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Greg Dyke Taking the Helm at the BBC (A)
This is a teaching case designed to illustrate the challenges facing a senior executive, in this case a CEO (Director-General), as he/she takes over a new role in a new organization. The BBC has major internal challenges around organization and culture, in addition to significant external market challenges as the media industry moves from analogue to digital technologies. The case is set on the day of Greg Dyke´s first speech to staff when he needs to set the agenda for his time as Director-General. Key discussion points are expected to be around: the priorities he sets for tackling the issues that face him, how he communicates his leadership style and the approaches for tackling an unhappy organization. -
Wawa: Building a New Business Within an Established Firm
Wawa, a $4 billion privately held firm, is arguably the most successful convenience store operator in the United States. Explores how senior management decided to build an entirely new gasoline retailing business within the 100+-year-old firm's core business of high-quality prepared foods and beverages. Charges students with defining the business and organization strategy necessary to "mainstream" the newly proven gasoline retailing concept throughout the company. -
Cancer Health Alliance of Metropolitan Chicago: Working Together to Achieve Mutual Goals
Describes how four independent, community-based nonmedical centers that offered professional services and programs to cancer patients on a voluntary non-fee basis in the 1990s came together to form the Cancer Health Alliance in 2003-2004 as a separate nonprofit to help achieve more of their mission and be more sustainable. -
Harilela Enterprises: An Indian Family Business in Hong Kong
A second-generation, multi-billion-dollar Asian family business, run for decades by six brothers, faces issues of ownership, family employment, management, leadership, governance, and succession as it transitions to the third generation of siblings and cousins. -
All the Wrong Moves (HBR Case Study and Commentary)
Nutrorim's products have been gaining national attention. In particular, sales of the company's organic, performance-enhancing sports supplement powder, ChargeUp, have gone through the roof. Now the new and improved version, called ChargeUp with Lipitrene, has recently hit the market, and expectations are high. CEO Don Rifkin has tried hard to build an inclusive, democratic culture at this successful company. But the organization's open decision-making process has proved problematic, especially during times of conflict and crisis--and a crisis there is. Several months after ChargeUp with Lipitrene is initially released, an investigator from the Minnesota state department of health calls Rifkin to report "11 cases of gastrointestinal distress" among those using the supplement. Nutrorim's top executives must now decide whether to recall the product. The head of R&D, Steve Ford, insists there is nothing wrong with the new ChargeUp, citing elaborate toxicity studies in animals and humans. Meanwhile, the heads of PR and legal want to stem any negative publicity by recalling the product and issuing a press release to that effect. The company decides to recall the supplement--but, two weeks later, the health department investigator calls back with good news: The people who had become ill, it turns out, had actually picked up a bug from their gym's smoothie bar. In other words, Nutrorim is exonerated. But the close call prompts Nutrorim to bring in a consultant to review the company's methods for making decisions. Among the many questions he's asking is, What's the right decision-making process for Nutrorim? Commenting on this fictional case study in R0601A and R0601Z are Christopher J. McCormick, the president and CEO of L.L.Bean; Hauke Moje, a partner at Roland Berger Strategy Consultants; Ralph Biggadike, a professor of professional practice at Columbia Business School; and Paul Domorski, the vice-president of service operations at Avaya. -
Brief History of Decision Making
Sometime around the middle of the past century, telephone executive Chester Barnard imported the term "decision making" from public administration into the business world. There it began to replace narrower terms, like "resource allocation" and "policy making," shifting the way managers thought about their role from continuous, Hamlet-like deliberation toward a crisp series of conclusions reached and actions taken. Yet, decision making is, of course, a broad and ancient human pursuit, dating back to a time when people sought guidance from the stars. From those earliest days, we have strived to invent better tools for the purpose, from the Hindu-Arabic systems for numbering and algebra to Aristotle's systematic empiricism to Friar Occam's advances in logic to Francis Bacon's inductive reasoning to Descartes' application of the scientific method. A growing sophistication