As Paul Kennedy sits in Cleveland's endless morning traffic, his thoughts are going in all sorts of directions, even if he's not. He's worried about his wife, who may be coming down with a cold right before their wedding anniversary. He's worried about the pitching and fielding assignments he'll have to make for tonight's Little League game. He's worried about the health of his boss, Larry, who recently had a heart attack. He's worried about his associate, Lisa, whose mother is ill and whose work is slipping. He's worried about the Cleveland Browns. He's excited too, though, about his plans to expand Daner Associates into Europe and the reorganization he's recommending, which would take a load off Larry by ceding day-to-day operations of the "new media" company to a new CEO--probably Paul, from all the hints he's heard. "I could swear Larry's been doing the nudge-nudge, wink-wink in my direction," Paul says to himself. And why not? He's been there for 10 years; he knows every facet of the operation. Customers, vendors, and employees love him. But when he meets with his boss that afternoon, Paul is in for a rude shock. Larry is considering hard-nosed George for the top slot and Paul for the No. 2 role. Paul has many of the right ingredients to be CEO, Larry explains, but he's got to get tougher. "What does that mean?" Paul thinks indignantly, back in traffic, on the way home that night. "Become an absolute jerk like George?" What can Paul do to show he's CEO material? In R0602A and R0602Z, four experts--Google CEO Eric Schmidt, author Stephen R. Covey, AVL North America CEO Don Manvel, and executive coach Maggie Craddock--comment on this fictional case study.

We highlight 20 ideas just bubbling up to the surface in 2006. Howard Gardner contends that the ability to synthesize information will be the most valued trait for leaders. Dan Williams explores how body area networks can lower health care costs and improve safety. William McDonough describes China as a seedbed for environmental innovation. Nitin Nohria and Thomas A. Stewart say the next frontier for business will be managing incalculable uncertainty. Jeff Cares outlines the challenge confronting business as networks face off against networks. Claire Craig reports how scientists are going beyond the lab and using the world outside as their petri dish. Ted Halstead recommends that every newborn in America receive $6,000 as a down payment on a productive life. Georg von Krogh warns that customer-collaborators are starting to demand a stake in IP. Ged Davis envisions an OPEC-like organization to benefit consumers instead of producers. Nancy M. Dixon describes a model for peer-to-peer leadership development. Harris Allen and Sean Sullivan contend that investment in employees' health can pay for itself. David Weinberger says that stores should imitate Web design. Gerd Gigerenzer shows how a leader's personal rules of thumb influence employees. Zachary Karabell discusses the growing gap between nations' and companies' economic performance. Paul Hemp tells why avatars make good customers. Philip Parker explains why creating private labels for your retail customers is smart strategy. Judith Samuelson and Claire Preisser describe how companies are combating short-term thinking. George Stalk Jr. explains why many firms aren't benefiting from China sourcing. Michael S. Gazzaniga punctures inflated expectations about what neuroscience can do for business. E.L. Kersten says employees shouldn't expect their jobs to provide meaning. HBR also offers a list of important business books due out in 2006.

For organizations like GE, P&G, and Visa, management innovation is the secret to success. But what is management innovation? Why is it so important? And how can other companies learn to become management innovators? This article from expert Gary Hamel answers those questions. A management breakthrough can deliver a strong advantage to the innovating company and produce a major shift in industry leadership. Few companies, however, have been able to come up with a formal process for fostering management innovation. The biggest challenge seems to be generating truly unique ideas. Four components can help: a big problem that demands fresh thinking, creative principles, or paradigms that can reveal new approaches; an evaluation of the conventions that constrain novel thinking; and examples and analogies that help redefine what can be done. No doubt, existing management processes in your organization exacerbate the big problems you're hoping to solve. To identify them, pose a series of questions for each one: Who owns the process? What are its objectives? What are the metrics for success? What are the decision-making criteria? How are decisions communicated, and to whom? After documenting these details, ask the people involved with the process to weigh in. This exploration may reveal opportunities to reinvent your management processes. A management innovation, the author says, creates long-lasting advantage when it meets at least one of three conditions: It is based on a novel principle that challenges the orthodoxy; it is systemic, involving a range of processes and methods; or it is part of a program of invention, where progress compounds over time.

