NASA chief Daniel Goldin made enemies during his controversial tenure, but even critics agree that his aggressive, no-nonsense tactics transformed the moribund agency into a lean and innovative operation. He talks candidly about what he learned and what he would have done differently.

Alfred Sloan wrote the book on hierarchical management. Turns out, though, he didn't practice what he preached, a fact that has new relevance as businesses look to the past for guidance on the future.

It's the end of the quarter, and the sales staff at Exceso Corp. is scrambling to meet CEO R. Foley Vinton's overheated 9% sales target. Sure, the sales team has always hit its target in the past, and yes, that number was based on its forecast data. But the fact is, the projection was based on raw data. And as Martin Wu, the company's head of sales, warns Vinton, sales will do well to hit 3%. Vinton remains unconvinced. He has already given that number to the analyst community, and, he thinks, if he keeps up the pressure, Wu will find a way to make it, just like he always does. So Wu and his sales team do what they have done in the past--discount the heck out of their product and load up the distribution channel. That's great news for Alice Dias over at Flemings ValuMart. She just stocked up on 3,000 cases of ClickZipPlus at a 6% discount to the standing price, with the idea of shipping most of it to diverters and to other ValuMarts in regions that haven't been offered such a good deal. But it's bewildering to analyst Andrea Valdini who, after Vinton has just shepherded her through a plant cranking at full production, can't find any eight-packs at a store near the very offices where she and her colleagues are pondering the health of Exceso's stock. "They can't keep this up much longer," suggests a ValuMart manager, pointing to the empty shelves that are the ClickZipPlus display. As he falls asleep that night, Vinton thinks they'll be able to kick the loading habit--someday, when the timing's better. But should they? In R0205A and R0205Z, four commentators offer advice in this fictional case study.

Why do some people bounce back from life's hardships while others despair? HBR senior editor Diane Coutu looks at the nature of individual and organizational resilience, issues that have gained special urgency in light of the recent terrorist attacks, war, and recession. In the business arena, resilience has found its way onto the list of qualities sought in employees. As one of Coutu's interviewees puts it, "More than education, more than experience, more than training, a person's level of resilience will determine who succeeds and who fails." Theories abound about what produces resilience, but three fundamental characteristics seem to set resilient people and companies apart from others. The first characteristic is the capacity to accept and face down reality. In looking hard at reality, we prepare ourselves to act in ways that allow us to endure and survive hardships. Second, resilient people and organizations possess an ability to find meaning in some aspects of life. And values are just as important as meaning; value systems at resilient companies change very little over the long haul and are used as scaffolding in times of trouble. The third building block of resilience is the ability to improvise. Within an arena of personal capabilities or company rules, the ability to solve problems without the usual or obvious tools is a great strength.

No matter how we rail against the status quo, most of us are reluctant to take action in the workplace. Faced with choosing between our values and jobs, most of us either resign ourselves to the situation or leave. Yet, society's tempered radicals--individuals who create large-scale change in subtle, incremental ways--have learned that you can rock the boat without falling out of it. Award-winning director Robert Redford has been described as the quintessential tempered radical. His Sundance Institute, tucked away in the Utah mountains, was conceived as a haven for writers and directors with promising ideas but little more than lint in their pockets. Sundance has proven such a successful incubator of independent films that, perhaps ironically, it has become one of the most influential forces in Hollywood. In this article, Redford talks about how to change an industry--specifically, how he and Sundance have influenced the movie business. Based on his sometimes harsh experiences as an environmental activist and a film actor--he was burned in effigy by demonstrators and figuratively by film distributors who deemed Downhill Racer too uncommercial--Redford concluded that "if you want to crack the system, you can't hit it directly; you have to work behind the scenes." Over the past 20 years, he has experimented again and again with grassroots projects--pieces of which he incorporated into Sundance. Redford's multifaceted approach to change includes earning credibility and then leveraging his successes; practicing the arts of compromise and persuasion to get projects completed; gathering support along the way; and, most important, persisting--tactics that a patient manager in any industry can apply.

