we’ve built the agile network and created a portfolio of activities to support them, we move on to the next,  arguably  harder, step of institutionalizing the new behaviors across the company. For this to happen, we need to actively replenish our agile network. We’re heartened by the rising number of people signing up to get involved, but we’ll need to keep expanding the team to maintain its impact over time.

When a Country is Facing Political and Human Rights Issues, Should Businesses Leave or Stay?

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After the murder of dissident Saudi journalist Jamal Khashoggi, many companies had to urgently decide whether to attend Saudi Arabia’s Future Investment Initiative, a global business conference scheduled to take place just days after news of Khashoggi’s killing broke.

Questions like this involving issues like politics, human rights, or equality often present themselves sooner or later for any business operating in global markets. “I’ve had at least five instances where decisions like that had to be made,” the longtime CEO of Tupperware, Rick Goings, told me. The examples sound familiar: South Africa during Apartheid, China after the Tiananmen protests, Venezuela since the Chavez era, Egypt during and after the Arab Spring, and parts of Mexico today.

Over the course of the last few decades, multinationals have entered and left “frontier markets” like Venezuela, Cuba, Iran, Vietnam, Myanmar, and others. How did they, and how can they, make decisions about entering or leaving these markets, knowing it is never certain when a political, financial, or diplomatic crisis will happen?

Keep a long term focus 

A decision based on short-term financial or legal motives alone is destined to end in problems. It doesn’t matter whether that short-term motive is to make profits or to avoid losses, to follow sanctions or to evade them.

First, consider short-term profits and sanctions, and the cautionary tale of French bank BNP Paribas. According to Reuters reporting, until a few years ago the bank operated in Sudan, a country whose government was under U.S. sanctions for its “continued support for international terrorism, ongoing efforts to destabilize neighboring governments, and human rights violations – in particular with respect to the conflict in Darfur.” To do business in such an environment, as in many other places struck by unrest and turmoil, could still be profitable. According to the Manhattan District Attorney, who later investigated the bank’s practices there for violating U.S. sanctions, that was also the reason why BNP Paribas continued operating in the East African nation: it made financial sense. The compass that was guiding the bank was a financial one.

But that focus on short-term profit was short-sighted – even on purely financial terms. In the case of dealing with Sudanese authorities, BNP Paribas never really made a clear-cut choice when sanctions hit. It continued to operate in the country, even as international pressure on the Sudanese government mounted. It cost the bank dearly: in 2014, the investigating U.S. attorney slapped the bank with a record fine of nearly $9 billion, partially for its dealings in Sudan, partially for its activities in other countries facing U.S. sanctions, like Iran. Its short-term motives led to deep losses.

Leaving a country in order to prevent short-term financial losses isn’t a panacea either. The companies that know this best are those who have been around for a long time, like 152-year-old Nestle. “Financial criteria are very important,” Nestle Chairman Paul Bulcke told me, “but it doesn’t mean financial results today.” The company was and remains present in troubled markets like Cuba, Myanmar, Syria, and Venezuela. In the latter it has “no financial reasons” to be present, Bulcke said. “But Venezuela has been important to us and will one day make a comeback. People continue to eat. Our allegiance is to them. They remember the companies that left, and those that stayed. If you add the perspective of time, it’s not that dumb to stay. It’s an investment.”

Finally, consider the case of a company that adheres strictly to sanctions, but immediately re-enters a country when those sanctions end. The problem with this short-term legalistic approach is that sanctions come and go, but the underlying problems may remain. Cuba, Libya, Iran, and Myanmar in recent times saw sanctions come and go (and in some cases, come back again). A company can’t simply treat a sanction regime as a traffic light. If sanctions are dropped for diplomatic or geopolitical reasons but the beliefs or values of a country’s leaders haven’t changed, issues may surface again. A company’s presence may then backfire. More on that below.

Which decision factors provide a better “true north,” then? Here are a few tried and tested methods, that worked for companies in the past.

First, Do No Harm 

For business executives with a medical background, the Latin maxim “Primum non nocere” will be a well-known and non-negotiable rule. It can be of great help in deciding whether to enter or leave a country facing difficulties as well. For a consumer goods company, it might be easier to see in the Sudan example above why staying in the country despite selective sanctions on the government could be the right decision. All else being equal, a multinational producing milk, bread, or cereals might want to stay in business in a country with a corrupt or authoritarian regime to ensure the population continues having access to food. The alternative — leaving and therefore not supplying those things — may cause more harm to the population.

One country where this equation is particularly relevant today is Venezuela. The country, ever tighter in the grip of a government that erodes human rights guarantees and arbitrarily arrests opponents, has nationalized many companies, and seen many more leave. But consumer goods companies like Polar, Nestle, and Johnson & Johnson so far clung to their presence there, even if they increasingly must cut back production. “We have a connection with the consumers, not the government” Nestle Chairman Bulcke told us. “As long as we can serve them, we do that.” The same is true for Tupperware, CEO Rick Goings said: “If you see how much weight people lost on average, my first concern is: how do we not abandon them? We had to come up with lower priced product, and source locally, but we never left them.” That could be a good “true north” argument for others, too.

Who Benefits?

