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Inside Ericsson: A Framework for the Practice of Leading Global IT-Enabled Change
This article explores what it is that managers actually do to successfully lead IT-enabled change. It is based on a three-year case study of the practice of leading IT-enabled change inside the global telecommunications company Ericsson. This organization managed to successfully change their finance and accounting department from an independent structure of numerous local finance and accounting organizations with their own information systems and their own way of doing things into one interdependent global network of shared service centers enabled by a single information system. Based on this and other studies, this article develops a commonality framework for IT-enabled change, which offers important guidelines to improve managerial practice. -
Technology Transfer across Organizational Boundaries: Absorptive Capacity and Desorptive Capacity
In light of the trend towards open innovation, interorganizational technology transfer by means of alliances and licensing has often become a key component of open innovation processes. Inbound open innovation describes inward technology transfer, whereas outbound open innovation refers to outward technology transfer. Traditionally, inward technology transfer has received considerable attention because most practitioners and academics focus on the technology recipient's absorptive capacity. In contrast, the role of the technology source has been relatively neglected. This article addresses the concept of desorptive capacity, which refers to a firm's ability to identify technology transfer opportunities and to transfer technology to the recipient. The notion of market knowledge in the concept of desorptive capacity deepens our understanding of many firms' managerial difficulties in implementing active technology transfer strategies. Thus, desorptive capacity enriches our understanding of the dynamics of outward technology transfer. It provides new insights into the success or failure of interorganizational technology transactions. -
Rohm and Haas's Former CEO on Pulling Off a Sweet Deal in a Down Market
Raj Gupta had led the specialty chemical company Rohm and Haas without drama for years when some of its most important shareholders asked him to orchestrate its sale. Surprised but determined to do his best for the company, in July 2008 he arranged an $18 billion deal with competitor Dow Chemical, which the industry press called "the deal of the century." But Dow was relying on cash from a planned joint venture of its own with Kuwait Petroleum, and when the stock market plummeted, the joint venture-and Dow's financing-fell through. Then things got really interesting. Would Dow try to walk away from the deal? Could Rohm and Haas insist that it go through in spite of the unforeseen global meltdown? How airtight was that agreement? Gupta, who learned he had cancer in the midst of all this, had to find a way through the complicated financial and economic issues. In this first-person account he talks about the most difficult deliverable ever asked of him-seeing through the sale of his company as the world economy was collapsing. -
The Next Scientific Revolution
For decades, computer scientists have tried to teach computers to think like human experts. Until recently, most of those efforts have failed to come close to generating the creative insights and solutions that seem to come naturally to the best researchers, doctors, and engineers. But now, Tony Hey, a VP of Microsoft Research, says we're witnessing the dawn of a new generation of powerful computer tools that can "mash up" vast quantities of data from many sources, analyze them, and help produce revolutionary scientific discoveries. Hey and his colleagues call this new method of scientific exploration "machine learning." At Microsoft, a team has already used it to innovate a method of predicting with impressive accuracy whether a patient with congestive heart failure who is released from the hospital will be readmitted within 30 days. It was developed by directing a computer program to pore through hundreds of thousands of data points on 300,000 patients and "learn" the profiles of patients most likely to be rehospitalized. The economic impact of this prediction tool could be huge: If a hospital understands the likelihood that a patient will "bounce back," it can design programs to keep him stable and save thousands of dollars in health care costs. Similar efforts to uncover important correlations that could lead to scientific breakthroughs are under way in oceanography, conservation, and AIDS research. And in business, deep data exploration has the potential to unearth critical insights about customers, supply chains, advertising effectiveness, and more. -
Extreme Negotiations
