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At the June 2007, Central City Medical Group (CCMG) board meeting, Deb Moore, Executive Director, reported that there were mounting tensions caused by the implementation of an electronic health record (EHR). Physician morale and productivity were spiraling downward. The present challenge was the growing gap between the patient workload and physician capacity, as physicians remained well below historic productivity levels while learning to use the new EHR. The medical director had resigned her post and other senior physicians were threatening to retire. Ms. Moore had a pressing question for the board: should CCMG stop accepting new patients until they returned to full productivity?

Jane Leader, president of Simsbury General Hospital, was reviewing the recommendations put together by her senior management team to resolve the growing problems her hospital was facing. The recommendations, totaling some $10 million, could put the hospital back on a sound financial footing. But Jane was unsure which of the recommendations made sense and should be implemented. She was particularly interested in understanding the financial, operational and political impact of each one. She was due to meet with the senior management team that afternoon to develop an action plan.

Carolina Pad had received several requests for cash payments from internet bloggers in exchange for product reviews. The requests were for relatively small amounts (none more than $1000). The company believed that paying the bloggers' would offer a significantly higher rate of return on their promotional dollars than traditional advertising or other forms of promotion. Like many other companies, Carolina Pad provided review products to bloggers, but questioned whether cash payments were somehow different. The case examines the ethics of making cash and in-kind payments to bloggers for product reviews. The case also examines the question of whether bloggers are journalists and should adhere to the same journalist standards as news reporters or simply writers of internet infomercials.

John Calhoun, one of two brothers who own Stratton Auto, of Stratton, Vermont, has been contacted by Tyler Mann, the owner of one of the firms that wholesales Stratton's unwanted used cars. Mann has been asked for a kickback in return for receiving good-condition used cars from Stratton Auto at a discount, by Blake Power, a Sales Manager at Stratton Auto. Mann had previously provided a small kickback for the purchase of one car, but Power was now asking for much more. Calhoun investigates the situation, reviews a past precedent, and talks to a senior sales manager. After discussing the situation with his brother John Calhoun confronts Blake concerning the situation. Blake admits to the facts as stated, but does not apologize for his actions. Calhoun is concerned that firing Power might be a problem since it is now close to Christmas. He is also concerned with the impact any decision will have on his employees. Both brothers pride themselves on their ethical, employee, and community oriented practices. The case concludes with Calhoun wondering what to do.

'Earnings management' - the drive to meet earnings targets, and the things executives will do to make that happen -- has become a pervasive practice, and according to the author, it is a step down a very dangerous path. Far too many of our leaders are using their talents and corporate resources to 'smooth earnings' rather than to build their companies, he says. This has become a significant feature of the unhealthy community in which our CEOs now live -- a community that causes people to lead inauthentic lives. The good news is, if we can refocus CEOs on communities that are both healthy and meaningful, we can return authenticity to the C-suite. The first step on this road: do away with stock-based incentives. This doesn't mean that executives shouldn't own any shares, but they should be prevented from selling any stock while serving in that capacity, and indeed for several years after leaving their post.

Although we think of ourselves as being reasonable, we often make negative attributions about other peoples' intentions and hold them responsible for issues that arise. While we hold our positions with a high degree of certainty, none of what we are thinking is spoken directly to the person involved. When and if we do share our emotionally-charged assessments and theories, we generally do so only with people we feel will be sympathetic to our views. These private conversations tend to be held behind closed doors and rarely, if ever, do the targets of these conversations ever find out what we really think. The result: undiscussables - sometimes referred to as the 'elephant in the room'. The author shows that undiscussaables can be incredibly disruptive to trust and to the whole process of getting work done, and provides three tools to help eradicate them from the workplace.

In this interview, negotiations expert and author Doug Stone describes the ways in which difficult conversations threaten our identity. We all view ourselves a certain way, he says: 'I'm a hard worker' or 'I'm a caring boss' -- and the conversations that feel the most difficult for us are the ones that have the potential to threaten that self image. He shows that we make some systematic thinking errors when we are deciding whether to avoid or raise an issue with someone: we tend to focus on the costs of raising the issue and the benefits of avoiding it, but we don't think about the benefits of raising it and the costs of avoiding it. He goes on to describe how to reap these benefits via 'learning conversations', provides tools for dealing with difficult conversations, and advises on the best way to deliver difficult messages.

Fear has shaped human behaviour for a very long time, and it continues to do so today. However, attention to fear in organizational life - how and why it is experienced, and to what effects - has received little attention. The authors argue that the most significant result of fear at work is silence on the part of employees. They describe four types of silence that affect productivity and innovation across industries: Non-Deliberative Defensive Silence, Schema-Driven Defensive Silence, Deliberative Defensive Silence and introduce a new one, Habituated Silence. In addition, they describe the concept of 'voice efficacy', and show how to develop it in oneself and in others in an effort to mitigate the debilitating effects of silence.

