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In the five years since Chancellor Joel Klein took over the New York public schools, the system has changed dramatically and produced remarkable gains in student learning. However, to achieve excellence over the long term, Klein and his team designed and implemented a sophisticated performance management system that includes both accountability and organizational learning mechanisms. Covers the design and early implementation of the various aspects of the system, as well as the attempts to shift the culture from a focus on effort to a focus on results.

Contends that viewing organizations through an accountability lens (in terms of source, focus, salience, and intensity) helps illuminate issues of governance and ethical dilemmas common to most individuals at work. Proposes that disconnects between aspects of accountability may pressure individuals to behave unethically and seek to rationalize their behaviors and suggests that accountability is not only an organizational requirement, but also a perceptual lens that can be used to observe and understand behavior in, and of, organizations. Demonstrates how to make better sense of functional and dysfunctional behavior in organizations by applying the accountability lens. A key component of this accountability lens is the notion of an accountability environment: those aspects of an individual's immediate work environment that directly affect the subjective interpretation and experience of felt accountability. The notion that individuals perceive and interpret their accountabilities subjectively is critical to understanding why multiple employees can behave differently (and sometimes unethically) under the same accountability conditions.

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Michael Fernandes, the Director of Custom Manufacturing Operations at the pharmaceutical company Nicholas Piramal India Limited (NPIL), schedules a meeting with three of his reports, whose interpersonal conflicts with one another are causing his business development function to falter. He struggles to know how to handle these conflicts and bring the three into a productive working collaboration. Fernandes is in charge of incorporating NPIL's new acquisitions in Canada and the United Kingdom to market NPIL globally. His three direct reports are each involved in different aspects of NPIL--the Canadian operations, the British operations, and the global business development, and the case explores the team dynamics among them. Unless Fernandes can resolve the conflicts, the integration of the acquisitions is in jeopardy.

In early 2006, it was apparent that PFM Devices was experiencing a significant downturn in consolidated earning among its three international divisions. To address this issue, the newly hired chief information officer was asked by the executive team to evaluate the two options of implementing a customer relationship management solution to improve revenue or a corporate data warehouse to cut costs. This case illustrates the importance of aligning information technology (IT) and business strategy and of the complex issues IT executives face in prioritizing IT investment alternatives.

CEOs tend to have a rosier view of senior management's performance than other top team members do, according to new research--and it looks like the former need a reality check. The authors offer three simple questions that can provide one.

When a CEO takes office, stakeholders dissect his or her intellectual, physical, and emotional capacities as they try to gauge whether the new leader will help them fulfill their aspirations and protect them from trouble. For the heir to a family business, the challenge of turning stakeholders into followers is particularly thorny: he or she must manage many constituencies--family members, directors, senior executives, investors, trade unions--that may not be convinced the successor has earned the right to hold the top spot. Making matters worse, says Lansberg, a family business expert, corporate scions usually ignore or greatly underestimate stakeholders. They don't realize that, particularly after they are formally anointed as CEOs, they must establish their credibility with and authority over these spheres of influence. Smart CEOs understand that their success depends on how well they respond to the iterative testing process that stakeholders use to make judgments about would-be leaders. This article offers a road map for managing the four kinds of tests that constitute iterative testing: Qualifying tests are assessments based on criteria--such as formal education, work experience, and professional awards--that executives can cite as evidence of suitability for the top job. Self-imposed tests are expectations that leaders themselves set and against which they assume stakeholders will measure their performance. Circumstantial tests are unplanned challenges or crises, during which stakeholders can observe the leader coping with the unexpected. And political tests are challenges from rivals who want to enhance their own influence, often by undermining the leader.

The customer care team lead at Hospital Software Solutions was becoming increasingly distressed in her workplace. Her supervisors were not managing her or the department effectively; her responsibilities did not align with her job description; she was being blamed for computer system failures; and she felt she was being viewed as the office slacker. The case provides for the application of theoretical concepts surrounding leadership, power/influence, motivation, corporate culture and conflict. The supplement case, Hospital Software Solutions (B), product # 907C19, follows the events after the customer care team lead attends a town hall meeting to air her concerns about computer systems problems.

The customer care team lead (team lead) decides to attend a town hall meeting with the company's president and publicly air her concerns about computer system problems. This action appears to help resolve the system's problems but her supervisor rates her poorly on a performance review, possibly motivated by the team leader's actions at the town hall meeting. She must find a way to resolve her issues at Hospital Software Solutions without ruining her career. This is a supplement case to Hospital Software Solutions (A), product # 907C18.

In October 2005 Andrea Jung is coping with a 30% decline in Avon's stock price--the biggest test of her leadership since she became CEO in 2000.

