Is our memory involved in the development of new insights? If so, in what ways? In this article the author attempts to connect the dots between memory and insight -- two thought processes that are normally treated independently. In so doing, he shows that the connecting thread among the dots involves the 'making of meaning', and that the needle for weaving the connecting thread is the concept of co-creation. A better understanding of this, he argues, can deepen our knowledge about consumer behavior and improve research methods and marketing practice.

Is your fund manager's sudden bullishness the result of some special insight, or is it the result of the torrid love affair he is engaged in providing a hormonal charge to his perception of the facts? Is your chairman's congratulatory smile addressed at you, or, rather, to the other people around the table, whom he intends to see him smiling at you so that they don't think he bears you a grudge - which, unfortunately, he actually does? Welcome to the ZOO -- the Zone Of Oblivion, both yours and that of others. The ZOO is a special place: it comprises all of the facts, feelings and experiences that make a huge difference to you and your business, but which you neither know about, nor know that you don't know. The author provides guidance for thriving in this murky, ambiguous - yet entirely human environment.

'Synthesis' is defined as a process or result of building up separate elements, especially ideas, into a connected whole. The author argues that this is an essential element of the skill of designing everything from products to services to strategies. He proposes that synthesis consists of two key stages: sensemaking and framing, describing in detail how each works. A better understanding of these concepts, he argues, will lead to the emergence of a professional methodology for 'innovation by design'.

While a master chef or painter may welcome the freedom and flexibility associated with an enlarged set of options, does the average person benefit from more choice during problem solving? The authors show how the increased complexity inherent in increased options affects people and describe the research that led them to conclude that both individual and situational factors play a role in influencing creativity. They identify two important variables that managers must pay attention to in the quest for creative outcomes.

While there are many roads to innovation, there is reason to believe that it often arises from the adaptation of known solutions to new problem domains. The good news is that people have a remarkable facility to make analogies - to notice similarities between domains that, on the surface, are not much alike. The authors argue that this ability to make analogical inferences is crucial to problem solving. When solving any new problem, the problem statement is only a partial match to the known solutions; the key to analogical problem solving is to find known problems that have the same structure as the problem being solved. The authors describe how to improve our 'analogical retrieval' and provide several tools for analogical innovation.

Rede Alta Velocidade, SA RAVE, the state-owned company responsible for planning and developing a major high-speed rail project in Portugal, must persuade both public officials and lenders that the project is worth undertaking. It must also make a recommendation on the appropriate organizational form for the enterprise. Specifically it must determine the role of the Portuguese government in financing and operating the high-speed rail network, with options ranging from full development and management of the project by the public sector to completely private development and management. Lying in between these two polar cases were a variety of hybrid models often referred to as public-private partnerships (PPPs). Using data in the case, students have the opportunity to perform a benefit-cost analysis of the project. They also must think carefully about the optimal role of the government in a major new infrastructure project.

In December 2010, one U.S. legislative action was largely overlooked in the popular press: the one-year extension of the 45-cent-per-gallon Volumetric Ethanol Excise Tax Credit (VEETC), commonly known as the "blender's credit." Both proponents and opponents of the blender's credit liked to cite data to support their positions. Proponents pointed out the number of jobs created by new ethanol plants, while opponents cited unfavorable energy balances from the use of ethanol and the overall budgetary impact of the blender's credit. What was less clear-but potentially much more important than the selective data cited by advocates and critics of ethanol-was the overall impact of the blender's credit on the U.S. economy. In particular, to what extent did the ethanol subsidy-by influencing the allocation of resources to the ethanol market-act as a drag on efficiency in the U.S. economy? This case presents a history of ethanol in the U.S. and an overview of the market for ethanol-based motor fuel, including data on demand and supply fundamentals. It also discusses the broader U.S. energy market, as well as the U.S. market for corn. The case reviews other policy interventions besides the ethanol tax credit that have an impact on the market for ethanol-based motor fuel, such as tariffs and mandates. Finally, it surveys the ways other countries around the world, such as Brazil, have supported the use of ethanol-based fuel.