Counterproductive Work Behaviour (CWB) is an umbrella term that refers to intentional behaviour by employees that harms or intends to harm an organization or the people in it, including employees and customers. It can run the gamut from nasty interpersonal behaviour (insulting or yelling at someone) to behaviour directed toward inanimate objects (sabotage and theft) to purposely doing work incorrectly or withdrawing from an organization via absence or lateness. The authors describe the individual and environmental factors that increase the likelihood of 'CWB', which include interpersonal conflict amongst employees; job insecurity; and perceptions of organizational injustice. In the end, the authors show that careful selection processes are not a sufficient solution to the problem of CWB: steps must also be taken to reduce triggers as much as possible by reducing unnecessary stressors, treating employees fairly, and mediating disputes between coworkers.

People are often surprised to hear that most of us overestimate our ethicality at some point. Significant research indicates that we are unaware of the gap between how ethical we think we are and how ethical we truly are. The authors describe the related concepts of bounded awareness and bounded ethicality and discuss the implications of these states for organizations. They then provide three tools for improving our individual ethicality and outline several aspects of organizational life that must be examined more closely to reduce unethical behaviour on a group level, including addressing 'hidden but powerful informal values' and 'ethical sinkholes'.

Microsoft Canada CEO Eric Gales talks to Roger Martin, Dean of the Rotman School of Management, University of Toronto, about the need for more companies to take a leap of faith with respect to innovation. The two discuss why Canadian companies lag their peers in innovation; the perils of the status quo for companies in any industry; the role of IT in innovation; how the Canadian capital markets discourage innovation; and the importance of having senior leaders who are willing to 'stick their necks out' for the sake of innovation. Martin ends by explaining why 'Prove it' is the most dangerous phrase in the English language when it comes to innovation.

We've seen plenty of unethical behaviour in the business arena over the past decade. But surprisingly, bad behaviour doesn't always lead to reputational consequences. The authors offer a Model of Reputational Loss which explains why, using Arthur Anderson and PayPal as prime examples. The key levers involved, they argue, are the firm's perceived control of the situation; perceived certainty that the event truly occurred; the level of perceived threat to stakeholders; and perceived deviance from established practices. In addition, they show that stakeholder motivation and media coverage also play key roles in whether or not an organization's reputation is significantly damaged by bad behaviour.

Having spent the past five years working with the boards of some of the world's leading organizations, the authors reached a conclusion: boards need to become much more diverse -- not just demographically, but also in terms of the backgrounds, competencies and interests of their members. However, they warn that putting fresh faces onto boards provides no guarantee that benefits will ensue: diversity can also lead to gridlock. The fact is, people often feel threatened or annoyed by colleagues who are very different from themselves and have difficulty accepting, much less appreciating, those colleagues. In this article they describe the costs and benefits of diversity and provide seven recommendations for effectively diversifying boards - or senior teams -- in any industry.

Rogers was a freshly minted CEO trying to lead Public Service Indiana back from the brink of bankruptcy when the results of a 10-year federal study on acid rain were released. He became convinced that legislation to curb sulfur dioxide emissions was inevitable-and that his industry should have a seat at the negotiating table. Though his peers were opposed to any government action, cap and trade looked to him like a smart and creative compromise that would enable utilities to modernize their plants and meet aggressive emissions targets without sending electricity prices skyrocketing. In 1990 Rogers testified before Congress in support of cap and trade, which was established by the Clean Air Act Amendments that year. A relatively high number of allowances gave PSI time to make a deliberate and sustainable transition to cleaner generation. Within three years the company's market capitalization had increased by more than 65%, while its price to customers had dropped. By 1995 its sulfur dioxide emissions were down by 30%. PSI acquired a national reputation; it merged with Cincinnati Gas & Electric to create Cinergy, which in 2006 merged with Duke Energy. Together with 21 other companies and five leading environmental organizations, Duke created the U.S. Climate Action Partnership to lobby for strong federal legislation to reduce greenhouse gas emissions.

In an era of increasing discontinuity, wise leadership has nearly vanished. Many leaders find it difficult to reinvent their corporations rapidly enough to cope with new technologies, demographic shifts, and consumption trends. They can't develop truly global organizations that operate effortlessly across borders. And they find it tough to ensure that their people adhere to values and ethics. The world needs leaders who pursue the common good by striving to create social as well as economic value and who pair micromanagement with big-picture aspirations about the future. The authors, who have studied, taught, and interviewed executives in some of the world's leading companies, assert that such leaders must acquire practical wisdom, or what Aristotle called phronesis: experiential knowledge that enables people to make ethically sound judgments. Wise leaders demonstrate six abilities. They make decisions on the basis of what is good for the organization and for society. They quickly grasp the essence of a situation and fathom the nature and meaning of people, things, and events. They provide contexts in which executives and employees can interact to create new meaning. Phronetic leaders use metaphors and stories to convert their experience into tacit knowledge that others can use. They exert political power to bring people together and spur them to act. And wise leaders use apprenticeship and mentoring to cultivate practical wisdom in others.

