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Supplements the (A) case. The (B) case presents the final outcome of the events. Reveals how Keller is able to turn around perceptions about him and forge relationships with key decision makers. Includes reflections and lessons learned from all parties and Keller's actual 2005 year-end and self evaluations on the project.

Supplements the (A) case. The (C) case includes Keller's actual 2006 mid-year and self evaluations.

Brainard, Bennis and Farrel is a short case designed to explore the challenge of establishing appropriate compensation from a general management/CEO perspective. Brainard (B) is a one-page handout that is designed to show how an already difficult problem is made more complex by situational context--the detailed personal and interpersonal relationships among key executives over time.

Tom Pedersen, newly appointed chief learning officer (CLO) of Shinsei Bank in Japan, pondered how he could facilitate development of an integrated culture and transformation of the organization. Shinsei Bank had not developed longstanding tradition or a strong corporate culture. The bank, which was made up of professionals with extremely diverse backgrounds, had to develop an integrated organizational culture. Pedersen had just administered a new performance evaluation program for 17 senior executives. This was the first time that they had been measured against competencies aligned with the corporate vision and values revised in late 2005. He thought the evaluation program was critical for permeating the vision and values throughout the bank and was eager to roll out the program to a larger number of employees next year. Pedersen wondered how he should improve the performance evaluation, and if this was the right process to influence the culture of the bank? He also wondered what other measures might be effective to get employees with diverse backgrounds to work together. How could he create a learning organization at Shinsei Bank?

Ever since ex-Ben and Jerry's CEO Perry Odak took over as CEO of Wild Oats in 2001, he has been trying to turn the company around. After some apparent false starts, profits now seem to be on the rise in 2005 and 2006. Has he finally done it?

It is 1988 and David Glass has just taken over as CEO from the legendary Sam Walton at Wal-Mart. Meanwhile, Joe Antonini has just taken the CEO position at Wal-Mart's arch rival, Kmart. Although Wal-Mart is still well behind Kmart, it appears to be in great shape and is catching up fast. Glass seems committed to continuing with "business as usual." Is this enough? What might Kmart do to stop him?

BP's IR director has begun a program to use information regarding external views of BP and the industry as part of the firm's planning and operational activities. This information is generated as a portion of their award winning investor relations program, and had previously been used only to enhance communications. Allows a discussion of the relative merit of more formally including this information in BP's planning and operations. Also provides "best practices" insights into IR.

In late 2004, Hilmi Panigoro, CEO of the publicly traded Indonesian oil company Medco Energi Internasional, is striving to regain majority control of the company his brother Arifin founded in 1980. The Asian financial crisis of 1999 led to a major restructuring that left the Panigoros with a 34.1% equity stake in Medco. Two other large shareholders are now looking to sell their combined stake of 50.9% and have selected Temasek, the Singapore government's investment arm, as their preferred bidder. The Panigoros have a right of first refusal, but only a four-month window to raise the capital needed to head off Temasek's bid. The Panigoro brothers are considering a two-stage plan: a leveraged buyout (LBO) to be followed by a secondary equity offering at a share price high enough to enable them to repay the loan and maintain majority control of their company. As attractive as the plan seems, they worry about the high cost of the loan and the risk of the offering failing. In January 2005, with no time left to consider alternative financing plans, the Panigoro brothers have to decide whether to go ahead with the plan or lose control of Medco to Temasek.

The Khemka family of India--founders, managers, and majority owners of Russia-based SUN Brewing--faces a difficult decision in 1998. Following the ruble's massive devaluation in August 1998, the stock price of SUN brewing, which is publicly listed on the Luxemburg exchange, has declined by over 90%. Only two months earlier they had planned a $200 million to $400 million equity and debt offering on the New York Stock Exchange to finance major investments in the face of increased competition from international beer companies in the Russian market. However, the ruble devaluation and the deep financial crisis that has ensued has led to the cancellation of the proposed CYSE listings--and to a $40 million bridge loan that now needs to be repaid. The family is debating the merits of two main alternatives: To bring in a major global beer company as a strategic partner at this difficult time or to stay on as controlling owners, inject millions of dollars into the company from other parts of the family business group, and weather the storm until better terms can be expected from any outside provider.

A successful company, recognized worldwide for exquisite design of consumer electronics products, strives to better integrate software design into its traditional physical product design processes to meet the demands of a post-iPod world. Details the Bang & Olufsen "design driven innovation" process, that works very differently than many companies' product development processes, but allows this company to produce very high profit margin products that retain their margins for a very long time in an industry in which products come and go very quickly. The case helps students understand processes and practices that support the creation of highly differentiated products. It also deals with issues of change in an already successful context, and of managing highly creative staff who are vital to a company's business model.

