The supermarket chain "Atlantida" is considering an investment in a new delivery service for telephonic orders. The project will have a lifetime of 5 years. Learning objectives: The objective of the case is the project analysis, construction of cash flow maps, NPV, and capital budgeting in general.

Despite concerns about censorship and putting users in jeopardy, Google decided to launch Google.cn in 2006. Google stated that it would monitor conditions in China and even reconsider its approach to China if warranted. Three years later, in December 2009, Google detected an extensive and sophisticated cyber attack that targeted companies and specific employees within the companies. Google investigated the attack and announced that it would change its approach in China. Google would no longer censor results in China and acknowledged that this move might result in shutting down Google.cn. It then moved its search business to Hong Kong to outside the great firewall. This case explores the ethical dilemmas raised by Google's foray into the Chinese market while trying to adhere to its motto of "Don't Be Evil." The case also identifies the market consequences of its decision to withdraw from China and the reactions of its competitors and Chinese firms with which it had been working.

HBR's annual ideas collection, compiled in cooperation with the World Economic Forum, offers 10 fresh solutions with the potential for a huge positive impact on business and the world. Teresa M. Amabile and Steven J. Kramer reveal what their research shows is the true key to employee motivation-and it's not what most managers focus on providing. Ronald Dixon proposes that the real performance breakthrough in health care will come when the medical community adopts the everyday communications technologies patients already use. Lawrence M. Candell asks why the U.S. has a Lincoln Laboratory to put public-spirited experts across the table from profit-motivated defense contractors, but no such entity to do the same in the financial sector. Eric Bonabeau, Alpheus Bingham, and Aaron Schacht urge players in the pharmaceutical industry to treat drugs as information assets; big pharma could orchestrate drug-development networks to promote innovation. Jack D. Hidary describes a market solution to achieve what no government handout can in the greening of existing buildings. Robert E. Litan and Lesa Mitchell advocate that universities' technology transfer offices loosen their monopolistic grip on their scientists' taxpayer-funded discoveries. Bill Jensen and Josh Klein urge frustrated professionals to "hack work" by adopting the mind-set and tool kit of the hacker to achieve the positive outcomes their employers want but make difficult to achieve. Sendhil Mullainathan notes that we have the tools to spot bubbles about to burst, but individual firms have little incentive to sound the alarm. Why not appoint a "bubbles committee"? Paul Romer proposes that "charter cities" be established to show the citizens of failed and languishing states the merits of market economies and to provide an option for change. Carne Ross questions why only nation-states are allowed to shape international affairs and reveals the need for independent diplomacy.

Modern capitalism can be broken down into two major eras. The first, managerial capitalism, began in 1932 and was defined by the then radical notion that firms ought to have professional management. The second, shareholder value capitalism, began in 1976. Its governing premise is that the purpose of every corporation should be to maximize shareholders' wealth. If firms pursue this goal, the thinking goes, both shareholders and society will benefit. Though that is the theory, in reality shareholders have not been better off since they became the center of the business universe. From 1933 to the end of 1976, when they were allegedly playing second fiddle to professional managers, shareholders of the S&P 500 earned compound annual real returns of 7.6%. From 1977 to the end of 2008, S&P 500 shareholders did considerably worse - earning real returns of 5.9% a year. Putting shareholders first forces managers into playing a game in which they focus on managing shareholder expectations rather than on managing the business. The main principle behind shareholder value capitalism is inherently flawed, and it's time we abandoned it and made a shift to a new era: customer-driven capitalism. Companies that make customers their top priority, as P&G and J&J do, generate returns that are just as high as, if not higher than, those of shareholder-focused companies, and can sustain them for longer. If companies put the customer first, they will make better decisions, because they can focus on improving operations and products and services, rather than on spinning lines to shareholders.

