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The South African archbishop, civil rights leader, and Nobel Peace Prize winner talks about finding the patience to overcome apartheid and how he has benefited from the prayers of others.

How do you reduce headcount when almost everyone gets the same scores on performance reviews? HR vice president Nils Ekdahl confronts that question at Circale Corporation, a fictional electronic-components distributor that has just completed a series of acquisitions. Ekdahl wants to make the personnel cuts objectively, but the company's new performance-review system yields disappointing results: On a five-point scale, virtually every employee gets a 4 or 5 on each dimension. So Ekdahl instructs managers to redo the evaluations, tells them they're not allowed to give just 4s and 5s, and requires an average score of 3 across each manager's direct reports. This time the scores indeed average 3, but they are nearly all 3s. Grade compression at the top of the scale has merely shifted to the middle. Should Ekdahl initiate yet another round of performance reviews or make do with the data he has? The authors of this fictionalized case are Brian J. Hall and Andrew Wasynczuk, both of Harvard Business School. Expert commentary comes from John Berisford, currently of The McGraw-Hill Companies and formerly of Pepsi Beverages, and from Stephen P. Kaufman, currently of Harvard Business School and formerly of Arrow Electronics (the company whose performance-review system was the seed for this case). HBR's readers also weigh in.

How do you reduce headcount when almost everyone gets the same scores on performance reviews? HR vice president Nils Ekdahl confronts that question at Circale Corporation, a fictional electronic-components distributor that has just completed a series of acquisitions. Ekdahl wants to make the personnel cuts objectively, but the company's new performance-review system yields disappointing results: On a five-point scale, virtually every employee gets a 4 or 5 on each dimension. So Ekdahl instructs managers to redo the evaluations, tells them they're not allowed to give just 4s and 5s, and requires an average score of 3 across each manager's direct reports. This time the scores indeed average 3, but they are nearly all 3s. Grade compression at the top of the scale has merely shifted to the middle. Should Ekdahl initiate yet another round of performance reviews or make do with the data he has? The authors of this fictionalized case are Brian J. Hall and Andrew Wasynczuk, both of Harvard Business School. Expert commentary comes from John Berisford, currently of The McGraw-Hill Companies and formerly of Pepsi Beverages, and from Stephen P. Kaufman, currently of Harvard Business School and formerly of Arrow Electronics (the company whose performance-review system was the seed for this case). HBR's readers also weigh in.

This is an MIT Sloan Management Review article. There is no dearth of advice or resources on how to turn corporations into fountains of creative ideas. However, as veteran leaders of innovation campaigns know, the problem for most large organizations usually isn't a shortage of ideas -it's figuring out how to ferret out the good ones. As experienced executives know, delegating critical decisions comes with risks. The corporation may end up promoting ideas senior management does not deem worthy; alternatively, it may not pursue projects top management would have promoted had they known about them. Therefore, it's essential for senior managers to understand the mechanisms at work when their staff evaluates one another's ideas, so that executives can design an efficient idea selection process to hone in on the ideas that will make a real difference to the organization as they move through the innovation funnel. This article, based on research on more than 10,000 innovation proposals from within a large multinational corporation, examines what happens when ideas are screened through a large organization. Senior managers need to design systems, or funnels, where the ideas they are likely to favor are either (a) selected by subordinate managers for further evaluation at their level or (b) if the ideas are of sufficient importance or promise, flagged to the attention of top management for further evaluation. In a sense, the real challenge in selecting good ideas is optimizing the trade-off between the direct selection costs on the one hand and the costs of both missing out on good ideas and implementing the wrong ideas on the other. The author describes seven "setscrews"that senior managers can adjust to their particular context to ensure that the most promising innovation proposals -and only those -stand a good chance of being implemented.

This is an MIT Sloan Management Review article. Talking about "green technology"gets people excited. It's thrilling to think that a new wave of inventions and discoveries will revolutionize the way we live, halt the degradation of our planet, and conserve resources for future generations. And it's more than just talk: investors are committing real dollars. As the level of activity increases, however, discussions about green technology raise as many questions as they answer. Addressing the key questions is complicated by the fundamental uncertainties that are at the heart of the green technology market. The evolution of this market space depends on forces that are beyond the control of any individual entrepreneur or investor: government policies; availability of capital; and wild cards such as oil price volatility, geopolitical conflicts, the rate of economic growth, and public attitudes toward warnings of global climate change. History shows that the road to technological innovation is a long and winding one. Between 2005 and 2007, runaway enthusiasm led to the proliferation of hundreds of new green technology ventures, many of which ran into trouble during the great recession. Green technology companies need to develop staying power. In addition to understanding the opportunities, they need to get ahead-and stay ahead-of competitors.

This is an MIT Sloan Management Review article. Sometimes products and markets that seemingly have nothing in common 'taxonomically' can have 'thematic similarity,' which may open up important business opportunities.

