Describes political and economic forces that influenced the development of an all-digital, high-definition television (HDTV) standard in the United States between 1986 and 1996. Outlines the stakes for various government and industry participants in the standard-setting process. Contrasts the market-led approach used in developing U.S. HDTV standards to the government-led processes employed in Japan and Europe, where billions of dollars were invested in R&D but the resulting analog standards were soon abandoned. Concludes with a series of unresolved policy issues facing U.S. regulators in 1996, for example, whether to intervene to resolve technical disputes between the broadcasting and computer industries, whether to mandate or simply authorize use of an HDTV standard, and whether to set specific deadlines for broadcasters' deployment of HDTV technology.
Maverick Capital, a $7 billion hedge fund, faced a number of long-term strategic questions, particularly the issue of growth. With all of its assets invested with one strategy, Maverick was already managing more capital in a dedicated approach than any hedge fund in the world. How much growth could Maverick sustain? If Maverick should grow, how should it do so, and how would this choice affect Maverick's investment approach? Should Maverick take bigger positions in companies? Should it add more stocks to the portfolio? Was it time to reconsider Maverick's net long exposure to the market?
Loctite Corp., a large industrial adhesives company, has implemented the five principles of lean management on its customer service operation. A recent merger of the customer engineering service operation with the dispensing equipment operation has the vice-president of technical service and application engineering looking at applying the lean principles on the equipment operations. The company initially considered equipment a secondary product line, needed only to augment its service offering in support of the core product--industrial adhesives. In addition, most of Loctite's equipment manufacturing activities were outsourced, so suppliers played a key role in lean transformation. The vice-president must prepare a plan to implement the principles of lean management while meeting the goals set out by the president of the company.
Two hundred of today's leading management thinkers were asked to identify their gurus. The result is an illuminating list, notable for some of the less obvious names it contains.
Two academics challenge U.S. multinational companies to match their increasing international sales with commensurate philanthropic giving outside the United States.
When Shirley Franklin took over as mayor of Atlanta in 2001, city hall was flat broke, employee morale was in the basement, and the public had lost faith. In her own words, Franklin describes how she's managing the city's recovery.
The new WorldCom (to be known as MCI) will come out of Chapter 11 as a formidable competitor. That's left some experts questioning U.S. bankruptcy laws.
Henry Hephaestus founded Hephaestus, Inc. in 1895. Its first product was a tapered roller bearing for use with horse-drawn wagons and carriages. It reduced friction on the axle and reduced the force necessary to move a heavy load, thereby enabling one horse to do the work of the two. Although there were more than 30 European and American patents on tapered roller bearings, dating back to 1802, Hephaestus, Inc. designed an innovative technique for keeping the rollers in alignment, which was patented in the United States in 1898. The founder's son and daughter, Will and Ginny, took over the firm in 1899 after their father retired. His final admonition was, "Don't set your name to anything you will ever have cause to be ashamed of." Faced with a severe cash crunch in 2001, Hephaestus, Inc. did a private placement of preferred stock to HBS Investors and GSB Investments, two private equity firms. By early 2003, Hephaestus, Inc. had become a significant supplier of roller bearings and other machinery parts for use in automobiles, aircraft engines, and prosthetic medical devices. Cash remained tight, and both HBS Investors and GSB Investments wanted to sell Hephaestus, Inc. so they could cash out their stock.
This is an MIT Sloan Management Review article. Many international business leaders consider a global mind-set desirable, but few know how to embed it companywide. A corporate global mind-set differs from having a few managers think globally. That comes first. But global thinking must be incorporated into an organization's processes so that everyone knows how to handle the tug-of-war between local responsiveness and corporate efficiency. Two Northeastern University professors studied global companies and found that inculcating a corporate global mind-set lagged behind the will to do so. IBM made the most progress. Having originally overemphasized global consistency, it learned to embrace a more flexible approach, adopting global policy development teams, worldwide knowledge networks, and appropriate performance measures. Unfortunately, many American executives regard globalization as pursuing standardized products through centralized decision making. In favoring global consistency, they often fail to secure local cooperation. Through a global mind-set, corporate decision-making processes become more permeable to influences from beyond the home country. The authors show how managers can determine when an issue calls for a locally adaptive response, when it calls for a globally consistent response, and when both elements are needed. The corporate global mind-set is a requirement for motivating a diverse and sprawling work force and giving it a common purpose.