After Disney's Michael Eisner, Miramax's Harvey Weinstein, and Hewlett-Packard's Carly Fiorina fell from their heights of power, the business media quickly proclaimed that the reign of abrasive, intimidating leaders was over. However, it's premature to proclaim their extinction. Many great intimidators have done fine for a long time and continue to thrive. Their modus operandi runs counter to a lot of preconceptions about what it takes to be a good leader. They're rough, loud, and in your face. Their tactics include invading others' personal space, staging tantrums, keeping people guessing, and possessing an indisputable command of facts. But make no mistake--great intimidators are not your typical bullies. They're driven by vision, not by sheer ego or malice. Beneath their tough exteriors and sharp edges are some genuine, deep insights into human motivation and organizational behavior. Indeed, these leaders possess political intelligence, which can make the difference between paralysis and successful organizational change. Like socially intelligent leaders, politically intelligent leaders are adept at sizing up others, but they notice different things. Those with social intelligence assess people's strengths and figure out how to leverage them; those with political intelligence exploit people's weaknesses and insecurities. Despite all the obvious drawbacks of working under them, great intimidators often attract the best and brightest. In the author's research, some individuals reported having positive relationships with intimidating leaders--some being profoundly educational and transformational. So before we dispose of the great intimidators, we should stop to consider what we would lose.

Consider a coffeemaker that offers 12 drink options, a car with more than 700 features on the dashboard, and a mouse pad that's also a clock, calculator, and FM radio. All are examples of "feature bloat," or "featuritis," the result of an almost irresistible temptation to load products with lots of bells and whistles. The problem is that the more features a product boasts, the harder it is to use. Manufacturers that increase a product's capability--the number of useful functions it can perform--at the expense of its usability are exposing their customers to feature fatigue. The authors have conducted three studies to gain a better understanding of how consumers weigh a product's capability relative to its usability. They found that even though consumers know that products with more features are harder to use, they initially choose high-feature models. They also pile on more features when given the chance to customize a product for their needs. Once consumers have actually worked with a product, however, usability starts to matter more to them than capability. For managers in consumer products companies, these findings present a dilemma: Should they maximize initial sales by designing high-feature models, which consumers consistently choose, or should they limit the number of features to enhance the lifetime value of their customers? The authors' analytical model guides companies toward a happy middle ground: maximizing the net present value of the typical customer's profit stream. The authors also advise companies to build simpler products, help consumers learn which products suit their needs, develop products that do one thing very well, and design market research in which consumers use actual products or prototypes.

Leaders make decisions every day of their lives, but how they do it changes dramatically over the course of their careers. At lower levels, the job is to get widgets out the door; action is at a premium. At higher levels, the job involves decisions about which widgets to offer and how to develop them. To climb the corporate ladder and be effective in new roles, managers need to change the way they use information and evaluate options. Based on a study of the decision-making profiles of more than 120,000 executives, the authors found that people make decisions very differently in public than they do in private and that the decision styles of successful managers evolve in highly predictable patterns. The most successful managers and executives become increasingly open and interactive in their leadership (or public) styles, and more analytic in their thinking (or private) styles, as they progress in their careers. The research shows that decision-making profiles do a complete flip over the course of a career; that is, the decision profile of a successful CEO is the opposite of a successful first-line supervisor's. When does the major change in focus occur? Executives find that somewhere between the manager level and the director level, formerly effective decision styles no longer work so well. At this point, decision styles fall into a "convergence zone," where managers use all styles more or less equally. From then on, the executives continue to evolve their styles. The most successful managers come to the convergence zone quickly and continue to adjust their styles as their careers progress. Low performers seem to stagnate once they hit the convergence zone; their styles do not evolve in new directions. Clearly, relying on past successes and habits is no guarantee of success--indeed, it may be the road to failure.