After celebrating their nineteenth harvest and seventh year as California producers and marketers of premium wine in September 2007, the Mexican-born owners of Ceja Vineyards were considering whether or not to make a concerted effort to target U.S. Hispanic consumers. Doing so would enable Ceja to capitalize on its heritage as one of the first Hispanic-owned and operated wine businesses in America, but this was no easy decision. Targeting the emerging and potentially vast U.S. Hispanic consumer segment might require extensive repositioning of Ceja's premium varietal wine brands, result in a diminution of effort to sustain its rapidly growing wine club, pose additional future expenses for promotion of wine consumption to U.S. Hispanic consumers, and erode the high-end premium wine brand. In addition, the Hispanic wine consumer living outside the U.S. represented another high potential market opportunity and was of serious interest to Amelia Ceja, co-founder of the winery, and her family partners.

When the chief executive of Maclaren USA learned about a rise in finger injuries to children involving the hinges on his strollers-which were similar to those used for almost all strollers on the market-he and his colleagues immediately began working with the U.S. Consumer Product Safety Commission to plan a voluntary "recall," during which the company would send protective hinge covers to anyone who wanted them. Maclaren saw this as an opportunity to educate parents about stroller safety as well as to protect children. But news of the recall was leaked early in a sensationalist report, and the company was unprepared to cope with the response. Thousands of concerned parents tried to reach Maclaren, causing its communications systems to crash: Callers got a busy signal; e-mails went into the ether; the website froze. The company's executives realized they would need four times as many extra employees and three times as many hinge covers as they'd originally thought. Rastegar explains how and why their careful planning fell short, discusses the lessons he and Maclaren learned, and affirms his commitment to pursuing industrywide safety standards.

HBR asked top management thinkers to share what they were resolved to accomplish in 2011. Here are their answers: Joseph E. Stiglitz will be crafting a new postcrisis paradigm for macroeconomics whereby rational individuals interact with imperfect and asymmetric information. Herminia Ibarra will be looking for hard evidence of how "soft" leadership creates value. Eric Schmidt will be planning to scale mobile technology by developing fast networks and providing low-cost smartphones in the poorest parts of the world. Michael Porter will be using modern cost accounting to uncover-and lower-the real costs of health care. Vijay Govindarajan will be trying to prototype a $300 house to replace the world's poorest slums, provide healthy living, and foster education. Dan Ariely will be investigating consumers' distaste for genetically modified salmon, synthetic pharmaceuticals, and other products that aren't "natural." Laura D. Tyson will be promoting the establishment of a national infrastructure investment bank. Esther Duflo will be striving to increase full immunization in poor areas of India. Clay Shirky will be studying how to design internet platforms that foster civility. Klaus Schwab will be undertaking to create a Risk Response Network through which decision makers around the world can pool knowledge about the risks they face. Jack Ma will be working to instill a strong set of values in his 19,000 young employees and to help clean up China's environment. Thomas H. Davenport will be researching big judgment calls that turned out well and how organizations arrived at them. A.G. Lafley will be proselytizing to make company boards take leadership succession seriously. Eleven additional contributors to the Agenda, along with special audio and video features, can be found at hbr.org/2011-agenda.