with managing risk, along with a nuanced understanding of human behavior and advances in technology that support and mimic cognitive processes, has improved decision making in many situations. Even so, the history of decision-making strategies has not marched steadily toward perfect rationalism. Twentieth-century theorists showed that the costs of acquiring information lead executives to make do with only good-enough decisions. Worse, people decide against their own economic interests even when they know better. And in the absence of emotion, it's impossible to make any decisions at all. Erroneous framing, bounded awareness, excessive optimism: The debunking of Descartes' rational man threatens to swamp our confidence in our choices. Is it really surprising, then, that even as technology dramatically increases our access to information, Malcolm Gladwell extols the virtues of gut decisions made, literally, in the blink of an eye? -
Decisions and Desire
When we make decisions, we're not always in charge. One moment we hotheadedly let our emotions get the better of us; the next, we're paralyzed by uncertainty. Then we'll pull a brilliant decision out of thin air--and wonder how we did it. Though we may have no idea how decision making happens, neuroscientists peering deep into our brains are beginning to get the picture. What they're finding may not be what you want to hear, but it's worth listening. We have dog brains, basically, with human cortexes stuck on top. By watching the brain in action as it deliberates and decides, neuroscientists are finding that not a second goes by that our animal brains aren't conferring with our modern cortexes to influence their choices. Scientists have discovered, for example, that the "reward" circuits in the brain that activate in response to cocaine, chocolate, sex, and music also find pleasure in the mere anticipation of making money--or getting revenge. And the "aversion" circuits that react to the threat of physical pain also respond with disgust when we feel cheated by a partner. In this article, HBR Senior Editor Gardiner Morse describes the experiments that illuminate the aggressive participation of our emotion-driven animal brains in decision making. This research also shows that our emotional brains needn't always operate beneath our radar. Although our dog brains sometimes hijack our higher cognitive functions to drive bad, or at least illogical, decisions, they play an important part in rational decision making as well. The more we understand how we make decisions, the better we can manage them. -
Who Has the D? How Clear Decision Roles Enhance Organizational Performance
Decisions are the coin of the realm in business. But even in highly respected companies, decisions can get stuck inside the organization like loose change. As a result, the entire decision-making process can stall, usually at one of four bottlenecks: global vs. local, center vs. business unit, function vs. function, and inside vs. outside partners. Decision-making bottlenecks can occur whenever there is ambiguity or tension over who gets to decide what. For example, do marketers or product developers get to decide the features of a new product? Should a major capital investment depend on the approval of the business unit that will own it, or should headquarters make the final call? Which decisions can be delegated to an outsourcing partner, and which must be made internally? Bain consultants Paul Rogers and Marcia Blenko use an approach called RAPID (recommend, agree, perform, input, and decide) to help companies unclog their decision-making bottlenecks by explicitly defining roles and responsibilities. For example, British American Tobacco struck a new balance between global and local decision making to take advantage of the company's scale while maintaining its agility in local markets. At Wyeth Pharmaceuticals, a growth opportunity revealed the need to push more decisions down to the business units. And at the UK department-store chain John Lewis, buyers and sales staff clarified their decision roles to implement a new strategy for selling its salt and pepper mills. When revamping its decision-making process, a company must take some practical steps: Align decision roles with the most important sources of value, make sure that decisions are made by the right people at the right levels of the organization, and let the people who will live with the new process help design it. -
Evidence-Based Management