In 1964, Daniel Yankelovich introduced in the pages of Harvard Business Review the concept of nondemographic segmentation, by which he meant the classification of consumers according to criteria other than age, residence, income, and such. The predictive power of marketing studies based on demographics was no longer strong enough to serve as a basis for marketing strategy, he argued. Buying patterns had become far better guides to consumers' future purchases. In addition, properly constructed nondemographic segmentations could help companies determine which products to develop, which distribution channels to sell them in, how much to charge for them, and how to advertise them. But more than 40 years later, nondemographic segmentation has become just as unenlightening as demographic segmentation had been. Today, the technique is used almost exclusively to fulfill the needs of advertising, which it serves mainly by populating commercials with characters with whom viewers can identify. It is true that psychographic types like High-Tech Harry and Joe Six-Pack may capture some truth about real people's lifestyles, attitudes, self-image, and aspirations. But they are no better than demographics at predicting purchase behavior. Thus, they give corporate decision makers very little idea of how to keep customers or capture new ones. Now, Yankelovich returns to these pages, with consultant David Meer, to argue the case for a broad view of nondemographic segmentation. They describe the elements of a smart segmentation strategy, explaining how segmentations meant to strengthen brand identity differ from those capable of telling a company which markets it should enter and what goods to make. And they introduce their "gravity of decision spectrum," a tool that focuses on the form of consumer behavior that should be of the greatest interest to marketers--the importance that consumers place on a product or product category.

Persistent demand from people who have been denied the blessings of parenthood has created an assisted-reproduction market that stretches around the globe and encompasses hundreds of thousands of people. In the United States alone, nearly 41,000 children were born via in vitro fertilization (IVF) in 2001. Roughly 6,000 came from donated eggs, and almost 600 were carried by surrogate mothers. U.S. legislators have been reluctant to regulate this market. As a result, there are no national policies for IVF, which requires creating--and often discarding--embryos, or for many other technologies. State laws vary widely, and many states have no legislation on these subjects whatsoever. Although fertility specialists generally seem delighted to practice in an unregulated gray area, a modicum of regulation and the establishment of agreed-upon norms could lead to substantially lower prices, wider access, and an expansion of the market to the millions who have not yet sought out assisted reproduction. Among those millions are fertile individuals seeking to ensure that they'll be able to produce offspring in the future. For example, the technology already permits young women to freeze their eggs, thus preserving their fertility (in case, for instance, they marry late in life). The fertility trade is in some ways analogous to the markets for personal computers and DVD players, which were initially considered luxury items but migrated to the mass market, earning manufacturers the revenues to finance further innovation. A widening of availability and the introduction of property rights, rules, and institutional policies would make the marketplace more sensitive to the social, medical, and ethical issues that are emerging from the science. For example: Should there be age limits on infertility treatment? Should new procedures be subject to rigorous testing? It is time for U.S. society to begin discussion of these complex questions.

In more than 30 essays for Harvard Business Review, Peter Drucker (1909-2005) urged readers to take on the hard work of thinking--always combined, he insisted, with decisive action. He closely analyzed the phenomenon of knowledge work--the growing call for employees who use their minds rather than their hands--and explained how it challenged the conventional wisdom about the way organizations should be run. He was intrigued by employees who knew more about certain subjects than their bosses or colleagues but who still had to cooperate with others in a large organization. As the business world matured in the second half of the 20th century, executives came to think that they knew how to run companies--and Drucker took it upon himself to poke holes in their assumptions, lest organizations become stale. But he did so sympathetically, operating from the premise that his readers were intelligent, hardworking people of goodwill. Well suited to HBR's format of practical, idea-based essays for executives, his clear-eyed, humanistic writing enriched the magazine time and again. This article is a compilation of the savviest management advice Drucker offered HBR readers over the years--in short, his greatest hits. It revisits the following insightful, influential contributions: "The Theory of the Business" (September-October 1994); "Managing for Business Effectiveness" (May-June 1963); "What Business Can Learn from Nonprofits" (July-August 1989); "The New Society of Organizations" (September-October 1992); "The Information Executives Truly Need" (January-February 1995); "Managing Oneself" (March-April 1999, republished January 2005); "They're Not Employees, They're People" (February 2002); and "What Makes an Effective Executive" (June 2004).