A second Latin phrase that can offer respite to business executives face with an ambiguous situation is “Cui Bono,” or “Who stands to gain?” In judicial matters, this question is considered to help determine who may have committed a crime. Business leaders providing services that benefit both a suffering population and a profiteering government could ask themselves this question, too. Weighing the interests of both their clients and the government, who stands to gain from us being here, and who stands to lose? If a Swiss engineering company is contracted in a junta-led Myanmar to advise on building a dam that provides electricity to hundreds of thousands of families, should it accept, because it benefits the population? Or should it decline, because the dam benefits the military junta? In this case, the company in question decided to move forward.

For U.S. companies in Myanmar, the dilemma didn’t pose itself for a long time, as there had long been sanctions on the Burmese government. But when opposition leader Aung San Suu Kyi came to power, the sanctions were gradually lifted, and companies could enter the “final frontier”. In 2013, executives from large tech companies, including Google, Cisco, Microsoft and Intel hopped on a trip organized by USAID. That same year, my own organization, the World Economic Forum, organized a major international meeting in Nay Pyi Taw, a city north of Yangon. But even if the largest government and international organizations greenlight a country, it’s important to make your own assessment about who benefits from your entry. Those that did not got a wake-up call this year. Suu Kyi, a heroine of human rights just years before, herself came under fire for the military and government intervention in the Rakhine state. One of the companies that came under scrutiny because of the events was Facebook. Members of the military were believed to have used to platform to spread hatred under the population. The claim is that they benefited from Facebook’s presence, and used it as a weapon against the Rohingya population.

Why Are You There?

A third reflection companies could make in assessing difficult markets, is what their “raison d’etre” is. For a profit-seeking company, profitability should at least be a theoretical possibility when they open a new foreign subsidiary. In a country whose currency in a given year is in free fall, like Argentina’s and Turkey’s this year, it may be non-sensical for a company that is not yet active there to make a large dollar-denominated investment to start operations. Similarly, while consumer goods companies may have a reason to stay in crisis-ridden countries like Venezuela, service firms may no longer see the point of being there. “We left Venezuela. There was no business there for us, and no future,” Patrick De Maeseneire said. He is the CEO of Jacobs Holding, a Swiss long-term investment firm, but talked about Adecco, the largest HR services firm in the world, which he previously led. “Our clients had left, and our leadership – mostly expats – went to Colombia.”

The raison d’etre can also differ per industry. For a services firm, De Maeseneire said, the calculation is different than for a manufacturer: services firms have fewer fixed assets to look after, and their clients often are fellow multinationals. They themselves leave when a crisis strikes. Conversely, companies with long term assets, like factories or buildings, may have an even stronger incentive to stay in troubled markets, but equally should think twice before entering a market.

But when circumstances change and the reason to operate returns, a company should also not hesitate too long to enter. “The first mover has an enormous advantage in growth markets,” De Maeseneire said. “You can capture market share and put up a barrier to entry for others.” When he was CEO of Barry-Callebaut, the world’s largest chocolate producer, he often was among the first to build a factory in Russia, China, and certain countries in Latin America and Africa, like Cote d’Ivoire, Cameroon, and Ghana. With the network of private schools he currently looks after for Jacobs Holding, he equally eyes expansion in emerging markets. “You have to dare to invest,” he said. “We’re in it for the long run. You have to learn to deal with volatility. Business survives politics, fortunately.”

What Are Your Values?

Finally, consider your own and your company’s values, and the priorities you put on each of them. That can be helpful in case a snap decision needs to be made about new events that need responding or emerging crises. Nestle got in such an emergency situation when its plant producing Maggi Bouillon in Syria was bombed and burned down in 2013. As a consequence, the company was forced to shut down its operations in the country. “If we cannot guarantee the safety of our employees, or the quality of our products, we cannot continue to function,” Bulcke told us. In other words, safety and quality is a red line for Nestle. He applied the rule in Congo as well, where he was forced to shut down a factory that he had himself opened many years earlier. But even when the company ceases operations it tries not to cut ties with a country all together. Nestle keeps some 100 people on the payroll in Syria, for example. “Our pain limit is high, and I’m proud of that” Bulcke said, referring to the company’s preparedness to accept short-term financial losses. “We respect ourselves, the other, and the future. Those are our values.”

Others go even a step further. As an executive at Avon in the South Pacific, and later as CEO of Tupperware, Rick Goings decided to remain active in countries that were seen in the West as flaunting human rights. To reconcile this ambiguity, Goings was both principled and pragmatic. In Apartheid South Africa, Tupperware decided to apply the Sullivan Principles, a set of corporate social responsibility rules aimed at putting pressure on the government to end Apartheid, while allowing the company to not “exit and abandon”. “The majority of our salesforce and workforce was black. If we left the country in protest, we took the food off their table, he said” In China, he followed a more pragmatic logic. “I lobbied Congress for Chinese membership of the World Trade Organization,” he said. “It later earned me the Marco Polo Award in Beijing, a rare honor for a foreigner. But because of my lobbying, I was able to protest [the government’s actions on democracy] directly rather than having to abandon.”

Ultimately, each board, and each executive team will need to make its own set of principles and rules to decide whether and when to enter or leave turbulent markets. But the personal compass of decision makers matters. “We can’t live in Fantasyland. Profits matter,” Goings said, summarizing his views. “But you need to be able to look back, put your head on the pillow, and say: wow, this is a good thing we do.”