In 1999, Hewlett-Packard (HP) split into two companies. The issue facing human resources (HR) had to do with creating loyalty and enthusiasm for a new company (Agilent) whose roots lay in an established institution with an extremely loyal workforce who identified with the HP brand. How could they create a new culture of more focus and accountability with the same people? Developing an organizational culture that supported business performance and accountability was the foremost HR task. This case provides detailed background on the company's key initiatives and projects to transform HR organization and culture in the new company. The HR transformation marked a change from an egalitarian, safe culture to a performance culture characterized by a strong meritocracy and a results-based rewards program. In 2001, the company faced increasing financial challenges that would test the newly developing culture. How could top management continue building the Agilent culture--especially in the face of layoffs and restructuring?

After a long stint in consulting, Jane Epstein has just become a manager at TechniCo. She's trying to get a fix on the various personalities and roles of her new coworkers, and by and large, she seems to have inherited a pretty good team. One's got a lot of social capital built up; another seems to be a natural salesperson. Something about Andy Zimmerman, though, has her worried. At first she can't put her finger on it--maybe he's a bit too aggressive? But as time passes, she watches Andy's mean streak show itself again and again: He belittles administrative assistants for minor mistakes, ruthlessly cuts down colleagues when they present ideas that aren't fully developed, and makes everyone in the group feel small and stupid. But Andy has another side: He's usually right, and he's very, very good at his job. In fact, in terms of pure performance, he's the best Jane's got. She'd be crazy not to want him in her group. And yet, she can't deny that Andy's behavior is undermining morale and hurting the team's financial performance. Now Jane's feeling frustrated. When she left her consulting job for this position, she expected to focus on numbers, products, customers--on building something. Instead, she finds that people issues are taking up most of her time. This fictional case study explores the dynamics that occur when a star performer has a highly abrasive personality. In R0108A and R0108Z, Mary Rowe, Chuck McKenzie, Kathy Jordan, and James Waldroop advise Jane on how she can curb Andy's bad behavior without hurting the team's bottom line.

Every aspiring entrepreneur can recite the truisms of the business: Feel comfortable with risk, hire the best people, do what you love, and don't do it for the money alone. Nevertheless, the road to success can be a scramble from one slippery rock to another. And no one knows that better than Dan Bricklin, creator of VisiCalc, the first electronic spreadsheet. In this first-person account, Bricklin, now on his fourth start-up, describes his life as an entrepreneur and professional tinkerer. In addition to the usual suspects for creating a business--solid training, talent, and good timing--he suggests that entrepreneurs need a few more tricks in their bags to thrive during the inevitable ups and downs. First, entrepreneurs need to understand what value they bring to their endeavors. They have to know their limits, both in terms of evaluating their penchant for risk and personal sacrifice and recognizing when their ambitions exceed their skills. They may, for instance, need others to step in when their own talents don't match their businesses' current needs. Second, entrepreneurs shouldn't wait to get started. Or, if they do wait, they should understand that as time goes by, they may become less willing to sacrifice their standard of living for their businesses. Third, entrepreneurs need to recognize that they are not their businesses. They must remember that their companies' failures don't make them awful people. Likewise, their companies' successes don't make them geniuses or superhumans. Indeed, training, talent, and good timing are essential, but entrepreneurs must also have a true passion for what they're doing, and they must possess the humility to know when they need help. Many of today's dot-com entrepreneurs, Bricklin says, have paid a price for their arrogance. Others can learn from their mistakes.

The difficult task of achieving worldly success while also storing up spiritual treasure is perennially with us, in good times and in bad. Today, however, as the economy has cooled and companies have demonstrated their mortality, questions about meaning and value appear more relevant, even urgent. HBR associate editor David A. Light recently spoke with the Reverend Peter J. Gomes, one of the nation's best-known preachers and the minister at Harvard University's Memorial Church, about why and how it is both possible and necessary to reconcile a life of success with a life of faith. To do so, says Gomes, you must first "get used to it"--come to terms with the age-old tension between being rich in spirit and rich in worldly goods. Second, you should "get over it"--arrive at an understanding of the value and responsibilities associated with power and wealth. Finally, "get on with it"--figure out how you can live your life spiritually while continuing to lead in the business world. For those wondering how to get on with spiritual development, Gomes cites the growing phenomenon of senior executives gathering with peers--out of shared need, not shared accomplishment--to pray, study sacred texts, and share their religious life together. He counsels that it's never too late to get on with it. Gomes concludes that business will continue to be one of the most significant forces in American culture, but it will always struggle against people's need for a perspective that is beyond this world's.

