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Zia Yusuf at SAP: Having Impact
Zia Yusuf, a Pakistani graduate of Harvard Business School in 1998, joined SAP, a high technology software company, in 2000 after working first at Goldman Sachs. Although Yusuf had no technical background nor ever worked in sales, marketing, or software development, he moved up rapidly at SAP, bringing a great deal of business value to the organization. This case explores Yusuf's success in navigating the organizational dynamics of a very complex and large organization, tracing his career path at SAP and before. -
James Madison and "The Business of May Next" (B)
On May 30, 1787, the second day of the Convention held in the Pennsylvania State House, six states voted "aye" and one "nay" to the proposal to establish "a national Government ... consisting of a supreme Legislative, Executive and Judiciary." In that moment, delegates who had gathered merely to revise the Articles of Confederation agreed to abolish it. In that moment, James Madison earned the title of Father of the Constitution, although he had not even introduced the proposal. -
Developing Cooperative Project Client-Supplier Relationships: How Much to Expect from Relational Contracts?
In recent years, infrastructure promoters have become interested in translating the Toyota lean management paradigm into new infrastructure development projects. This approach assumes client and project suppliers are willing to work cooperatively. To enable this prerequisite, clients have started to experiment with relational contracts. An empirical study on the use of a relational contract in the £4.2bn extension of Heathrow airport in London confirms, however, the old adage that the devil is in the details. Unarguably, relational contracts enable the project client and suppliers to work together for a common purpose. However, the interwoven ways in which the client implements the contract-writing up the commercial details, as well as adjusting and interpreting these details throughout the project-are critical to encourage the suppliers to work cooperatively and meet the expectations of the client. This study unpacks five factors for making relational contracts work in projects: suppliers are keen to reap reputation benefits from project participation; suppliers have flexibility in their production processes; client and suppliers choose the right people for the jobs; client learns to relationally contract in response to supplier feedback; and client aligns its practices to control and improve performance with the suppliers' skills. -
Why Good Leaders Make Bad Decisions
Decision making lies at the heart of our personal and professional lives. Yet the daunting reality is that enormously important decisions made by intelligent, responsible people with the best information and intentions are nevertheless hopelessly flawed at times. In part, that's due to the way our brains work. Modern neuroscience teaches us that two hardwired processes in the brain - pattern recognition and emotional tagging - are critical to decision making. Both are normally reliable; indeed, they provide us with an evolutionary advantage. But in certain circumstances, either one can trip us up and skew our judgment. In this article, Campbell and Whitehead, directors at the Ashridge Strategic Management Centre, together with Finkelstein, of Dartmouth's Tuck School, describe the conditions that promote errors of judgment and explore how organizations can build safeguards against them into the decision-making process. In their analysis, the authors delineate three "red-flag conditions" that are responsible either for distorting emotional tagging or for encouraging people to see false patterns: conflicts of interest; attachments to people, places, or things; and the presence of misleading memories, which seem, but really are not, relevant and comparable to the current situation. Using a global chemical company as an example, the authors describe the steps leaders can take to counteract those biases: inject fresh experience or analysis, introduce further debate and more challenges to their thinking, and impose stronger governance. Rather than rely on the wisdom of experienced chairmen, the humility of CEOs, or the standard organizational checks and balances, the authors urge, everyone involved in important decisions should explicitly consider whether red flags exist and, if they do, lobby for appropriate safeguards. -
Stop Overdoing Your Strengths
Although most managers can recognize an off-kilter leader (consider the highly supportive boss who cuts people too much slack), it's quite difficult to see overkill in yourself. Unfortunately, that's where leadership development tools such as 360-degree surveys fail to deliver, say Kaplan and Kaiser. Dividing qualities into "strengths" and "weaknesses" and rating them on a five-point scale will not account for strengths overplayed. The authors suggest several strategies, based on their years of consulting experience and research, for figuring out which attributes you've employed to excess and adjusting your behavior accordingly. Strengths taken too far have two consequences: First, they become weaknesses. For instance, quick-wittedness can turn into impatience with others. Second, you're at risk of becoming extremely lopsided - that is, diminishing your capacity on the opposite pole. A leader who is very good at building consensus, for example, may