This is an MIT Sloan Management Review article. It seems that for most companies, no matter how much they invest in customer relationship management, neither the quality of their customer relationships nor the profitability of their business has increased commensurately. Of course, it was not supposed to turn out this way; relationship marketing was a "new paradigm" that would herald a golden age of marketing-more loyal and satisfied customers and much more profit for companies. The authors' evidence indicates that it is neither the quality of the CRM solutions nor their implementation that is to blame. Simply, companies have failed to prepare the ground adequately in advance of major CRM investments. Without development of the right capabilities, new technology fails to improve marketing practice. As a consequence, customer relationships are neither better nor more profitable. The authors' research reveals how operational managers can develop relationship marketing capabilities commensurate with the implementation of CRM to help make better investment decisions and exploit the opportunities profitably.

This is an MIT Sloan Management Review article. Charges of labor rights abuses and environmental harm are common for major brands that source from global supply chains. However, brand attempts to police supply chains to enforce company standards seldom serve as an effective long-term solution. Frustrated with the limitations of a typical compliance-oriented approach and after committing significant human and financial resources with senior management buy-in, apparel retailer Gap Inc. undertook a strategy of stakeholder engagement. Stakeholder theory suggests that such an approach should be more effective in fulfilling corporate social responsibility and other business goals than focusing on compliance, but many companies continue to focus on policing supply chain labor and environmental standards. Gap's successful experiment with stakeholder engagement confirmed academic intuition about the value of stakeholder engagement. For Gap, the transition to a strategy of stakeholder engagement helped build its image as a caring company and improve outcomes for subcontractor employees after labor violations were discovered. After just a few years of this practice, Gap succeeded in both further improving the working conditions of its contractors' employees and reducing the company's status as a target for anti-globalization protesters and other activists. Gap's long supply chain is not uncommon, nor is the challenge of monitoring the social performance of thousands of subcontractors. Proactive stakeholder engagement can help avert problems in the supply chain (and elsewhere); solve problems sooner when they do appear; and enhance the company's credibility and effectiveness through partnerships with labor, environmental activists, and the broader public.

This is an MIT Sloan Management Review article. As the competitive landscape grows tougher, project leaders must sequence, time and articulate core messaging about their projects in much the same way a marketing manager would organize an external customer-facing branding effort to promote a company's products and services. And therein lies an opportunity; brand your projects in order to gain an edge in obtaining funds and the best staff. Just as product branding creates awareness and sustains value in the minds of an organization's external customers, shareholders, and constituents, a brand mindset can empower a project leader to develop strategically-timed messages to create visibility and engagement among key targets. Depending on the stage of the project, different project brand audiences may include senior business leaders, project sponsors, and team members with primary allegiances to vertical functions, as well as network partners external to the home organization. The savvy project leader will ensure that all parties up, down, across, and outside the organization understand, internalize, and embrace the promise of the project brand, agree on goals, and employ steadfast support for the initiative through its completion.

This is an MIT Sloan Management Review article. Consumers were surprised in October 2009 by the first of a series of highly publicized recalls of Toyota vehicles in the United States. Citing a potential problem in which poorly placed or incorrect floor mats under the driver's seat could lead to uncontrolled acceleration in a range of models, Toyota announced that it was recalling 3.8 million U.S. vehicles. For manufacturing executives who have strived for decades to emulate Toyota, the mere suggestion that it had quality issues was a serious matter. All over the world, executives paused to wonder if they had been chasing after the wrong manufacturing model. Despite Toyota's long record of building reliable, low-defect vehicles, public perceptions about quality are often greatly influenced by reports in the media and their overall timing, the author argues. The key question was the source of Toyota's problems: To what extent did they originate with the product designs and assembly, and to what extent could they be pegged to the company's supply and manufacturing systems? The author discusses two root causes for Toyota's quality problems. The first is an outgrowth of management's ambitions for rapid growth. Management's goal was to increase Toyota's global market share from 7.3% in 1995 to 10% over the next decade, then to 15% by 2010. The second is the result of the increasing complexity of the company's products. A typical auto sold in the United States or Europe has more than 60 electronic control units and more than 10 million lines of computer code -a fourfold increase over what was common a decade ago. However, the author notes that any thorough analysis would also need to acknowledge the role of the company's centralized management structure. The result: Top management in Japan was less sensitive to the expectations of regulators, culture, and politics in overseas markets, and consequently they were slower to respond to local problems.

The case describes the process of integrating environmental, social, and governance issues into valuation models and research analyst recommendations.

Julie Bornstein, senior vice president of Sephora Direct, is seeking to double her budget for social media and other digital marketing initiatives for 2011. A number of digital efforts implemented in the past two years seem to be bearing fruit, and there is a desire to intensify Sephora's social media, online video, and mobile presence. Bornstein must justify the need for the additional funding, determine how best to allocate the money across the various platforms, and establish effective ways to measure return on investment (ROI) for digital marketing spending . She must also take into account that the funding requested will likely come at the expense of Sephora's traditional marketing programs. Importantly, Bornstein needs to begin thinking about a cohesive long-term strategy that clearly identifies the role digital platforms play and how they help Sephora maintain its leadership position in the prestige beauty care space. The constant emergence of new players, such as Groupon and Shop Socially, the growing power of social media platforms such as Facebook, and the way consumer behavior and user generated content are rapidly evolving in a digital era, make her task all the more challenging.