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Within the past few years, executives have come under increased scrutiny and criticism for the levels of compensation they receive. At the same time, corporate practices surrounding the design and review of executive compensation programs have received increased attention. While some recent executive misconduct has involved violations of the law, many academics and other corporate critics view the issues involving executive compensation more from an ethical than a legal perspective. Several dimensions of the executive compensation decision process offer significant opportunities for ethical choices. Identifies the major components of executive compensation and highlights decision points in the design and administration of each component where ethical issues may arise. Proposals to reduce the potential for ethical misconduct are also offered.

Conventional wisdom assumes that trust develops from a history of interpersonal interactions and communication, through which people come to 'know and trust' one another. In virtual teams, however, establishing trust can be complicated: members may have no past on which to build, no future to reference, and may never even actually meet face-to-face. Swift but fragile trust can develop early in a team's life cycle. Yet, if swift trust doesn't develop or even dissipates, members need to find ways of building trust in each other. To this end, an understanding of how trust impacts a virtual team's development will help managers and team leaders to facilitate and improve team success. Describes the three components of trust (ability, integrity, and benevolence) and identifies which of these are critical to each life cycle stage (establishing the team, inception, organizing, transition, and accomplishing the task) of the virtual team. Proposed action steps for each stage show managers and team leaders how to help members develop trust and sustain it through the project's successful completion.

Four times more CEOs are being fired today than in 1995, a Booz Allen Hamilton study finds. That's good news. It's not that CEOs are being pressured to think more in the short term; it's that boards are finally clearing away the dead wood.

A study of 2,859 firms shows that companies unwisely cutting costs to artificially improve performance are fooling no one for long. Their stock rises sharply right afterward but falls precipitously in the next few years, as poor management comes home to roost.

The oldest family-run business in the U.S., the Zildjian Company has been making cymbals, first in Turkey and then in America, since 1623. As a 14th-generation leader of the company, Craigie Zildjian sees innovation in collaboration with customers as her best path to continued success.

When they cut R&D, underinvest in their brands, and--worse--cut worker and middle management ranks, leaders are merely punishing their employees (and stockholders) for their own inability to create real value, says this McGill University professor. Productivity improvements come from better management or applying new technologies, not from making fewer people do more work.

Last December the Toyota Motor Corporation officially forecast that it would sell 9.34 million cars in 2007--which could make it the world's largest automaker. However, rapid growth and globalization have created many pressures for the company, and the strain of success is already beginning to show. Two HBR editors interviewed Toyota's president, Katsuaki Watanabe, and several top executives to learn about the strategies they're developing to cope in the future. For well over a decade, J.D. Power and other research firms have consistently rated Toyotas among the top automobiles for quality, reliability, and durability. But in 2006 a series of problems with its cars threatened to sully the company's reputation. What's more, speedy expansion to meet demand and the struggle to keep pace with technological change have combined to challenge Toyota's grand ambitions and its famed "Toyota Way." For Watanabe, being number one means "being the best in the world in terms of quality." If Toyota's quality continues to improve, he says, volume and revenues will follow. If problems arise from overstretching, he wants them made visible, because then his people will "rack their brains" to solve them--and if that means postponing growth, so be it. Toyota's long-term strategy involves developing both global and regional car models in order to compete worldwide with a full line of products. Watanabe aims to achieve his goals through a combination of kaizen ("continuous improvement") and kakushin ("radical innovation"). One of his visions for the future is a "dream car": a vehicle that cleans the air, prevents accidents, promotes health, evokes excitement, and can drive around the world on a single tank of gas.

How do some firms produce a pipeline of consistently excellent managers? Instead of concentrating merely on strengthening the skills of individuals, these companies focus on building a broad organizational leadership capability. It's what Ulrich and Smallwood--co-founders of the RBL Group, a leadership development consultancy--call a leadership brand. Organizations with leadership brands take an "outside-in" approach to executive development. They begin with a clear statement of what they want to be known for by customers and then link it with a required set of management skills. The Lexus division of Toyota, for instance, translates its tagline--"The pursuit of perfection"--into an expectation that its leaders excel at managing quality processes. The slogan of Bon Secours Health System is "Good help to those in need." It demands that its managers balance business skills with compassion and caring. The outside-in approach helps firms build a reputation for high-quality leaders whom customers trust to deliver on the company's promises. In examining 150 companies with strong leadership capabilities, the authors found that the organizations follow five strategies. First, make sure managers master the basics of leadership--for example, setting strategy and grooming talent. Second, ensure that leaders internalize customers' high expectations. Third, incorporate customer feedback into evaluations of executives. Fourth, invest in programs that help managers hone the right skills by tapping customers to participate in such programs. Finally, track the success of efforts to build leadership bench strength over the long term. The result is outstanding management that persists even when individual executives leave. In fact, companies with the strongest leadership brands often become "leader feeders"--firms that regularly graduate leaders who go on to head other companies.