# Faculty lectures from London Business School

Data: 11-01-2025 22:01:47

## Lista de Vídeos

1. [Building personal and organisational resilience with Richard Jolly | London Business School](https://www.youtube.com/watch?v=5nbcaGyQrf4)
2. [Why should anyone be led by you? - HR Strategy Forum Lecture ! London Business School](https://www.youtube.com/watch?v=DX-P12R2M9Q)
3. [Why should anyone work here? - HR Strategy Forum Lecture | London Business School](https://www.youtube.com/watch?v=DM2QVuHpfKE)
4. [Faculty Lecture: Improving health delivery in sub-Saharan Africa](https://www.youtube.com/watch?v=RCh3E68yHUc)
5. [Madan Pillutla: Why we fail to execute our plans | London Business School](https://www.youtube.com/watch?v=ERb3_wvAaRA)
6. [To save or to Invest? Long-term strategies during times of recession | London Business School](https://www.youtube.com/watch?v=kwitSvRLi-8)
7. [The impact of the School on Marketing | London Business School](https://www.youtube.com/watch?v=EFW-87l5L-M)
8. [John Mullins Findings from his Book 'The Customer-Funded Business' | London Business School](https://www.youtube.com/watch?v=IojjHWsHHUc)
9. [Gary Hamel: Revolution, Renewal and Resilience | London Business School](https://www.youtube.com/watch?v=I6YpJ1qn_Sc)
10. [Handling Complexity with Professor Richard Jolly | London Business School](https://www.youtube.com/watch?v=HPL5g3F_wbA)
11. [Two tips for developing good management skills | London Business School](https://www.youtube.com/watch?v=lLcgCEbsT08)
12. [Helping newcomers integrate into a workplace | Dan Cable | London Business School](https://www.youtube.com/watch?v=vvItQitwGeI)

## Transcrições

### Building personal and organisational resilience with Richard Jolly | London Business School
URL: https://www.youtube.com/watch?v=5nbcaGyQrf4

Transcrição não disponível

---

### Why should anyone be led by you? - HR Strategy Forum Lecture ! London Business School
URL: https://www.youtube.com/watch?v=DX-P12R2M9Q

Transcrição não disponível

---

### Why should anyone work here? - HR Strategy Forum Lecture | London Business School
URL: https://www.youtube.com/watch?v=DM2QVuHpfKE

Transcrição não disponível

---

### Faculty Lecture: Improving health delivery in sub-Saharan Africa
URL: https://www.youtube.com/watch?v=RCh3E68yHUc

Transcrição não disponível

---

### Madan Pillutla: Why we fail to execute our plans | London Business School
URL: https://www.youtube.com/watch?v=ERb3_wvAaRA

Transcrição não disponível

---

### To save or to Invest? Long-term strategies during times of recession | London Business School
URL: https://www.youtube.com/watch?v=kwitSvRLi-8