The capitalist system is under siege. Recently business has been criticized as a major cause of social, environmental, and economic problems. Companies are widely thought to be prospering at the expense of their communities. Trust in business has fallen, leading governments to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle. A big part of the problem is firms' narrow approach to value creation. Focused on short-term financials, companies overlook the broader influences on their long-term success. Why else would they ignore the well-being of their customers, the depletion of vital natural resources, the viability of suppliers, and the economic distress of the communities in which they produce and sell? It doesn't have to be this way. Companies could bring business and society back together if they redefined their purpose as creating "shared value"-generating economic value in a way that also produces value for society by addressing its challenges. Firms can do this in 3 ways: by reconceiving products and markets, redefining productivity in the value chain, and building supportive industry clusters near their locations. A number of leading firms have already embarked on such initiatives. Nestle, for example, redesigned its coffee procurement, providing small, impoverished farmers advice on agricultural practices; helping them secure plant stock, fertilizers, and pesticides; and paying them a premium for better beans. Higher yields and quality increased the growers' incomes, the environmental impact of farms shrank, and Nestle's reliable supply of good coffee grew significantly. Shared value was created. Shared value could transform capitalism. It could also drive the next wave of innovation and growth as it opens managers' eyes to immense human needs to be met, large new markets to be served, and the internal costs of social deficits-as well as the competitive advantages available from addressing them.

To survive over the long haul, a company must reinvent itself periodically, jumping from the flattening end of one business performance curve to the rising slope of another. Very few companies make the leap successfully when the time comes. That's because they start the reinvention process too late. Once existing business begins to stall and revenue growth drops significantly, a company has less than a 10% chance of ever fully recovering. Accenture's Nunes and Breene, reporting on the results of their long-running High Performance Business research program, point to a striking difference between companies that have successfully reinvented themselves and those that failed. High performers manage their businesses not just along the growth curve of their revenues but also along three much shorter, though equally important, S curves: tracking the basis of competition in their industry, renewing their capabilities, and nurturing a ready supply of talent. By planting the seeds for new businesses before revenues from existing ones begin to stall, these companies enjoy sustained high performance.

Many Western multinationals expect to find most of their future growth in emerging economies. But they have frequently struggled to exploit the opportunity, relentlessly cutting costs and accepting profit margins close to zero. The problem, say the authors, who are all with the innovation consultancy Innosight, is not that these companies can't create viable offerings but that simply transplanting their domestic business models to the new markets won't work. They must devise fundamentally new models-by identifying an important unmet job consumers need to do; performing that job profitably at a price the customer will pay; and carefully implementing and evolving the model by constantly testing assumptions and making adjustments. Drawing on their experience investing in, incubating, and consulting for companies that have created 20 new business models in developing markets, the authors describe the vast potential demand represented by the "middle market" in emerging economies-the millions of people who have the desire and wherewithal to pay for goods and services, from refrigeration to clothes washing to money transfers, that will help them do the "jobs" no current offering adequately can.

With product life cycles growing ever shorter and competition cropping up in unexpected places, nearly every industry is facing disruption. How can you tell if your model is running out of gas? For starters, if your next-generation innovations provide smaller and smaller improvements and your people have trouble thinking of new ways to enhance your offering. Pay heed to the signs and start experimenting with several new options until you find one that will turn your threat into an opportunity.

Most executives believe that competing through business models is critical for success, but few have come to grips with how best to do so. One common mistake, the authors' studies show, is enterprises' unwavering focus on creating innovative models and evaluating their efficacy in standalone fashion-just as engineers test new technologies or products. However, the success or failure of a company's business model depends largely on how it interacts with those of the other players in the industry. (Almost any business model will perform brilliantly if a company is lucky enough to be the only one in a market.) Because companies build them without thinking about the competition, they routinely deploy doomed business models. Moreover, many companies ignore the dynamic elements of business models and fail to realize that they can design business models to generate winner-take-all effects similar to the network externalities that high-tech companies such as Microsoft, eBay, and Facebook often create. A good business model creates virtuous cycles that, over time, result in competitive advantage. Smart companies know how to strengthen their virtuous cycles, undermine those of rivals, and even use them to turn competitors' strengths into weaknesses.

Fending off new competitors is a perennial struggle for established companies. Govindarajan and Trimble, of Dartmouth's Tuck School of Business, explain why: Many corporations become too comfortable with their existing business models and neglect the necessary work of radically reinventing them. The authors map out an alternative in their "three boxes" framework. They argue that while a CEO manages the present (box 1), he or she must also selectively forget the past (box 2) in order to create the future (box 3). Infosys chairman N.R. Narayana Murthy mastered the three boxes to reinvigorate his company and greatly increased its chances of enduring for generations.