As Paul Kennedy sits in Cleveland's endless morning traffic, his thoughts are going in all sorts of directions, even if he's not. He's worried about his wife, who may be coming down with a cold right before their wedding anniversary. He's worried about the pitching and fielding assignments he'll have to make for tonight's Little League game. He's worried about the health of his boss, Larry, who recently had a heart attack. He's worried about his associate, Lisa, whose mother is ill and whose work is slipping. He's worried about the Cleveland Browns. He's excited too, though, about his plans to expand Daner Associates into Europe and the reorganization he's recommending, which would take a load off Larry by ceding day-to-day operations of the "new media" company to a new CEO--probably Paul, from all the hints he's heard. "I could swear Larry's been doing the nudge-nudge, wink-wink in my direction," Paul says to himself. And why not? He's been there for 10 years; he knows every facet of the operation. Customers, vendors, and employees love him. But when he meets with his boss that afternoon, Paul is in for a rude shock. Larry is considering hard-nosed George for the top slot and Paul for the No. 2 role. Paul has many of the right ingredients to be CEO, Larry explains, but he's got to get tougher. "What does that mean?" Paul thinks indignantly, back in traffic, on the way home that night. "Become an absolute jerk like George?" What can Paul do to show he's CEO material? In R0602A and R0602Z, four experts--Google CEO Eric Schmidt, author Stephen R. Covey, AVL North America CEO Don Manvel, and executive coach Maggie Craddock--comment on this fictional case study.

As Paul Kennedy sits in Cleveland's endless morning traffic, his thoughts are going in all sorts of directions, even if he's not. He's worried about his wife, who may be coming down with a cold right before their wedding anniversary. He's worried about the pitching and fielding assignments he'll have to make for tonight's Little League game. He's worried about the health of his boss, Larry, who recently had a heart attack. He's worried about his associate, Lisa, whose mother is ill and whose work is slipping. He's worried about the Cleveland Browns. He's excited too, though, about his plans to expand Daner Associates into Europe and the reorganization he's recommending, which would take a load off Larry by ceding day-to-day operations of the "new media" company to a new CEO--probably Paul, from all the hints he's heard. "I could swear Larry's been doing the nudge-nudge, wink-wink in my direction," Paul says to himself. And why not? He's been there for 10 years; he knows every facet of the operation. Customers, vendors, and employees love him. But when he meets with his boss that afternoon, Paul is in for a rude shock. Larry is considering hard-nosed George for the top slot and Paul for the No. 2 role. Paul has many of the right ingredients to be CEO, Larry explains, but he's got to get tougher. "What does that mean?" Paul thinks indignantly, back in traffic, on the way home that night. "Become an absolute jerk like George?" What can Paul do to show he's CEO material? In R0602A and R0602Z, four experts--Google CEO Eric Schmidt, author Stephen R. Covey, AVL North America CEO Don Manvel, and executive coach Maggie Craddock--comment on this fictional case study.

Founded in 1980 by Bill Drayton, Ashoka was a professional organization that identified and invested in leading social entrepreneurs globally. Analogous to a venture capital firm for social start-ups, Ashoka found and supported outstanding individuals with ideas for far-reaching social change by electing them to a fellowship of social entrepreneurs. As defined by Ashoka, the social entrepreneur had the same makeup as a business entrepreneur--in mental attitude, vision, bias for action, and skills--but the social entrepreneur sought to better the world in some way. Until 1997, Ashoka focused solely on locating and supporting social entrepreneurs in developing countries. Over the next three years, however, Ashoka entered a new stage, requiring it to shed its trappings as a "global development organization." Ashoka updated its mission to address the demands of a rapidly expanding citizen sector and its more than 1,500 leading social entrepreneurs. Because Ashoka's new mission required a kind of risk-taking and willingness to "make things happen in a bigger way," Ashoka made a commitment to hire only social entrepreneurs for its key functions. The new mission and hiring commitment attracted leading business entrepreneurs to Ashoka for the first time, triggering unprecedented organizational growth and allowing Ashoka to open for business in the U.S. Addresses the challenges facing Ashoka in the U.S.