You call a meeting to try to convince your boss that your company needs to make an important move. Your argument is impassioned, your logic unassailable, your data bulletproof. Two weeks later, though, you learn that your brilliant proposal has been tabled. What went wrong? It's likely the proposal wasn't appropriately geared toward your boss's decision-making style, say consultants Gary Williams and Robert Miller. Over the course of several years' research, the authors have found that executives have a default style of decision making developed early in their careers. That style is reinforced through repeated successes or changed after several failures. Typically, the authors say, executives fall into one of five categories of decision-making styles: Charismatics are intrigued by new ideas, but experience has taught them to make decisions based on balanced information, not just on emotions. Thinkers are risk-averse and need as much data as possible before coming to decisions. Skeptics are suspicious of data that don't fit their worldview and, thus, make decisions based on their gut feelings. Followers make decisions based on how other trusted executives, or they themselves, have made similar decisions in the past. And controllers focus on the facts and analytics of decisions because of their own fears and uncertainties. But most business presentations aren't designed to acknowledge these different styles--to their detriment. In this article, the authors describe the various subtleties of the five decision-making styles and how best to persuade executives from each group. Knowing executives' preferences for hearing or seeing certain types of information at specific stages in their decision-making process can substantially improve your ability to tip the outcome in your favor, the authors conclude.

Although most companies dedicate considerable time and attention to acquiring and creating businesses, few devote much effort to divestitures. But regularly divesting businesses--even good, healthy ones--ensures that remaining units reach their potential and that the overall company grows stronger. Drawing on extensive research into corporate performance over the last decade, McKinsey consultants Lee Dranikoff, Tim Koller, and Antoon Schneider show that an active divestiture strategy is essential to a corporation's long-term health and profitability. In particular, they say that companies that actively manage their businesses through acquisitions and divestitures create substantially more shareholder value than those that passively hold on to their businesses. Therefore, companies should avoid making divestitures only in response to pressure and instead make them part of a well-thought-out strategy. This article presents a five-step process for doing just that: prepare the organization, identify the best candidates for divestiture, execute the best deal, communicate the decision, and create new businesses. As the fifth step suggests, divestiture is not an end in itself. Rather, it is a means to a larger end: building a company that can grow and prosper over the long haul.

"Business model" was one of the great buzzwords of the Internet boom. A company didn't need a strategy, a special competence, or even any customers--all it needed was a web-based business model that promised wild profits in some distant, ill-defined future. Many people--investors, entrepreneurs, and executives alike--fell for the fantasy and got burned. And as the inevitable counterreaction played out, the concept of the business model fell out of fashion nearly as quickly as the .com appendage itself. That's a shame. As Joan Magretta explains, a good business model remains essential to every successful organization, whether it's a new venture or an established player. To help managers apply the concept successfully, she defines what a business model is and how it complements a smart competitive strategy. Business models are, at heart, stories that explain how enterprises work. Like a good story, a robust business model contains precisely delineated characters, plausible motivations, and a plot that turns on an insight about value. It answers certain questions: Who is the customer? How do we make money? What underlying economic logic explains how we can deliver value to customers at an appropriate cost? Every viable organization is built on a sound business model, but a business model isn't a strategy, even though many people use the terms interchangeably. Business models describe, as a system, how the pieces of a business fit together. But they don't factor in one critical dimension of performance: competition. That's the job of strategy. Illustrated with examples from companies like American Express, EuroDisney, Wal-Mart, and Dell Computer, this article clarifies the concepts of business models and strategy, which are fundamental to every company's performance.

When a company faces a major disruption in its markets, managers' perceptions of the disruption influence how they respond to it. If, for instance, they view the disruption as a threat to their core business, managers tend to overreact, committing too many resources too quickly. But if they see it as an opportunity, they're likely to commit insufficient resources to its development. Clark Gilbert and Joseph Bower explain why thinking in such stark terms--threat or opportunity--is dangerous. It's possible, they argue, to arrive at an organizational framing that makes good use of the adrenaline a threat creates as well as of the creativity an opportunity affords. The authors claim that the most successful companies frame the challenge differently at different times: When resources are being allocated, managers see the disruptive innovation as a threat. But when the hard strategic work of discovering and responding to new markets begins, the disruptive innovation is treated as an opportunity. The ability to reframe the disruptive technology as circumstances evolve is not an easy skill to master, the authors admit. In fact, it might not be possible without adjusting the organizational structure and the processes governing new business funding. Successful companies, the authors have determined, tend to do certain things: They establish a new venture separate from the core business; they fund the venture in stages as markets emerge; they don't rely on employees from the core organization to staff the new business; and they appoint an active integrator to manage the tensions between the two organizations, to name a few. This article will help executives frame innovations in more balanced ways--allowing them to recognize threats but also to seize opportunities.

