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The founders of Lynx Solutions have survived tensions within the founding team, the firing of Lynx's founder-CEO, and a crisis sparked by media allegations that it had been spying on its users. Now the founders are considering a proposal from one of their directors to make a dramatic shift in the venture's strategy and have to decide how to react.

Incoming and outgoing foreign direct investment in an environment of politics, geography, globalization, and history. Since the end of apartheid, South Africa had undertaken substantial economic reforms in order to attract more foreign direct investment, but it was slow in coming. At the same time, South African firms had become major players in sub-Saharan Africa and beyond. Collectively, these investment decisions could have a major long-run impact on South Africa's economic growth and political stability. South African policymakers needed to decide what they wanted from the private sector, and how to achieve it.

Describes how the "Moonshine Shop," a group of plant-savvy creative generalists, is helping a great industrial company become more innovative. Chronicles the history of the Moonshine Shop, its successes and failures, and describes innovations they've helped put in place. The group routinely creates savings equal to multiples of their own budge through front-lines process innovation and support of staff on-the-floor.

The founding entrepreneur of Honey Care Africa (Honey Care) revitalized Kenya's national honey industry by focusing on small-holder farmers across the country. Central to the success was an innovative business model: a synergistic partnership between the development sector, the private sector, and rural communities that drew on the core competencies of each party as well as their complementary roles. This tripartite model was combined with local manufacturing of beehives, effective beekeeping training and community-based extension service provision, and the provision of a guaranteed market to small-holder farmers through forward contracts as well as prompt payments. Four years later, Honey Care has achieved 68% market share in Kenya, distributes several brands of organic, fair-trade honey internationally, and is a lead distributor of beeswax. The business model has been successfully replicated in neighboring Tanzania, with expansion plans to Uganda and Sudan.

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Two managers attending a week-long executive education course are working on an assignment which requires them to estimate the cost of capital for EnCana Corporation, a leading North American oil and gas producer. The two managers disagree about which costs need to be taken into account to complete the assignment. They are not sure about the costs of different sources of capital, the overall cost of capital and the appropriate use of the hurdle rate.

Rough schooling helps multinationals from small or developing countries become formidable global competitors.

The failed McDonald's hotel project is a good example of a "real option"--a set investment for an uncertain but potentially high return--and shows that the company is willing to nurture innovation.

More women than men at Fortune 1000 firms have reached executive officer positions in their 30s, 40s, and 50s--and they've done it faster. Still, nearly half of those companies lack female executive officers altogether.

Making employees prove their ideas' worth results in better concepts and more motivated workers. Executives must give people the tools to stand behind their ideas and must follow up with strong rewards.

The best way to foster an appreciation for intellectual property rights in China is to let partner firms experience the benefits of locally generated knowledge.

Even rude or irrelevant feedback can be useful, but only a rare few can put ego aside and extract the hidden value.

The Q&A should be more than just an afterthought, says communications consultant Michael Sheehan. It may be the only part of your speech people actually listen to.

Consumers are slow to notice positive or negative changes in a product's quality, and that could have important implications for your company's marketing plan.

Outside directors are at lower risk of liability than they might think, but they can protect themselves even further.

Galvatrens, a consumer products company in Houston, has a whistle-blower's lawsuit on its hands. Mike Fields, a former divisional sales manager, claims that he was wrongfully terminated for trying to report an illegal scheme designed by a colleague to inflate numbers. He'd left the company's COO a confidential voice mail about it, but the COO referred the matter to Mike's boss rather than following up on it himself. Mike says his boss subsequently told him his performance wasn't up to snuff and he'd have to accept a demotion and a transfer if he wanted to stay with the company--knowing that Mike, a divorced father with joint custody of his kids, couldn't leave town. How could all of this have happened? Chip Brownlee, the CEO of Galvatrens, had taken steps a while back to upgrade the company's procedures for uncovering misconduct and solving conflicts. He and the general counsel had instituted a number of changes, including a new open-door policy for raising workplace concerns. Although the policy encouraged employees to go to their immediate supervisors, it emphasized that they could approach any manager at any level for assistance, and it included a ban on retaliation against whistle-blowers. Chip and the board need to figure out why, with all those channels in place, only one person came forward with information about the sales scheme--and why that person ended up suing the company. How should Galvatrens strengthen its system for uncovering misconduct, and what roles should the board and management play? Commenting on this fictional case study in R0704A and R0704Z are Stephen R. Hardis, the nonexecutive chairman of Marsh & McLennan; Hal Shear, the managing director of Board Assets; Mary Rowe, an ombudsperson for the Massachusetts Institute of Technology; and Jackson W. Robinson, the founder and president of Winslow Management.