For the most part, managers looking to cure their organizational ills rely on obsolete knowledge they picked up in school, long-standing but never proven traditions, patterns gleaned from experience, methods they happen to be skilled in applying, and information from vendors. They could learn a thing or two from practitioners of evidence-based medicine, a movement that has taken the medical establishment by storm over the past decade. A growing number of physicians are eschewing the usual, flawed resources and are instead identifying, disseminating, and applying research that is soundly conducted and clinically relevant. It's time for managers to do the same. The challenge is, quite simply, to ground decisions in the latest and best knowledge of what actually works. In some ways, that's more difficult to do in business than in medicine. The evidence is weaker in business; almost anyone can (and many people do) claim to be a management expert; and a motley crew of sources--Shakespeare, Billy Graham, Jack Welch, Attila the Hun--are used to generate management advice. Still, it makes sense that when managers act on better logic and strong evidence, their companies will beat the competition. Like medicine, management is learned through practice and experience. Yet managers (like doctors) can practice their craft more effectively if they relentlessly seek new knowledge and insight, from both inside and outside their companies, so they can keep updating their assumptions, skills, and knowledge. -
Decisions Without Blinders
By the time Merck withdrew its pain relief drug Vioxx from the market in 2004, more than 100 million prescriptions had been filled in the United States alone. Yet researchers now estimate that Vioxx may have been associated with as many as 25,000 heart attacks and strokes. Evidence of the drug's risks was available as early as 2000, so why did so many doctors keep prescribing it? The answer, say the authors, involves the phenomenon of bounded awareness--when cognitive blinders prevent a person from seeing, seeking, using, or sharing highly relevant, easily accessible, and readily perceivable information during the decision-making process. Doctors prescribing Vioxx, for instance, more often than not received positive feedback from patients. So, despite having access to information about the risks, physicians may have been blinded to the actual extent of the risks. Bounded awareness can occur at three points in the decision-making process. First, executives may fail to see or seek out the important information needed to make a sound decision. Second, they may fail to use the information that they do see because they aren't aware of its relevance. Third, executives may fail to share information with others, thereby bounding the organization's awareness. Drawing on examples such as the Challenger disaster and Citibank's failures in Japan, this article examines what prevents executives from seeing what's right in front of them and offers advice on how to increase awareness. Of course, not every decision requires executives to consciously broaden their focus. Collecting too much information for every decision would waste time and other valuable resources. The key is being mindful. If executives think an error could generate almost irrecoverable damage, then they should insist on getting all the information they need to make a wise decision. -
Conquering a Culture of Indecision (HBR Classic)
The single greatest cause of corporate underperformance is the failure to execute. According to author Ram Charan, such failures usually result from misfires in personal interactions. And these faulty interactions rarely occur in isolation, Charan says in this article originally published in 2001. More often than not, they're typical of the way large and small decisions are made (or not made) throughout an organization. The inability to take decisive action is rooted in a company's culture. Leaders create this culture of indecisiveness, Charan says--and they can break it by doing three things: First, they must engender intellectual honesty in the connections between people. Second, they must see to it that the organization's social operating mechanisms--the meetings, reviews, and other situations through which people in the corporation transact business--have honest dialogue at their cores. And third, leaders must ensure that feedback and follow-through are used to reward high achievers, coach those who are struggling, and discourage those whose behaviors are blocking the organization's progress. By taking these three approaches and using every encounter as an opportunity to model open and honest dialogue, leaders can set the tone for an organization, moving it from paralysis to action. -
All the Wrong Moves (HBR Case Study)