Idioma: en

[Music]
for the first few of these I could say
this is the third one this is the fourth
of these um
but right now you know we've this is now
established this is the end I don't know
10th or something like this that we we
held and they've been I mean very
popular with uh with with staff and he's
very popular faculty so uh so it's a
it's a good thing and today we have uh
from pianist from the Patrick Province
who's going to talk about to save or
invest during chemical times okay
thank you thank you it was not an
attempt at cheating or anything so it is
the same material so uh thank you uh to
all of you for coming for taking out uh
this hour out of your busy schedules to
come in and and hear what uh we often do
behind closed and locked doors sometimes
um Kimberly and Stephen thank you so
much for for the invitation
um so what uh what I'm going to do today
is uh present to you some of my work
some of you might have heard about me as
working in the domain of social
responsibility and sustainability this
is my attempt to go a bit beyond that we
got strategy more broadly particularly
as it relates to the the recent uh uh
recession which uh which because of its
extent people call it the Great
Recession
um so I would like to keep this quite
interactive so I will have some uh you
know block of time at the end for
questions but by all means if if
anything is unclear or you need more
clarifications or any questions or
criticism please go ahead and and
interrupt me you know I'm Greek I like
to talk and honestly I could talk the
entire hour if I'm not interrupted and
then some more so so with that intro
um let me tell you the big idea before I
go into the details now the big idea
here is that um often we we know a lot
and we hear a lot from macro economists
and economists about how the economy is
doing in times of sessions often we talk
about unemployment the interest rates
inflation and investment and so on but
the thing is that all those kind of
Concepts translate and have important
implications to the way that we teach
our mbas we think about businesses
running their organizations during
turbulent times and you can imagine
these are uncertain times These are
times in which Investments become risky
of course it's at times where liquidity
and cash flow goes down and therefore
managers are faced with very real trade
dose in terms of how they manage their
business such that it doesn't only
survive during the time of Crisis but
it's also also remains competitive
following the crisis so the big question
that we try to answer with this kind
with the with this paper which is uh
it's a bit Sherlock Holm inspired the
actual title of the paper is called the
doc that didn't bark
um and uh and if you are if you happen
not to remember your Sherlock Holmes
we'll freshen up on that as well a bit
later today
um so we the idea here with uh with my
course or Caroline was trying to
understand how did managers handle those
difficult decisions during the Great
Recession as their cash flow was going
down as liquidity constraints and were
binding as credit was becoming more
scarce but at the same time while
they're trying to not only survive but
keep an eye to the Future keep an eye of
what's going to happen right after the
recession ends right so
um we talk about the recession what does
that mean so we we call it the creditors
the Great Recession of
2007-2009 exactly because it was the
largest contraction on record
um since the second world war you can
see the similarity Great Recession Great
Depression of the 1930s so we call it
the Great Recession because it
represented the biggest contraction in
gross domestic product and a contraction
that hit essentially all of the
components of a country's gross domestic
product in particular which is important
personal consumption right remember the
crisis started as a housing uh the
crisis in the U.S it it affected the the
equity that people had in their homes
right the average drop imagine in in
only a couple of years was more than 15
in some areas where he with a reduction
in the the price of their homes of more
than 30 40 percent so it was at a um a
recession that had profound implications
for for individuals as well as for for
businesses so here is just a graph of
how much that that contraction was in
nominal and in real terms but the
another key important thing here is the
unemployment rate right here plotted
from the Bureau of Labor Statistics the
um the regular unemployment rate you can
see Peaks at 10 percent uh into it at
the peak of the of the recession but
importantly and as you see the the red
line and unlike other previous
recessions it was a recession where the
long-term rate of unemployment uh also
peaked in other words the the number of
people that are not permanently
unemployed but for a much longer time
period remained unemployed so it was a a
period in which there was a lot of
turmoil a lot of uncertainty a lot of
unemployment a lot of uh reduction in
people's consumption a lot of reduction
in terms of Investments turbulent times
that basically we have all lived through
whether the latest one or or previous
ones now what do we know academically
speaking about
um crises right take periods of Crisis
what defines what characterizes periods
of Crisis why are they so important to
to understand particularly from a a
business perspective so what we know is
that major economic crises are generates
significant uncertainty once you are in
a crisis typically you do not know when
it's going to end right although you do
know if you're a manager that crisis you
know there's the business cycle you have
booms and you have recessions and
recession is bound to come but once
you're in a recession there there's huge
uncertainty as to the magnitude of the
eventual magnitude of the crisis as well
as the the end of the crisis secondly
they as we see with the financial crisis
this kind of period spark a major
Regulatory and policy changes in other
words in addition to the fundamental
uncertainty they migrate the regulatory
uncertainty what kind of how are laws
and regulations going to change if you
are in the financial industry you do
worry about how the government is going
to react to the crisis and how the the
laws that that govern the financial
system are going to change for instance
right so um
Capital becomes an adverse Financial
Resources becomes more scarce if it
becomes more scarce it basically means
it becomes more expensive to borrow if
it becomes more expensive to borrow than
firms as well as individuals are faced
with liquidity constraints the lack of
cash
secondly there might be huge disruptions
in the supply chains right payments
might not be made on time may payments
may not be accepted on credit for
example which delays the whole the whole
the entire supply chain and the delivery
of the value propositions
um deterioration and sometimes quite
sharp deterioration of consumer demand
exactly because incomes go down exactly
because personal consumption more
General more generally goes down there
is increased risk of firm failure is in
other words it's easier for firms to go
bankrupt during pre-usive crisis and to
the external crisis are large enough uh
they they might the redefine industry
boundaries or sometimes shut down entire
Industries and redefine the boundaries
of entire Industries so in In Sum right
um economic meltdowns economic crisis as
we know them they live little untouched