Shortly after Jim Hackett became CEO of Steelcase in 1994, the office furniture manufacturer introduced two products. The Leap chair was a great success. But the Pathways office cubicle system ran into trouble from the start, plagued by R&D disputes, distribution misunderstandings, and product recalls. How could a company fail as well as succeed? Hackett traced the root of the matter to something many organizations would see as a virtue: the company's "can do" attitude. People at Steelcase were not spending enough time thinking things through before they jumped to execute. Hackett set out to transform Steelcase's "doing" culture into a "thinking before doing" culture. After much research, he developed a four-part process to give development teams at Steelcase the mental tools, intellectual resources, and time they needed to think a project through to completion. In the think phase, the team finds out as much about a potential project as possible. Team members ask questions, contact experts, do research, and come up with a range of options. In the point-of-view phase, they select the option they will pursue. Once the point of view is formed and cleared with the company, all second-guessing comes to an end and, in the plan-to-implement phase, the group determines the process by which the project will be completed. Only after full-scale practice runs with everyone involved does the project actually go forward in the implementation stage. It takes a great deal of courage and confidence for people anxious to storm the world to slow down and explore all their options first, Hackett acknowledges. But by bringing thinking and doing into the proper balance, everyone is much better prepared to meet the future.

The success of an executive team depends heavily on the relationships the boss has with his or her direct reports. Yet the leadership literature has had little to say about what is expected in those relationships--on either side. Larry Bossidy, formerly the chairman and CEO of Honeywell, and before that of AlliedSignal, shares what he calls "the CEO compact," detailing the behaviors a leader should look for in subordinates and what they should be able to expect in return. A CEO's best people, he says, know when a situation calls for them to get involved. They generate ideas--remembering that some of the best ones may sound crazy at first. They are willing to collaborate, putting the long-term good of the company above short-term goals of their divisions. They step up to lead initiatives, even if the outcome is uncertain. They develop leaders among their people, especially through direct involvement in performance appraisals. They stay current on world events and anticipate how those events may affect the company and its competition. They drive their own growth by exposing themselves to new people and ideas and by accepting demanding assignments. And they sustain these behaviors in bad times as well as good. On the other side of the compact, the boss should provide clarity of direction; set goals and objectives; give frequent, specific, and immediate feedback; be decisive and timely; demonstrate honesty and candor; and offer an equitable compensation plan. Executives who aren't lucky enough to have such a boss can create a compact with their own subordinates, Bossidy says, and demonstrate by example. The result will be to improve team and company performance and accelerate individual growth.

How do you know when your core needs to change? And how do you determine what should replace it? From an in-depth study of 25 companies, the author, a strategy consultant, has discovered that it's possible to measure the vitality of a business's core. If it needs reinvention, he says, the best course is to mine hidden assets. Some of the 25 companies were in deep crisis when they began the process of redefining themselves. But, says Zook, management teams can learn to recognize early signs of erosion. He offers five diagnostic questions with which to evaluate the customers, key sources of differentiation, profit pools, capabilities, and organizational culture of your core business. The next step is strategic regeneration. In four-fifths of the companies Zook examined, a hidden asset was the centerpiece of the new strategy. He provides a map for identifying the hidden assets in your midst, which tend to fall into three categories: undervalued business platforms, untapped insights into customers, and underexploited capabilities. The Swedish company Dometic, for example, was manufacturing small absorption refrigerators for boats and RVs when it discovered a hidden asset: its understanding of, and access to, customers in the RV market. The company took advantage of a boom in that market to refocus on complete systems for live-in vehicles. The Danish company Novozymes, which produced relatively low-tech commodity enzymes such as those used in detergents, realized that its underutilized biochemical capability in genetic and protein engineering was a hidden asset and successfully refocused on creating bioengineered specialty enzymes. Your next core business is not likely to announce itself with fanfare. Use the author's tools to conduct an internal audit of possibilities and pinpoint your new focus.