This is the fourth of a four-case series. At first glance, Hewlett Packard (HP) doesn't seem to be a family firm, but when push comes to shove - as it did during the controversial HP-Compaq merger - family matters. The case introduces the strategy that drove the merger, analyses Carly Fiorina's background and leadership style, and discusses the corporate culture of HP. Chronologically, the case begins with the announcement of the merger and ends with the shareholders' vote. This case study illustrates the importance of corporate governance, parallel planning, and a shared vision in organisations in which the founding families still have a large financial and emotional stake.

This is the fourth of a four-case series. At first glance, Hewlett Packard (HP) doesn't seem to be a family firm, but when push comes to shove - as it did during the controversial HP-Compaq merger - family matters. The case introduces the strategy that drove the merger, analyses Carly Fiorina's background and leadership style, and discusses the corporate culture of HP. Chronologically, the case begins with the announcement of the merger and ends with the shareholders' vote. This case study illustrates the importance of corporate governance, parallel planning, and a shared vision in organisations in which the founding families still have a large financial and emotional stake.

This is the fourth of a four-case series. At first glance, Hewlett Packard (HP) doesn't seem to be a family firm, but when push comes to shove - as it did during the controversial HP-Compaq merger - family matters. The case introduces the strategy that drove the merger, analyses Carly Fiorina's background and leadership style, and discusses the corporate culture of HP. Chronologically, the case begins with the announcement of the merger and ends with the shareholders' vote. This case study illustrates the importance of corporate governance, parallel planning, and a shared vision in organisations in which the founding families still have a large financial and emotional stake.

This is the fourth of a four-case series. At first glance, Hewlett Packard (HP) doesn't seem to be a family firm, but when push comes to shove - as it did during the controversial HP-Compaq merger - family matters. The case introduces the strategy that drove the merger, analyses Carly Fiorina's background and leadership style, and discusses the corporate culture of HP. Chronologically, the case begins with the announcement of the merger and ends with the shareholders' vote. This case study illustrates the importance of corporate governance, parallel planning, and a shared vision in organisations in which the founding families still have a large financial and emotional stake.

This case allows course participants to use a graphical simulation tool to explore several key factors that lead to customer response delays in service systems. A high-level discussion can then ensue on process flow management, including tools like segmentation, process standardization and scheduling, and resource utilization planning. The case requires the ProModel simulation software tool (not included, to be purchased separately), and computer simulation input files (available free from the author's website: http://faculty.insead.edu/stephen-chick/simulations ).

In some Third World factories, there is a literal wall of codes. Posted are dozens of codes of conduct as defined by dozens of customer, firm, and industry groups and a host of certifying organizations. The cost of this wall of codes is clear for managers: They must fill out streams of forms and host endless visits from compliance auditors. Less obviously, the wall of codes is costly for consumers and other stakeholders who care about the social performance of businesses. Not only must they pay the (passed on) costs of compliance, but with so many standards, they cannot always identify which standards and codes are valid measures of true social responsibility. Documents the proliferation of metrics and outlines some of the problems regarding reliability, validity, and comparability of existing codes. Examines two large sets of metrics: those used in the apparel industry and those created by socially responsible investment funds. Concludes with some practical suggestions to help reduce the burdens on managers and yield more reliable, valid, and comparable metrics.

Examines current priorities of nonfinancial reporting among large, publicly traded European corporations to assess how companies disclose on corporate social responsibility (CSR). Analyzes 90 multinational companies' social, environmental, and sustainability reports; identifies what they report on relations with stakeholders; and examines differences among reporting tools. The two key findings: Companies differ in the way they deal with nonfinancial reports, falling somewhere between a monitoring approach and a managerial approach. Second, companies tend to focus on specific CSR-relevant themes that reflect the priorities of multiple stakeholders. The latter include safety for workers and of products, product quality and innovation, environmental protection, dialogue with communities and stakeholders in general, attention to skill development, and responsible citizenship.

Identifies stages in the development of corporate citizenship in large organizations. Drawing on a combination of U.S. and global executive surveys, a longitudinal study of 10 companies advancing their citizenship agendas, and several case studies, this article posits that a series of challenges that firms encounter determines the pace of development of citizenship. Describes these evolutionary stages and circumstances that trigger movement and illustrates characteristic company attitudes and practices at each stage. Concludes by examining the institutional, environmental, and organizational factors that shape and constrain the development of corporate citizenship within firms.