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In today's business world, there's no shortage of know-how. When companies get into trouble, their executives have vast resources at their disposal: their own experiences, colleagues' ideas, reams of computer-generated data, thousands of publications, and consultants armed with the latest managerial concepts and tools. But all too often, even with all that knowledge floating around, companies are plagued with an inertia that comes from knowing too much and doing too little--a phenomenon the authors call the knowing-doing gap. The gap often can be traced to a basic human propensity: the willingness to let talk substitute for action. When confronted with a problem, people act as though discussing it, formulating decisions, and hashing out plans for action are the same as actually fixing it. And after researching organizations of all shapes and sizes, the authors concluded that a particular kind of talk is an especially insidious inhibitor of action: "smart talk." People who can engage in such talk generally sound confident and articulate; they can spout facts and may even have interesting ideas. But such people often exhibit the less benign aspects of smart talk as well: They focus on the negative, and they favor unnecessarily complex or abstract language. The former lapses into criticism for criticism's sake; the latter confuses people. Both tendencies can stop action in its tracks. How can you shut the smart-talk trap and close the knowing-doing gap? The authors lay out five methods that successful companies employ in order to translate the right kind of talk into intelligent action.

The CEO of Northern Napa Valley Winery must forecast aggregate sales of red table wine for the product year, as well as month-by-month sales for the same period. This case provides the student with the opportunity to try to forecast a time series characterized by distinct trend and seasonality with almost nine years of monthly data available. (A Microsoft Excel data file is available for use with this case, product 7A98E046.)

GE is faced with Jack Welch's impending retirement and whether anyone can sustain the blistering pace of change and growth characteristic of the Welch era. After briefly describing GE's heritage and Welch's transformation of the company's business portfolio of the 1980s, the case chronicles Welch's revitalization initiatives through the late 1980s and 1990s. It focuses on six of Welch's major change programs: The "Software" Initiatives, Globalization, Redefining Leadership, Stretch Objectives, Service Business Development, and Six Sigma Quality.

Spreadsheet supplement for case 399-150.

In March 1997, an executive vice president of Genzyme Corporation must develop the terms by which the $518 billion (revenue) firm will form a joint venture with a small biotechnology firm to make and market a new drug. The tasks for the decision-maker are to estimate the enterprise value of the new joint venture and to recommend how large an interest to acquire in the venture, and to determine what price to pay for that interest, and when. The case may be used to pursue some or all of the following objectives: (1) exercising analytical techniques, (2) introducing a framework for creating value and reducing risk, (3) exploring the impact on value of a hidden option (staged investing), and (4) visualizing risk and its implications.

The senior vice president of the Robert Mondavi Corp. (one of the world's leading producers of premium wine) and head of Mondavi's Chilean joint venture, faces a series of quality problems with the Caliterra brand. At the same time, he has the unprecedented task of building a state of the art winery in Chile in less than 10 months or losing the entire harvest. The case traces the process of entering into a joint venture with Vina Errazuriz, a much smaller, but well respected, Chilean company, and presents the cross-cultural communication challenges faced by the joint venture partners. Communication and trust are central issues in the case.

Al Dunlap was one of the best-known corporate turnaround artists of the 1990s. In 1996, he was hired at Sunbeam to effect a restructuring, but was fired almost two years later when the company's financial performance and stock price began to decline. Many of the controversies that had surrounded him at his previous job, Scott Paper, followed him to Sunbeam: his rejection of the multiple stakeholder view of corporate governance, his aggressive managerial style, his shaky relations with the media, and his high level of pay. The case describes Dunlap's compensation package at Sunbeam and addresses the issue of how U.S. companies compensate "superstar" CEO's.

Based on a multi-year field study of internal ventures in several established firms, this article highlights the central dilemmas that confront innovation from concept to commercialization. The chief difficulties in generating innovation arise from five key dilemmas encountered in locating, seizing, and then methodically navigating creative sparks through the maze and haze of large organizations. To systematically address these dilemmas, firms must endeavor to integrate their entire innovation effort. Three overarching themes are useful for understanding how to holistically manage the dilemmas of innovation in large firms: Strategic Envelope, Strategic Pacing, and Strategic Partnerships.

