Knowledge that Transforms

Many leaders say it’s wise to hold back from making new investments or acquisitions during tumultuous times. They posit that significant risk-taking works only if you go into an uncertain period with momentum or with a healthy fallback cushion. A new analysis of data on 6,000 companies that experienced high-uncertainty events reveals that these common beliefs don’t align with actual outcomes. Learn three myths about risk-taking and how to make bold but well-informed business bets.

When selling radical innovations, salespeople often worry that they’ll appear incompetent, which undermines their confidence and stalls sales pipelines. New products’ complexity can get in the way of knowledge transfer via traditional training approaches. Companies should instead reframe the salesperson’s role from expert to orchestrator, provide consultation support through expert tandems and fast-response channels, and foster a culture that values curiosity and collaboration over perfection.

The conventional playbook for managing supply chain risk is falling short in the face of increasing disruption from geopolitical events like trade wars, sanctions, and armed conflict. A three-part framework for understanding geopolitical signals through scenario planning and risk monitoring, anticipating risks by creating flexible options, and adapting quickly to disruptions can help companies protect their supply chains.

A research study of management consultants who were asked to use a large language model to recommend strategic business decisions found that the AI responded to human validation attempts with persuasive rhetorical strategies. In addition to appealing to the user’s logic, sense of trust, and emotions, the AI also engaged in tactics such as flooding the user with large volumes of unrequested data and analyses that could overwhelm them and convince them to override their expert judgment.

Real-time businesses are able to make quick, data-driven decisions, enabling them to dramatically outperform competitors. Research points to four key capabilities that the most successful RTBs have: real-time data availability and decision-making, empowered employees, better business agility, and a more integrated customer experience. Case studies of United Airlines, Ikea Retail, and Vanguard illustrate how those companies have engaged in the four capabilities to become successful real-time businesses.

A longitudinal study on how different countries and industries achieve sustainable growth, resilience, and longevity led to the development of Decompose, Interpret, Reward, and Scale (DIRS), a new framework to help managers determine why initiatives succeeded or failed. DIRS, combined with two other tools, enables leaders to engage in strategic learning and apply the resulting lessons to future business development opportunities and repeatable growth strategies to make better business decisions.

Generative AI is transforming retail pricing decisions by providing an accessible and low-cost alternative to traditional pricing algorithms. Unlike traditional approaches, LLM-based pricing relies on natural language prompts, not custom code and historical data. However, LLM-based pricing introduces challenges around consistency, explainability, and potential biases. Implementation examples demonstrate how to prompt LLMs and use their recommendations to optimize product and service pricing.

Can generative AI serve as an on-demand business adviser? A field experiment with hundreds of small business owners in Kenya found that AI access boosted revenues and profits by 15% for high performers — but caused a nearly 10% decline for those who had already been struggling. The culprit: Weaker performers followed generic or misleading AI advice because they lacked the judgment to filter it out. Leaders deploying AI at scale must design their rollouts carefully to avoid widening performance gaps.

In negotiations, first offers act as powerful psychological anchors — and even skilled negotiators struggle to escape them. New research published in the Journal of Experimental Social Psychology finds that adopting a choice mindset when you receive a first offer can reduce anchoring: The simple act of reminding yourself that you can choose any counteroffer expands the range of options you consider, helping you negotiate on your own terms.

Studies of the airline industry show that resilience does not have to come at the cost of efficiency. Managers in a variety of industries can meet both objectives by ensuring that operational performance metrics reflect true customer priorities; using predictive analytics and data-driven insights to allocate system buffers where they generate the most meaningful resilience benefits; and shaping the options offered to customers to improve their company’s resilience to disruptions.