take too long to move into action. To strike a balance between two key leadership dualities - forceful versus enabling, and strategic versus operational - you need to see your actions and motivations clearly. That's no easy task since most leadership development tools don't spell out that you're overdoing your strengths. But there are other ways to bring that information to light. You can start with a review of the highest ratings on your most recent 360 report. Ask yourself: Is this too much of a good thing? Another technique is to make a list of the traits you most want to have as a leader. Are you going to extremes with any of them? To check for lopsidedness, you can prompt feedback from other people with a list of qualities you've composed or one you've gleaned from other sources. Once you know which attributes you're overdoing, you can recalibrate. -
The Carlyle Group
This case describes the investment philosophy, organizational structure, management processes and culture of the largest private equity firm in the world measured in terms of assets under management ($89 billion). The Carlyle Group is distinctive in several ways, including its origins in Washington, D.C. and its early commitment to organizing the firm and its investment decision-making process along industry lines. The latter enables the firm to build deep knowledge and capabilities in particular sectors which makes it possible for it to identify investment opportunities that will not be apparent to others, such as in industries where the fundamentals do not look promising. Carlyle is also very geographically diverse with 33 offices around the world, giving it a higher overhead structure than some of its peers. Through the "One Carlyle" approach which emphasizes collaboration, information sharing and knowledge transfer across sectors and geographical locations, the firm seeks to leverage the vast array of capabilities it has built over time. It is attempting to improve on this through the use of information technology. The case describes the firm's foray into financial services, an industry largely neglected by PE firms due to the inability to use leverage to improve returns, and professional services, another largely-neglected sector because the primary asset is human capital. The case also describes how the firm had to learn to develop a different approach to PE investing in Asia. Looking forward, the firm faces huge challenges in delivering attractive returns to its investors given its size and the size of the PE industry as a whole. These challenges are compounded by the financial crisis happening at the time of the case and the prospects of a potentially severe economic recession, raising questions about the future prospects of the PE industry and its role in the capital markets. -
Solvay Group: International Mobility and Managing Expatriates
Marcel Lorent, head of International Mobility at Brussels-based Solvay Group, faces decisions on the expatriation status of four of his firm's talented executives. Each decision will impact the candidate's professional and personal life, and will have implications for effective management and growth in Solvay's global markets. The case explores these issues, with a close look at Solvay's attempts to develop talent management and mobility processes that allow the firm to align its strategic needs with the complexities of its individual employees' needs and lives. -
When Supply Is of Public Interest: Roche & Tamiflu
The case focuses on the challenges of Roche maintaining a supply network for a global influenza pandemic response initiative based on its antiviral drug Tamiflu. The Roche group is a 40 billion CHF company consisting of a pharmaceutical division and a diagnostic division. The company's antiviral drug Tamiflu dominates the market for prevention and treatment of seasonal influenza (flu). Tamiflu, however, could also play an important role in responding to the first wave of a pandemic caused by a particularly harmful strain of the influenza virus A. Tamiflu was designed to be effective against any strain of Type A or B influenza. Thus, there was the potential to establish a preparedness plan based on creating a stockpile of the drug in conjunction with an appropriate plan for distribution to the affected population. The use of Tamiflu in such a crisis would allow the world to respond immediately, rather than having to wait for development of a vaccine which had limitations in its effectiveness and the drug had been endorsed by the WHO as a first line of defense. The case focuses on the challenges of Roche maintaining a supply network for a global pandemic response initiative. Managing supply is particularly challenging for three reasons. First, demand for stockpile quantities is spiky and uncertain, and governments placing orders expect lead times to be short. Second, lead times for increasing capacity are long, as are lead times for drug production and encapsulation. Last, media coverage and press releases made by governments and other stakeholders increase the stakes, as negative media coverage may damage Roche's reputation with consumers, leading to lower sales levels for its products. -
Yoshiko Shinohara and Tempstaff
The case presents a biographical portrait of Yoshiko Shinohara who founded Tempstaff in 1973, one of the largest temporary staffing agencies in Japan. In addition to chronicling Shinohara's entrepreneurial activities, the case provides contextual background about the role of women in business in Japan in the last few decades of the 20th century. -