DuPont had spent six years helping licensee manufacturers to develop the domestic market for non-stick cookware. While DuPont Teflon brand coating held 80 per cent of the non-stick market, the non-stick market overall represented 2 per cent of the domestic cookware market. Moreover, the amount of money spent on developing the non-stick market exceeded the revenue that DuPont received in the Chinese market. If DuPont decided to take a different role in the market, it faced many obstacles that required significant additional investment. It appeared that the domestic market offered tremendous opportunity, but it would require new efforts, skills, distribution channels and patience. The case examines the issues around leadership and product development that DuPont considered in their decision to go from licensing the manufacture of non-stick coating technology in China, to introducing a wholly owned brand of non-stick cookware.

Through acquisitions and innovative management, Moscow Joint Stock Commercial Bank Vozrozhdeniye (V.Bank), had grown to be one of the largest banks in Russia. In a market with many competitors of varying strength and reliability in an unstable business environment, V.Bank was attempting to become a true commercial bank, fashioned after the operations of western banks. The Canadian Imperial Bank of Commerce had undertaken a World Bank contract to assist V.Bank in this process. However, in October 1998, as the Russian economy grew worse, management of V.Bank wondered if it would be able to survive the crisis, let alone continue towards its goal of transforming its operations into those that were competitive with the western banks. This case is appropriate for courses where the goal is to provide students with the ability to understand and forecast broad economic forces and incorporate this information into a decision-making process. The student is forced to make strategic decisions in a situation of uncertainty and instability, and in crisis mode, in an emerging market. Issues that need to be resolved include privatization, economic and monetary policy, IMF and World Bank intervention, societal stability, and government regulation.

Presents a model or theory about the competence or capability of organizations. Written to help managers be more precise about what the capabilities and disabilities of an organization are, and to be able to put their finger precisely on the place in the organization where capabilities and disabilities reside.

Dr. Hans Fritz is 37 years old when he arrives in Bangkok on March 1, 1998 to assume his position as general manager of Novartis Thailand. Novartis is the world's largest pharmaceutical company. He had lobbied to transition from a staff position to this line management assignment. He encounters an organization in chaos, a demoralized staff, and a market in crisis. The case describes his first month in this new position. His most important task at this stage is to set priorities when everything needs to be done at once. He has to decide whom to trust on his team and what to do in the short, medium, and long term.

Supplements the (A) case.

Student spreadsheet for case UV0086.

In the global economy, having a workforce that is fluent in the ways of the world is a competitive necessity. That's why more and more companies are sending more and more professionals abroad. But international assignments don't come cheap: on average, expatriates cost a company two to three times what they would cost in equivalent positions back home. Most companies, however, get anemic returns on their expat investments. The authors discovered that an alarming number of assignments fail in one way or another--some expats return home early, others finish but don't perform as well as expected, and many leave their companies within a year of repatriation. To find out why, the authors recently focused on the small number of companies that manage their expats successfully. They found that all those companies follow three general practices: 1) When they send people abroad, the goal is not just to put out fires. Once expats have doused the flames, they are expected to generate new knowledge for the organization or to acquire skills that will help them become leaders. 2) They assign overseas posts to people whose technical skills are matched or exceeded by their cross-cultural skills. 3) They recognize that repatriation is a time of upheaval for most expats, and they use a variety of programs to help their people readjust. Companies that follow these practices share a conviction that sustained growth rests on the shoulders of individuals with international experience. As a result, they are poised to capture tomorrow's global market opportunities by making their investments in international assignments successful today.

In today's competitive markets, every company has an action plan. Yet for most managers, the processes used to create these plans don't work. The root of the problem, suggests Campbell, may be that too many companies benchmark their processes and by doing so, prevent managers from focusing on what is unique to their situation. Good planning processes, the author argues, are not generic processes but ones in which both analytic techniques and organizational processes are carefully tailored to the needs of individual businesses and to the skills of corporate managers. The author cites examples of three companies that have successfully individualized their processes: Granada, Dow Chemical Company, and Emerson Electric. A mature electrical-products business such as Emerson, he says, has different planning needs than a fast-growing entertainment business like Granada or a highly cyclical chemicals business like Dow. Different chief executives may have different insights about how to go about adding value. Take the CEOs of Granada and Dow. Both set tough targets to stretch their businesses, but the way each CEO gets his managers to commit to his targets differs considerably. Bad planning can actively destroy value, the author says. It wastes people's time and money. It sends the wrong signals to managers. It can even lead managers to follow bad advice. That's why managers should go to the effort of reexamining and possibly changing their company's planning process.