they live little in terms of remaining
undisturbed by the turbulence in the
environment and usually at camp
companies they generate fundament and
tell questions about strategy about
short-term survival but also about
long-term profitability so it sort of
shakes the foundations of
competitiveness and and and and causes
everything a very fundamental rethink of
what businesses should be doing or would
be doing in order to survive now
to to to to start thinking a bit more
about a bit more detail how in terms of
what businesses do we need to sort of
break down that problem into smaller
pieces right and in strategy we have
this Theory called the The
resource-based View which basically says
that
um some firms are better than others in
other words some firms are more
profitable than others because
essentially in their Weaponry they have
a set of resources in other words a set
of capabilities some friends might be
better at innovating some friends might
be better at their employee relations
some others might be better at Supply
Chain management so a set of underlying
resources that are different across
firms right that generate this
performance heterogeneous firm so in
order to understand those resources
right we break them down into into three
categories uh human capital tangible
resources like uh buildings offices
planting equipment and so on and
intangible resources such as branding
reputation Innovation capability the
capability to manage stakeholder
relations and social responsibility and
so on so all this to break down these
resources
um and and you can imagine that in order
to maintain these resources companies
needs to invest in them right you need
to invest in advertising in order to
maintain your brand you need to invest
in your people in order to maintain
employee relations right so
um and the same applies for uh tangible
and human capital as well so but those
those types of investments in order to
maintain those underlying resources and
in order to maintain them relevant for
competitiveness generate important trade
of exactly during the time of Crisis
right because in times of Crisis some
some firms just Financial budgets get
more tightened so these Investments have
to be cut
because of the uncertainty right the
risk of some of these Investments might
go up at the same time right and at the
same time
um even even cognitively speaking a lot
of the managers might be preoccupied
with surviving the short run and then
say well you know what let us just
barely go through the recession let's
just survive the recession first and
then we can start dealing with these
long-term Investments and and our
Pipeline and competitiveness the
immediate threat is and they mediate a
kind of a need is to is to survive in
the it's perceived to be to survive in
the short run therefore the this becomes
a very fundamental issue for monitors to
say well what should I do I know that in
the long term I need to maintain these
underlying assets I need to maintain my
Innovation capability I need to maintain
the relationships with my employees I
need to maintain the relationships with
my stakeholders therefore in order to
maintain those valuable assets I need to
invest in in them but at the same time I
look at my cash flow I look at the
environment and see all this uncertainty
I might not be able to get enough credit
to maintain those Investments so how do
I manage that trade-off right and at the
same time people can say well
um should I fire people and save money
and invest in r d or should I hold back
on R D and invest in them in my
relationships with people because then
there are straight loss across different
resources right do I for instance do I
delay the building the the buying of new
buildings and instead invest in my brand
during this time should I delay the
build buying new buildings and invest in
Innovation because in times of Crisis
perhaps if I come up with new products
that are cheaper or better I can
actually attack the market better if if
I'm in a time of Crisis so a number of
these questions that relate to how
managers try to handle the the the the
crisis and of course we all know the
Baseline right we all know that there
are layoffs during during crisis but the
more
kind of more nuanced strategies in terms
of r d in terms of a capital expenditure
and in terms of stakeholder relations
are not not exactly obvious indeed I'm
pretty sure if you asked uh more broadly
you say well what's the first thing you
would cut out during a recession in
terms of your budget and some people
might say oh of course CSR projects we
cannot afford to have our people
volunteered over the weekend right we
cannot afford to pay above above Market
living wages right now these are
difficult times maybe you should cut
back so on the one hand firms will have
a tendency to retrench to hold back to
become more conservative in the way they
handle their spending right which seems
to be kind of the more common sensical
uh view of the world you know given
times of uncertainty you become more
conservative you you retrench you hold
back until uncertainty is result until
the recession finishes and then you go
ahead and and and proceed with those
Investments however not all firms think
uh not all firms think alike so during
the uh during the crisis there were some
surveys uh for instance this is from
booze and Company at the time this is
the annual r d survey and these guys
found that
um in their annual side of the world's
biggest corporate r d Spenders right so
research and development most of
companies have stuck with their
Innovation programs despite the
recession and many are boosting spending
to compete more effectively in the
upturn this is at the peak of the crisis
in 2009. so say wait wait a second some
people might say well
um there's another side of things we say
well during times of Crisis asset prices
go down Things become cheaper so it
might be a good period to invest as
opposed to save such that when the
recession finishes companies that invest
are better positioned to be competitive
and this can translate even to corporate
social responsibility you can say well
according to this argument at least we
say well look companies that stick with
their employees that invest in the
relations with them exactly when perhaps
their employees need the most which is
in times of Crisis maybe they will fare
better after the recession therefore
rather than cutbacks they will maintain
their Investments right and indeed if we
go to some other what other firms said
during this time this is um a a big Tech
in this company says when we emerge from
this downturn will emerge leaner more
efficient and more technologically
capable this has been both a business
mandated and a cultural imperative for
us again in 2009 so
um It's Time some other friends I'd say
well maybe this is the time where we cut
the excess fat from the organization
maybe now is the time to use the
opportunity of the crisis to restructure
to cut out inefficiency to become leaner
to become more rapid in the way we take
it take decisions maybe it's the time
that we can hire scientists at lower
wages perhaps right and then invest in
our technology because all wages are
going down now some of the the the the
the some other so we have at least some
indications that perhaps The Innovation
aspect and the RND aspect may become
particularly valuable or at least
particularly relevant during times of
Crisis here's what Starbucks will say at
