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BuildingBlocks International (BBI) plans to accomplish its mission to help children in developing countries succeed in school by bringing management expertise to local organizations. Two years after founding BBI, however, the team hasn't figured out exactly how to make it work. In their model, a firm would support BBI in two ways: by donating money and by lending BBI a highly skilled employee for anywhere from four months to a year. This employee would live in the developing country and work with the local organization to improve its effectiveness. So far, they've not been able to convince any firm to sign on, although few have said "absolutely not." Presents the options for the selling strategy. There are three potential entry points into the organization: senior management, philanthropy, and human resources. Moreover, there are two substantial value propositions: social benefit and leadership training of the employee. Where should BBI focus its selling effort, and what should the main message be? Allows for quantification of the social benefits delivered by BBI and discussion of when and whether this would be useful in the selling process. Rich description of BBI's selling process at a single site makes it possible to draw inferences about what is really going on, why things aren't working out, and what might be changed in the sales strategy.

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Gretchen Fox, founder and CEO of FOX Relocation Management Corp., a company that specializes in managing the relocation of organizations, has successfully grown her Boston-based business form a 1 to a 40-person firm. Fox's business model and management style were unusual and fit her personal beliefs. For example, Fox disliked hierarchical, highly structured organizations and kept the lines of responsibility and authority ambiguous between herself and her second in command. As the demands for the company's services expanded and Fox prepared to grow her firm from 40 to 60 people, her experimentations with organizing principles and compensation approaches have come under pressure. Fox needs to decide: which of the organizational design and management practices need to change? How should they change? Concomitantly, how does Fox maintain the culture of the company that she has so carefully nurtured and that has brought success to the company?

"It's worse than I thought....She's completely lost her mind," says Harry Beecham, the CEO of blue chip management consultancy Pierce and Co. The perplexed executive was in a hotel suite with his wife in Amsterdam, the latest stop on his regular trek to dozens of Pierce offices worldwide. In his hand was a sheaf of paper--the same message sent over and over again by his star employee and protegee Katharina Waldburg. The end of the world is coming, she warned. "Someone is going to die." Harry wouldn't have expected this sort of behavior from Katharina. After graduating with distinction from Oxford, she made a name for herself by single-handedly building Pierce's organizational behavior practice. At 27, she's poised to become the youngest partner ever elected at the firm. But Harry can't ignore the faxes in his hand. Or the stream of consciousness e-mails Katharina's been sending to one of the directors in Pierce's Berlin office--mostly gibberish but potentially disastrous to Katharina's reputation if they ever got out. Harry also can't dismiss reports from Roland Fuoroli, manager of the Berlin office, of a vicious verbal exchange Katharina had with him, or of an "over the top" lunch date Katharina had with one of Pierce's clients in which she was explaining the alphabet's role in the creation of the universe. Harry is planning to talk to Katharina when he gets to Berlin. What should he say? And will it be too late? In R0404A and R0404Z, four commentators offer their advice on this fictional case study. They are Kay Redfield Jamison, a professor of psychiatry and a co-author of Manic-Depressive Illness; David E. Meen, a former director at McKinsey & Co.; Norman Pearlstine, the editor-in-chief at Time Inc.; and Richard Primus, an assistant law professor at the University of Michigan.

For men, ambition is considered a necessary and desirable part of life. Most women, however, associate ambition with egotism, self-aggrandizement, or manipulation. Getting to the bottom of why this is so required study of what ambition consists of--for both sexes. In childhood, the research uncovered, girls are clear about their ambitions. Their goals are grand and they make no apologies for them. In nearly all childhood ambitions, two distinct factors are in place: the mastery of a special skill and recognition for it. And what's true in childhood is no less true in later life: We all want our efforts and accomplishments acknowledged. Yet, there are dramatic differences in how women and men create, reconfigure, and realize (or abandon) their goals. Most women are demure when praised for their achievements. Research shows that such behavior varies according to social context: Women more openly seek and compete for affirmation when they are with other women, but behave differently when competing with men. The underlying problem has to do with cultural ideals of femininity. Women face the reality that to appear feminine, they must provide or relinquish scarce resources to others--and recognition is a scarce resource. Although women have more opportunities than ever before, they still come under social scrutiny that makes hard choices--such as when and whether to start a family or advance in the workplace--even harder. There are no easy solutions, but there are ways women can hold fast to their dreams. They must band together, learn to blow their own horns, and structure their lives in a way that promotes recognition.

