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Although a typical public company director might help hire a CEO a few times in a career, PE executives hire multiple CEOs each year. To tap this expertise, Jeffrey Cohn, of the executive search firm DHR International, and J.P. Flaum, of the consulting firm Green Peak Partners, surveyed and interviewed the managing partners of 32 private equity firms about their CEO search process. They drew five conclusions: (1) Experience is overrated; someone who can run with a new situation is often better than someone with years of industry experience. (2) Team-building skills are paramount. (3) Urgency outranks empathy; leaders need to be able to move decisively and without regrets. (4) Resilience is a must; in turnaround situations, leaders are likely to encounter some negative results. (5) Candor is also key; leaders must have the confidence to give their PE sponsors bad news quickly and honestly.

New research on recent graduates of the top U.S. MBA programs suggests that the prevailing wisdom about establishing a specialty may be misguided. Jacks-of-all-trades tended to get more job offers and bigger signing bonuses, the study showed.

This reading covers the basic elements of bonds and introduces some of the analytical techniques used to understand and compare them. It assumes the reader is familiar with the concept of the time value of money (see HBP 8299). The reading provides an economic analysis of simple risk-free bonds, including both zero-coupon and coupon bonds, and extends to bonds with credit risk. The material covers the relationships between prices, yields and maturity and introduces the concept of duration. The reader is introduced to the yield curve and the term structure of interest rates. Selected advanced topics (floating rate bonds, forward rates, evaluating default risk) are included in the Supplemental Reading. The reading concludes with a brief discussion of how the formulas in the reading relate to pre-programmed Excel functions. The reading includes nine interactive illustrations: "Bond Terminology" is a term sheet excerpted from an Apple, Inc. prospectus which familiarizes the reader with bond terminology. "Calculating the Price of a Coupon Bond" calculates the price (present value) of a bond's cash flows, based on reader inputs for maturity, coupon and yield to maturity (YTM). "Inverse Relationship Between Bond Price and Yield to Maturity" demonstrates the inverse relationship between prices and yields. "Historical Yield Curves" is an animated display of the U.S. Treasury yield curve from 1962 to 2015. "Bond Duration" calculates the duration of a bond based upon inputs for maturity, coupon and YTM. "Bond Duration and Maturity" demonstrates the relationship between duration and maturity over a 50-year horizon. "Calculating Bond Duration" is an animated demonstration of how duration is calculated. "Bond Price Sensitivity to Changes in Interest Rate" demonstrates the sensitivity of bond duration to changes in interest rates and maturity.

In September 2014, a real estate and procurement expert was preparing his notes for an upcoming strategic meeting with the management team of the Regional Council of Lombardy (RCL), the governing body of one of the 20 regions in Italy. The RCL wanted to analyze the procurement process for two of its most important projects: the construction of Ospedale Papa Giovanni XXIII, a new cutting-edge, high-technology public hospital; and the construction of the hospital's surrounding parking area. During the construction of the hospital, a number of scope changes had been introduced and a major issue emerged. Construction had concluded at the end of 2012-€156 million over budget. The surrounding parking area was also subject to some issues, but with relatively minor economic and reputational impacts. Two years after the end of construction, the RCL was performing post-project reviews with the intent of improving future project procurement performance.

Student spreadsheet for case W16347.

Monique Oxender, chief sustainability officer for Keurig Green Mountain Coffee, is carefully considering the criticism the company has received regarding its plastic K-Cups that deliver a single serving of coffee to consumers through the Keurig brewing system. Billions of the difficult-to-recycle K-Cup pods are ending up in landfills. Keurig Green Mountain has pledged to produce 100% recyclable K-Cups by 2020, but how will it achieve this goal? Oxender must address the environmental impact and public scrutiny of the company's signature product. However, she must find a way to overcome the inconsistent and sometimes inadequate recycling infrastructure in Keurig's markets. Students join Oxender in finding the best, workable solutions.