Ask any CEO who has overseen a corporate transformation what should have been handled differently, and you are likely to get this answer: "We should have - and could have - moved faster." Such executives have a long list of regrets: They wish they had unified the leadership team right away. They wish they had quickly drummed up support for the new vision. They wish they hadn't waited so long to test their assumptions and refine their key initiatives. And they wish they had generated visible returns early on. Transformation launches must be bold and rapid to succeed. Yet embedded in most organizations are six kinds of "speed brakes" that can slow things down to a grinding pace. During business-as-usual periods, these brakes may be irritating, but their effects on performance are reasonably benign. When a bold transformation is required, however, any one of them can derail the larger effort. To accelerate transformations, managers need to release each of the following brakes, in this order. Speed Brake #1: Cautious management culture-To address this problem, compel all executives to confront reality and agree on ground rules for working together. Speed Brake #2: Business-as-usual management process-Run a no-slack launch on a parallel track with other systems; secure early, visible victories. Speed Brake #3: Initiative gridlock-Limit the company to three or four initiatives. Speed Brake #4: Recalcitrant executives-Compress launch to quickly engage key executives and to identify and confront those not on board. Speed Brake #5: Disengaged employees-Rapidly cascade the changes to all employees to boost engagement. Speed Brake #6: Loss of focus during execution-Anticipate and defuse postlaunch blues, midcourse overconfidence, and the presumption of perpetual motion.

It's time to reinvent the way companies develop strategy. Traditional strategy frameworks operate under the assumption that industries have distinct boundaries and that companies know who their rivals, customers, and suppliers are. Moreover, those frameworks create categories and visual representations that are static, using, for instance, maps and comparative value curves. Today, as the competitive landscape is continually redrawn and most industries are in a constant state of flux, the existing strategy tools do not offer much help. Instead of using maps, graphs, and numbers, executives should use words to write a playscript: a narrative that sets out the cast of characters in a sector, the way in which they are connected, the rules they observe, the plots in which they play a part, and how they create and capture value as the sector changes. Playscripts force companies to focus on the causes of change, and they allow companies continually to assess the relevance of their strategies. They also acknowledge that strategy could involve changing a company's links to other players. Companies can follow a three-step process to reinvent their strategies using playscripts. Step 1: Write the current playscripts for your company and your sector. Step 2: Rewrite your company's playscript and perhaps the playscript for the entire sector, focusing on how you could change the way value is created and which elements of the plot you could influence. Step 3: Future-proof your playscript by considering how customers' needs are evolving and building relationships that can reinforce your position.

When bad things happen, most of us have a gut reaction. Psychological resilience-the capacity to respond quickly and constructively in a crisis-can be hard to muster when a manager is paralyzed by fear, anger, confusion, or a tendency to assign blame. Resilient managers are able to shift quickly from endlessly dissecting traumatic events to looking forward, determining the best course of action given new realities. They understand the size and scope of the crisis and the levels of control and impact they may have in a bad situation. The authors present a regimen for boosting personal resilience that begins with recognizing four dimensions of an adverse event- influence, impact, breadth, and duration-and continues with a series of pointed questions designed to get managers out of their own heads. Specifying questions help them identify particular points of intervention when dealing with a crisis. Visualizing questions help them look beyond problems and toward actual solutions. Collaborating questions inspire them to reach out to others, not for affirmation of wrongdoing, or commiseration, but for assistance. Managers can use these questions to tamp down unproductive responses to adversity, to replace negativity with creativity and resourcefulness, and to get things done despite real or perceived obstacles.

Companies have never before had such powerful technologies for understanding and interacting with customers. Yet too many firms operate as if they're stuck in the 1960s, an era of mass marketing, mass media, and impersonal transactions. To compete in an aggressively interactive environment, companies must shift their focus from driving transactions to maximizing customer lifetime value. That means products and brands must be made subservient to customer relationships. And that means transforming the marketing department-traditionally focused on current sales-into a "customer department" by: replacing the CMO with a chief customer officer, cultivating customers rather than pushing products, adopting new performance metrics, and bringing under the marketing umbrella all customer-focused departments, including R&D and customer service.

Historically the U.S. economy has been about ideas, experiment, and exploration. U.S. dynamism-the country's ability and proclivity to innovate-depends on multiplicity: variety among new ideas, a pluralism of beliefs among financiers, and diversity among consumers. Dynamism has been in decline over the past decade. Venture capitalists bemoan a dearth of innovative ideas, and investors bewail a precipitous drop in their returns. Total venture investment is running at less than $20 billion per year. The current financial system chokes off funds for innovation. As an antidote, this article proposes the establishment of a new government-sponsored enterprise - the First National Bank of Innovation. It would be structured as a network of "merchant" banks that invest in and lend to innovative projects, and it would have some features of the Farm Credit System in the United States. A dedicated funding arm would raise money in the capital markets at attractive rates. Banks would pass these funds on to entrepreneurs at rates commensurate with the risks of their projects. The banks in the network would be dedicated to "relationship-based" investing and lending. Thanks to comprehensive risk-based disclosure, strict oversight and transparency would emerge.

