More than a century ago the merchant John Wanamaker wryly complained, "Half the money I spend on advertising is wasted. The trouble is, I don't know which half." In this article the authors present a solution to Wanamaker's famous quandary. Drawing on a large database supplied by the World Advertising Research Centre to empirically identify what kinds of brand advertising are most effective-both for attracting new customers and for converting them into loyal repeaters-they show that the key to successful brand building is offering a memorable, valuable, and deliverable promise to the customer. What's more, a well-designed customer promise not only translates directly into sales but also provides an effective framework around which to organize a company's activities.

Most people believe that business competition takes place between companies: Boeing vs. Airbus; GM vs. Toyota; and Amazon vs. Google. But the author argues that there is a better way to think about competition: It happens at the front line more so than at head office. Customers choose between products and services that hold the potential to meet their needs; and they have a limited amount of concern for who brings that product or service to their front line-let alone the layers between the product on the shelf and where and by whom it is made. He discusses four outcomes that must be addressed in every business strategy today, including 'the layers you should drop' and 'the products and services you should add.' In the end he provides a strong argument for proactively structuring corporate strategy from the front line back.

In today's knowledge economy, employees with unique skills have a profound impact on organizations. It's crucial to keep them happy. Many managers believe that compensation is the key (as the eye-popping rewards paid to employees in the upper echelon show). But truly talented people aren't highly motivated by money. Feeling special is far more important to them. You must treat stars like valued individuals, not like members of a group, even an elite one. To do that, respect these three never-dos: Never dismiss their ideas. The Green Bay Packers learned this the hard way when they had a falling out with Aaron Rodgers because he wasn't given a voice in decisions affecting his ability to lead his team to victory. The videoconferencing provider Webex made this mistake too; it gave no traction to a proposal for a phone-friendly platform made by star exec Eric Yuan, who got frustrated and left to start megarival Zoom. Never block their development. Enabling stars to keep growing will win their loyalty. But if they feel their way forward has been barred, they'll take their skills to an organization they think will clear a path for them. Never pass up the chance to praise them. Extraordinary people spend all their time doing hard things. If they don't get recognition, they will drift away or become resentful.

The authors argue that the corporate world and the world that it serves are ready for the next evolution of corporate virtue: 'virtuous capital'. Annual budgets and sustainability reports provide some hints about a company's true character, they say, but there is something that is far more telling: capital commitments. They show how 'virtuous capital', as indicated on a balance sheet, speaks volumes as to a firm's long-range commitment to making the world a better place. They provide four avenues for leaders to focus on going forward, including risk reallocation, different forms of ownership and government incentives.

In an excerpt from his latest book, the author argues that the outsized success of a few outlier companies points to four steps that every business can take to contribute positively to the future of democratic capitalism: turn your back on reductionism; recognize that slack is not the enemy; guard against surrogation with multiple measurements; and realize that monopolization is not a sustainable goal. It won't be easy for executives to get started on this agenda, because it will mean unlearning ideas and beliefs that are deeply embedded. But as he shows, the unique results and competitive differentiation will be well worth the effort.

Why do large corporations sell off business units to PE firms that make a fortune by selling them a few years later? The author, a former Rotman School dean, argues that the answer is rooted in the way many corporations value their businesses and projects. Their basic mistake is to compare estimates of future cash flow with the amount of cash put into a business as a capital investment. Although this sounds perfectly reasonable (and largely follows conventional practices for measuring economic value added, or EVA, and its equivalents), it can anchor performance measurement in a historical number that very quickly loses its relevance. As Martin explains, once an investment has been made in an asset, the company's expectations about the value that investment will create are, in effect, publicized. Thus a company assessing the performance of its investment should base its measures not on the cash put in but on the current value of the asset or capability in question, which--and this is the critical point--includes the value that the market already believes the company will create or destroy with that asset or capability. Martin describes an approach that is grounded in market expectations about future value.

There's a secret about strategy that no one tells you: Every function has one, whether or not it is written down and whether or not it is the product of an official strategic-planning process. If functions do not adopt a strategy consciously, they almost inevitably end up defaulting to one of two unconscious models, both of which are likely to result in their becoming a drag on corporate performance rather than a driver of it. Most leaders acknowledge that companies and business units need strategies. But for corporate functions--shared services such as IT, HR, R&D, finance, and so on--the need for strategy is less widely understood. In many firms, functions just exist, serving the company in whatever manner and at whatever scale the business units demand. In this article, the authors describe the problems of the unconscious strategies and outline a strategy-making framework to help functions strengthen the capabilities that set their company apart.