In the early 1980s, visitors on an hour-long tour of a factory headed by Eugene Goodson reported surprisingly accurate details about the plant, its technology, and even its cost of sales. Meanwhile, the author's managers took part in short tours of a competitor's plants and learned next to nothing. With that, Goodson resolved to do better and, over time, developed a tool to assess a plant's strengths and weaknesses. The tool, the Rapid Plant Assessment (RPA) process, allows small tour teams to gauge factory's leanness accurately solely from visual cues and conversations with employees. Since 1998, Goodson, his colleagues, and his students have used the tool hundreds of times to evaluate their own plants, their competitors', and those of possible acquisition targets. At the heart of the RPA process are two assessment tools: the rating sheet and the questionnaire. The first contains 11 categories--including safety, scheduling, inventory, teamwork, and supply chain--that determine a plant's leanness. The second features 20 yes-or-no questions that focus thinking within the categories. The article explains how to rate a plant's practices in each category and how to choose team members. It also outlines how to use the tool to assess cost of sales. Even with varying levels of manufacturing experience, different teams touring the same plants have produced consistent results with this tool. It's easy to learn, quick to put into practice, and it produces results in a day or less.

Just a few years ago, becoming an entrepreneur was pretty simple. All you needed was some idea--any idea--a little experience, and venture capital funds to get you going. Many young people started to believe that entrepreneurship was a viable, even safe, career choice. Older folks, too, underestimated the risks of financing start-ups, and, as a result, they ended up throwing millions of dollars into doomed ventures. The economic downturn has laid waste to those illusions. So now is a good time to ask potential entrepreneurs and their financial backers the hard questions unheeded in the days of the Internet boom: What makes an entrepreneur? What characteristics set successful entrepreneurs apart, enabling them to keep their companies alive even when the going gets tough? This article addresses those questions, reminding us that becoming a successful entrepreneur is decidedly not a squeaky-clean affair; you may end up making powerful enemies, risking your own financial security, or even, in extreme cases, looking at jail time. Specifically, the article explores the key qualities that make someone a successful entrepreneur. Walter Kuemmerle has distilled these characteristics into a kind of litmus test of the following five straight-forward, albeit disquieting, questions you should ask yourself if you are considering starting your own venture: Are you comfortable stretching the rules? Are you prepared to make powerful enemies? Do you have the patience to start small? Are you willing to shift strategies quickly? Are you a closer? Answering these questions honestly will help you decide whether you have what it takes to become an entrepreneur.

It's the end of the quarter, and the sales staff at Exceso Corp. is scrambling to meet CEO R. Foley Vinton's overheated 9% sales target. Sure, the sales team has always hit its target in the past, and yes, that number was based on its forecast data. But the fact is, the projection was based on raw data. And as Martin Wu, the company's head of sales, warns Vinton, sales will do well to hit 3%. Vinton remains unconvinced. He has already given that number to the analyst community, and, he thinks, if he keeps up the pressure, Wu will find a way to make it, just like he always does. So Wu and his sales team do what they have done in the past--discount the heck out of their product and load up the distribution channel. That's great news for Alice Dias over at Flemings ValuMart. She just stocked up on 3,000 cases of ClickZipPlus at a 6% discount to the standing price, with the idea of shipping most of it to diverters and to other ValuMarts in regions that haven't been offered such a good deal. But it's bewildering to analyst Andrea Valdini who, after Vinton has just shepherded her through a plant cranking at full production, can't find any eight-packs at a store near the very offices where she and her colleagues are pondering the health of Exceso's stock. "They can't keep this up much longer," suggests a ValuMart manager, pointing to the empty shelves that are the ClickZipPlus display. As he falls asleep that night, Vinton thinks they'll be able to kick the loading habit--someday, when the timing's better. But should they? In R0205A and R0205Z, four commentators offer advice on this fictional case study.

It's the end of the quarter, and the sales staff at Exceso Corp. is scrambling to meet CEO R. Foley Vinton's overheated 9% sales target. Sure, the sales team has always hit its target in the past, and yes, that number was based on its forecast data. But the fact is, the projection was based on raw data. And as Martin Wu, the company's head of sales, warns Vinton, sales will do well to hit 3%. Vinton remains unconvinced. He has already given that number to the analyst community, and, he thinks, if he keeps up the pressure, Wu will find a way to make it, just like he always does. So Wu and his sales team do what they have done in the past--discount the heck out of their product and load up the distribution channel. That's great news for Alice Dias over at Flemings ValuMart. She just stocked up on 3,000 cases of ClickZipPlus at a 6% discount to the standing price, with the idea of shipping most of it to diverters and to other ValuMarts in regions that haven't been offered such a good deal. But it's bewildering to analyst Andrea Valdini who, after Vinton has just shepherded her through a plant cranking at full production, can't find any eight-packs at a store near the very offices where she and her colleagues are pondering the health of Exceso's stock. "They can't keep this up much longer," suggests a ValuMart manager, pointing to the empty shelves that are the ClickZipPlus display. As he falls asleep that night, Vinton thinks they'll be able to kick the loading habit--someday, when the timing's better. But should they? In R0205A and R0205Z, four commentators offer advice on this fictional case study.

