Americans have long believed that U.S. military officers-trained for high-stakes positions, resilience, and mental agility-make excellent CEOs. That belief is sound, but the authors' analysis of the performance of 45 companies led by CEOs with military experience revealed differences in how the branches (Army, Navy, Air Force, Marine Corps) prepare leaders for business. Those differences reflect the trade-off between flexibility and process that each branch of the armed services must make. Army and Marine Corps officers operate in an inherently uncertain environment. They define the mission but then give subordinates the flexibility to adjust to realities on the ground. This leadership experience tends to turn out business executives who excel in small firms, where they can set a goal and then empower others to work toward it. Navy and Air Force officers, who operate expensive, complex systems such as submarines and aircraft carriers, are trained to follow processes to the letter, because even small deviations can have large consequences. In corporations, these leaders excel in regulated industries and in firms that take a process approach to innovation. The larger lesson that the military can offer the business world is that fit matters. Different circumstances demand different leadership skills. Hire the person who fits the job.
The armed services have been in the business of leadership development much longer than the corporate world has. Today's military leaders need tools and techniques to face a fast-changing and unpredictable type of enemy-so the armed services train their officers in ways that build a culture of readiness and commitment. Business leaders need to foster an adaptive culture to survive and succeed, given that they, too, face unprecedented uncertainty-and new types of competitors. Michael Useem and his colleagues at the Wharton School incorporate exposure to military leadership into MBA and executive MBA programs. Highlights include direct contact in the classroom with leaders in the U.S. Army, the U.S. Marine Corps, and the Department of Defense, along with field-training exercises and battlefield visits. The programs are designed to help students connect viscerally to essential leadership lessons. Four are featured in the article: (1) Meet the troops. Creating a personal link is crucial to leading people in challenging times, (2) Make decisions. Making good and timely calls is the crux of leadership, (3) Mission first. Focus on common purpose and eschew personal gain, (4) Convey strategic intent. Make the objectives clear, but give people the freedom to execute on them in their own way.
An economic downturn can quickly expose the shortcomings of your business strategy. But can you identify its weak points in good times as well? And can you focus on those weak points that really matter? Drawing on some 25 years of research, Harvard Business School professor Robert Simons identifies seven questions all executives should ask in order to ensure their strategies' success. Have you identified your primary customer? Decided whether shareholders, employees, or customers come first? Narrowed down which performance variables to track? Have you set creative boundaries? Are you generating creative tension? Are you promoting cooperation among your employees? And at the end of the day (and in the middle of the night), are you thinking about the right issues as you ponder how the future will change your business? The answers to these questions can be tough, and their full implications are not always immediately clear. Simons provides a real-world guide to the various alternatives and their risks, illustrating his points with examples from companies including Home Depot, McDonald's, Merck, and Pfizer. There is no magic bullet that can target the pitfalls of your business strategy, Simons concludes. But you must engage in ongoing, face-to-face dialogue with those around you concerning emerging data, unspoken assumptions, difficult choices, and, ultimately, action plans. You and they must be able to give clear, consistent answers to the seven questions Simons poses if you want to be sure that your strategy is firmly on track.
How do some entrepreneurs, corporate innovators, and investors turn adverse conditions to competitive advantage? Chakravorti, of McKinsey and Harvard Business School, has identified four areas that the most successful of these people consistently explore: (1) Entrepreneurs reroute resources that become redundant to meet new needs, as Jonathan Bush did at athenahealth. The company is now a leader in internet-based revenue-cycle management tools, (2) They round up unusual suspects and break industry orthodoxy, as Iqbal Quadir did with Grameenphone in Bangladesh, (3) They find small solutions to big problems, as Trey Moore and Cameron Powell did with their AirStrip OB smartphone app for mobile physicians who needed a major advance in wireless health care, (4) They focus on platform, not just product. That's how Fred Khosravi and Amar Sawhney broadened the field of surgical applications for Incept's hydrogel technology. The entrepreneurs who survive in the "new normal" will be those who find counterintuitive solutions to the bottlenecks, constraints, and other difficulties that adversity engenders. Call them the "new abnormals."
In virtually every industry, the focus of green competition is shifting from a race to launch new eco-friendly products to a battle over what constitutes a "green" product in the first place. The definition can vary from one sector or product to the next, but whatever your business, if you're not engaged in the debate and in shaping the rules, you risk being assessed against standards you can't meet. Once you understand what degree of standardization exists in your industry and what your company's internal capabilities are, you can choose from among four strategies the authors offer: adopt existing standards; co-opt them by negotiating beneficial modifications with a standard-setting body; define standards where none exist; or break away from the current standards by challenging and supplanting them. In the building sector, for example, LEED certification is considered definitive, so architects, construction companies, and office furnishings suppliers naturally choose to adopt LEED standards. But the coffee industry has more than a dozen competing standards, so Starbucks decided to create its own-the C.A.F.E. Practices.
