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Eric Palmer arrived at the top floor of Camden Robotics, a supplier of industrial automation tools, excited to tell CEO Tom O'Reilly about his latest win: a print ad account with a well-known local software maker. "You pulled in more business?" the boss responded. "It's really working out, then, isn't it?" Six months earlier, Palmer, the head of marketing communications at Camden, had been in a less optimistic mood as he'd walked into the executive suite. His department had recently expanded and hired some pricey designers, but because of the economic slowdown, Camden was launching fewer marketing campaigns, and Palmer had feared that his department would be targeted for layoffs. Instead, O'Reilly proposed recasting the marketing function as a business unit. It would continue to provide services to other units within the company, but it would also be free to engage in "value pricing" and could propose project work internally just as outside agencies might. In addition, the new group, Creative Central, could serve customers outside Camden in its spare time to earn revenue to defray its expenses. At first, the reaction to the news was overwhelmingly positive across the company. Palmer was thriving in the role of corporate entrepreneur. But several months into the change, the complaints started. As the discontent grows, O'Reilly is left to decide whether this organizational change is working. In R0204A and R0204Z, commentators Dan Logan, Michael McKenney, Mark P. Rice, and Jeffrey W. Bennett weigh in on this fictional case study.

We've all heard, or perhaps even told, the "organizational lie": We're customer centric; everyone's performance is above average; we're the darling of our industry, coming up with one innovation after another. That last one was true of Advanced Cardiovascular Systems (ACS) in the past, but not when Ginger Graham took over as CEO. From that first moment in 1993, Graham chose to tell the truth about ACS's situation--that R&D was practically at war with product development, yields were down, and customers were disgruntled. And ever since, she's seen the benefits of exploding organizational lies. Truth telling is something that's hard to argue with but difficult to do. And, indeed, ACS instituted some radical practices to create its culture of honesty. Every senior manager was assigned a coach from the ranks who regularly solicited feedback from everyone, high and low, about the executive's performance. To get the truth, though, ACS executives learned that they had to offer it up themselves--the whole truth about the company's financial state, its problems, and its triumphs. In return, they could ask their employees for help in solving the problems; passive complainers became active partners in the company's fortunes. ACS management spreads the word about the virtues of honesty through vivid stories of corporate history and quirky rituals. Every quarter, it holds companywide meetings in which the faults of top managers are examined--to keep them honest and tough enough to go on telling the truth. In fact, in the process of openly owning up to problems and jointly fixing them with employees, the entire company grew more powerful, nimble, and tough-minded, able to respond quickly to change, both internal and external.

Business has undergone a dramatic transformation in recent years. So has warfare. Every executive knows firsthand the daunting challenges of the 21st century business environment: disruptive change, fleeting opportunities, an overall sense of uncertainty and disorder. Although military commanders have long faced such challenges on the battlefield, meeting them has become more difficult in today's world of electronic weaponry, blurred battle lines, and amorphous enemies. In this article, Eric Clemons and Jason Santamaria lay out the concept of maneuver warfare--a philosophy tailor-made for today's uncertain combat environment--and analyze its applicability to business. Maneuver warfare isn't designed to destroy an adversary. Rather, it's used to render an enemy unable to fight as an effective, coordinated whole. This approach recognizes that it is impossible to control disorder and uncertainty; thus, the only viable option is to use those forces against your opponent. The authors have distilled seven guiding elements of maneuver warfare: targeting critical vulnerabilities, boldness, surprise, focus, decentralized decision making, rapid tempo, and combined arms. They illustrate each element with examples from both the military and corporate arenas. Although warfare often seems a facile metaphor for business, the authors argue that the principles of maneuver warfare are relevant to business strategy because they have been developed to address conditions that mirror those facing today's executives. Furthermore, the approach--with its focus not on overpowering a rival but on outflanking him, targeting his weaknesses, and rendering him unable to analyze the situation--can help achieve a decisive advantage with a minimal deployment of resources.

This is an MIT Sloan Management Review article. Many companies proudly think of themselves as innovative. The great majority of them, however, are adept at producing only sustaining innovations--products or services that meet the demands of existing customers in established markets. Few companies have introduced genuinely disruptive innovations, the kind that result in the creation of entirely new markets and business models. And, yet, the motivation to pursue such innovations should be urgent. In almost any industry, the most dramatic stories of growth and success were launched from a platform of disruptive innovation. Clayton M. Christensen of Harvard Business School, Mark W. Johnson of Innosight in Woburn, Massachusetts, and Darrell K. Rigby of Bain & Co. are close observers of innovation successes and failures at large and small companies. Drawing on a decade's worth of research, they offer two sets of litmus tests that senior managers can use to shape business plans to improve their chances of success. Following a detailed exploration of the litmus tests, they try out their ideas in a hypothetical example that asks whether Xerox could disrupt Hewlett-Packard's ink-jet printer business. They conclude by outlining the process any company needs to institute if it wants to create an engine capable of building new disruptive businesses over and over again. If senior managers pursue the path outlined here--and if the growth businesses they start or acquire are truly disruptive in character--it will be less difficult and risky than many have supposed to create wave after wave of new corporate growth.

