HARVARD BUSINESS REVIEW

 Contents

January-February 2020

41

SPOTLIGHT

THE LOYALTY ECONOMY

42 STRATEGY

Are You Undervaluing Your Customers?

It's time to start measuring

and managing their worth.

Rob Markey

51 PERFORMANCE MEASUREMENT

How to Value

a Company by Analyzing Its Customers

A guide to customer based corporate valuation Daniel McCarthy and Peter Fader

56 CUSTOMERS

"Over Time, the Market Will Demand This Information"

Vanguard chairman

emeritus Jack Brennan on corporate disclosure Daniel McGinn

COVER PHOTOGRAPH Potter/Getty Images

Harvard Business Review January-February 2020

Managing for loyalty has gone from intuitive idea to a conceptual goal in operational practice." PAGE 56

5January February 2020

59 FEATURES

60 TECHNOLOGY Competing in the Age of Al

How machine intelligence changes the rules of business Merco lansiti and Karim R. Lakhani

68 HEALTH CARE Managing the Most Expensive Patients

A new primary-care model can lower costs and improve outcomes.

Robert Pearl and Philip Madvig 76 ORGANIZATIONAL

CULTURE The New Analytics of Culture

What email, Slack, and Glassdoor reveal about your organization Matthew Corritore, Amir Goldberg, and Sameer B. Srivastava

84 HUMAN RESOURCES

The Transformer LO

me role of chief learning ficer isn't just about ining anymore. bie Lundberg and orge Westerman

Harvard Business Review January-February 2020

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102 LEADERSHIP

The Elements of Good Judgment

How to improve your decision-making Sir Andrew Likierman

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94

94 STRATEGY When Data Creates

Competitive Advantage...

and when it doesn't Andrei Hagiu and Julian Wright

112 OPERATIONS

Taming Complexity

Make sure the benefits of any addition to an organization's systems outweigh its costs. Martin Reeves et al.

124 ECONOMICS & SOCIETY

Choke Points

Countries are turning economic infrastructure into political weapons, and that poses a major risk to business.

Henry Farrell and Abraham L. Newman

Illustration by KEITH NEGLEY

SH

HROur Commitment to Sustainability

Hear that the paper we use in our print magazine is certified

der the lash Firestry Initiative program, meaning that it

Pom responebly managed sources and is a renewable resource.

January February 2020

17 IDEA WATCH

New Research and Emerging Insights

17 LEADERSHIP Why Boards Should Worry About Executives' Off-the-Job Behavior

DUIs, traffic tickets, and other factors can raise on-the-job risks. PLUS An upside to boredom, a new way to look at sponsorship, why awards can be demotivating, and more

32 DEFEND YOUR RESEARCH

Advertising Makes

Us Unhappy The more a country spends on ads, the less satisfied its citizens are.

Harvard Business Review January-February 2020

140 CASE STUDY

Give Your Colleague the Rating He Deserves-or the One He Wants?

Not all the members

of a high-profile team are doing their share of the work.

Anthony J. Mayo, Joshua D. Margolis, and Amy Gallo

35 HOW I DID IT

The Founder of Chewy.com on Finding the Financing to Achieve Scale

More exciting than the company's

multibillion-dollar sale was the first significant investment. Ryan Cohen

135 EXPERIENCE Advice and Inspiration

135 MANAGING YOURSELF

Building an Ethical Career

A three-stage approach to navigating moral

challenges at work Maryam Kouchaki and Isaac H. Smith

146 SYNTHESIS #MeToo's Legacy

Lessons from the movement, and what women want next Nicole Torres

152 LIFE'S WORK

Sugar Ray Leonard

DEPARTMENTS

10 FROM THE EDITOR 12 CONTRIBUTORS

148 EXECUTIVE SUMMARIES

Photograph by MARY BETH KOETHFrom the Editor

Connect with HBR

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TWITTER Hrven FACEBOOK HER, Harvard Business Review LINKEDIN Hard Business Review INSTAGRAM havent business, review

The Real Deal on Data

CUSTOMER DATA AND analytics are an enormously potent combination. We all know the drill: The more customers you have, the more data you can collect and analyze to create ever better products that attract ever more customers. Conventional wisdom holds that this virtuous cycle confers a nearly unbeat able competitive advantage.

Not so fast, say Andrei Hagiu of the Questrom School of Business and Julian Wright of the National University of Singa pore. They argue that it's a mistake to assume that the benefits of data-enabled learning are as powerful or as enduring as those of network effects, wherein the value of an offering-say, a social media platform-keeps rising as more people use it. "In most instances," they say, "people grossly overestimate the advantage that data confers." To attain the strongest competi tive position, you need both data and network effects-a dual accomplishment that very few companies manage to pull off.

That doesn't mean that data alone won't help you. In fact, you can use data and analytics to build competitive defenses even without the reinforcement of network effects. Hagiu and Wright explain how in "When Data Creates Competitive Advantage...and When It Doesn't" (page 94). Indeed, the abil ity to improve offerings with customer data will essential to compete. But to outperform rivals over the long haul, you need something more: You must know how to balance an organiza tion's capabilities and use them to amplify one another.

ADI IGNATIUS Editor in chief

CONTACT HBR PHONE 800.988.0885 EMAIL editors@hbr.org customerservice@hbr.org

designers@hbr.org

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dative with Emily Neville-O'Neill irector of product management

Business Review

-February 2020

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