In January 2002, speculators in the finance community suspected that Ha Chung Fong, chairman of Fountain Set (Holdings) Ltd., might be in the mood to reconsider a previous proposal to privatize the company. Ha was dissatisfied with the counter's trading volume, and some managers of the firm also believed that the share price did not reflect its true value. In 1995, Fountain Set had attempted to privatize by way of a scheme of arrangement under Section 166 of the company's ordinance. The scheme was later abandoned due to difficulties in reaching an agreement between the company's consortium shareholders and also problems in ascertaining the proportion of the holders of the company's convertible notes. With the redemption of the convertible notes in 1999, financial analysts believed that privatizing the company would not be as difficult as in 1995.

The president and chief executive officer of a large food manufacturer is preparing his company's strategic agenda for the next five years. One of the top five food manufacturers in Canada, the company went public and restructured its management team six years ago. The efforts were successful, resulting in an increase in the company's market share. Recent food industry trends, however, added "box" stores and private label brands to the domestic competition. At the same time, the terms of the Canada-U.S. Free Trade Agreement are expected to abolish food-related tariffs within two years, opening up competition from across the border. Although the company has experienced success in the past five years, the president and CEO needs a strategic plan that will take the company to the next level.

The Canadian biotechnology industry generates nearly $1 billion in revenues annually. This note provides a sense of the key success factors associated with competing in this rapidly-evolving business area, including an exploration of the key sectors of economic activity, current scientific and social issues affecting development of biotechnology-based businesses, the role of clusters in building an infrastructure for biotechnology activity, and the key steps involved in patenting and developing biotechnology-related products. Issues associated with financing biotechnology-based businesses in Canada are also reviewed.

The growing popularity of the Internet for shopping has launched the latest round of multiple retail channel integration as traditional stores, cataloguers, online stores and others all seek to provide customers with the choice of when and how to do business with them. Multi-channel retailing presents both significant opportunities and challenges. Success depends on how well a retailer addresses these opportunities by creating a seamless, fully integrated, multi-channel operation focused on providing high-quality, cost-effective service to consumers. Multi-channel integration is a complex strategy to undertake. This note discusses the major issues that retailers have to address.

Stamford Machine Corporation is a market leader in the manufacturing of photocopiers and office equipment. The director of corporate business ethics and compliance has been notified that the company is being served with a discrimination lawsuit. A newspaper announcement was released to the public outlining details of the charges and before the director could leave his office, he receives a call from a journalist asking for the company's comments. He must determine if there has been a breach in the company's policy on discrimination and plan how the company will deal with the media.

A recently hired co-ordinator of a cross-docking facility has been assigned the task of designing an efficient layout for the facility, assessing the equipment requirements and workflows, and training and supervising the floor staff. Since this is his first managerial position, he is eager to prove himself. He wants to show senior management that they were correct in their decision to hire him, despite his young age. A long-term employee seems determined to thwart the co-ordinator's efforts at every turn. The much-older man never misses a chance to point out that the old company's system was superior to the one the co-ordinator is trying to implement. When a costly shipping error occurs twice in two days, the co-ordinator and the employee have a heated exchange the forces the co-ordinator to do some serious thinking about what his next move should be. Should he fire the employee? Should he rethink his system? Or should he simply try a more diplomatic approach to managing the employee?

N.K. Builders and Contractors was a construction company newly formed by an experienced contractor and a young project manager. The project manager was very knowledgeable of the construction industry but not familiar with the bidding process for contracts; for this he relied heavily on the experience of his partner. The company's first project was a government contract that required the partners to go to the divisional office to apply for the tender, where they found out they were one of 15 interested in the highway project. The bidding process was similar to an auction, the highest bid won. Money generated from the highest bid was shared equally among the remaining contractors, and the higher the bid the more commission government officials received. Winning the contract is only the beginning. Once a company receives the project, they are expected to begin work within a month; however, many things can happen between winning and the completing of the contract and he would discover there would be a number of times when it would be necessary to pay various officials to proceed with the project. The project manager was disappointed in the way the company was awarded the project and now must decide if he should quit and lose the money he invested in the company or remain with the business.