Building a Networked Organization: Restructuring the IT Department at MWH (A)
In this first in a series of cases on organizational network analysis (ONA), Vic Gulas, the new head of IT at the engineering consulting firm MWH Consulting, is charged with turning a geographically organized department into one organized by function. He knows that the success of the reorganization will depend on effective collaboration, but he cannot get a sense of what collaborative relationships do and do not exist by looking at a formal organizational chart. Instead, Gulas uses ONA, a method for mapping relationships among people in a group. In the ONA results, Gulas sees a group still fragmented by geography and constrained by hierarchy and other gaps in connectivity. After studying the highly detailed assessment of working relationships within the IT department, Gulas must decide in the A case what steps he can take to align the department's network with its business objectives. -
Building a Networked Organization: Restructuring the IT Department at MWH (B)
In this first in a series of cases on organizational network analysis (ONA), Vic Gulas, the new head of IT at the engineering consulting firm MWH Consulting, is charged with turning a geographically organized department into one organized by function. He knows that the success of the reorganization will depend on effective collaboration, but he cannot get a sense of what collaborative relationships do and do not exist by looking at a formal organizational chart. Instead, Gulas uses ONA, a method for mapping relationships among people in a group. In the ONA results, Gulas sees a group still fragmented by geography and constrained by hierarchy and other gaps in connectivity. The B case presents the network-building steps Gulas took on the basis of the ONA results and the results of a follow-up ONA Gulas conducted two years after the initial analysis. This second ONA revealed a network that was stronger and more appropriately connected in various ways. -
Cisco Systems (2001): Building and Sustaining a Customer-Centric Culture
Customer centricity has been an important part of the culture at Cisco Systems since its inception. While part of this is attributable to values put in place by the founders and retained by subsequent management, it is also closely interwoven with its organizational architecture that reaffirmed those values. Until 2001, Cisco had a decentralized organizational structure with three business units organized around each of its three main customer types: Service Provider, Enterprise, and Commercial. Each unit developed and marketed a complete product line for its specific customer group further reaffirming its belief in the centrality of distinct customers. A number of other systems, structures, and behavioral mechanisms reaffirmed the importance of customer centricity. The 2001 market downturn, however, brought new challenges as Cisco was forced to lay off 18% of its workforce and reexamine its organizational structure that was costly due to duplication of activities across each of the three customer-facing business units. Ultimately, Cisco Systems decided to transform the company from a decentralized to centralized organization. While recognizing that a centralized, functional structure was necessary to avoid product and resource redundancies, it also threatened Cisco's customer-centricity in that the centralization of R & D and marketing made them more distant from Cisco's customers. To overcome the perceived misalignment between its structure and culture, Cisco introduced a number of initiatives like the Customer Focus Initiative (CFI) to ensure that while the structure was turning away from customer centricity, the beliefs and actions of its employees maintained that focus. In doing so, management accepted the likely misalignment between its structure and culture and sought ways to compensate for this perceived gap. -
Cisco Business Councils (2007): Unifying a Functional Enterprise with an Internal Governance System
In response to the 2001 market downturn, Cisco Systems implemented a major restructuring that transformed the company from a decentralized to centralized organization. While recognizing that a centralized, functional structure was necessary to avoid product and resource redundancies, it also risked making the company less customer-centric. To mitigate this risk, Cisco implemented a cross-functional system of executive-level councils that would bring leaders of different functions together to collaborate and focus on the needs and issues of specific customer groups. Each council employs a "Three-in-a-Box" leadership model consisting of an executive leader from the engineering or technology business unit, a member of the go-to-market team, and an operations resource director. Each council is also accountable to the Operating Committee, which is chaired by CEO John Chambers and determines the long-term corporate strategy and allocation of corporate resources. Many other companies have failed at facilitating collaboration across functions-particularly large organizations-but Cisco's system has been successful because the company remained committed to the system, required a consistent infrastructure while also allowing for flexibility, gave members decision making authority, and used council leaders who thrive in collaborative environments. The success of the council system led to the creation of 20 boards of "sub-councils" in 2007. The boards are charged with driving development efforts and customer reach further into the organization by addressing specific issues too narrow for the councils to address. -