This is an MIT Sloan Management Review article. Nowhere is the growing interconnectedness of business more clear than in the information technology industry, where the success of any one company's innovation is dependent on the activities of a complex web of partners. Michael Cusumano of the Sloan School and Annabelle Gawer of INSEAD offer a new framework for understanding what is going on and how to orchestrate the interactions. Building on their in-depth research at Intel, a company that excels in shaping its environment, the authors show how organizations can maximize innovation. First, they say, companies must decide if they are platform leaders (companies that drive industrywide innovation for an evolving system of separately developed pieces), wannabes (companies that want to be platform leaders), or complementors (companies that make ancillary products that expand the platform's market). Managers have two major challenges: coordinating internal units that play one or more of those roles and interacting effectively with outsiders playing the same roles at different times. The authors delineate four levers of platform leadership (including productive ways to work with complementors and techniques for building a supportive internal organization) and offer practical advice to complementors as well. They provide guidelines on when to show your cards to competitors and when to hold them. As the experiences of Intel, Microsoft, Cisco, NTT DoCoMo, and others demonstrate, platform leaders need to have a vision that extends beyond their current business operations and the technical specifications of one product or one component. Complementors have an important role, but it is the platform leaders, and their decisions, that have the most influence over the innovations that complementary producers create--and the future of the industry.

This is an MIT Sloan Management Review article. For too long, people have made unwarranted but detrimental assumptions about pricing. Changing prices, for example, has been looked on as an easy, quick, and reversible process, and new technologies have only reinforced that way of thinking. Similarly, extracting value from a product by pricing it correctly has been seen as relatively uncomplicated; the hard part is creating the valuable product in the first place. But these dismissive attitudes toward pricing miss the mark. Pricing is complex, and it's only growing more so as new tools and techniques become available. The ability to set the right price at the right time, any time--the very definition of a pricing capability--is also becoming increasingly important. In fact, in the course of working with dozens of companies in the past couple of years, the authors have spoken with several executives who believe that developing a pricing capability is essential to their business' survival. And they are backing up their views by investing in three areas: human capital, systems capital, and social capital. The authors explain the nature of these investments and how they come together to form a pricing capability that competitors will have a hard time imitating. Building such a capability requires an effort that some companies may not be in a position to undertake. Those that do take a comprehensive approach, however, can make superior pricing decisions that fit with their positioning, customers, suppliers, and evolving market conditions for years to come.

This is an MIT Sloan Management Review article. Over the past couple of decades, management innovations have pushed companies toward the ideal of the "boundaryless" organization. As a result of these changes, formal reporting structures and detailed work processes have a much diminished role in the way important work is accomplished. Instead, informal networks of employees are increasingly at the forefront, and the general health and "connectivity" of these groups can have a significant impact on strategy execution and organizational effectiveness. Many corporate leaders intuitively understand this, but few spend any real time assessing or supporting informal networks. And because they do not receive adequate resources or executive attention, these groups are often fragmented, and their efforts are often disrupted by management practices or organizational design principles that are biased in favor of task specialization and individual rather than collaborative endeavors. The authors initiated a research program two years ago to determine how organizations can better support work occurring in and through informal networks of employees; they assessed more than 40 networks in 23 organizations. They discovered in all cases that the networks provided strategic and operational benefits by enabling members to collaborate effectively; they also found that managers truly wanting to assist these groups had to overcome six myths about how networks operate. Explains the six myths and why they are harmful; in place of these assumptions, the authors offer reality checks that can be implemented to help networks become more effective.

This is an MIT Sloan Management Review article. Offering products or services alone is no longer enough: Organizations must provide their customers with satisfactory experiences. Competing on this dimension means orchestrating all the clues that people detect in the buying process. Customers always have an experience--good, bad, or indifferent--whenever they purchase a product or service from a company. The quality of the experience lies in how effectively the company manages it--in all its facets and from beginning to end. Organizations that simply tweak design elements or focus on improving isolated pockets of the customer experience--by providing a quick hit of entertainment, for example--will be disappointed in the results. An organization's first step toward managing the total customer experience is recognizing what the authors call clues: the signals or messages given off by everything involved in the buying process. Clues can include the product itself (Does it work as advertised?), the layout of a retail outlet (Are the signs easy to follow?), the salesperson's tone of voice (Did he really mean it when he said, "Have a nice day"?), and so on. Organizations that orchestrate the sum total of all the clues can create an optimal experience for their patrons. Addressing the clues that speak to emotions is especially important. Emotional bonds between companies and customers are difficult for competitors to sever. The internalized meaning and value that the clues assume can create a deep-seated preference for a particular experience--and, thus, for one company's product or service over another's. Discusses the tools that are available to help organizations rethink the signals they are sending to customers. Presents two case studies in which organizations dramatically improved their customers' experiences.