Companies strive to create fiercely loyal, profitable customers, but the authors shows that this can only be achieved by rethinking the existing logic about customer loyalty; integrating your loyalty efforts with product-offering development, marketing, and sales; and close collaboration between the strategy and design functions of an organization. Cultivating loyalty requires ambition and risk-taking, but will ultimately provide your company with valuable and sustained relationships. Included is a four-step process for defining the appropriate levers, design interventions, and organizational strategy for creating fiercely loyal customers.

Despite engaging with other people on a regular basis, individuals vary significantly in their willingness to trust. For some, trusting intentions are central to their conceptions of their social selves; while for others, the social world takes second place to their individually-motivated concerns. Despite these differences, extrinsic motivations (i.e., the tangible benefits that result from trusting) provide strong motivations to establish mutual trust and/or mutually-trusting reciprocal actions. The authors present the Motivated Attributions Model, with explains the conditions under which acts of trust are most likely. One immediate implication of their Model is for individuals in potentially-trusting relationships to seriously consider the effects of their motivations, their dependencies, their need to see themselves positively, and their inability to fully understand their counterparts' perceptions.

Blind reliance on customer loyalty as a universal goal will put you out of business, warn the authors. Any loyalty initiative needs to begin with an understanding of the profitability of individual customers. Their investigation revealed more than 50 commonly-held beliefs about customer loyalty that turned out to be oversimplifications, exaggerations or just plain lies. The difficult truth is that the links between customer loyalty and business profitability are far more complex than we have been led to believe. The authors provide the top ten key misunderstandings surrounding this widely-coveted phenomenon and provide advice for firms to counter each.

The ability to place workers into jobs with which they identify is central to what makes organizations work. The authors discuss the limits of monetary incentives and the power of an identity-enhanced economic model to encourage a new view of a variety of management policies, organizational behaviors, and employment policies. They argue that identity is the next step in the evolution of the economic modeling of organizations, and show that the simplest representation of an organization is equated to its physical capital: a more sophisticated view adds the specific human capital of employees to the description of the firm. Insofar as the firm can profitably motivate its employees through such attachments, these investments should be considered a part of the capital of the organization, its motivational capital.

The emerging concept of corporate citizenship entails membership in a global community where citizens have duties to respond to the needs of their fellow citizens. The author puts forth a 'statement of a minimal moral obligation' (SMMO) for firms in industries such as pharmaceuticals, who have the ability to address rampant health risks in developing countries. He defines corporate obligation as consisting of three elements, and argues that the emerging concept of corporate and business citizenship supports recognition of the duty established in his SMMO. By supporting the global community, he argues, firms will be helping to maintain a supportive environment for business activity.

In the sports arena as in the workplace, leaders can decrease counterproductive behavior by fostering organizational commitment and perceptions of fairness. Traditionally, job performance has been measured in terms of specific task-related statements and behaviors: did the employee accomplish the list of tasks set out in the job description? Current approaches pay attention to a much broader range of behaviors that, when present, can add value to an organization by helping it achieve its goals and contributing to the social and psychological work environment. By studying performance data from the NBA and NHL, the author comes to the conclusion that managers can increase organizational citizenship behavior and decrease counterproductive behavior by focusing on engendering employee satisfaction, organizational commitment, perceptions of fairness, and trust in leadership, all of which create an environment that encourages altruistic acts.

Edward Bennett has done wonders at Astar Enterprises. In the 15 years he's been CEO, the company has more than tripled in size through product line extension and disciplined acquisitions and is now distributing its cleaning, personal hygiene, and skin care products nationwide. But Astar's chief executive is 64 years old, and while all his attention is taken up with a new strategy to expand into international markets, board members are becoming increasingly worried about the issue of succession. Bennett wants none of it, arguing that if he were to die suddenly, his second in command, Tom Terrell, could take over. Besides, after much prodding, Bennett, former vice-chairman Vincent Dalton, and longtime HR head Gail Thompson have already come up with a list of four possibilities. "When will these guys back off?" Bennett complains to Thompson. "I've told them who the candidates are. Why do we need to talk about it?" Thompson knows, however, that the board chairman, Tom Calloway, considers Terrell a nonstarter without the requisite skills to take over in anything more than an interim capacity. As for the other three candidates, only one is even known to the board, and none has any significant international experience. Calloway is well aware of how critical Bennett is to Astar. But he's equally certain that the board risks failing in its fiduciary responsibilities if it doesn't create a viable succession plan. What should Calloway and the board do if Bennett refuses to cooperate? Commenting on this fictional case study in R0609A and R0609Z are John W. Rowe, the executive chairman of Aetna; Edward Reilly, the president and CEO of the American Management Association; Jay A. Conger, a professor at Claremont McKenna College and London Business School; Douglas A. Ready, a visiting professor at London Business School; and Michael Jordan, the CEO of EDS.