In 1977 John Mackey moved into a vegetarian co-op, became its food buyer, and went to work in a natural foods store, putting him on the path to founding Whole Foods. An iconic brand, Whole Foods dominates natural-foods retailing in the United States. Mackey talked to HBR about how top management functions at the company (decisions are made by consensus), his sustainable seafood initiative, and what he means by "conscious capitalism." Among other things, conscious capitalism recognizes the stakeholder model, whereby customers, employees, investors, suppliers, larger communities, and the environment are all interdependent. Conscious leadership and a conscious company culture-which allows the organization to fulfill its higher purpose-are important ingredients as well. Part of Whole Foods' higher purpose is realized through the Whole Planet Foundation, which has set up microlending organizations in the communities where the company actually trades. "Nothing we've ever done in our history has created more goodwill with our team members than that," Mackey says.

Private moments of doubt and fear come even to managers who have spent years on the job. Any number of events can trigger them: An initiative is going poorly; you get a lukewarm performance review; your new assignment is daunting. HBS professor Linda Hill and executive Kent Lineback have long studied the question of how managers grow and advance. Their experience brings them to a simple but troubling observation: Most bosses reach a certain level of proficiency and stay there-short of what they could and should be. Why? Because they stop working on themselves. The authors offer what they call the three imperatives for every manager who seeks to avoid this stagnation: Manage yourself. Who you are as a person, the beliefs and values that drive your actions, and especially how you connect with others all matter to the people you must influence. Manage your network. Effective managers know they cannot avoid conflict and competition among organizational groups; they build and nurture ongoing relationships. Manage your team. Team members need to know what's required of them collectively and individually and what the team's values, norms, and standards are. The authors include a useful assessment tool to help readers get started.

Corporate strategy often seems abstract to managers on the ground, who struggle to translate it into a realistic plan of action. But a process called strategy briefing, which originated with the military, can help them overcome that challenge. Bungay, the director of the Ashridge Strategic Management Centre, describes in this article how briefings can move managers and their reports from confusion about a complex set of goals and performance measures to clarity about just which objectives each person needs to focus on and in what order. Using a fictional case study as an illustration, Bungay outlines the five critical steps of the process: (1) State your intent, or what you are expected to do and why, (2) Revise it in the context of your company's situation, (3) Determine which measures indicate whether you're achieving your goal, (4) Define the tasks implied by your intent, (5) Define the boundaries, or constraints, that limit your team. A single strategy briefing can help a team perform better, but the real magic happens when briefings roll down through an entire organization. When that occurs, the company's strategy is broken into a cascade of discrete but linked elements. In the end, people will be strategically aligned and operationally autonomous-a combination that is one of the hallmarks of high-performance organizations.

Many philanthropists have big ambitions, but even the richest individuals and largest foundations don't have enough money to end poverty, reverse climate change, or cure cancer. And many donors impose substantial costs on their grantees by, for instance, becoming excessively involved in program design or imposing burdensome reporting requirements. To achieve breakthroughs, donors need a multiplier effect-an approach that delivers many dollars' worth of impact for each dollar invested. In short, they need an investment model. To develop a sound model for philanthropy, donors must understand the methods of change that breakthrough results require. These include building robust nonprofit organizations, modifying public policy, establishing intermediaries, and facilitating research. The Draper Richards Foundation, for example, helps direct-service nonprofits build their capacity and capabilities; the James Irvine Foundation created an intermediary organization to improve high school education in California. Donors must also understand how they can best support those efforts-through the roles they play, the resources they devote, and the relationships they develop. Michael J. Fox, for instance, has used his celebrity and credibility in his foundation's efforts to cure Parkinson's disease. Developing a clear investment model doesn't have to be complicated or expensive, just deliberate. Without one, donors risk adding little value and imposing steep costs.