This note explains how the People's Bank of China (PBOC) manages (some say manipulate) the dollar-yuan exchange rate. It discusses briefly the process of sterilization in China and the possible costs for the PBOC. Therefore, the note summarizes some of the main challenges the PBOC faces to contain inflation in China and to keep Chinese exports competitive.

Established in 2006, OSSCube was an open source software development company based in North Carolina, United States, which had its India office in Noida and its development centres in Delhi, Bangalore and Noida. OSSCube started as a software training provider and gradually emerged as an open source software development and consulting company. The marketing of OSSCube's offerings was primarily executed by search engine optimization (SEO) initiatives. Later on, OSSCube created a social media presence on various social media platforms such as Facebook, Twitter, LinkedIn, Slideshare, Vimeo, YouTube, Blip.TV, Blog and Friendfeed. The primary objective of creating a presence on these social media platforms was to augment the company's SEO initiatives. This strategy did help OSSCube in gaining business leads; however, Kinshuk, the community manager of the firm, realized that this strategy was not building the brand identity of OSSCube. Also, the thought of having a wide presence on social media platforms to augment SEO activities created some sort of confusion in consumers' minds regarding OSSCube's expertise. Hence, in 2010, Kinshuk was reviewing the social media approach with some definite objectives such as branding employees, branding OSSCube and promoting open source software. He faced the challenge of forming an appropriate social media strategy that would address these objectives.

Many companies view financial variables independently from ecological and social variables. Is it possible to hold one's organization equally accountable for financial performance and social responsibility? This field-based case is suitable for MBA and undergraduate courses or modules in sustainability and innovation, ethics, and corporate social responsibility. For REI, an outdoor gear and apparel manufacturer, the challenge lies in how to expand sustainability awareness through consensus building across the organization and with outside collaborators. As it designs a new strategic framework for the operations footprint, the company seeks to adopt a corporate strategy on product stewardship and adapt its philanthropy strategy around sustainability objectives.

At a time of market turmoil, a university investment manager wants to unload the school's entire private equity portfolio, yet no public market exists, so the assistance of a partner at a PE firm is sought. This case provides an introduction to a range of secondary transactions and the valuation challenges that arise.

It supplements case UV5620

This is a supplement to 9B11M016.The president and founder of New Deantronics (ND), launched her sales office in San Francisco, California, in 1985 and then set up her factory in Taiwan in 1987. Without any technical background or prior experience, through her system of management strategy and management philosophy, the president built ND's reputation as a trusted manufacturer and developer of medical devices. All ND products were directly exported to large global health-care companies, including Philips Medical Systems, Johnson & Johnson, and Covidien. With the rapid increase in Liu's business, the need for expanding production capacity became increasingly urgent. Sitting in her office in early 2009, the president knew that she could no longer postpone her decision to relocate. Several options were presented to her, and the factors that influenced her decision included considerations about the supply of quality human resources, geographical convenience, the willingness of her current employees to relocate, affordability, and the possibility for future expansion. The president pondered what would be the best bet.

The president and founder of New Deantronics (ND), launched her sales office in San Francisco, California, in 1985 and then set up her factory in Taiwan in 1987. Without any technical background or prior experience, through her system of management strategy and management philosophy, the president built ND's reputation as a trusted manufacturer and developer of medical devices. All ND products were directly exported to large global health-care companies, including Philips Medical Systems, Johnson & Johnson, and Covidien. With the rapid increase in business, the need for expanding production capacity became increasingly urgent. Sitting in her office in early 2009, the president knew that she could no longer postpone her decision to relocate. Several options were presented to her, and the factors that influenced her decision included considerations about the supply of quality human resources, geographical convenience, the willingness of her current employees to relocate, affordability, and the possibility for future expansion. The president pondered what would be the best bet.

The China Investment Corporation (CIC) was China's sovereign wealth fund (SWF), established with $200 billion of registered capital in September 2007 to diversify China's foreign exchange holdings and increase risk-adjusted returns on those assets. CIC was unusual in that it had a strictly commercial orientation and market-driven investment mandate to invest in foreign assets but also served as the parent company of a 100 percent-owned subsidiary, Huijin, that invested solely in key state-owned financial institutions in China. Moreover, the fact that CIC was an SWF presented broader political challenges for it, its shareholder the Chinese government, its direct investments and their governments, and the world economy generally. This case involved two decisions CIC faced in early 2011: the first was how to best and most accurately articulate the relationship among CIC, Huijin, and Industrial and Commercial Bank of China (ICBC) to the Federal Reserve Board (the Fed) so that ICBC could expand its business in the United States while exempting CIC and Huijin from certain types of Fed oversight. The second was whether to appoint a board director to Morgan Stanley, a company in which CIC had directly invested close to $6 billion and held 9.9 percent ownership. Additionally, the case discussed SWFs generally and their rights and responsibilities to the global community.