Illustrates how various elements in a customer's encounter with Internet services relying on physical service (labor-intensive customer support and/or logistics) affect one another. Presents a framework that suggests: 1) that improving service quality in specific elements results in cost reductions in others creating a virtuous cycle and 2) that some elements of the service encounter provide superior sources of competitive advantage than others because of the difficulty competitors have replicating them. Both findings have implications for managers of organizations involved in the provision of most services over the Internet because they illustrate how those managers can simultaneously increase organizational efficiency and customer effectiveness.

Provides a vehicle to explore Islamic development and political issues within BGIE (business, government, and international economy). Set in early 2002, the case focuses on Crown Prince Abdullah's efforts to liberalize a failing rentier state, that had been dependent on petroleum for too long. His efforts to liberalize, however, come at a politically and socially sensitive time--just after September 11, 2001, and in the midst of the Palestinian intifada. In a desperate effort to maintain oil prices, OPEC has recently reduced output by 1.5 million barrels daily, with Saudi Arabia bearing the largest cut.

As Canada's largest direct online grocer, Grocery Gateway provided home delivery to approximately 125,000 customers in the Greater Toronto area, which covered a territory of approximately 3,200 square kilometres. Grocery Gateway's management staff was concerned that the company had been met only 67 per cent of its target of making four deliveries per hour. Consequently, the vice-president of industrial engineering and operations had been asked to make some recommendations aimed at improving delivery operations. These recommendations would be presented at Grocery Gateway's next weekly management meeting. There are a number of options that were worth considering. The vice-president's job was to pinpoint those options and assess how each one might affect the company's existing operation. The final choice would have to reflect and maintain Grocery Gateway's focus on low cost and high service.

Presents an introduction and overview of corporate venturing. Describes the need for companies to create new businesses, the stages in the process, predictable problems and challenges, the strengths and weaknesses of alternative approaches such as internal venture divisions and corporate venture capital funds, and guidelines for successful practice.

Describes the entrepreneurial process through which the September 11th Fund was created, developed, and operated, focusing primarily on the furst seven weeks of the fund. This case details the genesis of the fund as a partnership between the United Way of New York City (NWNYC) and the New York Community Trust, New York City's largest funders-to its development/fundraising efforts and operations with pro bono consulting from a team of McKinsey consultants. Describes how the social entrepreneurial process was facilitated by key leaders from McKinsey, who were instrumental in initiating and executing McKinseys involvement in the fund development and operation. Discusses how the UWNYC executive staff and the McKinsey team worked to maximize giving to the fund, develop the infrastructure to process donations, and create an early distribution strategy highlighting how the McKinsey team and United Way staff adapted to respond to this crisis.

Genzyme has made money with external technology in orphan drug markets generally considered to be too small to be attractive to other drug companies. Now competition is entering these same markets, placing Genzyme's business model under new pressures.

This case details the experience of Metalclad, a small California company, with an investment in a hazardous waste treatment and disposal facility in Mexico. Led by its new president and CEO, Grant Kesler, Metalclad shifts away from its core business and attempts to become a major player in the emerging market for hazardous waste disposal in Mexico. Despite support for the project at the highest levels of Mexican government, the project fails because of local opposition. The case ends with Metalclad charging illegal expropriation and filing the first ever suit by a private company against a NAFTA government.

Following from "Metalclad In Mexico (A)," this case details two parallel processes. The first traces the process by which Metalclad, a small California company, ultimately wins a NAFTA dispute settlement process judgment against Mexico for illegal expropriation of the company's property in the state of San Luis Potosi. Second, the case discusses the problems that led to the company's failed investment in a second waste disposal facility, this time in the state of Aguascalientes. With this last failure, Metalclad sold its assets and left Mexico. .

In April 2001, Dietmar Kuhnt, CEO of the German energy giant RWE, had to make a decision that would affect his company's future. Profits in the electricity sector depended heavily on regulatory rules that influenced industry structure and pricing. RWE had emerged through deregulation as one of the largest electricity companies in Germany and a multiutility. Now there was a proposal on the table to replace the largely lighthanded regulatory model based on negotiation between private parties with a more traditional regulatory model of an industry-specific regulator. What type of regulatory regime would be best suited to RWE's ambitious strategy to grow and prosper?

Develops a framework for exploring the idea of, how service affects the economics of Internet organizations. Development of the framework requires an understanding of the different forms service takes in organizations that conduct business through the Internet. These forms are described as "virtual" (either pure information or automated) and "physical" (requiring some degree of human intervention). Because the nature and quantity of physical service necessary to deliver value to customers influence the quantity of human intervention required, they also influence a firm's ratio of variable to fixed costs, which alters its "scalability." A paradox occurs: many venture capitalists and proponents of Internet business view reduced scalability negatively; yet the cause of that reduction in scalability, human intervention, often helps a firm to differentiate its offering to customers, thus providing a source of competitive advantage. Also illustrates that scalability alone is insufficient to generate profit.

Supplements the (A) case.

The FBI indicates that three purchasing agents are suspected recipients of bribes. After an inconclusive investigation, the agents leave. The superiors are unsure what to do. A rewritten version of an earlier case.