A lot of people have blamed short-term thinking for causing our current economic troubles, which has set off a debate about what time window we should use to assess a CEO's performance. Today boards of directors, senior managers, and investors intensely want to know how CEOs handle the ups and downs of running businesses over an extended period. Many executive compensation plans define the "long term" as a three-year horizon, but the real test of a CEO's leadership has to be how the company does over his or her full tenure. This article contains a list of the 50 CEOs of large public companies who performed best over their entire time in office-or, for those still in the job, up until September 30, 2009. To compile the results, the authors collected data on close to 2,000 CEOs worldwide. They asked, Who had led firms that, on the basis of stock returns, outperformed other firms in the same country and industry? The ranking combines three measures: country-adjusted return, industry-adjusted return, and change in market capitalization during tenure. While it may come as no shock that Steve Jobs of Apple tops the list, the ranking does contains a few surprises. You'll see some relatively unknown faces at the top. The inverse is also true: Some obvious candidates based on reputation don't make the top 50. The authors' analysis of the factors that increased the likelihood that an executive would place high in the ranking turned up a few more surprises. Although one might expect context to have a big effect, they found a wide diversity of countries and industries represented in the top performers. The CEO's background did matter, however, as did the situation left behind by his or her predecessor.

Fully half of all joint ventures are a failure. That's worrying, given that partnerships and alliances are central to many companies' business models. The reasons are not mysterious: the partners have divergent strategies; the goals set for the venture are ambiguous; partnership agreements quickly become obsolete; and middle managers don't have clear strategic principles to work from. The problems can be remedied if companies switch their focus from operations and contractual obligations to strategy and commitment. This article describes how Solvay Pharmaceuticals and biopharmaceutical services firm Quintiles used the balanced scorecard and strategy maps to help them define strategic goals, create a governance structure, develop metrics, and align the two groups. The new approach yielded impressive results: The alliance reduced cycle time for clinical studies by approximately 40%, an achievement that brings new products to market much faster and leads to tremendous cost reductions.

Russia is no longer a failing superpower. After Vladimir Putin became president in 2000, Goldman Sachs predicted that Russia, along with Brazil, China, and India, would soon be among the world's most important economies. Although Russia's growth hasn't kept up with China's and India's, the world economy cannot ignore Russia. Over the past ten years, Putin has strengthened Russia's nascent capitalist economies and institutions. In the process, he has stoked the Kremlin's apparently infinite appetite for power. That represents a growing threat, not only to Russia's development but also to companies wishing to do business there. Instead of looking solely at growth rates, CEOs should come to grips with Russia's still-evolving capitalism, particularly the tensions between the state and business, to craft an effective strategy. There is money to be made in Russia, as long as companies play by the rules imposed during Putin's tenure as president. The very different experiences of Shell, BP, and Enel-each of entering the energy industry-illustrate the importance of government relations. Multinational companies must fit in with the prevailing definition of Russia's national interest; they cannot hope to succeed in spite of it. The bottom line: It is safe to invest in Russia as long as you have the right partner, which is the state or a well-connected local company.

"The Aflac Duck is a rock star in Japan," writes the company CEO. From 2003, when the duck was introduced in that country, to 2008, Aflac's revenues increased by 44%, to $16.6 billion. Seventy percent of that increase came from Japan. This article tells the often comical story of how the duck came into existence in the United States, its instant success in CNN ads on New Year's Day in 2000, its transmogrification into a popular stuffed animal, and its export to Japan-where U.S. duck wranglers had to be flown in because the Japanese were unaccustomed to using live animals in commercials. In 2009 Aflac's Japanese marketing team introduced a new incarnation of the duck: Maneki Neko Duck, which incorporates the traditional Asian good-luck white cat. A giant plush version of the cat duck toured Japan by bus, drawing crowds as big as 20,000 in city after city. At each event the company set up tables where it sold policies to enthusiastic fans.