the time uh again 2008 the CEO of
Starbucks has said
um now it's a time to invest truly and
authentically in our people in our
corporate responsibility and in our
communities the argument and opportunity
for companies to do this has never been
more compelling right so in addition to
RND some people say well uh you know the
the relationships are long-term they're
based of mutual trust and understanding
you can and it's exactly in times of
Crisis that you don't want to cut back
or divest from them it's exactly in
times of Crisis that there's those
relationships will become particularly
valuable for firms that are able to
maintain them right and finally this is
where the um the title of the um you
know the talk comes from this is what
the CEO of Intel said at the time says
you cannot save your way out of
recession you have to invest your way
out we look at our CSR activities in
pretty much the same way you can't just
do them in good times and then just
forget about them in bad times and hope
to get any results
all right
so as much as we see that you know some
Business Leaders might be perhaps more
forward or looking might care more about
this issues and say well wait a second
whereas the world might expect us to cut
cut back to retrench right to become
more conservative you know perhaps we
should see this as an opportunity
perhaps we should see this as the time
where we truly invest in some
intangibles like my r d my Innovation
capability my people my stakeholder
relationships more broadly so as we were
reading with with Caroline trying to
understand what farmers do or do not do
it became kind of of an empirical puzzle
right it says well on average then what
did firms in the US do which ones of
these resources did they cut and which
ones of these resources did they
maintain investments in which ones of
the view in which one of the views in a
sense they invest or to save seems to
have been uh what firms actually did
during the recession so so in order to
attack that question we said okay we're
going to use the classification that we
know in other words we know that the
fundamental pillars are human capital
tangible resources and intangible
resources and in order to measure
intangible intangibles brand reputation
is notoriously difficult to to get data
on in terms of advertising data and so
on so we broke down intangible resources
in terms of research and development
capability and CSR or stakeholder
relations Investments right and we
wanted to see exactly what did on
average firms do during the crisis
across those four dimensions now now
going back before before we go into the
the empirics and see what they actually
did is they let's take a step back and
say well well why would
intangibles right why would these
investments in r d or CSR be
particularly important during times of
Crisis or particularly valuable during
times of Crisis what do you think maybe
I should open it up because it's been 20
minutes since I've been talking so I
need a break so um why should
investments in our your people or why
should we invest investments in
Innovation capability become
particularly important in a time of
crisis
why would you want an employer or if you
or your employer to to uh uh to not to
fire you but actually invest in your
relationship in times of Crisis what
does that make you feel about your
employer for instance
loyalty right loyalty commitment perhaps
increased productivity because of that
loyalty and commitment yeah
what else
yes
right it might be valuable because you
say well you know what this is downtime
we have excess capacity for instance
right so why don't we put them through
trainings or some training programs and
so on to improve their skills to improve
their capabilities so one when we emerge
from the from the crisis again rather
than fire them and they're looking for
human capital or if you're looking for
skills after the crisis right why don't
we use this downtime to invest in our
people
how about any other thoughts yes
or capabilities in general for the long
run right and and perhaps someone say
well cutting that in the short run is a
very short-sighted kind of strategy
because that is if it's one thing that's
for sure is that the recession will end
at some point
right yes
yes
it starts to move in the right direction
really poor to the strategy pad
in very senior level called
right
so it might be part of of investing in
this kind of research in this kind of
research resources might be part of part
of brand new reputation and that's
important because for instance we have
evidence that serves that
um companies sorry consumers might be
less price sensitive they might
consumers might be more or less loyal to
some of these Brands and perhaps
consumers like sorry for companies that
care more about their consumers and
invest in that relationship they might
enjoy better loyalty and less price
sensitivity what does that mean it means
that when the crisis hit that's exactly
when you want the the loyalty to kick in
right that's exactly when you you reap
the benefits so to speak of of your
investment so cutting them will give
exactly the opposite signal of what uh
of your original investments yes
right out of control
right so in in a sense the uh well
there's two aspects is investment in the
relation might sort of compensate for
the the broader let's say turbulence or
or uh or the the the say the bad
experience that people have because
companies did fire people right so how
do you motivate the ones that were left
behind right in order to work and be
loyal and be productive and be efficient
things that you particularly need during
the the crisis right so maintaining
those Investments might again become
particularly valuable so that those are
the kinds of conversations that we we
had with with Caroline and we went back
to to what we call the theory just
understand what we'll have people we'll
have people proven in other words in
terms of uh why this kind of intangible
resources may become particularly
valuable during times of Crisis and we
were able to to categorize these
explanations in at least three kind of
of beef buckets uh big buckets which I'm
going to to briefly describe one is that
investment in investment maintaining
Investments and intangible resources
during time of Crisis may enable
organizations to become more efficient
and more Innovative it might enable
organizations to adapt more quickly to
the changing demands and expectations
whether it's consumers suppliers or
indeed the capital markets and finally
like what we said before with consumer
or employee loyalty right it might build
up organizational resilience so we argue
in this work that is exactly because of
these three sets of mechanisms
maintaining
resources is sorry intangible resources
become particularly important during
time of Crisis so we would expect
companies to maintain rather than cut
their investments in this kind of
intangibles it's kind of an ambitious
agenda here it's kind of uh you know it
is we thought at the beginning there was
much more likely to say oh no there's no
way people were just going to go
conservative people are just going to
cut their Investments and then there's
many reasons to think why the within
these three explanations why this kind
of investments will be particularly more
valuable so this is what I said before
so I'm going to skip that here we go so
let's think about uh efficiency and
Innovation right indeed if you are uh if
you continue to invest in r d for