CEOs and other senior executives these days must manage countless complex, high-stakes conversations across functional areas and divisions, with alliance partners and critical suppliers, and with customers and regulators. The pressure of such negotiations make them a lot like U.S. military officers in an Afghan village, fending off enemy fire while trying to win trust and intelligence from the local populace. Both kinds of leaders face what the authors call "dangerous negotiations," in which the traps are many and good advice is scarce. Although the sources of danger are quite different for executives and officers, they resort to the same kinds of behaviors. Both feel pressure to make quick progress, project strength and control (particularly when they have neither), rely on force rather than collaboration, trade resources for cooperation rather than build trust, and make unwanted compromises to minimize potential damage. The authors outline five core strategies that "in extremis" military negotiators use to resolve conflicts and influence others: maintaining a big-picture perspective; uncovering hidden agendas to encourage collaboration; using facts and fairness to get buy-in rather than grudging support; building trust; and focusing on process as well as outcomes. These strategies provide an effective framework with which business negotiators can change their thinking ahead of the deal as well as their actions at the bargaining table. -
"You Have to Lead from Everywhere"
When responding to a complex, fast-moving crisis, leaders must constantly adapt their mental models and create a "unity of effort," argues Allen, a retired U.S. Coast Guard admiral and the national incident commander for the Deepwater Horizon oil spill. That's a much bigger management challenge than approaching the job as a military operation and drawing on unity of command, and it can require nuanced and creative strategies, such as deciding to go "off book" when standard protocol simply won't work. In this edited interview, Allen-who also brought post-Katrina New Orleans back from the brink of anarchy and headed the Coast Guard's response to the September 11 attacks along the eastern seaboard-stresses the need to lead both from headquarters and on the ground. He discusses how the phenomenon of publicly available, real-time information has affected crisis management in recent years, addresses the challenges of managing multiple public and private stakeholders, and shares his thoughts on how to lead when an anxious public is counting on success. -
Which of These People Is Your Future CEO? The Different Ways Military Experience Prepares Managers for Leadership
Americans have long believed that U.S. military officers-trained for high-stakes positions, resilience, and mental agility-make excellent CEOs. That belief is sound, but the authors' analysis of the performance of 45 companies led by CEOs with military experience revealed differences in how the branches (Army, Navy, Air Force, Marine Corps) prepare leaders for business. Those differences reflect the trade-off between flexibility and process that each branch of the armed services must make. Army and Marine Corps officers operate in an inherently uncertain environment. They define the mission but then give subordinates the flexibility to adjust to realities on the ground. This leadership experience tends to turn out business executives who excel in small firms, where they can set a goal and then empower others to work toward it. Navy and Air Force officers, who operate expensive, complex systems such as submarines and aircraft carriers, are trained to follow processes to the letter, because even small deviations can have large consequences. In corporations, these leaders excel in regulated industries and in firms that take a process approach to innovation. The larger lesson that the military can offer the business world is that fit matters. Different circumstances demand different leadership skills. Hire the person who fits the job. -
Four Lessons in Adaptive Leadership
The armed services have been in the business of leadership development much longer than the corporate world has. Today's military leaders need tools and techniques to face a fast-changing and unpredictable type of enemy-so the armed services train their officers in ways that build a culture of readiness and commitment. Business leaders need to foster an adaptive culture to survive and succeed, given that they, too, face unprecedented uncertainty-and new types of competitors. Michael Useem and his colleagues at the Wharton School incorporate exposure to military leadership into MBA and executive MBA programs. Highlights include direct contact in the classroom with leaders in the U.S. Army, the U.S. Marine Corps, and the Department of Defense, along with field-training exercises and battlefield visits. The programs are designed to help students connect viscerally to essential leadership lessons. Four are featured in the article: (1) Meet the troops. Creating a personal link is crucial to leading people in challenging times, (2) Make decisions. Making good and timely calls is the crux of leadership, (3) Mission first. Focus on common purpose and eschew personal gain, (4) Convey strategic intent. Make the objectives clear, but give people the freedom to execute on them in their own way. -