Nutrorim's products have been gaining national attention. In particular, sales of the company's organic, performance-enhancing sports supplement powder, ChargeUp, have gone through the roof. Now the new and improved version, called ChargeUp with Lipitrene, has recently hit the market, and expectations are high. CEO Don Rifkin has tried hard to build an inclusive, democratic culture at this successful company. But the organization's open decision-making process has proved problematic, especially during times of conflict and crisis--and a crisis there is. Several months after ChargeUp with Lipitrene is initially released, an investigator from the Minnesota state department of health calls Rifkin to report "11 cases of gastrointestinal distress" among those using the supplement. Nutrorim's top executives must now decide whether to recall the product. The head of R&D, Steve Ford, insists there is nothing wrong with the new ChargeUp, citing elaborate toxicity studies in animals and humans. Meanwhile, the heads of PR and legal want to stem any negative publicity by recalling the product and issuing a press release to that effect. The company decides to recall the supplement--but, two weeks later, the health department investigator calls back with good news: The people who had become ill, it turns out, had actually picked up a bug from their gym's smoothie bar. In other words, Nutrorim is exonerated. But the close call prompts Nutrorim to bring in a consultant to review the company's methods for making decisions. Among the many questions he's asking is, What's the right decision-making process for Nutrorim? Commenting on this fictional case study in R0601A and R0601Z are Christopher J. McCormick, the president and CEO of L.L. Bean; Hauke Moje, a partner at Roland Berger Strategy Consultants; Ralph Biggadike, a professor of professional practice at Columbia Business School; and Paul Domorski, the vice-president of service operations at Avaya. -
All the Wrong Moves (Commentary for HBR Case Study)
Nutrorim's products have been gaining national attention. In particular, sales of the company's organic, performance-enhancing sports supplement powder, ChargeUp, have gone through the roof. Now the new and improved version, called ChargeUp with Lipitrene, has recently hit the market, and expectations are high. CEO Don Rifkin has tried hard to build an inclusive, democratic culture at this successful company. But the organization's open decision-making process has proved problematic, especially during times of conflict and crisis--and a crisis there is. Several months after ChargeUp with Lipitrene is initially released, an investigator from the Minnesota state department of health calls Rifkin to report "11 cases of gastrointestinal distress" among those using the supplement. Nutrorim's top executives must now decide whether to recall the product. The head of R&D, Steve Ford, insists there is nothing wrong with the new ChargeUp, citing elaborate toxicity studies in animals and humans. Meanwhile, the heads of PR and legal want to stem any negative publicity by recalling the product and issuing a press release to that effect. The company decides to recall the supplement--but, two weeks later, the health department investigator calls back with good news: The people who had become ill, it turns out, had actually picked up a bug from their gym's smoothie bar. In other words, Nutrorim is exonerated. But the close call prompts Nutrorim to bring in a consultant to review the company's methods for making decisions. Among the many questions he's asking is, What's the right decision-making process for Nutrorim? Commenting on this fictional case study in R0601A and R0601Z are Christopher J. McCormick, the president and CEO of L.L. Bean; Hauke Moje, a partner at Roland Berger Strategy Consultants; Ralph Biggadike, a professor of professional practice at Columbia Business School; and Paul Domorski, the vice-president of service operations at Avaya. -
General Electric's 20th Century CEOs
General Electric thrived in every decade of the 20th century. Since its founding in 1892, GE has placed a high value on picking and training the best people. Staff members worked with other scientists in the company's research lab to design and manufacture new and better products to satisfy the growing American consumer demand for lighting, appliances, and consumer electronics in the 1910s to 1920s as well as in the 1950s and 1960s. GE's top executives have shown a clear understanding of the leadership and managerial styles that were appropriate for the years in which they worked. In the first decade of the 20th century, Charles Coffin demonstrated that he was an adept negotiator who amassed great wealth for GE in building generators and power equipment for local utilities in which GE also had a financial stake through bond issues. In the final decades of the 20th century, Jack Welch emphasized that GE should support only the most profitable businesses in the company's portfolio, a logic that led Welch and GE to phase out GE's consumer electronics division while bolstering the financial position of GE capital. Profiles all of GE's top executives. -
Innovation and Collaboration at Merrill Lynch
In the spring of 2005, Candace Browning, head of Global Securities Research and Economics at Merrill Lynch, led about 500 Merrill Lynch analysts worldwide in a collaborative effort to produce innovative research, most of them accustomed to working independently in their own regions and areas of expertise. Less than five years earlier, research analysts had expressed little or no interest in group efforts. By 2005, many analysts who had been assigned to work on collaborative projects indicated increased learning and a willingness to work in teams again. Some analysts themselves chose to work together. Whereas Merrill had come a long way, some analysts remained skeptical. Managers also questioned whether all types of collaboration were worth the significant efforts required. Browning had to consider the issues involved, the feedback received, and the industry itself and devise a strategy moving forward. -
