You've been ordered to reduce overhead by 10%, 20%, or even (wince) 30%. How do you do it? First, don't expect to reach your target with a single big idea; you'll need a combination of 10 or more separate actions. Second, match the kinds of opportunities you examine and implement to the degree of cost-reduction required. To cut 10%, use an incremental approach-for instance, reduce spending on department management, hold down pay increases, and repropose previously rejected cost-saving ideas. To get to 20%, think in terms of redesign or reorganization. Strive to eliminate any work for which the cost exceeds the value. This will involve changes in process, mind-set, and how departments serve one another. Finally, to reach 30%, you'll need to broaden your perspective even more. For example, try coordinating parallel activities in the organization, doing away with low-value meetings and forums, and eliminating entire programs.

Understanding how competitors will respond to your actions should be a critical component of decision making. Few companies, however, incorporate such insights into their strategic decisions, in large part because most methods for obtaining them are complex and unreliable. The authors have drawn on their research and work with companies to develop an approach for predicting rivals' behavior that is both accurate and easy to apply. It involves considering just three questions: Will the competitor react at all? Few strategic planners consider the possibility that a rival may not respond to a company's competitive move. Yet 17% of the companies surveyed by the authors did not react to a rival's major initiative. Some competitors may not detect a company's move, while others may not feel threatened by it or may simply be unable to coordinate a timely response. What options will the competitor actively consider? Most companies seriously examine fewer than four response options, and it's likely that among them will be the most obvious, such as introducing a me-too product or matching a price change. To come up with a short list of options, companies will probably look at what they have done in similar situations. Which option will the competitor most likely choose? Your adversaries will choose the option that they consider to be most effective. It helps to know that in anticipating competitive behavior, most companies analyze only one round of moves and countermoves, and they evaluate their options using simple, short-term measures. The key is to get inside your rival's head and look at the situation from that perspective, not yours.

Companies often begin their search for great ideas either by encouraging wild, outside-the-box thinking or by conducting quantitative analysis of existing market and financial data and customer opinions. Those approaches can produce middling ideas at best, say Coyne, founder of an executive-counseling firm in Atlanta, and Clifford and Dye, strategy experts at McKinsey. The problem with the first method is that few people are very good at unstructured, abstract brainstorming. The problems with the second are that databases are usually compiled to describe current--not future--offerings, and customers rarely can tell you whether they need or want a product if they've never seen it. The secret to getting your organization to regularly generate lots of good ideas, and occasionally some great ones, is deceptively simple: First, create new boxes for people to think within so that they don't get lost in the cosmos and they have a basis for offering ideas and knowing whether they're making progress in the brainstorming session. Second, redesign ideation processes to remove obstacles that interfere with the flow of ideas--such as most people's aversion to speaking in groups larger than ten. This article offers a tested approach that poses concrete questions. For example, what do Rollerblades, Haagen-Dazs ice cream, and Spider-Man movies have in common? The answer: Each is something that adults loved as children and that was reproduced in an expensive form for grown-ups. Asking brainstorming participants to ponder how their childhood passions could be recast as adult offerings might generate some fabulous ideas for new products or services.

Almost 50% of the largest American firms will have a new CEO within the next four years; your company could very well be next. Senior executives know that a CEO transition means they're in for a round of firings, organizational reshuffles, and other unwelcome career changes. When your career suddenly depends on the views of a person you may not know, how worried should you be? According to the authors--very. They investigated the 2002-2004 CEO turnover rates of the top 1,000 U.S. companies and interviewed more than a dozen CEOs, each of whom had taken over at least one very large organization. Their study reveals that when a new CEO takes charge, remaining top managers are more likely than not to be shown the door. Those who leave often land in a lower position at a new company, work in a much smaller firm, or retire altogether. The news is not all grim, however. The interviewees offer some pointers on how to create a good impression and maximize your chances of survival and success under the new regime. Some of that advice may surprise you. One CEO pointed out, for instance, that "managers do not realize how much the CEO is looking for teammates on day one. I am amazed at how few people come through the door and say, 'I want to help. I may not be perfect, but I buy into your vision.'" Other recommendations are more intuitive, such as learning the new CEO's working style, understanding his or her agenda, and helping him or her look good in the new position by achieving positive operating results--and soon. Along with the inevitable stresses, the authors point out, CEO transitions can provide opportunities. Whether you reinvigorate your career within your company or find fulfillment elsewhere, the key lies in deciding what you want to do--and then doing it right.

Your company knows its investors pretty well, right? But do you know how they'll react to any particular strategic decision your company might make? Probably not. The consequences of not knowing can derail your strategy, leading you to miss out, for example, on acquisition opportunities. Authors Coyne and Witter claim that in most companies, the decisions of fewer than 100 investors typically account for about 70% of the changes in a company's share price. They also claim that a new approach to investor relations, drawing on the one used to manage customer relations, can help companies paint a more complete picture of their investors' behaviors and motivations. Investor-based finance first has you identify four groups of actual and potential key investors: large shareholders that suddenly become active, past shareholders that seem to be buying back in, smaller shareholders you think are poised to increase their holdings, and potential shareholders that own shares in comparable companies but not yours. By analyzing the patterns in the buying and selling behaviors of investors in those groups, you can ascertain which investors have the power to move your share price. Once you've determined who your key investors are, compare their horizon of analysis (long, medium, or short term) and the dominant content they analyze (information about organizational structure, strategy, or financials). In doing so, you'll come to understand what's most important to those investors, and you'll be able to predict how they'll likely react to different kinds of news and thus buy or sell shares in your company.

Kevin Coyne and Renee Dye, consultants at McKinsey, show how customers use networks in different ways and explain how companies can adjust their strategies according to the usage patterns in their networks. Managers of network-based businesses--defined here as those that move people, goods, or information from many points to many others--need to know the underlying economic framework of their network, because this can differ substantially from what works for traditional, stand-alone businesses. Managers have long assumed that customers valued all links in these networks equally. Intuitively, managers thought that many of their customers' needs were, in reality, narrower, but they had no way of knowing which links were most important. New computing power and robust mapping software now make it possible to understand network customers better. In applying this technology, the authors have uncovered three distinct usage patterns: one in which all links are, indeed, valued equally; another in which customers concentrate their use in particular zones; and a third in which customers value only individual links. Those managers who don't spot the patterns or understand their strategic implications will find themselves on the losing end of the network battle.