The winners in business play hardball, and they don't apologize for it. They single-mindedly pursue competitive advantage and the benefits it offers: a leading market share, great margins, and rapid growth. They pick their shots, seek out competitive encounters, set the pace of innovation, and test the edges of the possible. Softball players, by contrast, may look good, but they aren't intensely serious about winning. They don't accept that you must sometimes hurt your rivals, and risk being hurt, to get what you want. Softball players don't play to win; they play to play. That approach may reflect the recent focus of management science, which itself has gone soft. Indeed, the discourse around soft issues such as leadership, corporate culture, knowledge management, talent management, and employee empowerment has encouraged the making of softball players. Although there are countless ways to play hardball, a handful of classic strategies are effective in generating competitive advantage. Best employed in bursts of ruthless intensity, these strategies are: Devastate rivals' profit sanctuaries, plagiarize with pride, deceive the competition, unleash massive and overwhelming force, and raise competitors' costs. But hardball isn't only about the moves you make. It's also about the attitude you bring to them. The playbook won't do you any good if you feel squeamish about using it.

Corporate executives must constantly look backward, attending to the products and processes of the past, while also gazing forward, preparing for the innovations that will define the future. This mental balancing act is one of the toughest of all managerial challenges, and it's no surprise that few companies do it well. But as every businessperson knows, there are companies that do. What's their secret? These organizations separate their new, exploratory units from their traditional, exploitative ones, allowing them to have different processes, structures, and cultures; at the same time, they maintain tight links across units at the senior executive level. Such "ambidextrous organizations," as the authors call them, allow executives to pioneer radical or disruptive innovations while also pursuing incremental gains. Of utmost importance to the ambidextrous organization are ambidextrous managers--executives with the ability to understand and be sensitive to the needs of very different kinds of businesses. They possess the attributes of rigorous cost cutters and free-thinking entrepreneurs while also maintaining the objectivity required to make difficult trade-offs. Almost every company needs to renew itself through the creation of breakthrough products and processes, but it shouldn't do so at the expense of its traditional business. Building an ambidextrous organization is not easy, but the structure itself, combining organizational separation with senior team integration, is not difficult to understand.

Breakthrough innovations--not just steady improvements--in operations can destroy competitors and shake up entire industries. Just look at Dell, Toyota, and Wal-Mart. But fewer than 10% of large companies have made serious attempts to achieve operational innovation. Why? One reason, contends the author, is that business culture undervalues operations--they're not as sexy as deals or acquisitions. In addition, many executives who rose through the ranks of finance or sales aren't familiar with operations--and they aren't interested in learning more. Finally, because no one holds the title vice-president of operational innovation, it doesn't have a natural home in the organization, so it's easily overlooked. Fortunately, all of these barriers can be overcome. This article offers practical advice on how to develop operational innovations, such as looking for role models outside your industry to emulate and identifying--and then defying--constraining assumptions about how work should be done. The author also discusses the best way to implement operational innovations. For instance, because they are disruptive by nature, projects should be concentrated in those activities with the greatest impact on enterprise strategic goals. Operational innovation may feel unglamorous or unfamiliar to many executives, but it is the only lasting basis for superior performance.

Deal making is glamorous; due diligence is not. That simple statement goes a long way toward explaining why so many companies have made so many acquisitions that have produced so little value. The momentum of a transaction is hard to resist once senior management has the target in its sights. Companies contract "deal fever," and due diligence all too often becomes an exercise in verifying the target's financial statements rather than conducting a fair analysis of the deal's strategic logic and the acquirer's ability to realize value from it. In a recent Bain & Co. survey of 250 international executives with M&A responsibilities, only 30% of them were satisfied with the rigor of their due diligence. And fully a third admitted they hadn't walked away from deals they had nagging doubts about. In this article, the authors, all Bain consultants, emphasize the importance of comprehensive due diligence practices and suggest ways companies can improve their capabilities in this area. They provide rich, real-world examples of companies that have had varying levels of success with their due diligence processes, including Safeway, Odeon, American Seafoods, and Kellogg's. Effective due diligence requires answering four basic questions: What are we really buying? What is the target's stand-alone value? Where are the synergies--and the skeletons? And what's our walk-away price? Each of these questions will prompt an even deeper level of querying that puts the broader, strategic rationale for acquisitions under a microscope.

