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  • VINESH JUGLAL: SOUTH AFRICAN SERIAL ENTREPRENEUR

    Serial entrepreneur Vinesh Juglal wondered what it would be like to run Durban Computer College (DCC), the institution he had just bought. The education market in Africa was growing by leaps and bounds, and the ever-opportunistic Vinesh knew that buying a successful training enterprise could help him make the most of this market. On the other hand, Vinesh was well aware that in order to grow the institution he would need another source of financing, since his current lines were tied up in his real estate and supermarket businesses. Infrastructure was not an issue, since Vinesh had most of the fixed assets he needed to grow DCC Campus. Attracting more students would happen either by lowering fees or by offering financial aid. Vinesh had heard of many sponsoring bodies, including government programs, set up for this purpose. But these sponsors tended to give grants only to non-profit entities. What would be the best way to grow this "business"-if it could be called a business in the first place? Should he target the same return on investment as in his other businesses? More broadly, could he be successful using his previous, purely commercial approach? Learning objectives: To experience, almost first-hand, the rapidly changing business environment in South Africa in the 1985-2010 period, through the entrepreneurial adventures of Vinesh Juglal who builds a series of enterprisees across several industries. To consider the social role of business in the context of a developing country.
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  • PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY

    The situation was clearly untenable. In March 2008, ESB's chief executive Padraig McManus made the startling announcement that the company would become a net-zero carbon emitter by 2035, and would still remain competitive. Under his leadership, ESB was going to lead the way in slowing the growth of Ireland's GHG emissions. He declared that to achieve this goal, ESB would invest €22 billion over 15 years to develop alternative clean technologies, including energy efficiency measures, the use of clean coal, and the connection of an electricity-generating wind farm to the national grid. His target would make ESB the world's first carbon-neutral electric utility. This strategy presented a number of significant risks: 1) Financial risk - the €22 billion capital investment had to succeed. 2) Technological and ecological risks - the strategic framework relied on clean coal technology, still being developed. 3) Credibility risk - what if ESB was not able to achieve its goal? 4) Stakeholder risk - Landowners, concerned over health, environment and property prices, were ready to oppose the wind farms. McManus was conscious of the risks, and he also knew that high performing leaders always take risks even while confronting dilemmas such as: Could an electric utility achieve a zero carbon footprint and remain competitive? Can a responsible leader risk jeopardizing the present and future well-being of his company, the environment, and his country? Could he exert his leadership by influencing Irish, and possibly European, climate policy? The case provides an opportunity for a debate on responsible leadership. It was written for use in senior executive and MBA programs.
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  • Crown Worldwide: Integrating Corporate Social Responsibility in Business

    Founded in 1965 by Jim Thompson, the Crown Worldwide Group ("Crown") began as a small moving company in Japan, shifting its headquarters to Hong Kong in the mid-1970s. Within 30 years, Crown had became the world's largest privately held relocation and logistics enterprise, a success that was attributed primarily to the founder's insistence on high service quality and unwavering commitment to community development. With growing concern among customers about CSR, the company recognized that CSR must be integrated into its corporate strategy and day-to-day business operations to achieve sustainability for both the company and society. In 2008, Crown appointed its first CSR director, whose primary task was to develop and implement a standardized global CSR strategy that would support Crown's environmental and community development initiatives. Various CSR integration steps were taken, such as developing global environmental standards, stimulating employee volunteerism, building CSR communication channels, developing a supplier management system and conducting CSR measurement. In line with the goals of the UN Global Compact-a leadership initiative that guided participants in practicing responsible business-Crown would also publish sustainability reports yearly. Although employees were supportive of the company's CSR efforts, the journey of becoming a well rounded corporate citizen is full of complexities and involves a wide range of stakeholders and multi-dimensional issues. Without a roadmap or framework, CSR integration efforts could be daunting, but inaction is no longer an option in light of increasing CSR expectations. What would be the key success factors for Crown's CSR integration?
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  • The VC Shakeout

    To regain its strength, venture capital must return to its roots.
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  • How Investors React When Women Join Boards

    A company's stock price will tend to decline after women are appointed to the board.
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  • The Secret to Job Growth: Think Small

    With job growth lagging, local communities will be tempted to use tax breaks to attract big employers, but new research by Harvard economist Edward L. Glaeser and William R. Kerr of Harvard Business School indicates that's a misguided approach-growth is highly correlated with an abundance of small firms, not the presence of a few big ones.
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  • Wall Street Is No Friend to Radical Innovation

    How Wall Street stifles innovation.
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  • The Early Bird Really Does Get the Worm

    A survey by biologist Christoph Randler reveals that morning people are more proactive than evening people. That makes them more likely to succeed, especially since corporate schedules are geared to their peak performance hours. Though evening people may be more intelligent and more creative, when it comes to the business world, morning people hold the important cards.
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  • Powerlessness Corrupts