example you might you might find more
efficient ways of doing things you might
find new ways of doing things that give
you a Competitive Edge in other words
you can go down your costs more quickly
which is again particularly valuable
during um during times of Crisis indeed
believe it or not the the the the iPhone
was the result of Investments during
times of Crisis right and a number of
other GE products for example where the
direct results of Investments during
times of Crisis so
um if you invest in in stakeholder
relations uh and more entitled
stakeholder relations might uh again
help you become uh more Innovative more
efficient for instance if you have
better relationships with employees your
suppliers you're basically tapping into
different sources of information than
and better so than a company that might
not have such good relationships with
its stakeholders right and those that
kind of information is very very
important because remember what we said
in times of Crisis a defining
characteristic is uncertainty well how
do you deal with uncertainty you you try
to get as much information and as
quickly as possible but what enables
better and and information and more and
higher quality information is exactly
investments in the relationships that
you have with these stakeholders right
you need to know what your how your that
your customers expectations are changing
during times of Crisis you need to know
what your suppliers are expecting of you
and you need to have a good relationship
so that information reaches you and it
reaches you quickly right in other words
the the um uh the the better stakeholder
relations allow you for more rapid uh
and more quick and more high quality
information to arrive at you therefore
allowing you to adapt more quickly now
the other thing is that exactly because
the stakeholder relations are based on
on trust what does that mean it means
that in a time of crisis when you need
to move quickly take strategic decisions
maneuver if you like in order to to
adjust the organization more quickly you
need the margin of flexibility you need
the benefit of the doubt sometimes you
need the external legitimacy and support
from your main stakeholders whether it's
a big supplier or whether it's uh it's
the capital markets themselves so better
stakeholder relations allow you for that
flexibility to strategically maneuver
and perhaps even tolerate more risk as
you take these decisions to adjust in
the times of Crisis and finally the the
uh the the biggest category of
explanations is what we call
organizational resilience
um so this is basically
um all the everything we know about why
investing in r d and investing in
stakeholder relations is important but
here we explain why all those reasons
are Amplified a lot of those users are
magnified during during times of
recession exactly because
um of of the uncertainty they increased
risk the reshaping of policies think
about that the reshaping for policies
for instance right better relationship
with let's say stakeholders in the form
of legislators or or or Regulators right
means that you may even be able to
influence policy as as a company as
opposed to having let's say the VW sort
of relationship with Regulators these
days right if there is trust with
Regulators you will be for instance on
the table when regulation for your
industry is being discussed in times of
Crisis if you're a VW you are not have a
seat on the table maybe a seat in jail
would be more appropriate right
um so for for many reasons uh the we we
have a lot of evidence from work that I
did and other people did at the school
that
um better investments in CSR are causing
better financial performance through
various mechanisms well even marginally
better financial performance builds
organizational resilience that becomes
particularly valuable in times of
economic uh crisis I mean the the
Loyalty of your employees as well as the
Loyalty of your customers becomes
particularly valuable uh during times of
of Crisis if let's see let's see the
other way around so if you are a company
that in in times of recession that
everyone knows that your cash constraint
that your credit constraint but then you
go out and say you yes but I'll continue
investing in r d for instance that sends
a very credible signal of your
commitment he says a credible signal of
how Central r d or stakeholder relations
are in your strategy and this is
particularly important in stakeholder
relations because some people say oh
these are the fluffy stuff these are the
three Huggers and so on but if exactly
in the times of Crisis where you have
the least amount of cash or access to
credit you continue investing but since
a more credible signal that perhaps
you're more you are serious about this
and this is core to what you are to what
you're doing so
all of the for all of these reasons
um uh I'll go to this data in a second
the what we argue in this paper is that
look the Baseline prediction will be
that people certain companies will fire
people we know that from macro studies
from macroeconomics that unemployment
shoots up which means people will have
companies will fire people we we also
argue that because there will be issues
of excess capacity you know if the
demand goes down you might have idle
factories if the demand goes down uh you
might need to become more efficient
restructure the organization and so on
we also argue that the companies are
actually going to cut investments in
capital expenditure in tangible
resources like you know building new
buildings or new offices and so on but
exactly because of these reasons we say
well that trade-off that we discussed at
the beginning we argue that well they
will save the money from capex for
instance from capital expenditure but
they will maintain the their investments
in intangible resources now we call it
this the the the dock that didn't bark
because essentially what we're trying to
find here is a non-finding in other
words we're trying to detect a
non-change in the investment right now
the decrease not an increase but we're
trying to detect a non-change right now
how did we go about doing that before I
go to the more technical any any
questions or any reactions or any
opposite views importantly that you
would like to share
all right so how did we try did we try
to to to address this question with uh
with with data
so basically
this is a database called computer that
contains information for
thousands of U.S publicly listed in
other words traded companies in the US
so we could detect all this information
how so how did we measure these all
these resources so first the human
capital was simply a count of the number
of employees and we said how many did
they have in 2009 how many did they have
in 2007 and how much did that change
right so we wanted to see the the impact
of the crisis on that change was it
positive was it negative or was it
neutral so a positive change means they
fired people right 2009 minus 2007 and
so on
now tangible resources there is this uh
this uh item in a company's Financial
accounts which is called capital
expenditure right so from there we can
get directly a measure of capital
expenditure but companies out of
different sizes right so we have to
deflate that measure to make it
compatible so we deflate that measure by
uh a company's
stock of existing resources sorry
tangible resources and finally the the
uh kind of the tricky part is how to