During the dot-com boom, many people saw the potential for new communication technologies to enable radically new business models, but they were far too optimistic about the speed with which the revolution would occur. Now, as the bitter disillusionment of the dot-com bust begins to fade, we have a chance to think again--this time more rationally--about how best to take advantage of the remarkable changes these new technologies are gradually making possible. One such change is the ability to create markets inside companies, allowing decision making to be decentralized and introducing some of the efficiency, flexibility, and motivating influence of free markets. In this article, the author examines this nascent form of business organization, exploring the benefits as well as the potential risks. BP, for example, met its goal of reducing the company's greenhouse gas emissions nine years ahead of schedule, not by setting and enforcing targets for each division but by allowing business unit heads to buy and sell emissions permits among themselves using an electronic trading system. And Hewlett-Packard recently experimented with a system that allowed employees to buy and sell predictions about likely printer sales, using a kind of futures contract. The markets ended up predicting the actual printer sales with much more accuracy than official HP forecasts. At a fundamental level, these changes are enabled by the fact that electronic technologies allow information to be widely shared at little cost. This simple fact has a profound implication for organizing businesses. When more people have more information, they can use it to make their own well-informed decisions, appropriate to local circumstances, instead of following orders from above. As a result, even very large companies can benefit from the collective wisdom of their employees.

In the late 1990s, Fleet Bank was facing high and rising employee turnover, particularly in its retail operations. Overall turnover had reached 25% annually, and among some groups, such as tellers and customer service reps, turnover was as high as 40%. Using a new methodology developed by Mercer Human Resource Consulting, Fleet set out to determine why so many employees were leaving and what could be done to retain them. Fleet's analysis showed that people were leaving not so much for better pay but for broader experience, which they thought would enhance their marketability. Additionally, the analysis revealed a link between the turnover problem and the company's busy history of mergers and acquisitions. Fleet's mergers and acquisitions frequently meant that it had to consolidate operations. That consolidation resulted in layoffs, which provoked higher levels of voluntary turnover, perhaps because remaining employees began worrying about their job security. Although the obvious solution to the turnover problem might have been to compensate the remaining employees--say, with higher pay--the more effective and less costly solution, Fleet discovered, was to focus on employees' career opportunities within the company. Those who moved up the hierarchy, or who even made lateral moves, stayed longer. Its solutions required only modest investments that, in the end, saved the company millions of dollars.

Ask senior managers to pare costs by 10%, and they know just what to do. Ask them to boost growth by 10%, and they're stymied, assuming that growth is not really something they can influence. But managers can control their company's growth if they have better information about where their revenues are coming from. Rather than sort sales by geographic market, business unit, or product line, they should break them out in a way that reveals which part of their strategy is responsible for what part of their revenue. This article presents a tool--the sources of revenue statement (SRS)--that does just that. Through straightforward calculations using data taken from a company's balance sheet, along with estimations of customer churn and industry growth rates, the SRS enables managers to classify their revenue according to five sources of growth: continuing sales to established customers (base retention); sales won from the competition (share gain); sales that fell into their laps because the market was expanding (market position); sales from moves into adjacent markets; and sales from entirely new lines of business. Once sorted in this way, revenue can be viewed as the outgrowth of manageable circumstances. Comparing the sources of revenue across divisions can uncover profound insights, which can suggest smart ways to change strategy or set stretch goals.