Middle managers have often been cast as dinosaurs. Has-beens. Mediocre managers and intermediaries who defend the status quo instead of supporting others' attempts to change organizations for the better. An INSEAD professor has examined this interesting breed of manager--in particular, middle managers' roles during periods of radical organizational change. His findings will surprise many. Middle managers, it turns out, make valuable contributions to the realization of radical change at companies--contributions that go largely unrecognized by most senior executives. Quy Nguyen Huy says these contributions occur in four major areas. First, middle managers often have good entrepreneurial ideas that they are able and willing to realize--if only they can get a hearing. Second, they're far better than most senior executives at leveraging the informal networks at companies that make substantive, lasting change. Because they've worked their way up the corporate ladder, middle managers' networks run deep. Third, they stay attuned to employees' emotional needs during organizational change, thereby maintaining the transformation's momentum. And, finally, they manage the tension between continuity and change--they keep the organization from falling into extreme inertia or extreme chaos. The author examines each of these strengths, citing real-world examples culled from his research. Of course, not every middle manager in an organization is a paragon of entrepreneurial vigor and energy, Huy acknowledges. But cavalierly dismissing the roles that middle managers play--and carelessly reducing their ranks--will drastically diminish senior managers' chances of realizing radical change at their companies. Indeed, middle managers may be the most effective allies of corner office executives when it's time to make major changes in businesses.

Most companies do a great job promoting efficiency within their own walls, streamlining internal processes wherever possible. But they have less success coordinating cross-company business interactions. When data pass between companies, inconsistencies, errors, and misunderstandings routinely arise, leading to wasted work--for instance, the same sales, order entry, and customer data may be entered repeatedly into different systems. Typically, scores of employees at each company manage these cumbersome interactions. The costs of such inefficiencies are very real and very large. In this article, Michael Hammer outlines the activities and goals used in streamlining cross-company processes. He breaks down the approach into four stages: scoping--identifying the business process for redesign and selecting a partner; organizing--establishing a joint committee to oversee the redesign and convening a design team to implement it; redesigning--taking apart and reassembling the process, with performance goals in mind; and implementing--rolling out the new process and communicating it across the collaborating companies. The author describes how several companies have streamlined their supply-chain and product development processes. Plastics compounder Geon integrated its forecasting and fulfillment processes with those of its main supplier after watching inventories, working capital, and shipping times creep up. General Mills coordinated the delivery of its yogurt with Land O'Lakes; butter and yogurt travel cost effectively in the same trucks to the same stores. Hammer says this new kind of collaboration promises to change the traditional vocabulary of corporate relationships. What if you and I sell different products to the same customer? We're not competitors, but what are we? In the past, we didn't care. Now, we should, the author says.

For at least the past decade, the holy grail for companies has been innovation. Managers have gone after it with all the zeal their training has instilled in them, using a full complement of tried and true management techniques. The problem is that none of these practices, well suited for cashing in on old, proven products and business models, works very well when it comes to innovation. Instead, managers should take most of what they know about management and stand it on its head. In this article, Robert Sutton outlines several ideas for managing creativity that are clearly odd but clearly effective: Place bets on ideas without much heed to their projected returns. Ignore what has worked before. Goad perfectly happy people into fights among themselves. Good creativity management means hiring the candidate you have a gut feeling against. And as for the people who stick their fingers in their ears and chant, "I'm not listening, I'm not listening" when customers make suggestions--praise and promote them. Using vivid examples from more than a decade of academic research to illustrate his points, the author discusses new approaches to hiring, managing creative people, and dealing with risk and randomness in innovation. His conclusions? The practices in this article succeed because they increase the range of a company's knowledge, allow people to see old problems in new ways, and help companies break from the past.

Most executives think of decision making as a singular event that occurs at a particular point in time. In reality, though, decision making is a process fraught with power plays, politics, personal nuances, and institutional history. Leaders who recognize this make far better decisions than those who persevere in the fantasy that decisions are events they alone control. That said, some decision-making processes are far more effective than others. Most often, participants use an advocacy process, possibly the least productive way to get things done. They view decision making as a contest, arguing passionately for their preferred solutions, presenting information selectively, withholding relevant conflicting data so they can make a convincing case, and standing firm against opposition. Much more powerful is an inquiry process, in which people consider a variety of options and work together to discover the best solution. Moving from advocacy to inquiry requires careful attention to three critical factors: fostering constructive, rather than personal, conflict; making sure everyone knows that their viewpoints are given serious consideration even if they are not ultimately accepted; and knowing when to bring deliberations to a close. The authors discuss in detail strategies for moving from an advocacy to an inquiry process, as well as for fostering productive conflict, true consideration, and timely closure. And they offer a framework for assessing the effectiveness of your process while you're still in the middle of it. Decision making is a job that lies at the very heart of leadership and one that requires a genius for balance: the ability to embrace the divergence that may characterize early discussions and to forge the unity needed for effective implementation.