The average baby boomer switches jobs 10 times in his or her career. Though such moves are just about inevitable, they're seldom easy-and they often lead to a noticeable decline in both short- and long-term performance. That's because people make them for the wrong reasons. Drawing on an extensive survey of executive search consultants, as well as surveys of HR heads and interviews with C-level executives around the world, the authors have identified senior managers' five most common career missteps: not doing enough research, leaving for money, going "from" rather than "to," overestimating yourself, and thinking short term. These mistakes follow predictable patterns and persist throughout the course of a career; they're often a direct result of psychological, social, and time pressures. What if you do take the wrong job? The authors' research indicates that you should cut your losses and leave. But fleeing to another bad situation is not the answer. Make your next move strategically-and wherever you are in the search process, don't hesitate to go down another road when it becomes evident that a certain kind of change wouldn't be right.

Dan Sestak has had a charmed career path at packaged-foods giant NutriSelect. But when the CEO unexpectedly passes away just months after Dan is tapped as his successor, he finds himself thrust into the role before he feels ready. Two experts comment on this fictional case study in R1001N and R1001Z. Commentator Bruce Chizen, former CEO of Adobe, remembers what it's like to step into big shoes and advises Dan to acknowledge his weaknesses and reach out to his top team for guidance. Executive coach Debra Benton proposes a few strategic firings to show detractors that Dan means business.

Former Secretary of State Condoleezza Rice has made a career of arriving in positions of power during difficult times and, critics say, without the requisite experience. HBR talks to Dr. Rice about making transitions between sectors, managing without management experience, and relearning lessons in new contexts.

Dan Sestak has had a charmed career path at packaged-foods giant NutriSelect. But when the CEO unexpectedly passes away just months after Dan is tapped as his successor, he finds himself thrust into the role before he feels ready. Two experts comment on this fictional case study in R1001N and R1001Z. Commentator Bruce Chizen, former CEO of Adobe, remembers what it's like to step into big shoes and advises Dan to acknowledge his weaknesses and reach out to his top team for guidance. Executive coach Debra Benton proposes a few strategic firings to show detractors that Dan means business.

Dan Sestak has had a charmed career path at packaged-foods giant NutriSelect. But when the CEO unexpectedly passes away just months after Dan is tapped as his successor, he finds himself thrust into the role before he feels ready. Two experts comment on this fictional case study in R1001N and R1001Z. Commentator Bruce Chizen, former CEO of Adobe, remembers what it's like to step into big shoes and advises Dan to acknowledge his weaknesses and reach out to his top team for guidance. Executive coach Debra Benton proposes a few strategic firings to show detractors that Dan means business.

This is an MIT Sloan Management Review article. For most companies, the single largest cost category is the total spend with suppliers. However, figuring out how to identify the best areas for supply savings -and then how to measure and report them -presents major challenges. Both understatement and overstatement of supply savings gaps signal the wrong reality, leading to an overemphasis on low-yielding cost saving initiatives, misdirected corporate resources and employees being rewarded for the wrong behavior. Moreover, supply savings gaps conceal the strategic contribution suppliers can provide. In studying the supply management practices at 30 large North American and European companies, the authors identified a variety of measurement and reporting practices for supply savings. They conclude that correct measurement of supply savings is almost impossible and that there are frequently gaps between reported savings and reality. They explore why gaps exist, what practices lead to under- and overstatement of savings, the consequences of poor supply savings measurement and what can be done to recognize supply savings gaps. To overcome the measurement and reporting challenges, the authors recommend that executives do three things: Focus on the total cost of ownership; categorize the different types of savings; and hardwire savings to the budget.

This is an MIT Sloan Management Review article. Despite the importance of innovation to a business's success, only recently have companies not only established internal environments conducive to innovation but also begun identifying, cultivating and taking advantage of a wide variety of external sources for innovation. Among such sources, suppliers are recognized as having especially large innovation potential because they know what the companies - that is, their customers -are doing and need and also because mechanisms for knowledge transfer from supplier to customer are typically in place. However, while it is one thing for a mechanism to be available by which suppliers may transfer innovation to customers, it is quite another for the suppliers actually to do the transferring. The customer, the prime mover in building and maintaining the relationship, can move in two different ways to encourage the supplier to innovate to the customer's benefit. First, it should reduce or eliminate three kinds of problems: (1) conflicting objectives among the customer's functional areas, (2) excessive and often late engineering or specification changes and (3) price-reduction pressures on suppliers that consider only the customer's financial needs. Second and most importantly, the customer should initiate directly positive and trust-building activities.