measure intangible resources right so in
order to to measure Innovation
capability we we used a company's r d
Investments right which we have annually
for every company again we deflated them
so that we make them compatible across
companies with different sizes and then
in order to measure stakeholder
relations there is this this database
which we call kld it's the most widely
used database in in academic research to
capture what we call
non-financial measures in other words
environmental social governance measures
and that includes star issues like
environmental policies employee policies
government governance policies human
rights policies and so on in other words
anything that is non-financial and is
not included in the financial statement
so kld
uses analysts that gather everything
that the company reports but everything
that everyone else is reporting about
the company as well and they have a
number of screens so they check for
environmental violations Recycling and
so on human rights policies human rights
by violations supply chain policy supply
chain violations and so on and so forth
so a range of screens that try to
capture in the entirety what the firm is
doing and and what we call stakeholder
relations right so they come up with
this widely used index that's basically
a summary measure that tells you how
well how badly a company is doing it's a
rating in other words right is a
credible rating because it is used by
investors to make investments they say
kld index in the stock exchange and so
on now what we did there similar to the
other measures is that we we looked at
the index in 2009 and then we looked at
it in 2007 we saw that how did it change
during the times of of Crisis okay so
those are the four uh categories where
we checked what companies actually did
now how do we measure the crisis right I
it's it's is it a one or a zero in other
words is it did it hit some firms versus
others so here is it where things got a
bit complicated right because you know
when doctors do experiments right they
have this thing we call double blind in
other words some patients get the
placebo effect in other words they get
the sugar peel some some patients get
the actual pill and then the the the
um the the the doctors or the
experimenters are able to compare and
say well actually the pill causes or
does not cause the curing of a disease
in other words causal kind of uh not
just to correlate things but to actually
say that a causes B with certainty now
you can imagine that in social science
that's extremely difficult to do we
cannot say oh this is a real crisis this
is a fake crisis and we're going to hit
the firms differentially right but with
chronometric methods we can get close to
that kind of an experiment and let me
explain to you how now we know that the
Great Recession was the result of the
housing crisis
right but we also know that the housing
crisis right the the heat in prices did
not affect all states in the same way it
affected some states more than some
others with that gives us a nice way of
of identifying the effects okay we don't
have a placebo a sugar pill and a real
pill but we have less severely affected
and much more severely affected States
across the U.S so that gives us a
comparison that is a more valid let's
just say than correlation that can tell
say something perhaps more causal in
terms of why firms did what they did
during the crisis now yes
foreign
we'll get to the sectors in a bit yes
because yes I'll I'll yes we will
um so so how do we yeah but how do we
estimate the the house prizing shock so
there is this uh
um uh website like zoopla in the UK they
call it Zillow I'm not sure I everything
starts with a z but anyway
um so these guys gathered the
information of more than 110 million
homes in the US right so they monitor
and they gather that kind of information
from mortgage applications listings tax
filings and so on so they by by
aggregating up 110 the prices of 110
million homes across the us they can
construct an index which we call the
Zillow house value index every month
that tells you you know it's like in the
UK right it's often reported you know
London versus the rest of the UK housing
prices increases decreases and so on
right but the nice thing about this um
this index is that we can get it at the
level of the us we can get it at the
level of the state we can get it all the
way down down to the level of the zip
code in the US or the postal code here
exactly because there's so much
information that goes into this index so
we can construct this for as we said
before the different states and we can
see that some states are more severely
hit by the crisis and some states are
less severely hit by the crisis and that
kind of variation allows us to identify
if you like the the effect of the crisis
on companies investment strategy so for
your information this the um during this
time and across the U.S in other words
between 07 and 09 the heat across the
entire U.S was about 15 percent which is
a huge
heat if you consider the the the the
real estate market and remember this is
the average in other words there are
states that we're hit much more and
respectively much less than on the
average so what we do technically
speaking is that we we we we take this
uh
heat right in other words the shock to
the to the uh the real estate market so
the housing price shock and we see
um figuratively speaking what how firms
uh reacted across those four domains
there's other technical stuff here in
other words there are some things you
need to consider control about the size
of the firm its profitability before the
crisis and so on but rest assured we we
control for all those things
um so what do we find what is the the
the main finding here is that
the Baseline hypothesis that we said is
that companies did indeed significantly
reduce the size of their Workforce and
their capital expenditure their
investments in tangible resources right
but here and but the the main finding
and this is the the dog that didn't bark
in other words no change in the
investment is that companies the blue
circles as companies maintained their r
d Investments and their investments in
corporate social responsibility so it
seems that it's not only invest or only
save it's sort of a combination we see
firms maintaining on intangibles by
cutting back on Workforce and tangible
resources in other words sort of
treating all of the resources that they
have as a portfolio that needs to be
adjusted during the times um during
times of of Crisis
um
again this is the code from uh from
Sherlock Holmes you want to have a look
I'm not sure the um how excited the
non-sherlock Holmes inclined the
reviewers are going to be about this
title but we'll fight it to the end and
see if it stays in
um we already published a paper with
Olga called mind the gap
um and you can imagine where that came
from so uh let's see if this goes
through uh anyway so
now let's go to the the other important
aspect we said that intangible resources
might particularly valuable in times of
Crisis because they help organizations
become more efficient or Innovative more
adaptive or more resilient during times
of Crisis now then the question becomes
what did they do following the crisis
how well or how much better or how much
worse did they do because who knows
maybe the other guys that did follow
different strategies uh invested better
and and Achieve better results following
the crisis so we said what we did is
