Faculty & Research

• HBS Book

Retirement, as a major life transition, can be both thrilling and challenging in unexpected ways. Written by acclaimed authors in the fields of business leadership, careers, and work, this book goes beyond the typical financial and health-related advice on retirement, providing insights to guide you in broader areas of your life – identity issues, relationship challenges, and questions about creating a new retirement life structure that works for you. With lively, engaging writing, the book tells the detailed retirement transition stories of 14 people – and draws on over 200 interviews with 120 people – to explore how retiring involves a reconstruction of both the person and their life structure.

• American Economic Review: Insights 6, no. 4 (December 2024): 558–574.

We document a sizeable increase in the frequency of price adjustments following the large energy shocks of 2022. We use a tractable New Keynesian model, calibrated to the pre-shock data, to interpret such a pattern. The calibration highlights the state-dependence of firms' decisions: prices are adjusted rapidly when markups are misaligned. In the model, a large cost shock triggers a swift increase in the frequency of price adjustments, causing a rapid pass-through from costs to prices. Time-dependent models, such as the Calvo model, miss this frequency response, failing to capture the sudden inflation surge after a large shock.

• Business & Environment Initiative

Using large language models to measure firms' climate solution products and services, we find that high-climate solution firms exhibit lower stock returns and higher market valuation multiples. Their stock prices respond positively to events signaling increased demand for climate solutions. These firms also show higher future profitability during periods of regulatory uncertainty, unexpected increases in climate concerns, and when a larger share of their sales occurs in states with climate plans and stronger public support for addressing climate change. Overall, our results indicate that high-climate solution firms, whose business benefits as climate transition risks materialize, hedge investors against such risks.

• Featured Case

Shamil and Kavi Thakrar, co-founders of Dishoom, faced critical decisions as they looked to expand the UK-based restaurant group. Shamil, the CEO, was confident in Dishoom's potential for growth but he was concerned about preserving the culture and values centered around the notion of "seva" or selfless service. He knew that this strong culture underpinned the nostalgic and culturally rich customer experience that defined the organization's success to date. At the same time, Thakrar wondered if Dishoom's culture was a double-edged sword, contributing to employee burnout. How could he ensure that Dishoom’s organization and culture were set up for the growth ahead? This case considers the challenge of how leaders design and manage culture in the face of organizational scaling.

• Featured Case

In August of 2017, CSL Capital, a private equity fund founded and operated by Charlie Leykum (HBS’04), was deciding to take one of its portfolio companies, Ranger Energy Services, public. Founded in 2014, Ranger Energy was an oilfield service company providing high-spec rig services to E&P customers. With 150% growth in top line and improving margin performance over the last two years, Ranger was still generating negative net income and hence Leykum was worried if public markets would be able to understand Ranger’s business strategy and value the business fairly. How can investors value a growth business like Ranger fairly? What are the advantages and disadvantages of taking a company public? How can investors assess whether Ranger Energy would continue to be a top performer in the high-spec rig market? Students are encouraged to decide as to whether they agree with CSL’s strategy of taking Ranger public or should they have explored other means of raising growth capital.

• HBS Working Paper

We investigate the conditions that motivate managers to impede the growth of talented subordinates due to fears of future competition for their own positions. Our research expands on existing tournament and contest theory literature that considers peer-to-peer sabotage as an unintended consequence of relative performance evaluation (RPE) to sabotage across hierarchical levels. Drawing on survey data from 335 U.S. corporate executives, we find that top-down sabotage (TDS) is not driven by RPE systems, but thrives in environments where subjective managerial discretion dominates the performance evaluation process. Weak management control systems create opportunities for such discretion, undermining RPE's effectiveness as a self-monitoring tool. Notably, our results reveal that organizational culture emerges as the most significant factor in mitigating TDS.

• Working Paper

Many active funds hold concentrated portfolios. Flow-driven trading causes price pressure, which pushes up the funds’ existing positions resulting in realized returns. We decompose fund returns into a price pressure (self-inflated) and a fundamental component and show that when allocating capital across funds, investors are unable to identify whether realized returns are self-inflated or fundamental. Because investors chase self-inflated fund returns at a high frequency, even short-lived impact meaningfully affects fund flows at longer time scales. The combination of price impact and return chasing causes an endogenous feedback loop and a reallocation of wealth to early fund investors, which unravels once the price pressure reverts. We find that flows chasing self-inflated returns predict bubbles in ETFs and their subsequent crashes, and lead to a daily wealth reallocation of $500 Million from ETFs alone. We provide a simple regulatory reporting measure – fund illiquidity – which captures a fund’s potential for self-inflated returns.