As Angela Laramie compiled her thirteenth annual report on sharps injuries (SIs) among hospital workers for the Massachusetts Department of Public Health's Occupational Health Surveillance Program, she noted that the prevalence of injuries had remained at the same level for six years in a row. From 2002 through 2009, the SI rates had trended downward as hospitals implemented sharps injury prevention plans, but starting in 2009, the decline in rates and number of sharps injuries appeared to have stalled. Angela hoped to evaluate the reasons for the apparent lack of progress over the last few years, and to reassess the state's approach: were the data they had been collecting adequate to meaningfully capture the sources and incidence of SIs in Massachusetts hospital workers? Did it clearly indicate where interventions should be targeted? Were there other data that could help her better understand the flat trend line? What did the data tell her, and what more should she know?

The Spanish Riding School (SRS) was an icon of Austrian national identity, the oldest riding school in the world and the primary exponent of the art of classical dressage (a "ballet" with horses). In 2012, 447 years after its founding, the School confronted a serious threat: how to survive its so-called "privatization" by the Austrian government. Elisabeth Gürtler, recently reappointed to a five-year term as Managing Director needed to address three interrelated challenges: how to counter the critics of the SRS and its leadership and the avalanche of bad press they had generated, how to consolidate the significant organizational changes she had implemented during her first five years as Managing Director, and how to generate additional revenue so that the SRS would continue to breakeven financially - and in the long run, achieving financial sustainability for the SRS and preserving both its exalted status as the world's foremost institution of classical dressage and its responsibility to preserve and improve the breed of Lipizzaner horses. Since her appointment (on a 5-year contract) in December, 2007, Gürtler had acted quickly to implement a series of initiatives aimed at reducing costs, increasing revenue, and improving organizational capabilities. While these changes appeared to be successful at staunching the SRS's financial losses, they were not without cost. Internally, a number of experienced riders had strongly resisted the changes and had been subsequently dismissed; externally, critics had initiated a media campaign claiming that the quality of the SRS's performances had declined and been "debased" as a consequence of the changes. As Gürtler looks to her second term as Managing Director, students are asked to evaluate her organizational change efforts, and consider her strategic options going forward.

In April 2012, Karen Oldfield, President and Chief Executive Officer of Halifax Port Authority (HPA), was considering urgently needed action on the disposition of the financially troubled Halifax Seaport Farmers' Market (HSFM). One of 18 Canada Port Authorities, HPA's mandate was to "develop, market, and manage its assets in order to foster and promote trade and transportation." The organization exercised management authority over Halifax Harbour and 258 acres of adjacent federal land and HPA-owned facilities. Its lines of business encompassed cargo handling, cruise, and real estate operations. HPA had launched a Seaport Redevelopment Plan in 2005. An integral component of that plan was the establishment in 2010 of a six-day-a-week HSFM that would service the cruise trade and provide the local community with a gathering place. The market was operated by the City Market of Halifax Cooperative Ltd. (CMHC), which leased the property from HPA. By 2012, CMHC revenues were failing to support operating expenses and debt. Current obligations that totaled $732,436 were past due. A consultant concluded that the performance failure was due to a high debt load, governance and management problems, an unclear identity, construction flaws, and insufficient revenue on weekdays. It was clear that without intervention, HSFM would fail soon. Should HPA allow the market to fail and put the property up for lease? Should the organization continue providing financial and management support to the current tenant? Should it endeavor to find another organization to operate the market? Or should it commit to operating the market, even though HPA did not normally operate the facilities it governed?

Billy Cordasco, as President of Babbitt Ranches, was looking for alternatives to his current business model, where calves were born on the ranch, kept on the range for over a year, and then sold on the hoof at the market price. Interest in alternatives to the grain-fed beef offerings of supermarkets was growing. Health and sustainability issues had increased the popularity of grass-fed beef. Beef production and sales were generally low margin businesses, but if consumers were willing to pay a premium price for sustainable grass-fed beef, it might be possible for Babbitt Ranches to respond to the consumer need and increase the firm's bottom line at the same time. Because of Babbitt Ranches' financial resources, size, and reputation, numerous business model options existed. Billy needed to brainstorm which business models made sense for Babbitt Ranches. Presented with information necessary to understand the complex beef value chain, financial data on different value chain functions, and several options that were previously considered by Babbitt Ranches, Billy was able to both quantitatively and qualitatively the evaluate taking over one or more of the following functions: slaughter, hanging, processing, distribution, wholesale and/or retail sales. Under consideration was Babbitt Ranches' ability to acquire or develop the necessary resources for a new business model. Recognizing the opportunity presented by the increasing demand for grass-fed beef and the challenge of a complex beef value chain, Billy's goal was to limit the number of business model options to those that were feasible so he could put additional resources toward due diligence on a reasonable set of models.