Stress-Test Your Strategy: The 7 Questions to Ask
An economic downturn can quickly expose the shortcomings of your business strategy. But can you identify its weak points in good times as well? And can you focus on those weak points that really matter? Drawing on some 25 years of research, Harvard Business School professor Robert Simons identifies seven questions all executives should ask in order to ensure their strategies' success. Have you identified your primary customer? Decided whether shareholders, employees, or customers come first? Narrowed down which performance variables to track? Have you set creative boundaries? Are you generating creative tension? Are you promoting cooperation among your employees? And at the end of the day (and in the middle of the night), are you thinking about the right issues as you ponder how the future will change your business? The answers to these questions can be tough, and their full implications are not always immediately clear. Simons provides a real-world guide to the various alternatives and their risks, illustrating his points with examples from companies including Home Depot, McDonald's, Merck, and Pfizer. There is no magic bullet that can target the pitfalls of your business strategy, Simons concludes. But you must engage in ongoing, face-to-face dialogue with those around you concerning emerging data, unspoken assumptions, difficult choices, and, ultimately, action plans. You and they must be able to give clear, consistent answers to the seven questions Simons poses if you want to be sure that your strategy is firmly on track. -
Finding Competitive Advantage in Adversity
How do some entrepreneurs, corporate innovators, and investors turn adverse conditions to competitive advantage? Chakravorti, of McKinsey and Harvard Business School, has identified four areas that the most successful of these people consistently explore: (1) Entrepreneurs reroute resources that become redundant to meet new needs, as Jonathan Bush did at athenahealth. The company is now a leader in internet-based revenue-cycle management tools, (2) They round up unusual suspects and break industry orthodoxy, as Iqbal Quadir did with Grameenphone in Bangladesh, (3) They find small solutions to big problems, as Trey Moore and Cameron Powell did with their AirStrip OB smartphone app for mobile physicians who needed a major advance in wireless health care, (4) They focus on platform, not just product. That's how Fred Khosravi and Amar Sawhney broadened the field of surgical applications for Incept's hydrogel technology. The entrepreneurs who survive in the "new normal" will be those who find counterintuitive solutions to the bottlenecks, constraints, and other difficulties that adversity engenders. Call them the "new abnormals." -
Winning in the Green Frenzy
In virtually every industry, the focus of green competition is shifting from a race to launch new eco-friendly products to a battle over what constitutes a "green" product in the first place. The definition can vary from one sector or product to the next, but whatever your business, if you're not engaged in the debate and in shaping the rules, you risk being assessed against standards you can't meet. Once you understand what degree of standardization exists in your industry and what your company's internal capabilities are, you can choose from among four strategies the authors offer: adopt existing standards; co-opt them by negotiating beneficial modifications with a standard-setting body; define standards where none exist; or break away from the current standards by challenging and supplanting them. In the building sector, for example, LEED certification is considered definitive, so architects, construction companies, and office furnishings suppliers naturally choose to adopt LEED standards. But the coffee industry has more than a dozen competing standards, so Starbucks decided to create its own-the C.A.F.E. Practices. -
How to Conquer New Markets with Old Skills
Many firms sit on the sidelines of global competition, believing they need to develop innovative products or leading brands before venturing abroad. The international success of Spanish companies like Telefonica, Freixenet, Banco Santander, and ALSA proves such thinking dead wrong. They all became global players in their industries-by excelling at old-fashioned capabilities. The Spanish firms skipped the risky, expensive strategy of opening their own facilities overseas. Instead, they extended their reach through acquisitions and alliances, focusing first on Latin America and Europe. Political and networking savvy helped them break into highly regulated or complex markets. Speed has also been a factor in their success: Rapid project execution allowed them to pull ahead of other multinationals, and with their expertise in vertical integration, they've been able to get products quickly and cost-effectively to far-flung customers. Though all these skills may be humdrum, Spanish firms have made the most of them and have become industry giants as a result. -
What's Your Personal Social Media Strategy?