well let's look at the return on assets
in the recovery period in other words in
the let's look at their profitability in
and take an average of 2010 and 11 right
when the crisis officially ended in 2009
and we used the Eternal nurses as I
mentioned but also the net profit margin
two measures of performance now what did
we try to see is is what what our basic
argument was is that those kinds of
Investments through those mechanisms
were going to lead to a competitive
advantage in other words we were
expecting
um companies that did not cut r d and
did not cut CSR to do better following
the crisis so this is the the outcome so
the the first line if you cannot read it
I apologize it says companies that did
not reduce r d only right those
companies did 34 or 67 better
um following in the recovery period
now there are those that did not cut CSR
and there we see another nine percent uh
or uh 20 uh yeah 23 in terms of the net
profit margin doing better in the
recovery period compares the ones that
did cut out r d and did cut CSR now the
interesting thing is let's look at those
companies that did not do both in other
words companies that may maintained both
their r d Investments as well as the
Investments and stakeholders in other
words our investments in CSR so we go
for those companies you see the the
numbers dominate both in other words
they did 53 and 78 better financially in
the recovery period compared to to other
firms all right
we hope that you know by by looking at
what firms actually did and also seeing
their post recession performance we
Again Begin to understand uh what
strategy doing the business cycle
um begins to to to look like yes
self-selection that those that could
afford to maintain their r d and CSS our
investment from the ones who were
typically well run anyway because they
had the reserves where those that were
poorly run
so so well yeah
right so remember that we as I mentioned
the controls we control from where they
started so we controlled for how
profitable how leveraged they were what
kind of debt they have and all that at
the beginning of the crisis now on top
of that remember these are the guys that
did not cut their investments in other
words they were able to afford to
maintain the Investments
on average they did right that's why
there is as I showed it before it's for
the entire sample here I want to see the
ones that in particular did not cut it
both of them right because the sample it
could be a combination of both right
um all right now the you asked about
industry uh sector changes and and
that's this makes a lot of sense because
um for some sectors right stakeholder
relations are going to be important for
other sectors stakeholder relations are
not going to be material for instance in
sectors where human capital is important
you can see that broader stakeholder
relations are going to be important and
similarly for r d there might be sectors
in which innovation is critical but
there might be sectors in which
innovation is not critical so because we
have all these industries and sectors in
our sample we can test for that and if
our mechanisms are are close to being
truth we can say well if this mechanisms
that we argue for stand hold then we
would expect in Industries where
stakeholder relations are not important
that companies actually cut their r d
and we can order their CSR and we can
also say the reverse that in the top
quartile in other words in Industries
where CSR is particularly important or
CS or are in this particularly important
not only did they not cut but they
actually increased that investment in r
d and CSR during times of Crisis so we
try to break down Industries in terms of
how important r d is by taking an
average across all firms and then we
rank the industries and then we take the
top top quarter which is the most first
r d or most CSR intensive Industries and
there's another check we had to do right
because someone can say okay fine but
look identity Investments they take
years stakeholder relations may take
years this is has nothing to do with the
crisis it might be because these are
just sticky Investments right because of
long-term sticky investment so firms
just maintain it so in order to check
for that we said well why don't we look
at firms that they were that were
particularly financially constrained
right those that could not as you
mentioned be who did not have the
financial resources did they behave in
the way that we expect them to to to to
behave so all this as we call that the
robustness checks just auxiliary
analysis to make sure that the
mechanisms that we're working for are
particularly true in the context in
which we expect them to be particularly
true so
um
companies in low r d intensity
Industries we do find that they decrease
their r d Investments the reverse is
also true for the top quarter level of
adding the Intensive Industries
companies increased there are in the
Investments similar for CSR in in in in
low CSR in other words in indices where
the stakeholder relations Investments
are not Material firms went ahead and
diminished their Investments but at the
top of the of the list in other words in
the industries in which CSR Investments
are sorry stakeholder relations are
material firms maintained or increased
their investments in CSR and finally for
both of these the companies behaved
exactly as we'd expect them in other
words if indeed they were financially
constrained and we can measure how
financially constrained companies they
did reduce both r d and and
CSR in other words getting away without
sticking this argument because when they
did face the financial constraint they
cut it right so it's not the stickiness
of these Investments that may drive
these results
all right so to just to conclude
um so what did we try to understand here
we tried to understand what companies
actually did in their latest financial
crisis as you might have seen in popular
press on the news and so on there's a
lot of talk about the economy as a whole
and rightly so about inflation and
interest rates and so on uh in times of
Crisis there is much less talks about
firm strategy during times of Crisis and
you can imagine that it is it is
particularly in times of Crisis where
strategy generates uh important
advantages or Traders become
particularly binding and managers and
Executives need to take important
decisions so what we wanted to do in
this paper is sort of open this black
box because believe it or not there's
not really much out there at least in
our academic world that explores down to
the firm level what firms do in times of
Crisis despite the regularity of crisis
and despite the fact that the manager is
bound to go through a couple of crises
during his or her career right so we try
to answer this question with the latest
crisis and said what did firms actually
do and we argued that they are going to
maintain their investments in intangible
resources exactly because these are the
resources that become particularly more
valuable they're going to have to face
trades of trade-offs and therefore they
will cut on on on the workforce which is
our Baseline prediction that we know
from macro but in in capex and in at the
end of the day those firms that maintain
their investments in intangible are much
more likely to to correlate with better
performance following the crisis
all right
I had to use this slide it's one of my
favorites in the deck so
any questions uh concerns uh