This is an MIT Sloan Management Review article. Most companies invest a significant amount of time and effort in a formal, annual strategic planning process--but many executives see little benefit from the investment. In the course of the authors' research, one manager compared his company's process with a "primitive tribal ritual," and another likened it to the Soviet system: "We pretend to make strategy and they pretend to follow it." The authors found that, although few truly strategic decisions are made in the context of a formal process, formal planning can be a real source of competitive advantage when it is approached with the right goal in mind: as a learning tool to help companies create within their management teams "prepared minds" (to borrow from Louis Pasteur). The key is getting right a host of seemingly mundane but actually critical details concerning the annual meetings that are at the heart of all formal processes--including who should attend the meetings, where they should be held, and what kind of preparation is necessary to make them effective. Following an analysis of those details, the authors offer several examples showing prepared minds in action, in which formal planning helped managers make solidly grounded, real-time strategic decisions in a world of turbulence and uncertainty.
WebEx Communications, founded in 1996 by Min Zhu and Subrah Iyar, was an Internet-based, carrier-class communications services provider of web conferences and meetings. WebEx's online, real-time, interactive, multimedia communications services allowed its customers to communicate via voice conferencing, video conferencing, and data communication. With data communication, using just a standard web browser, multiple users could share and remotely control software applications and desktops, share and edit documents and presentations, remotely browse the web together, chat live, write on whiteboards, record and play back sessions, and transfer files. The company's services improved the efficiency of many activities: meetings, sales, marketing, training, customer support, etc. The company's early performance was impressive, but analysts had recently pointed out that the revenue growth rate was slowing. WebEx was considering a number of strategies to boost sales: expand the product line vertically to target specific end-user groups like health care or finance; increase partnering agreements with resellers; focus more on enterprise customers, which had the potential for hub-and-spoke acquisition of additional customers; or expand internationally (international sales accounted for about 4% of revenues in 2002). Also, Min and Subrah had to consider the repercussions of some recent news. On January 21, 2003, Microsoft announced it was acquiring PlaceWare, WebEx's most significant competitor.
Chief Technology Officer Barry Golding is meeting with Mathews & Co.'s department heads to ask for another round of investment so he can begin implementing customer relationship management software at the menswear chain. For months, he has been the CRM project's cheerleader, and it is Barry whose reputation is at stake. He quickly loses control of the meeting. One department head is disappointed that so few of her wish list items are in Barry's latest plan. Another is sour on the project now that he's discovered he won't get any payback for two years. The CEO, who has given the project his blessing, isn't present to back up Barry. Barry can't see what he could have done to keep the department heads on his side. But a friend later tells him about what she calls the "blue sky paradox:" You have to get people to dream big to sell a project, but by doing that you set them up to be disappointed. What can Barry do to save the project? Commenting on this fictional case study in R0312A and R0312Z, are Nathaniel Leonard, the supply chain director of Goodyear's Engineered Products business; Andrew McAfee, an assistant professor at Harvard Business School; Barry J. Gilway, the executive vice-president of Zurich North America Services; and John Freeland, the managing partner of Accenture's CRM practice.
The past three decades have been a time of increasing informality in the American workplace. It's easy to characterize this growing comfort with the casual as a positive step for workplace culture, an outgrowth of the American democratic belief in workers' equality. Informal environments are said to be more trusting and open, and workers who are free to express their personalities are more comfortable and, thus, more creative--right? According to etiquette guru Judith Martin--known far and wide as Miss Manners--informality in the workplace may do more harm than good. Without some formality in social intercourse, Miss Manners argues, human interactions end up being governed by laws, which are too heavy-handed to serve as a guide through the nuances of personal--or professional--behavior. On the whole, Miss Manners argues, informality in the workplace leads to a host of problems, from making employees feel pressured to "socialize" with coworkers during weekends and evenings to sexual harassment. Despite the shortcomings of informality in the American workplace, though, Miss Manners believes that we have the best code of manners the world has ever seen--in theory. In practice, American etiquette is undoubtedly still a work in progress.
