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To be successful, CEOs must articulate a compelling vision, align people around it, and motivate them to execute it. But there’s one thing that can make or break them: how they respond in real time to unforeseen events. On average, addressing unexpected issues—which range from fluctuations in stock price, to justdiscovered product flaws, to major accidents and crises— consumes 36% of a CEO’s time. That’s a big proportion, and not all those problems merit a leader’s attention. To help CEOs understand which ones they truly need to focus on, Nohria, the former dean of Harvard Business School, has created a framework that sorts events into four categories— normal noise, clarion calls, whisper warnings, and siren songs—and offers guidance on how leaders should handle each type. [ABSTRACT FROM AUTHOR]

Toto Wolff, the team principal for Mercedes-AMG Petronas— arguably the most impressive team in F1 racing history—has led his organization to unparalleled success. Mercedes earned the Constructors’ Championship (for best overall team performance) every year from 2014 through 2021, and over that time frame it won nearly 70% of the Grand Prix races it competed in. To understand what made that possible, Harvard Business School’s Anita Elberse spent time with the team in 2021, conducting interviews and watching what went on behind the scenes before, during, and after races. She found that Wolff shapes the culture at Mercedes to a remarkable degree. Elberse’s takeaway? What you say and do as a leader has a surprisingly powerful effect on the organization you run. In this article, drawing on her observations of Wolff’s management style and practices, Elberse presents six lessons that can help any leader cultivate a winning team: (1) Set the highest standards for everyone; (2) put people front and center; (3) analyze mistakes continually— even when winning; (4) foster an open, no-blame culture; (5) trust superstars but maintain authority; and (6) relentlessly battle complacency. [ABSTRACT FROM AUTHOR]

Despite substantial regulatory reform following the 2008 financial crisis, financial firms are still suffering from fraud and other forms of ethical misconduct. As a result, they have collectively paid out more than $400 billion in fines over the past 12 years. A 2019 Harvard Business School study found that among a sample of Fortune 500 companies, more than two instances of internally substantiated misconduct occur each week, on average. It’s becoming increasingly clear that the traditional approach to financial regulation—imposing formal rules and investing in a strong compliance function to ensure that institutions, managers, and employees comply with those rules—cannot protect firms against excessive risk-taking and financial misconduct. The authors of this article draw on their experience advising some of Europe’s largest financial institutions to present an alternative approach to compliance that is based on the principles and discoveries of behavioral psychology. It involves understanding the contextual drivers of human behaviors and introducing small changes, or “nudges,” to eliminate misconduct at the source. [ABSTRACT FROM AUTHOR]