The rise of the computer and the increasing importance of intellectual assets have compelled executives to examine the knowledge underlying their businesses and how it is used. Because knowledge management as a conscious practice is so young, however, executives have lacked models to use as guides. To help fill that gap, the authors recently studied knowledge management practices at management consulting firms, health care providers, and computer manufacturers. They found two very different knowledge management strategies in place. In companies that sell relatively standardized products that fill common needs, knowledge is carefully codified and stored in databases, where it can be accessed and used--over and over again--by anyone in the organization. The authors call this the codification strategy. In companies that provide highly customized solutions to unique problems, knowledge is shared mainly through person-to-person contacts; the chief purpose of computers is to help people communicate. They call this the personalization strategy. A company's choice of knowledge management strategy is not arbitrary--it must be driven by the company's competitive strategy. Emphasizing the wrong approach or trying to pursue both can quickly undermine a business. The authors warn that knowledge management should not be isolated in a functional department like HR or IT. They emphasize that the benefits are greatest--to both the company and its customers--when a CEO and other general managers actively choose one of the approaches as a primary strategy.

The theory of complexity, which began as a way to understand complicated natural phenomena, has attracted growing attention in business circles interested in the new economy. In Open Boundaries, Howard Sherman and Ron Schultz of the Santa Fe Center for Emerging Strategies see many parallels between complex natural systems and markets. Both involve so many intricate interactions that outcomes cannot be predicted. The authors advise managers to stop trying to plan and prepare for change and instead build companies into self-organizing teams ready to adapt to whatever opportunities emerge. Thomas Hout of the Boston Consulting Group finds much that is useful in complexity theory, particularly for turbulent industries. But there are limits to the pursuit of flexibility and self-organization, he argues. Flexible, information-driven companies may be too quick to jump at superficially attractive market opportunities that their seasoned rivals wisely shun. And teams, for all their virtues, can't entirely manage themselves. The combination of fast-growing entrepreneurial companies and smart, mobile, ambitious workers creates a workplace that may actually be more fragile than its industrial predecessors. Solutions to workplace problems are more likely to come from good managers than from the teams themselves. Hout also points out that most businesses do not move so fast that foresight, commitment, preemption, deterrence, and other traditional strategic elements no longer build business value. Even in the fastest industries, good managers can still add value by creating the right working conditions to spur creativity. In other words, management still matters a lot, Hout says, even in the new economy.

A gap has existed between the conventional wisdom about how managers work and the actual behavior of effective managers. Business textbooks suggest that managers operate best when they carefully control their time and work within highly structured environments, but observations of real managers indicate that those who spend their days that way may be undermining their effectiveness. In this HBR Classic, John Kotter explains that managers who limit their interactions to orderly, focused meetings actually shut themselves off from vital information and relationships. He shows how seemingly wasteful activities like chatting in hallways and having impromptu meetings are, in fact, quite efficient. General managers face two fundamental challenges: figuring out what to do despite an enormous amount of potentially relevant information, and getting things done through a large and diverse set of people despite having little direct control over most of them. To tackle these challenges, effective general managers develop flexible agendas and broad networks of relationships. Their agendas enable them to react opportunistically to the flow of events around them because a common framework guides their decisions about where and when to intervene. And their networks allow them to have quick and pointed conversations that give the general managers influence well beyond their formal chain of command. Originally published in 1982, the article's ideas about time management are all the more useful for today's hard-pressed executives. Kotter has added a retrospective commentary highlighting the article's relevance to current concepts of leadership.

In order to secure demand for its heavy oil, PDVSA buys 50% of the U.S. refining and retail company Citgo. In 1990, it buys the remaining 50% ownership of Citgo. The case describes the challenges faced by PDVSA and Citgo managements as they try to make their relationship work effectively.