"It's worse than I thought....She's completely lost her mind," says Harry Beecham, the CEO of blue chip management consultancy Pierce and Co. The perplexed executive was in a hotel suite with his wife in Amsterdam, the latest stop on his regular trek to dozens of Pierce offices worldwide. In his hand was a sheaf of paper--the same message sent over and over again by his star employee and protegee Katharina Waldburg. The end of the world is coming, she warned. "Someone is going to die." Harry wouldn't have expected this sort of behavior from Katharina. After graduating with distinction from Oxford, she made a name for herself by single-handedly building Pierce's organizational behavior practice. At 27, she's poised to become the youngest partner ever elected at the firm. But Harry can't ignore the faxes in his hand. Or the stream of consciousness e-mails Katharina's been sending to one of the directors in Pierce's Berlin office--mostly gibberish but potentially disastrous to Katharina's reputation if they ever got out. Harry also can't dismiss reports from Roland Fuoroli, manager of the Berlin office, of a vicious verbal exchange Katharina had with him, or of an "over the top" lunch date Katharina had with one of Pierce's clients in which she was explaining the alphabet's role in the creation of the universe. Harry is planning to talk to Katharina when he gets to Berlin. What should he say? And will it be too late? Four commentators offer their advice in this fictional case study. They are Kay Redfield Jamison, a professor of psychiatry and a co-author of Manic-Depressive Illness; David E. Meen, a former director at McKinsey & Co.; Norman Pearlstine, the editor-in-chief at Time Inc.; and Richard Primus, an assistant law professor at the University of Michigan.

"It's worse than I thought....She's completely lost her mind," says Harry Beecham, the CEO of blue chip management consultancy Pierce and Co. The perplexed executive was in a hotel suite with his wife in Amsterdam, the latest stop on his regular trek to dozens of Pierce offices worldwide. In his hand was a sheaf of paper--the same message sent over and over again by his star employee and protegee Katharina Waldburg. The end of the world is coming, she warned. "Someone is going to die." Harry wouldn't have expected this sort of behavior from Katharina. After graduating with distinction from Oxford, she made a name for herself by single-handedly building Pierce's organizational behavior practice. At 27, she's poised to become the youngest partner ever elected at the firm. But Harry can't ignore the faxes in his hand. Or the stream of consciousness e-mails Katharina's been sending to one of the directors in Pierce's Berlin office--mostly gibberish but potentially disastrous to Katharina's reputation if they ever got out. Harry also can't dismiss reports from Roland Fuoroli, manager of the Berlin office, of a vicious verbal exchange Katharina had with him, or of an "over the top" lunch date Katharina had with one of Pierce's clients in which she was explaining the alphabet's role in the creation of the universe. Harry is planning to talk to Katharina when he gets to Berlin. What should he say? And will it be too late? In R0404A and R0404Z, four commentators offer their advice on this fictional case study. They are Kay Redfield Jamison, a professor of psychiatry and a co-author of Manic-Depressive Illness; David E. Meen, a former director at McKinsey & Co.; Norman Pearlstine, the editor-in-chief at Time Inc.; and Richard Primus, an assistant law professor at the University of Michigan.

This is an MIT Sloan Management Review article. Today's managers acknowledge the importance of customer focus. Yet the costly customer efforts they usually implement rarely bring the promised gains. The reason? A superficial understanding of what customer focus really means. True customer focus involves comprehensive organizational change. As Baxter Healthcare, LexisNexis, IBM, and BP are learning, the kind of customer focus that creates an advantage competitors have great difficulty copying calls for companywide transformation. The author's in-depth research over many years shows how 10 breakthroughs in thinking, remarkably consistent across industries, improve growth and profitability more effectively than customer relationship management software, loyalty programs, or satisfaction surveys. She describes how, for example, the manager of Baxter Healthcare Corp. Germany got employees thinking of themselves as doing postoperative "home-recovery enhancement" instead of merely providing postoperative nutritional products to hospitals--and how that ultimately led to Baxter becoming indispensable to customers. When deep customer focus gets rooted in employee behavior, people at all levels become innovators.

This is an MIT Sloan Management Review article. By one informed estimate from the late 1990s, three-quarters of the Fortune 100's total market capitalization was represented by intangible assets, such as patents, copyrights, and trademarks. In this environment, cautions the author, intellectual property management cannot be left to technology managers or corporate legal staff alone--it must be a matter of concern for functional and business-unit leaders as well as a corporation's most senior officers. To realize the full value of their companies' intellectual property, top executives must seek answers to the following questions: How can the company use intellectual property rights to gain and sustain competitive advantage? How do intellectual property rights affect the industry's structure? What options do intellectual property rights offer vis-a-vis competitors? How can intellectual property rights grant incumbency advantage and establish barriers to entry? How can intellectual property rights help the company gain vertical power along the value chain? What organizational design accommodates an intellectual property strategy most effectively? The author explores each question, drawing on such company examples as Nokia, Motorola, Novo Nordisk, and Leo Pharma, in the process helping lead intellectual property rights out of their shadowy existence in patent and legal departments.