Everybody loves the stories of heroes like Martin Luther King, Jr., Mother Teresa, and Gandhi. But the heroic model of moral leadership usually doesn't work in the corporate world. Modesty and restraint are largely responsible for the achievements of the most effective moral leaders in business. The author, a specialist in business ethics, says the quiet leaders he has studied follow four basic rules in meeting ethical challenges and making decisions. The rules constitute an important resource for executives who want to encourage the development of such leaders among their middle managers. The first rule is "Put things off till tomorrow." The passage of time allows turbulent waters to calm and lets leaders' moral instincts emerge. "Pick your battles" means that quiet leaders don't waste political capital on fights they can't win; they save it for occasions when they really want to fight. "Bend the rules, don't break them" sounds easier than it is--bending the rules to resolve a complicated situation requires imagination, discipline, restraint, flexibility, and entrepreneurship. The fourth rule, "Find a compromise," reflects the author's finding that quiet leaders try not to see situations as polarized tests of ethical principles. These individuals work hard to craft compromises that are "good enough"--responsible and workable enough--to satisfy themselves, their companies, and their customers. The vast majority of difficult problems are solved through the consistent striving of people working far from the limelight. Their quiet approach to leadership doesn't inspire, thrill, or provide story lines for uplifting TV shows. But the unglamorous efforts of quiet leaders make a tremendous difference every day in the corporate world.

Like many manufacturers, DuPont traditionally has grown by making more and more "stuff." And its business growth has been proportional to the amount of raw materials and energy used--as well as the resulting waste and emissions from operations. Over the years, though, DuPont became aware that cheap supplies of nonrenewable resources wouldn't be endlessly available and that the earth's ecosystems couldn't indefinitely absorb the waste and emissions of production and consumption. Chad Holliday, chairman and CEO of DuPont, believes strongly in the challenge of sustainable growth and makes the business case for it: By using creativity and scientific knowledge effectively, he says, companies can provide strong returns for shareholders and grow their businesses--while also meeting the human needs of societies around the world and reducing the environmental footprint of their operations and products. In fact, a focus on sustainability can help identify new products, markets, partnerships, and intellectual property and lead to substantial business growth. Holliday describes how DuPont developed a three-pronged strategy to translate the concept of sustainability into nuts-and-bolts business practices. Focusing on integrated science, knowledge intensity, and productivity improvement, the strategy was accompanied by a new way to measure progress quantitatively. Sustainable growth should be viewed not as a program for stepped-up environmental performance but as a comprehensive way of doing business, one that delivers tremendous economic value and opens up new opportunities. Ultimately, companies will find that they can generate substantial business value through sustainability while both enhancing the quality of life around the world and protecting the environment.

Companies routinely overestimate the attractiveness of foreign markets. Dazzled by the sheer size of untapped markets, they lose sight of the difficulties of pioneering new, often very different territories. The problem is rooted in the analytic tools (the most prominent being country portfolio analysis, or CPA) that managers use to judge international investments. By focusing on national wealth, consumer income, and people's propensity to consume, CPA emphasizes potential sales, ignoring the costs and risks of doing business in a new market. Most of these costs and risks result from the barriers created by distance. "Distance," however, does not refer only to geography; its other dimensions can make foreign markets considerably more or less attractive. The CAGE framework of distance presented here considers four attributes: cultural distance (religious beliefs, race, social norms, and language that are different for the target country and the country of the company considering expansion); administrative or political distance (colony-colonizer links, common currency, and trade arrangements); geographic distance (the physical distance between the two countries, the size of the target country, access to waterways and the ocean, internal topography, and transportation and communications infrastructures); and economic distance (disparities in the two countries' wealth or consumer income and variations in the cost and quality of financial and other resources). This framework can help to identify the ways in which potential markets may be distant from existing ones. The article explores how (and by how much) various types of distance can affect different types of industries and shows how dramatically an explicit consideration of distance can change a company's picture of its strategic options.