Companies spend lots of time and money on complex tools to assess customer satisfaction. But they're measuring the wrong thing. The best predictor of top-line growth can usually be captured in a single survey question: Would you recommend this company to a friend? This finding is based on two years of research in which a variety of survey questions were tested by linking the responses with actual customer behavior--purchasing patterns and referrals--and ultimately with company growth. Surprisingly, the most effective question wasn't about customer satisfaction or even loyalty per se. In most of the industries studied, the percentage of customers enthusiastic enough about a company to refer it to a friend or colleague directly correlated with growth rates among competitors. Willingness to talk up a company or product to friends, family, and colleagues is one of the best indicators of loyalty because of the customer's sacrifice in making the recommendation. When customers act as references, they do more than indicate they've received good economic value from a company; they put their own reputations on the line. The findings point to a new, simpler approach to customer research, one directly linked to a company's results.
Answer true or false: "I am an ethical manager." If you answered "true," here's an uncomfortable fact: You're probably wrong. Most of us believe we can objectively size up a job candidate or a venture deal and reach a fair and rational conclusion that's in our, and our organization's, best interests. But more than two decades of psychological research indicates that most of us harbor unconscious biases that are often at odds with our consciously held beliefs. The flawed judgments arising from these biases are ethically problematic and undermine managers' fundamental work--to recruit and retain superior talent, boost individual and team performance, and collaborate effectively with partners. This article explores four related sources of unintentional unethical decision making: implicit bias--judging according to unconscious stereotypes rather than merit; in-group bias--favoring people in their own circles; a tendency to overclaim credit; and conflicts of interest. To counter these unconscious biases, traditional ethics training is not enough. You should gather better data, rid the work environment of stereotypical cues, and broaden your mind-set when making decisions.
Growth in an adjacent market is tougher than it looks; three-quarters of the time, the effort fails. But companies can change those odds dramatically. Results from a five-year study of corporate growth conducted by Bain & Co. reveal that adjacency expansion succeeds only when built around strong core businesses that have the potential to become market leaders. And the best place to look for adjacency opportunities is inside a company's strongest customers. The study also found that the most successful companies were able to outgrow their rivals consistently and profitably by developing a formula for pushing out the boundaries of their core businesses in predictable, repeatable ways. Companies use their repeatability formulas to expand into any number of adjacencies. Some companies make repeated geographic moves, whereas others apply a superior business model to new segments. In other cases, companies develop hybrid approaches. The successful repeaters in the study had two common characteristics: they were extraordinarily disciplined, applying rigorous screens before they made an adjacency move, and in almost all cases, they developed their repeatable formulas by carefully studying their customers and their customers' economics.
Why do so many newly minted leaders fail so spectacularly? Part of the problem is that in many companies, succession planning is little more than creating a list of high-potential employees and the slots they might fill. It's a mechanical process that's too narrow and hidebound to uncover and correct skill gaps that can derail promising young executives. And it's completely divorced from organizational efforts to transform managers into leaders. Some companies, however, do succeed in building a steady, reliable pipeline of leadership talent by marrying succession planning with leadership development. Eli Lilly, Dow Chemical, Bank of America, and Sonoco Products have created long-term processes for managing the talent roster throughout their organizations--a process Conger and Fulmer call succession management. Drawing on the experiences of these best-practice organizations, the authors outline five rules for establishing a healthy succession management system: Focus on opportunities for development, identify linchpin positions, make the system transparent, measure progress regularly, and be flexible.
Most brands don't make much money. Year after year, businesses generate 80% to 90% of their profits from less than 20% of their brands. Yet most companies tend to ignore loss-making brands, unaware of the hidden costs they incur. That's because executives believe it's easy to erase a brand; they have only to stop investing in it, they assume, and it will die a natural death. But they're wrong. When companies drop brands clumsily, they antagonize loyal customers: Research shows that seven times out of eight, when firms merge two brands, the market share of the new brand never reaches the combined share of the two original ones. It doesn't have to be that way. Smart companies use a four-step process to kill brands methodically. First, CEOs make the case for rationalization by getting groups of senior executives to conduct joint audits of the brand portfolio. Next, executives need to decide how many brands will be retained, which they do either by setting broad parameters that all brands must meet or by identifying the brands they need to cater to all the customer segments in their markets. Third, executives must dispose of the brands they've decided to drop, deciding in each case whether it is appropriate to merge, sell, milk, or just eliminate the brand outright. Finally, it's critical that executives invest the resources they've freed to grow the brands they've retained.