Social media are changing the way we do business and how leaders are perceived, from the shop floor to the CEO suite. But whereas the best businesses are creating comprehensive strategies in this area, research suggests that few corporate leaders have a social media presence-say, a Facebook or LinkedIn page-and that those who do don't use it strategically. Today's leaders must embrace social media for three reasons. First, they provide a low-cost, highly accessible platform on which to build your personal brand, communicating who you are both within and outside your company. Second, they allow you to engage rapidly and simultaneously with peers, employees, customers, and the broader public-in order to leverage relationships, show commitment to a cause, and demonstrate a capacity for reflection. Third, they give you an opportunity to learn from instant information and unvarnished feedback. To formulate your personal social media strategy, it helps to clarify your goals (personal, professional, or both), desired audience (private or public), and resources (can you justify using your company's?). You must also consider the risks of maintaining a large number of connections and of sharing content online. Active participation in social media can be a powerful tool-the difference between leading effectively and ineffectively, and between advancing and faltering in the pursuit of your goals. -
Changing Gender on the Job
Michael Wallent, twice married and the father of three, had been working at Microsoft for more than 11 years when he decided-with the full support of his wife-to transition to living as a woman. Rejecting the standard approach at big companies, whereby the HR department announces a transgendering (often at a meeting from which the affected employee is absent), Wallent chose to inform his superiors and his direct reports himself. He also urged them to ask whatever questions were on their minds. In large part as a result of the intimate conversations that followed, Megan Wallent's management style is quite different from Michael's. In the words of one employee, "She's becoming more of a coach, instead of a general." -
Play It Safe or Take a Stand? (HBR Case Study and Commentary)
The CFO of a plastics company has been asked to moderate a heated internal debate over a revolutionary technology. The head of R&D thinks the company should use it to break into a whole new industry, while the VP of the firm's most profitable unit believes it's a pipe dream that should be abandoned. The company's future could be riding on the decision. Is it time for the CFO to stop facilitating and take a strong stand promoting one choice over the other? Two experts comment on this fictional case study in R1011N and R1011Z. -
Life's Work: Oliver Sacks
The neurologist and best-selling author talks about career crossroads and gaining people's trust through empathy. -
Play It Safe or Take a Stand? (HBR Case Study)
The CFO of a plastics company has been asked to moderate a heated internal debate over a revolutionary technology. The head of R&D thinks the company should use it to break into a whole new industry, while the VP of the firm's most profitable unit believes it's a pipe dream that should be abandoned. The company's future could be riding on the decision. Is it time for the CFO to stop facilitating and take a strong stand promoting one choice over the other? Two experts comment on this fictional case study in R1011N and R1011Z. -
Play It Safe or Take a Stand? (Commentary for HBR Case Study)
The CFO of a plastics company has been asked to moderate a heated internal debate over a revolutionary technology. The head of R&D thinks the company should use it to break into a whole new industry, while the VP of the firm's most profitable unit believes it's a pipe dream that should be abandoned. The company's future could be riding on the decision. Is it time for the CFO to stop facilitating and take a strong stand promoting one choice over the other? Two experts comment on this fictional case study in R1011N and R1011Z. -
How the UK's Royal Marines Plan in the Face of Uncertainty
Despite shocks such as the Gulf oil spill and the global banking crisis, corporations still treat the world as a predictable place. Instead, they should emulate the UK's Royal Marines, an organization whose success has much to do with its agility in the face of unexpected adversity. For the Royal Marines, planning a mission is about shaping strategic thinking and figuring out how to reach the desired end state while allowing for improvisation. As the UK's amphibious commandos, they don't always know what they will find when they arrive on land, yet they must achieve their mission regardless of conditions. They must also be prepared to change plans when disruptive events occur. For those reasons, it's essential that individuals can fall back on common procedures in response to the unforeseen-and can rely on their colleagues to do the same. So the organization uses a military planning technique called the Seven Questions. All members apply it, which means they all approach and analyze their missions in the same way, no matter where they are in the hierarchy. Planners develop a working understanding of the situation on the ground and their mission by answering the first three questions and then decide how to proceed by answering the remaining four. They revisit the questions as events unfold, to see if they need to change anything or even abort the mission. To illustrate the technique, the authors describe how Royal Marine Brigade planners used the Seven Questions to put together a mission plan for an assault on Iraq's Al Faw peninsula. -
"Powering Down" Leadership in the U.S. Army
According to long-held U.S. Army tradition, leadership is based on a rigid hierarchy. Are you a young officer not sure what to do? Look one level up. But in modern warfare, particularly in Iraq and Afghanistan, teams of soldiers are distributed across-and embedded in-an entire population. This has sparked a movement toward leadership training that encompasses not only the skills of single individuals, but the effectiveness of the teams they lead. The U.S. Army's Center for the Advancement of Leader Development and Organizational Learning (CALDOL) at West Point has drawn on internet technology and social media to connect company commanders and platoon leaders informally-enabling them to learn from one another in real time. Through discussion forums, blogs, videos, and a Facebook-like "wall," these new leaders are exchanging ideas and experiences. Knowledge that was once concentrated near the top of the hierarchy is now "powering down" to the team level.