clarifications comments anything yes
it was about three
three and a half thousand U.S firms
which basically the entire universe of
of U.S fans are pretty important so the
largest firms and everything is and all
of them are included yeah
so
[Music]
follow
sliding scale you know
with us we would say that question
you're trying to you're asking me to
make out of sample predictions in other
words uh it is probable but as in as a
as everything there are trade-offs right
in other words I would expect that uh as
in anything you cannot just increase
something and get more and more and more
better of the other at some point there
should be trade-offs there should be
diminishing returns there should be a
saturation point right where an optimal
Point through which you cannot invest so
it is probable but uh I don't think we
can answer this question at least with
this data
that only applies to that Great
Recession period was good have you have
you done any other work around you know
what the impact of
perhapses right right so the the a lot
of the theories that we bring to explain
why in crisis these are particularly
important it comes from work that says
in general why these Investments are
important so yeah a lot of my work is
understanding well what is an
organization that integrates
environmental and social issues into
strategy how does it governance State
change how stakeholder engagement
change and so on and so forth there's a
lot of work for that which we leverage
but we need to build extend the argument
we're saying why that in particular in
crisis becomes important
yeah
another yes
why didn't you study Europe uh because I
think it would be different
um
yeah so I we started with the U.S it was
a sorry starting with is it slightly a
technical reason remember I told you
about the difference with
experimentation right so in order to be
able to say something that is beyond
just correlational we needed to have
these variance in the severity of the
crisis so because the crisis in the U.S
originated as a housing crisis we were
able to detect more and less severely
affected regions and therefore make that
comparison in the background is what
allows us to say what firms actually did
now the reason why I think there is not
enough work in general in recessions is
that if it's not the housing recession
and then all the companies are hit the
same there is no reason no way you can
say something Beyond correlation in
other words if I give everyone on the
same peel right I don't know for who for
for each people the pill works and for
which people the pill doesn't so you can
imagine a recession that doesn't have
that Regional variation as the
equivalent of giving everyone the same
peel right so I don't think we had um
housing price variation enough in Europe
to be able to let's say econometrically
identify uh that effect in in in Europe
yes
um so just a point of clarification this
is publicly or publicly traded companies
yes I was wondering about the impact of
you know the ownership structure because
of course some of the points you
mentioned in terms of benefits access to
finance so those companies don't have
the you know strategy a shareholder
friendly right no we we haven't looked
at that uh we haven't looked at changes
in the ownership structure because we
this was kind of the the platform to
start exploring kind of the crisis but
um you can imagine that it opens us a
range of questions let me even the
governance is a very important one in
how it perhaps changed over the crisis
but let me give you another one even
Within These pillars that we talked
about Workforce we found that Workforce
on average goes down right but this
opens it kind of worms because they say
well well who did they fire did they
fire skilled or unskilled labor what did
they do for the ones that remained
behind did they invest more or less in
the employee relations right and the
same thing with r d projects which ones
did they adjust did they adjust their
long-term RND projects or their
short-term r d projects which ones did
they maintain it was already shuffling
perhaps of of r d projects during the
crisis is that we cannot yet observe
here we can only see average effect at
the level of r d in general or Workforce
in general but believe it or not we we
don't have enough research that goes
into one of those quite fundamental
pillars for any company to understand
exactly what they're doing why they are
doing it in recessions
was a question no
yes
another question would be a
Communications to what extent that you
know investment in CSR or RB was
communicated both internally and
externally yeah yeah because they will
also could have impacted their results
and then depending on whether their
communication strategy was affected
right right yes yes so you're going a
bit more micro within the organizations
stakeholders yeah which would also
impact the results so the the the the um
the degree to the degree that they
communicate externally all that
communication is summarized in the kld
index right from company self-reports as
well as uh let's say what ngos report
about the company what the government
reports about the company and so on so
all those non especially the
non-financial stuff is captured by the
kld that's why we call it stakeholder
relations more broadly yeah
um well visual prediction is a tricky
one in in in in in Academia that it's
not like uh Us in strategy we don't do
investment strategies and and finance
and so on but I think what is predicted
I wouldn't say predict I would say
prescriptive is the general principles
that we're able to extract from these
findings in other words uh why are
intangible resources particularly
valuable how do they help a company uh
maintain or improve its competitiveness
so those more General learnings yes I
wouldn't call them you know it's
predictive with with respect to a
particular company but I would say that
those learnings uh generalize beyond the
context of this particular recession in
the context of intangible resources more
broadly in the context of managing under
extreme uncertainty whether we want to
call that a recession or some other uh
type of of uncertainty and so on so into
the to that extent yes there are that
our general findings that go beyond this
particular crisis and the U.S context
yeah
yeah it's what we call theoretical
contributions if you like yeah
huh
no question all right yep anyways all
right thank you so much for your
attention thank you
thank you

---

### The impact of the School on Marketing | London Business School
URL: https://www.youtube.com/watch?v=EFW-87l5L-M

Transcrição não disponível

---

### John Mullins Findings from his Book 'The Customer-Funded Business' | London Business School
URL: https://www.youtube.com/watch?v=IojjHWsHHUc

Transcrição não disponível

---

### Gary Hamel: Revolution, Renewal and Resilience | London Business School
URL: https://www.youtube.com/watch?v=I6YpJ1qn_Sc

Transcrição não disponível

---

### Handling Complexity with Professor Richard Jolly | London Business School
URL: https://www.youtube.com/watch?v=HPL5g3F_wbA

Transcrição não disponível

---

### Two tips for developing good management skills | London Business School
URL: https://www.youtube.com/watch?v=lLcgCEbsT08

Transcrição não disponível

---

### Helping newcomers integrate into a workplace | Dan Cable | London Business School
URL: https://www.youtube.com/watch?v=vvItQitwGeI

Transcrição não disponível

---