What is the best way to motivate employees to do creative work? Help them take a step forward every day. In an analysis of knowledge workers' diaries, the authors found that nothing contributed more to a positive inner work life (the mix of emotions, motivations, and perceptions that is critical to performance) than making progress in meaningful work. If a person is motivated and happy at the end of the workday, it's a good bet that he or she achieved something, however small. If the person drags out of the office disengaged and joyless, a setback is likely to blame. This progress principle suggests that managers have more influence than they may realize over employees' well-being, motivation, and creative output. The key is to learn which actions support progress-such as setting clear goals, providing sufficient time and resources, and offering recognition-and which have the opposite effect. Even small wins can boost inner work life tremendously. On the flip side, small losses or setbacks can have an extremely negative effect. And the work doesn't need to involve curing cancer in order to be meaningful. It simply must matter to the person doing it. The actions that set in motion the positive feedback loop between progress and inner work life may sound like Management 101, but it takes discipline to establish new habits. The authors provide a checklist that managers can use on a daily basis to monitor their progress-enhancing behaviors.

Allen, the author of the best seller Getting Things Done, and Schwartz, the author of the best seller Be Excellent at Anything and the CEO of The Energy Project, are two of the world's foremost authorities on increasing personal efficiency. Yet although they agree on much, their ideas on how to maximize the output of knowledge workers are fundamentally different. In this edited conversation with HBR, they discuss their own approaches and what they've learned from each other's work, along with subjects ranging from the distractive pull of e-mail to the benefits of napping in the middle of the workday. Allen has developed a system of time management that encourages workers to regularly make to-do lists-and helps them blast through the items on them. Breaking down big tasks into smaller "next actions" can help people stay focused and productive, he argues, and multitasking is to be avoided at all costs: We have only so many resources and can do only one thing well at a time. Schwartz focuses on workers' attitudes and how organizations can help them achieve a mental state that keeps their energy high. People should work for 90 minutes and then take a break to recover, he says. They should tackle their most important task first thing in the morning. And managers should consider themselves "chief energy officers," inspiring and regularly recharging the people they lead-while remembering to meet their own needs as well.

As technology has transformed the workplace and organizations have downsized, companies have sharply reduced the ranks of administrative assistants. But many firms have gone too far. In their zeal for cutting administrative expenses, numerous organizations now count on highly paid middle and upper managers to arrange their own travel, file expense reports, and schedule meetings. Some companies may see a type of egalitarianism in this assistant-less structure-believing that when workers see the boss loading paper into the copy machine, it creates a "we're all in this together" spirit. But as a management practice, that approach rarely makes economic sense. Generally speaking, work should be delegated to the lowest-cost employee who can do it well. Yet while companies seem to have embraced that logic by outsourcing work to vendors or to operations abroad, they ignore it back at headquarters. In this article, Duncan, a longtime recruiter of C-suite executive assistants, argues that a good assistant is a crucial productivity booster for a busy executive-one that offers a solid ROI if he or she is deployed correctly.

Never mind what you've heard about the world being flat. Today's global landscape is marked by unbalanced growth, protectionism, and ethnic, religious, and linguistic divides. Differences still do matter. The ideal of a truly global, stateless corporation has become popular, but it simply isn't possible to achieve, says the author. Look at Rupert Murdoch's News Corporation. A major player from Australia to the United Kingdom to the United Sates, the company made huge blunders in its move into TV services in Asia, ignoring English-speaking residents' preference for local-language content and touting satellite TV as a threat to totalitarian regimes everywhere (prompting a ban on satellite dishes by the Chinese government). News Corporation had transcended its Australian origins but not its roots in English-speaking democracies. Crafting a global strategy and organization is possible, but you must focus on understanding the differences among people, cultures, and places-not on eliminating them. One tool that can help you get a handle on the most critical differences is a rooted map, which sizes countries according to measures that reflect a particular nation's perspective, such as the amount of industry services they purchase from domestic companies. A cosmopolitan approach may lead firms, at least in the midterm, to concentrate more on adaptation to local markets than on aggregation or arbitrage. It has various other implications as well. Firms will have to think about how to readjust their organizations to better manage external distances, and they must cultivate leaders who know how to bridge cultural and national differences.

To create value, companies typically focus on revenue, cost structure, and resource velocity. Improving these factors is the main focus of management literature. But all of them are vulnerable to sharp changes in demand and supply. Companies can innovate their business models to reduce the impact of such swings. But they can also create value by adding some risk. For instance, more than 30 years ago Rolls-Royce identified a major pain point in the aircraft industry: maintenance of airplane engines. An engine breakdown grounds the plane, while the airline pays for repair time and materials. So Rolls-Royce offered a service contract whereby the airline would pay for an engine's flight hours rather than for time and materials. The new contract triggered a completely new value creation dynamic, because Rolls-Royce was motivated to improve its own products and maintenance processes. Business model innovations are much cheaper than product and technology innovations, and they can be approached in a systematic way. Furthermore, nearly all the big ones have already been done-so you can simply adapt them to suit your own situation.