Many firms sit on the sidelines of global competition, believing they need to develop innovative products or leading brands before venturing abroad. The international success of Spanish companies like Telefonica, Freixenet, Banco Santander, and ALSA proves such thinking dead wrong. They all became global players in their industries-by excelling at old-fashioned capabilities. The Spanish firms skipped the risky, expensive strategy of opening their own facilities overseas. Instead, they extended their reach through acquisitions and alliances, focusing first on Latin America and Europe. Political and networking savvy helped them break into highly regulated or complex markets. Speed has also been a factor in their success: Rapid project execution allowed them to pull ahead of other multinationals, and with their expertise in vertical integration, they've been able to get products quickly and cost-effectively to far-flung customers. Though all these skills may be humdrum, Spanish firms have made the most of them and have become industry giants as a result.
Social media are changing the way we do business and how leaders are perceived, from the shop floor to the CEO suite. But whereas the best businesses are creating comprehensive strategies in this area, research suggests that few corporate leaders have a social media presence-say, a Facebook or LinkedIn page-and that those who do don't use it strategically. Today's leaders must embrace social media for three reasons. First, they provide a low-cost, highly accessible platform on which to build your personal brand, communicating who you are both within and outside your company. Second, they allow you to engage rapidly and simultaneously with peers, employees, customers, and the broader public-in order to leverage relationships, show commitment to a cause, and demonstrate a capacity for reflection. Third, they give you an opportunity to learn from instant information and unvarnished feedback. To formulate your personal social media strategy, it helps to clarify your goals (personal, professional, or both), desired audience (private or public), and resources (can you justify using your company's?). You must also consider the risks of maintaining a large number of connections and of sharing content online. Active participation in social media can be a powerful tool-the difference between leading effectively and ineffectively, and between advancing and faltering in the pursuit of your goals.
Michael Wallent, twice married and the father of three, had been working at Microsoft for more than 11 years when he decided-with the full support of his wife-to transition to living as a woman. Rejecting the standard approach at big companies, whereby the HR department announces a transgendering (often at a meeting from which the affected employee is absent), Wallent chose to inform his superiors and his direct reports himself. He also urged them to ask whatever questions were on their minds. In large part as a result of the intimate conversations that followed, Megan Wallent's management style is quite different from Michael's. In the words of one employee, "She's becoming more of a coach, instead of a general."
The CFO of a plastics company has been asked to moderate a heated internal debate over a revolutionary technology. The head of R&D thinks the company should use it to break into a whole new industry, while the VP of the firm's most profitable unit believes it's a pipe dream that should be abandoned. The company's future could be riding on the decision. Is it time for the CFO to stop facilitating and take a strong stand promoting one choice over the other? Two experts comment on this fictional case study in R1011N and R1011Z.
The CFO of a plastics company has been asked to moderate a heated internal debate over a revolutionary technology. The head of R&D thinks the company should use it to break into a whole new industry, while the VP of the firm's most profitable unit believes it's a pipe dream that should be abandoned. The company's future could be riding on the decision. Is it time for the CFO to stop facilitating and take a strong stand promoting one choice over the other? Two experts comment on this fictional case study in R1011N and R1011Z.
The CFO of a plastics company has been asked to moderate a heated internal debate over a revolutionary technology. The head of R&D thinks the company should use it to break into a whole new industry, while the VP of the firm's most profitable unit believes it's a pipe dream that should be abandoned. The company's future could be riding on the decision. Is it time for the CFO to stop facilitating and take a strong stand promoting one choice over the other? Two experts comment on this fictional case study in R1011N and R1011Z.
Despite shocks such as the Gulf oil spill and the global banking crisis, corporations still treat the world as a predictable place. Instead, they should emulate the UK's Royal Marines, an organization whose success has much to do with its agility in the face of unexpected adversity. For the Royal Marines, planning a mission is about shaping strategic thinking and figuring out how to reach the desired end state while allowing for improvisation. As the UK's amphibious commandos, they don't always know what they will find when they arrive on land, yet they must achieve their mission regardless of conditions. They must also be prepared to change plans when disruptive events occur. For those reasons, it's essential that individuals can fall back on common procedures in response to the unforeseen-and can rely on their colleagues to do the same. So the organization uses a military planning technique called the Seven Questions. All members apply it, which means they all approach and analyze their missions in the same way, no matter where they are in the hierarchy. Planners develop a working understanding of the situation on the ground and their mission by answering the first three questions and then decide how to proceed by answering the remaining four. They revisit the questions as events unfold, to see if they need to change anything or even abort the mission. To illustrate the technique, the authors describe how Royal Marine Brigade planners used the Seven Questions to put together a mission plan for an assault on Iraq's Al Faw peninsula.