Walt Disney and the 1941 Animator's Strike
Focuses on the leadership lessons drawn from the events precipitating the Animator's Strike of 1941, depicting the growing pains of a company that was as much formed and changed by American culture as American culture was formed and changed by it. The tale of Walt Disney's roller-coaster journey from small-town paperboy to underage ambulance-driving serviceman to amateur animator and thrice-failed businessman to iconic leader is told against the backdrop of swift and seeping change in the beginning of the 20th century. An ambitious creative genius, he masterfully pursued emerging technological advantage and uniquely grasped and personified American social mores, but was reckless and naive about strategic business issues, especially concerning intellectual property and human resources management. A rewritten version of an earlier case. -
Christina Gold Leading Change at Western Union
The chief executive officer of Western Union had just begun implementing a new organization structure. Changing the structure sent a clear message about Gold's desire to change the company's mindset to a new more global one. Already the CEO was finding that leaders in the United States were reluctant to give up control of product lines. At the regional level, she had good leaders in place who wanted to push out the responsibility within their own regions and move toward a decentralized plan. Although the CEO supported this notion in principle, she wanted to ensure that the right leaders could be placed in decentralized offices to execute on the six strategic pillars that she had laid out for the organization. One thing was certain--the CEO had made it clear that no revenue decreases would be forgiven amidst the change. Many considerations had arisen: What pace of change should she take? How would she deal with resistance to change? How could she ensure that the new structure would support Western Union's global expansion? -
William Levitt, Levittown and the Creation of American Suburbia
Demand for low-cost housing after World War II far exceeded supply. Was this a profitable new market? New York developer William Levitt had to decide. During World War II, Levitt was eager to build basic housing for the working class--otherwise, Levitt & Sons would have been idle due to the federal government ban on all nonessential construction, like the luxury homes that Levitt & Sons typically built on Long Island, New York. Under a contract with the U.S. Navy, Levitt & Sons erected 2,000 homes in a year's time, an effort that gave Levitt & Sons the opportunity to perfect rapid home construction techniques. Levitt had to decide if he would apply those techniques to meet the post-war housing demand. Levitt & Sons had the manufacturing know-how. Would sizable profits follow? Levitt needed to understand the implications of the home improvement loans and mortgages the government guaranteed to returning servicemen as part of their veterans benefits. Levitt had the opportunity to parlay his own World War II experience as a Navy Seabee to market these homes by appealing to the sentiments of veterans like himself who were eager to return home and settle down after the fighting stopped. Levitt's decision would have profound social, economic, and political impact on the lives of returning veterans, their spouses, and their children--the Baby Boomers. -
C.W. Post
In 1906, C.W. Post had to move his latest breakfast product--corn flakes--from store shelves into cereal bowls nationwide. Post genuinely believed his corn flakes and other breakfast foods would make people well. Through sampling and other innovative sales and marketing techniques, Post convinced consumers and grocers to buy Postum and Grape-Nuts--which generated millions in profits for the Postum Cereal Co. But not Elijah's Manna--the brand name that Post put on his corn flakes boxes when his company introduced the product in 1904. Two years later, it was clearly not selling. To make matters worse, other cereal companies in the burgeoning Battle Creek area where Post's foods were manufactured were cornering the market, in particular, Kelloggs. How was Post going to convince consumers that his corn flakes were better than the rest? -
New Leadership at the Portland Public Schools
Introduces the concept and importance of coherence and the use of the Public Education Leadership Project coherence framework. Describes the challenges and opportunities facing Portland Public Schools Superintendent Vicki Phillips during her first seven months on the job.