To Lead, Create a Shared Vision
What do followers want? A leader with a compelling vision of the future - which is not usually that leader's personal view. New research shows that followers respond to a leader who can articulate a vision that reflects their own aspirations. -
Start Networking Right Away (Even If You Hate It)
Whether you want to or not, you need to start networking within the first couple of months after a promotion, when people in the new organization are deciding whether you're dependable - or a loser who should never have been hired. -
Shareholder Value Must Top the CEO's Agenda
New CEOs, mindful that poor stock performance is the primary reason boards fire chief executives, might be tempted to boost stock price immediately by adding a few pennies to earnings per share. But that would be a mistake. From day one, the new leader must establish objectives and rules that promote long-term value creation. -
Picking the Right Insider for CEO Succession
GlaxoSmithKline's radical process for choosing the best CEO candidate shows the benefit of running parallel evaluations of the finalists. -
Lego CEO Jorgen Vig Knudstorp on leading through survival and growth
The first outsider to become CEO of Lego talks about the different approaches he's used to lead the 76-year-old, family-owned Danish toymaker onto a firm financial footing, then to reorient it toward growth, and now to open it to ideas and feedback from enthusiastic users. -
From Regional Star to Global Leader (HBR Case Study and Commentary)
Yang Jianguo was recently promoted from country manager for China to global head of product development at a staid French perfume maker. He was chosen for his technical smarts and his knowledge of emerging markets - a critical avenue for growth, given that sales in the company's core markets have stalled. Eager to succeed in his new role in Paris, Jianguo has lots of fresh ideas, but they seem to be falling on deaf ears. Members of the executive team, for their part, find Jianguo to be largely indifferent to their input. Can Jianguo adjust to this new culture? And can he succeed without sacrificing his identity? Three experts comment on this fictional case study in R0901A and R0901Z. Katherine Tsang, the CEO of Standard Chartered Bank in Shanghai, explains the cultural differences between China and France and recommends that Jianguo push his thinking beyond the Chinese market. She also suggests that the company give all its executive team members multicultural training so they have the tools to understand one another and work together effectively. Mansour Javidan, the dean of research and a professor at Thunderbird School of Global Management, acknowledges that Jianguo's transition would be easier if he had the full support of the CEO, Alain Deronde. But since that isn't forthcoming, he advises Jianguo to work with Alain to develop targets for growth in emerging and traditional markets and a plan for building an infrastructure to achieve those goals. James Champy, the chairman of consulting for Perot Systems, is surprised that a family business would choose an "outsider" for this important post, but he recognizes it as a wise strategic move. He says that Jianguo needs a coach and should focus on learning the home market first, before trying to make inroads further afield. -
Playing to the Back Row: A Conversation with Ringmaster Chuck Wagner
It's hard to imagine a leadership image more iconic than the ringmaster. Merely say the word, and a picture springs to mind of a tall, dashing captain presiding over, well, a circus - a world full of both chaos and opportunity for delight. It's the ringmaster's job to make sense of that environment, anticipate the unexpected, and direct the attention of an audience with as many as 20,000 people - a massive community of stakeholders - to make sure they get their money's worth. The circus has evolved over the decades to keep pace with market realities, and the right talents for its front man have changed as well. In P.T. Barnum's day, he was master of three rings, a structure designed to keep visitors from seeing the whole show in one sitting so they'd come back another day. If he wasn't outright owner of the circus, he was head trainer of its equestrian team, a graduate of the stable and, in earlier times, the cavalry. But Chuck Wagner, of Ringling Bros. and Barnum & Bailey's 138th Edition, is none of those things. He's part of a new breed of ringmaster - a musical-theater star who brings Broadway-style entertainment to the show. Now, the circus has only one ring, and the goal is to make sure audience members leave thoroughly wowed. In a world saturated with entertainment options, they won't come back the next day - but they will tell their friends to. In this conversation with Special Issues Editor Julia Kirby, Wagner talks about the challenges of being the man in the middle of the twenty-first-century circus - his relationship with the cast and the crew, his responsibilities to the modern audience, and how he balances tradition with progress to help Ringling Bros. and Barnum & Bailey's circus remain "the greatest show on earth."