Surveys reveal that 80% of Americans don't trust corporate executives and--worse--that roughly half of all managers don't trust their own leaders. Mergers, downsizing, and globalization have accelerated the pace of change in organizations, creating a crisis of trust that didn't exist a generation ago. Leaders who understand how trust is built can actively influence its development, resulting in a more supportive and productive work environment and, not incidentally, a competitive advantage in the war for talent. Building on research in social psychology, and on his 15 years of experience consulting on trust, the author has developed a model for predicting whether trust or distrust will be chosen in a given situation. The model helps managers analyze 10 factors at play in the decision-making process. Hundreds of top executives have used it to diagnose and address the root causes of distrust in their work relationships. Some of the factors in the model relate to the decision maker: How tolerant of risk, how well-adjusted, and how relatively powerful is he or she? Others relate to the specific situation: How closely aligned are the interests of the parties concerned? Does the person who is asking to be trusted demonstrate competence? Predictability and integrity? Frequent and honest communication? Sue, a relatively new VP of sales, used the trust model to manage her relationship with Joe, an employee nearing retirement who was not performing well in a new sales role. Fearing for his job, Joe wasn't initially inclined to trust her. Sue took concrete steps to communicate openly with Joe, explore other options for him, and show concern for his well-being. When Joe was transferred, he let his former colleagues know how pleased he was with Sue's handling of the situation. As a result, the level of trust increased in Sue's department, even through a major change.

Executives have developed tunnel vision in their pursuit of shareholder value, focusing on short-term performance at the expense of investing in long-term growth. It's time to broaden that perspective and begin shaping business strategies in light of the competitive landscape, not the shareholder list. In this article, Alfred Rappaport offers 10 basic principles to help executives create lasting shareholder value. For starters, companies should not manage earnings or provide earnings guidance; those that fail to embrace this first principle of shareholder value will almost certainly be unable to follow the rest. Additionally, leaders should make strategic decisions and acquisitions and carry assets that maximize expected value, even if near-term earnings are negatively affected as a result. During times when there are no credible value-creating opportunities to invest in the business, companies should avoid using excess cash to make investments that look good on the surface but might end up destroying value, such as ill-advised, overpriced acquisitions. It would be better to return the cash to shareholders in the form of dividends and buybacks. Rappaport also offers guidelines for establishing effective pay incentives at every level of management; emphasizes that senior executives need to lay their wealth on the line just as shareholders do; and urges companies to embrace full disclosure, an antidote to short-term earnings obsession that serves to decrease investor uncertainty, which could reduce the cost of capital and increase the share price. The author notes that a few types of companies--high-tech start-ups, for example, and severely capital-constrained organizations--cannot afford to ignore market pressures for short-term performance. Most companies with a sound, well-executed business model, however, could better realize their potential for creating shareholder value by adopting the 10 principles.

Legal and cultural changes over the past 40 years ushered unprecedented numbers of women and people of color into companies' professional ranks. Laws now protect these traditionally underrepresented groups from blatant forms of discrimination in hiring and promotion. Meanwhile, political correctness has reset the standards for civility and respect in people's day-to-day interactions. Despite this obvious progress, the authors' research shows that political correctness is a double-edged sword. Although it has helped many employees feel unlimited by their race, gender, or religion, the PC rule book can hinder people's ability to develop effective relationships across race, gender, and religious lines. Companies need to equip workers with skills--not rules--for building these relationships. The authors offer the following five principles for healthy resolution of the tensions that commonly arise over differences: Pause to short-circuit the emotion and reflect; connect with others, affirming the importance of relationships; question yourself to identify blind spots and discover what makes you defensive; get genuine support that helps you gain a broader perspective; and shift your mind-set from one that says, "You need to change" to one that asks, "What can I change?" When people treat their cultural differences--and related conflicts and tensions--as opportunities to gain a more accurate view of themselves, one another, and the situation, trust builds and relationships become stronger. Leaders should put aside the PC rule book and instead model and encourage risk taking in the service of building the organization's relational capacity. The benefits will reverberate throughout every dimension of the company's work.