This is an MIT Sloan Management Review article. The reason most organizations struggle to demonstrate business gains from information technology investments is due to inadequate IT portfolio management (ITPM). Research at 130 companies, including Harrah's Entertainment, Waste Management, and Blue Cross Blue Shield, shows that only 17% are at the advanced, or synchronized, stage of ITPM. Scrutiny of that 17% reveals best practices for successfully aligning IT with strategic goals. The key to bridging the business-technology divide and improving results is early communication. Not only must senior business managers understand more about how IT affects both strategy and the bottom line, CIOs need to learn to communicate the vision, strategies, and goals of the IT organization in terms that non-IT executives can understand. The most effective partnerships studied were those in which the CIO took the initiative in discussing ITPM with business leaders and eventually transferred accountability to them. The most successful practitioners obtained cost savings of up to 40% of pre-ITPM budgets, better alignment between IT spending and business objectives, and greater central coordination of IT investments across the organization. By following certain specific steps to establish or upgrade ITPM and by benchmarking against synchronized companies, large organizations can make IT an integral part of their competitive advantage.

This is an MIT Sloan Management Review article. In recent years, leaders at such high-profile companies as Xerox, Procter & Gamble, Lucent, Coca-Cola, and Mattel have flamed out early in their tenures. Why did such promising and previously successful individuals fail so quickly in the CEO role? And why is such failure happening today with relatively high frequency? The individuals in charge bear some of the responsibility, of course. But the authors' research also uncovers other major forces at play. First is the impact of the predecessor CEO's actions on his or her successor's performance. Although outgoing CEOs do not intend to contribute to the failure of their successors, their personal needs and actions can lay the groundwork for derailment. A second force is often the succession process itself. The outgoing CEO may be responsible, having failed to prepare a successor adequately; and the board is also often guilty of lack of oversight. Third, new CEOs often have narrow expertise and are unable to set a proper context as leaders. The authors explore these issues and offer advice to outgoing CEOs, directors, and incoming leaders that may help them avoid the troubles that some companies have faced in making a leadership transition.

This is an MIT Sloan Management Review article. Many companies keep their suppliers and partners at arm's length, zealously guarding internal knowledge. Toyota Motor Corp., however, embraces its suppliers and encourages knowledge sharing through established networks. Toyota has developed interorganizational processes that facilitate the transfer of both explicit and tacit knowledge. The three key processes revolve around supplier associations (for general sharing of information), consulting groups (for workshops, seminars, and on-site assistance from Toyota), and learning teams (for on-site sharing of know-how within small groups). With Toyota's help, suppliers have fine-tuned their operations until, compared with their work for Toyota's rivals, they have 14% higher output per worker, 25% lower inventories, and 50% fewer defects. Quality improvements enable Toyota to charge price premiums for its products. Toyota's experience suggests that competitive advantages can be created and sustained through superior knowledge-sharing processes within a supplier network. The authors believe those principles have applicability in other types of alliances, too, including joint ventures. In fact, they contend that establishing effective interorganizational knowledge-sharing processes with suppliers and partners can be crucial for any company. The authors claim that knowledge sharing with suppliers is the reason for Toyota's dynamic learning capability and might be the company's one truly sustainable competitive advantage.

This is an MIT Sloan Management Review article. Companies deploying dishonest tactics toward customers, suppliers, distributors, and others typically do so to increase short-term profits, and in that regard they might succeed. But the misconduct is likely to fuel social psychological processes within the organization that have the potential for ruinous fiscal outcomes, outweighing short-term gains. There are three types of consequences to organizational dishonesty: reputation degradation, (mis)matches between values of employees and the organization, and increased surveillance. These outcomes can lead to decreases in repeat business and job satisfaction--and increases in worker turnover, employee theft, and other hidden costs. These consequences will, like tumors, spread and eat progressively at the organization's health and vigor. They will also be difficult to identify through typical accounting methods and might lead to corrective efforts that overshoot the true causes of poor productivity and profitability. Without a thorough understanding of the three types of consequences, an organization could try to control one financial hemorrhage (for example, losses from employee theft) by creating another (namely, investments in increasingly expensive security systems).