Bayou Side Hospital (BSH) is a critical access hospital in rural Louisiana that has offered labor and delivery services to its community since its beginning. However, the viability of this department and the hospital could be threatened by the changing healthcare reimbursement structure brought about by the Affordable Care Act. The decision to discontinue obstetric services would impact BSH's bottom line, but it may also complicate the hospital's relationship with its community and compromise its mission statement. The case will give insight into the complex ethical nature of hospital decision making and the way in which community reciprocity affects rural organizations. The instructor's manual offers a quantitative financial analysis and a qualitative discussion and review of literature on mission statements and community embeddedness. Further, the instructor's manual provides learning objectives, student preparation questions, and an outline for class discussion of the case.

This case provides a fascinating true story that will engage students and provide them with a real life example of corporate law and governance in the context of a socially responsible company. Specifically, the case addresses minority shareholder rights, fiduciary duties of directors and controlling shareholders, ethical decision-making in the business context. The case useful for an advanced business law course and is positioned to discuss social entrepreneurship and options for directors and officers of social enterprises who want to focus on social and service missions without risking a breach of their fiduciary duties. The instructor's manual provides theoretical frameworks in the areas of corporate social responsibility, business ethics and principles of corporate law to guide the discussion of the case. The manual also provides additional multimedia teaching aids and updated information regarding expanded choices of entity currently available for social enterprises.

This case explores the nature of the relationship between Uber Technologies, Inc., and its driver-partners. Uber touted itself as a technology company that licensed an app to independent contractors acting as drivers. However, some Uber driver-partners were unhappy and their lawyers filed lawsuits seeking class action status. The driver-partners believed that Uber should have treated them as employees and should have given them benefits (e.g., workers' compensation and reimbursement for their expenses). They complained that Uber unfairly denied them gratuities. The case provides a brief history of Uber Technologies, its competitors, and the taxi and limousine industry, discusses the requirements for working as an Uber driver-partner, and delves into litigation related to Uber's labor practices. It raises substantial questions about how to classify workers (employee v. contractor) and how to develop human resource practices in the sharing economy.

Namal College, Mainwali - Pakistan, was the brainchild and dream project of Imran Khan-world-renowned cricketer, philanthropist, and one of the most popular politicians of Pakistan. Namal's case opens at a critical juncture in the fall of 2012 when the board meets to discuss the organization's impending challenges, vision, and future. On one hand, Namal's leadership saw commendable achievements in a very short span of time while on the other there were major logistic, financial, infrastructural, and human resource related challenges. In the midst of this, the VC began to openly disagree with Mr. Khan and the board's dreams and ambitions for Namal. This conflict in the perspective of the college's leadership began to instill despair and confusion in the minds of the faculty as well as the students. The question that many were asking was "Where is Namal heading towards?" Namal's vision that had served as the bind¬ing force throughout its history was now being questioned by some. There were rumors that the VC and some of the faculty members were thinking of resigning from the college. Mr. Dawood, the chairperson, felt that it had become extremely important to rethink and clarify Namal's vision for the next 10-20 years. He believed that a well-articulated shorter term vision would enable the Board to address the existing challenges and take the institution forward.

When Pure Storage did its IPO, in October 2015, the company was six years old and had completed six rounds of private funding. It could have gone public a year or so earlier, and the CEO realized that waiting entailed risks. In fact, the IPO market was cooling, and companies were pulling their offerings as a result. But staying private longer may have significant advantages as well. In retrospect, Dietzen believes that the timing worked out well for Pure. Among the factors that influenced the decision to wait: Sarbanes-Oxley has made it more expensive to be a public company; staying private would make it easier to fend off M&A interest; and the precedents set by Google and Facebook, which waited much longer than venture-backed companies have historically, drove a change in the conventional wisdom. Nevertheless, Pure's customers encouraged an IPO, because many of them preferred to do business with a public company, whose financials are available for scrutiny. In preparation for the offering, Pure gave employees flexibility with their stock options, expanded the board, and hired a strong CFO. Happily, in the months surrounding the IPO, two key competitors were distracted by internal events. Although the company's stock price has fluctuated, Dietzen says, today Pure is a fast-growing and healthy business.