After a long stint in consulting, Jane Epstein has just become a manager at TechniCo. She's trying to get a fix on the various personalities and roles of her new coworkers, and by and large, she seems to have inherited a pretty good team. One's got a lot of social capital built up; another seems to be a natural salesperson. Something about Andy Zimmerman, though, has her worried. At first she can't put her finger on it--maybe he's a bit too aggressive? But as time passes, she watches Andy's mean streak show itself again and again: He belittles administrative assistants for minor mistakes, ruthlessly cuts down colleagues when they present ideas that aren't fully developed, and makes everyone in the group feel small and stupid. But Andy has another side: He's usually right, and he's very, very good at his job. In fact, in terms of pure performance, he's the best Jane's got. She'd be crazy not to want him in her group. And yet, she can't deny that Andy's behavior is undermining morale and hurting the team's financial performance. Now Jane's feeling frustrated. When she left her consulting job for this position, she expected to focus on numbers, products, customers--on building something. Instead, she finds that people issues are taking up most of her time. This fictional case study explores the dynamics that occur when a star performer has a highly abrasive personality. In R0108A and R0108Z, Mary Rowe, Chuck McKenzie, Kathy Jordan, and James Waldroop advise Jane on how she can curb Andy's bad behavior without hurting the team's bottom line.

After a long stint in consulting, Jane Epstein has just become a manager at TechniCo. She's trying to get a fix on the various personalities and roles of her new coworkers, and by and large, she seems to have inherited a pretty good team. One's got a lot of social capital built up; another seems to be a natural salesperson. Something about Andy Zimmerman, though, has her worried. At first she can't put her finger on it--maybe he's a bit too aggressive? But as time passes, she watches Andy's mean streak show itself again and again: He belittles administrative assistants for minor mistakes, ruthlessly cuts down colleagues when they present ideas that aren't fully developed, and makes everyone in the group feel small and stupid. But Andy has another side: He's usually right, and he's very, very good at his job. In fact, in terms of pure performance, he's the best Jane's got. She'd be crazy not to want him in her group. And yet, she can't deny that Andy's behavior is undermining morale and hurting the team's financial performance. Now Jane's feeling frustrated. When she left her consulting job for this position, she expected to focus on numbers, products, customers--on building something. Instead, she finds that people issues are taking up most of her time. This fictional case study explores the dynamics that occur when a star performer has a highly abrasive personality. In R0108A and R0108Z, Mary Rowe, Chuck McKenzie, Kathy Jordan, and James Waldroop advise Jane on how she can curb Andy's bad behavior without hurting the team's bottom line.

In April 2000, Yahoo! was sued by a French anti-racist group, on the grounds that Yahoo!'s online auctions of nazi items on its U.S. site violate French law. Yahoo! Inc. finally removed these items from its site in January 2001. The cases and its annexes present the economic, legal, technical, philosophical, cultural and managerial issues.

The case describes the development of Alibaba.com, an Internet start-up originated from China that had become the world's largest online business-to-business (B2B) marketplace for small and medium-sized enterprises (SMEs) conducting international trade. In particular, it highlights the changing business environments in China, and the dynamic interaction of Chinese culture, Internet culture and Western management practices.

Polymer Technologies Inc. are specialists in integrating metal and plastic to produce margin switches, relays and electromechanical products for the automotive industry. The program manager must decide whether or not to automate production of a component of power automobile seats called the seat switch substrate, and if the decision is made to automate, whether it should be done in-house or outsourced.

A professor has decided to build an equity portfolio made up of common shares from major companies. He has to decide what fraction of the portfolio should be devoted to each of the four issues by determining the best method of calculating risk. Excel files are available, products 7B01E009A and 7B01E009B.

In February 2001, the CEO of a new technology start-up had to decide how to present his firm's value proposition to future clients, customers, and business partners. The technology allowed distribution of full-motion video clips of sports highlights to "third generation" (3G) mobile phones. The plan was to target sports enthusiasts initially in Europe along with mobile phone companies, sports leagues, and networks.

Dynamic Engine Inc. is one of 12 divisions of the automotive parts maker North American Auto Parts. With guidance from the parent company, Dynamic Engine has well-established human resources policies, training programs and employee assistance programs that are available to all employees. The materials and purchasing manager must deal with the poor attendance of an employee whose performance until recently was considered above average. He discusses the issue with the employee and believes the problem has been resolved. Shortly after this conversation, he discovers that the absenteeism problem with this employee is still occurring, and now must determine what his next step is to resolve this issue.

Polymer Technologies Inc. are specialists in integrating metal and plastic to produce margin switches, relays and electromechanical products for the automotive industry. The program manager must decide whether or not to automate production of a component of power automobile seats called the seat switch substrate, and if the decision is made to automate, whether it should be done in-house or outsourced.