    Powerlessness damages organizations-especially in the middle ranks, says HBR columnist Rosabeth Moss Kanter. Hemmed in by rules and treated as unimportant, people get even with management by overcontrolling their own turf. Kanter urges leaders to give employees opportunities to make meaningful contributions, because small wins along those lines can propel big changes.
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  • My Inglorious Road to Success

    Warren Bennis, the pioneering management professor, looks back on his career-and at the events that turned a 19-year-old army lieutenant from a blue-collar background into a university president and a leadership scholar.
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  • Mapping the Social Internet

    Fresh data on internet user behaviors around the globe show an East-West divide.
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  • Stop the Innovation Wars

    Special teams dedicated to innovation initiatives inevitably run into conflict with the rest of the organization. The people responsible for ongoing operations view the innovators as undisciplined upstarts. The innovators dismiss the operations people as bureaucratic dinosaurs. It's natural to separate the two warring groups. But it's also dead wrong, say Tuck Business School's Govindarajan and Trimble. Nearly all innovation initiatives build on a firm's existing resources and know-how. When a group is asked to innovate in isolation, the corporation forfeits its main advantage over smaller, nimbler rivals-its mammoth asset base. The best approach is to set up a partnership between the dedicated team and the people who maintain excellence in ongoing operations, the company's performance engine. Such partnerships were key to the successful launch of new offerings by legal publisher Westlaw, Lucent Technologies, and WD-40. There are three steps to making the partnership work: First, decide which tasks the performance engine can handle, assigning it only those that flow along the same path as ongoing operations. Next, assemble a dedicated team to carry out the rest, being careful to bring in outside perspectives and create new norms. Last, proactively manage conflicts. The key here is having an innovation leader who can collaborate well with the performance engine and a senior executive who supports the dedicated team, prioritizes the company's long-term interests, and adjudicates contests for resources.
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  • Power Play

    If you want to get anything done in a large corporation, you need power. And it won't just fall into your lap: You have to go after it and learn how to use it. Many highly competent people get stuck because they're uncomfortable with that reality. Stanford University professor Pfeffer offers a primer on why power matters, how to get it, and how to use it to advance your organization's agenda-thus, not incidentally, furthering your career. When push comes to shove, the author explains, there are several things powerful people do to prevail. They mete out resources; deploy rewards and punishments to shape others' behavior; advance on multiple fronts; make the first move; co-opt antagonists; remove rivals (nicely, if possible); avoid drawing unnecessary fire; use a personal touch; persist; attend to important relationships; and make their vision compelling. Throughout, Pfeffer draws on real-world examples of people who exercised power skillfully to implement their plans-people ranging from the director of UCSF's breast cancer center to a successful software executive to an Indian cricket mogul. And Pfeffer identifies three big barriers that can make you your own worst enemy unless you learn how to get over them and embrace the power you need.
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  • Empowered

    After his guitar was broken on a United Air Lines flight and the airline rejected his damage claim, musician Dave Carroll made the YouTube video "United Breaks Guitars," which more than 8 million people have viewed. Carroll is far from alone in having employed social media to lambaste a company for poor customer service. For example, one popular blogger advised her million-plus followers on Twitter not to buy Maytag appliances. But the very technologies that empower customers can also empower employees, write Bernoff and Schadler, of Forrester Research. Companies can build a strategy around freeing employees to experiment with new technologies, make high-profile decisions on the fly, and effectively speak for the organization in public. Companies that feel hesitant to give their employees such freedom can benefit from what the authors call the HERO Compact-whereby management, IT, and HEROes (for "highly empowered and resourceful operatives") agree to work together to manage technological innovations. Management contracts to encourage innovation and manage risk, IT to support and scale employees' projects, and HEROes to innovate within a safe framework. Best Buy, Black & Decker, Vail Resorts, and Aflac are among the companies that have empowered their employees to take full advantage of social media. But it takes a while for corporate cultures to embrace this sort of innovation. In the meantime, managers can move forward on their own-building internal communities, looking outside the company for creative strategies, reviewing their hiring practices, and reaching out to customer-facing departments.
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  • Finding the Right Path

    Executing a new strategy nearly always requires new resources and capabilities-and most firms seek them out the wrong way. In a 10-year study of 162 telecom companies, the authors found that organizations deploying all the methods available to them outperform those that stick with a narrow approach. Yet most firms doggedly pursue one chief method, whether it's developing what they've already got internally, entering into contracts with providers, forming partnerships, or using M&A. The framework in this article will help companies weigh their options more strategically. To select the best tactics for the situation you face, ask whether your existing resources are relevant to your new needs. If the answer is yes, internal development makes sense; otherwise, you'll need to go outside the firm. Next, to figure out what kind of relationship you should pursue with a provider, determine whether all parties would have a shared understanding of the resources' value. If so, a purchase contract is a sensible choice; if not, consider a partnership or a corporate acquisition. Because M&A is the most complex option, reserve it for cases in which it really pays to have a deep relationship with the resource provider.
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  • The HBR Interview: Starbucks CEO Howard Schultz