The financial world set a record in 2015 for mergers and acquisitions. It's too soon to have data on how those deals will work out, but the signs are not promising. Last year Microsoft wrote off 96% of the value of the handset business it had acquired from Nokia in 2014 for $7.9 billion. The rule, confirmed by nearly all studies, remains true: M&A is a mug's game, in which some 70% to 90% of acquisitions are abysmal failures. The author has an explanation for this persistent failure and offers a way forward. Acquirers, he notes, tend to look at acquisitions as a way of obtaining value for themselves--access to a new market or capability. The trouble is, if you spot a valuable asset or capability in a company, others will too, and the value will be lost in a bidding war. But if you have something that will make the acquisition more competitive, the picture changes. As long as the acquired company is incapable of making that enhancement on its own or (ideally) with any other company, the buyer, rather than the seller, will earn the rewards. Martin describes four ways to enhance the competitiveness of a target: (1) Be a smarter provider of growth capital. (2) Provide better managerial oversight. (3) Transfer valuable skills to the acquisition. (4) Share valuable capabilities with the acquisition.

Companies today increasingly rely on teams that span many industries for radical innovation, especially to solve "wicked problems." So leaders have to understand how to promote collaboration when roles are uncertain, goals are shifting, expertise and organizational cultures are varied, and participants have clashing or even antagonistic perspectives. HBS professor Amy Edmondson has studied more than a dozen cross-industry innovation projects, among them the creation of a new city, a mango supply-chain transformation, and the design and construction of leading-edge buildings. She has identified the leadership practices that make successful cross-industry teams work: fostering an adaptable vision, promoting psychological safety, enabling knowledge sharing, and encouraging collaborative innovation. Though these practices are broadly familiar, their application within cross-industry teams calls for unique leadership approaches that combine flexibility, open-mindedness, humility, and fierce resolve.

Most leaders don't have the luxury of building their teams from scratch. Instead they're put in charge of an existing group, and they need guidance on the best way to take over and improve performance. Watkins, an expert on transitions, suggests a three-step approach: Assess. Act quickly to size up the personnel you've inherited, systematically gathering data from one-on-one chats, team meetings, and other sources. Reflect, too, on the business challenges you face, the kinds of people you want in various roles, and the degree to which they need to collaborate. Reshape. Adjust the makeup of the team by moving people to new positions, shifting their responsibilities, or replacing them. Make sure that everyone is aligned on goals and how to achieve them-you may need to change the team's stated direction. Consider also making changes in the way the team operates (reducing the frequency of meetings, for example, or creating new subteams). Then establish ground rules and processes to sustain desired behaviors, and revisit those periodically. Accelerate team development. Set your people up for some early wins. Initial successes will boost everyone's confidence and reinforce the value of your new operating model, thus paving the way for ongoing growth.

Over the years, as teams have grown more diverse, dispersed, digital, and dynamic, collaboration has become more complex. But though teams face new challenges, their success still depends on a core set of fundamentals. As J. Richard Hackman, who began researching teams in the 1970s, discovered, what matters most isn't the personalities or behavior of the team members; it's whether a team has a compelling direction, a strong structure, and a supportive context. In their own research, Haas and Mortensen have found that teams need those three "enabling conditions" now more than ever. But their work also revealed that today's teams are especially prone to two corrosive problems: "us versus them" thinking and incomplete information. Overcoming those pitfalls requires a new enabling condition: a shared mindset. This article details what team leaders should do to establish the four foundations for success. For instance, to promote a shared mindset, leaders should foster a common identity and common understanding among team members, with techniques such as "structured unstructured time." The authors also describe how to evaluate a team's effectiveness, providing an assessment leaders can take to see what's working and where there's room for improvement.

Too often, teams struggle to collaborate effectively because of destructive conflict within the group. While respectful differences of opinion can yield positive change, a perceived incompatibility between how different people think or act can have a serious impact on productivity and work culture. Based on team dynamics research as well as their personal experience working with executive teams, the authors propose a new approach for leaders to proactively address conflict in the workplace and lay the foundation for effective collaboration. Before tackling any specific work issue, they suggest that team leaders facilitate conversations about how people look, act, speak, think, and feel, in order to build a shared understanding of the process - rather than the content - of the team's work.