According to long-held U.S. Army tradition, leadership is based on a rigid hierarchy. Are you a young officer not sure what to do? Look one level up. But in modern warfare, particularly in Iraq and Afghanistan, teams of soldiers are distributed across-and embedded in-an entire population. This has sparked a movement toward leadership training that encompasses not only the skills of single individuals, but the effectiveness of the teams they lead. The U.S. Army's Center for the Advancement of Leader Development and Organizational Learning (CALDOL) at West Point has drawn on internet technology and social media to connect company commanders and platoon leaders informally-enabling them to learn from one another in real time. Through discussion forums, blogs, videos, and a Facebook-like "wall," these new leaders are exchanging ideas and experiences. Knowledge that was once concentrated near the top of the hierarchy is now "powering down" to the team level.
In 2005, the host unit of North Dakota's Grand Forks Air Force Base had to reinvent itself to stay relevant. Its large fleet of tanker aircraft was being replaced with a much smaller number of unmanned aerial vehicles. So, the base was left with a vast amount of infrastructure and a capable workforce-but an uncertain future due to its pending change in mission. Morale plummeted, and both military and civilian personnel exhibited an increase in destructive personal behaviors, such as alcohol abuse and suicide. Clearly something had to be done. The base's leaders took a page from positive leadership philosophies in business-most notably positive psychology, positive deviance, and appreciative inquiry. The idea was to energize people by appealing to their sense of purpose, encourage them to build mutually beneficial relationships internally and externally, and thus position Grand Forks to compete for additional mission opportunities. In a matter of months, the ailing culture began to recover: The DUI rate and the number of suicides dropped. Although the staff was cut by more than a third, voluntary involvement in base activities shot up. Perhaps most important, Grand Forks found a new mission as a federal center of excellence for remotely operated aircraft. The base learned to partner with universities, businesses, and others to achieve its goals and is now poised to lead the aviation community's fastest-growing segment: unmanned aerial vehicles.
The chief executive officer (CEO) of Social Media Group had to develop a social media campaign for ING Direct Canada, an online retail bank. The CEO had successfully developed social media campaigns for other businesses in the past but ING wanted the CEO to measure the success of the campaign. With little information available on how to determine the success of such strategies, the CEO set out to design one of Canada's first measurable social media campaigns.
This note is meant to provide students access to some of the world's greatest speeches. It contains excerpts that span over 2,000 years of history, from Pericles' Funeral Oration to Stephen Lewis's Aids in Africa speech. An introduction by the author explains why future business leaders need to study such speeches.
The chief financial officer of Granite Apparel is trying to determine which of the three fundraising options is optimal for Granite Apparel to finance a projected rapid growth strategy. The three options are an initial public offering of equity, a privately placed debt issue and a private placement of preferred shares.
The case provides students with (1) an understanding of the essence of long-term financial health; (2) familiarity with the calculation and meaning of various financial ratios; and (3) an understanding of the influence of a company's operating and competitive characteristics on its investment in various type assets, on the profitability of these investments, and on the financial structure of its balance sheet. The case also allows a discussion of (1) the incomplete and lagging nature of financial measures; (2) the influence of financial measures on behavior; and (3) the reality that financial analysis often results in better, more focused questions to be asked of management, not conclusive answers.
Any seasoned executive knows that information technology (IT) projects have a high failure rate. Large IT projects can become the business equivalent of what astrophysicists know as black holes, absorbing large quantities of matter and energy. Resources get sucked in, but little or nothing ever emerges. Of course, projects do not become black holes overnight. They get there one day at a time through a process known as escalating commitment to a failing course of action. Without executive intervention, these projects almost inevitably turn into black holes. This article sheds light on the insidious process through which projects that devour resources, yet fail to produce business value, are created and gradually evolve into black holes. It presents a framework that explains the creation of black hole projects as a sequence of three phases: drifting, treating symptoms, and rationalizing continuation. The framework is illustrated through two cases: EuroBank and California DMV. The article then presents recommendations to prevent escalating projects from becoming black holes and provides a means for detecting problems at an early stage.