    Two years ago Starbucks ran into trouble, and Schultz was called on to serve a second time as its CEO. In this edited interview, he talks about the effects of the financial crisis on Starbucks's sales, the surge of competition, the blogosphere, and retaining authenticity in spite of growth. Schultz calls values, culture, and Starbucks's reservoir of trust with its employees "the only assets we have as a company." He saw preserving and enhancing the integrity of those assets as his primary challenge. That meant declining to franchise the system or compromise on quality or change the company's generous health care coverage. One bold move was to take 10,000 store managers to New Orleans for a conference that began with more than 50,000 hours of community service and an investment in local projects of $1 million. The purpose of the conference was to galvanize the entire leadership of the company and to stress personal accountability and responsibility. Schultz believes that without that experience, he couldn't have turned things around for Starbucks.
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  • Stop Trying to Delight Your Customers

    The notion that companies must go above and beyond in their customer service activities is so entrenched that managers rarely examine it. But a study of more than 75,000 people interacting with contact center representatives or using self-service channels found that over-the-top efforts make little difference: All customers really want is a simple, quick solution to their problem. The Corporate Executive Board's Dixon and colleagues describe five loyalty-building tactics that every company should adopt: Reduce the need for repeat calls by anticipating and dealing with related downstream issues; arm reps to address the emotional side of customer interactions; minimize the need for customers to switch service channels; elicit and use feedback from disgruntled or struggling customers; and focus on problem solving, not speed. The authors also introduce the Customer Effort Score and show that it is a better predictor of loyalty than customer satisfaction measures or the Net Promoter Score. And they make available to readers a related diagnostic tool, the Customer Effort Audit. They conclude that we are reaching a tipping point that may presage the end of the telephone as the main channel for service interactions-and that managers therefore have an opportunity to rebuild their service organizations and put reducing customer effort firmly at the core, where it belongs.
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  • Are You Ignoring Trends That Could Shake Up Your Business?

    Virtually all managers in consumer businesses recognize major social, economic, and technological trends. But many do not consider the profound ways in which trends-especially those that seem unrelated to their core markets-influence consumers' aspirations, attitudes, and behaviors. As a result, companies may be ceding to rivals an opportunity to transform the industry. For instance, the impact of the digital revolution on consumers' daily lives is hardly a revelation. But it may be less obvious that heavy digital users tend to focus on short-term goals, demand immediate gratification, and expect to multitask. That insight, the authors argue, is as important for a company that sells lipstick as it is for one that sells smartphones. The authors present a process for identifying the trends that could reshape a business and three strategies for leveraging trends to create new value propositions: Infuse aspects of the trend into the product category to augment traditional offerings, as Coach did with its lower-priced Poppy handbags. Combine aspects of the trend with attributes of the category to produce offerings that transcend it, as Nike did with its Nike+ sports kit and web service. Or counteract negative effects of the trend with new products and services that reaffirm the category's values, as iToys did with its ME2 video game, which encourages children to be physically active.
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  • Innovation's Holy Grail

    Affordability and sustainability, not premium pricing and abundance, are the new tenets of effective innovation. Westerners are struggling with the shift in mind-set, but a few emerging-market pioneers are showing the way: They're designing inexpensive products and manufacturing them with so little capital and on a scale so vast that their prices-1 cent for a one-minute telephone call, $2,000 for a car-are the lowest in the world. Nowhere is this approach, which the authors call "Gandhian innovation," more evident than in India. Smart companies have used it to penetrate the country's burgeoning mass market. This article provides a framework to help executives understand three types of Gandhian innovation that have brought corporations success: disrupting business models, as Bharti Airtel did when it shifted its focus from average revenue per user to gross profit and expanded its market reach; modifying existing business capabilities, as Computational Research Laboratories did when it came up with a whole new supercomputer design that used standard components; and creating or sourcing new capabilities, as Lupin did when it reversed the usual drug development process to create an affordable treatment for psoriasis.
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  • Singapore Airlines' Balancing Act

    Singapore Airlines is widely regarded as an exemplar of excellence in an industry whose service standards are tumbling. What's not so well known is that the company is also one of the civil aviation industry's cost leaders. SIA's success in executing a dual strategy of differentiation and cost leadership is unusual. Indeed, management experts, such as Michael Porter, argue that it's impossible to do so for a sustained period since dual strategies entail contradictory investments and organizational processes. Yet SIA, and a few other emerging-economy companies, view the dualities as opposites that form part of a whole. SIA executes its dual strategy by managing four paradoxes: Achieving service excellence cost-effectively, fostering centralized and decentralized innovation, being a technology leader and follower, and using standardization to achieve personalization. The results speak for themselves: SIA has delivered healthy financial returns; it has never had an annual loss; and except for the initial capitalization, the Asian airline has funded its growth itself while paying dividends every year.
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