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Making high-stakes business decisions has always been hard. But in recent decades, it's become tougher than ever. The choices facing managers and the data requiring analysis have multiplied even as the time for analyzing them has shrunk. One simple decision-making tool, human intuition, seems to offer a reliable alternative to painstaking fact gathering and analysis. Encouraged by scientific research on intuition, top managers feel increasingly confident that, when faced with complicated choices, they can just trust their gut. The trust in intuition is understandable. But it's also dangerous. Intuition has its place in decision making--you should not ignore your instincts any more than you should ignore your conscience--but anyone who thinks that intuition is a substitute for reason is indulging in a romantic delusion. Detached from rigorous analysis, intuition is a fickle and undependable guide. And although some have argued that intuition becomes more valuable in highly complex and changeable environments, the opposite is actually true. The more options you have to evaluate, the more data you have to weigh, and the more unprecedented the challenges you face, the less you should rely on instinct and the more on reason and analysis. So how do you analyze more in less time? The answer may lie in technology. Powerful new decision-support tools can help executives quickly sort through vast numbers of alternatives and pick the best ones. When combined with the experience, insight, and analytical skills of a good management team, these tools offer companies a way to make consistently sound and rational choices even in the face of bewildering complexity--a capability that intuition will never match.

The case writers began taking notes on Thomas (Tom) Tierney's life experiences and the lessons that he has derived from them based on his presentations at several Harvard Business School MBA and executive education seminars during 2000 through 2002. This was followed by a series of interviews with Tierney. This case presents a compilation of Tom Tierney's reflections.

In 2002, Hewlett-Packard and Cisco Systems strove to develop their long-standing partnership into a strategic alliance with increasing impact. Critical components of successful alliance implementation emerge from the analysis. Specifically, the case illuminates the links among alliance strategy, formal design of alliance structure and processes, and informal management of interpersonal dynamics where trust, perceptions, and emotions can both create and overcome formidable obstacles to effective interfirm relationships.

This case provides a brief history of Boston Consulting Group (BCG) and the firm's approach to development and mentorship of its consultants. It also discusses the challenges facing three consultants who are nearing the two-year mark of working at BCG.

On November 16, 1996, Doug Crandall, second lieutenant and platoon leader of the Army's 1st Platoon, Delta Company, consisting of four tanks and 16 men, was tasked with establishing a mobile defense. Their mission was to block enemy scout vehicles' northward movement along the extensive trail networks of the Fort Polk woods in Louisiana. Upon receiving orders, the platoon had 18 hours to prepare their positions. Unfortunately, 30 minutes into the mission, the track on the crew's tank dislodged from the sprocket, requiring the crew to radio for maintenance. Sixteen hours later, the tank was repaired, but 100 meters into the woods, it sank into a bog. It was just past midnight. The temperature had dropped to 45 degrees. Amidst heated radio exchanges from his commander and angry interactions with the lead mechanic who had just spent 10 hours on replacing the tank's track, Crandall knew that the soldiers and the situation were his responsibility. He had to keep the people safe, maintain control, and figure out a way to get the platoon out of the bog and get into a defensive position in less than an hour.

From 1983 to 2001, British bank Lloyds TSB increased its market capitalization 40-fold, in part by shedding assets and narrowing its focus. But something else was at work: a CEO-led transformation of the company's culture. In this article, Sir Brian Pitman, chief executive and chairman of Lloyds during this period, describes how the company became an exemplar of what has come to be called value-based management. Pitman emphasizes that leading for value involves making difficult, even wrenching choices. To make these tough choices, you need to have a single definition of success and a single means of measuring it. At Lloyds, he replaced the existing array of implicit objectives with a single governing objective (generate greater value for shareholders) and established increasingly sophisticated internal metrics for achieving it. He found that this objective served to create value for everyone. Customer satisfaction levels rose, employees were better remunerated, and Lloyds contributed more to the communities in which it did business. Furthermore, getting people to concentrate on things that really create value for the company demands that a leader create an environment of inquiry and discovery.

When William Bratton was appointed police commissioner of New York City in 1994, turf wars over jurisdiction and funding were rife, promotion bore little relationship to performance, and crime was out of control. Yet in less than two years, and without an increase in his budget, Bratton turned New York into the safest large city in the nation. And the NYPD was only the latest of five law-enforcement agencies Bratton had turned around. In each case, he succeeded in record time despite limited resources, a demotivated staff, opposition from powerful vested interests, and an organization wedded to the status quo. Bratton's turnarounds demonstrate what the authors call "tipping point leadership." The theory of tipping points, which has its roots in epidemiology, hinges on the insight that in any organization, fundamental changes can occur quickly when the beliefs and energies of a critical mass of people create an epidemic movement toward an idea. Bratton begins by overcoming the cognitive hurdles that block companies from recognizing the need for radical change. He puts managers face-to-face with operational problems. Next, he manages around limitations on funds, manpower, or equipment by concentrating resources on the areas that are most in need of change and that have the biggest possible payoffs. He meanwhile solves the motivation problem by singling out key influencers--people with disproportionate power due to their connections or persuasive abilities. Finally, he closes off potentially fatal resistance from powerful opponents.

Most of us see the organizations we operate in--our schools or companies, for instance--as monolithic and predictable, subjecting us to deadening routines and demanding from us dehumanizing conformity. But companies are more unpredictable and more alive than we imagine, according to Karl Weick, a psychology professor at the University of Michigan and an expert on organizational behavior. Weick says executives can learn a lot about managing the unexpected from organizations that can't afford any surprises in the workplace--nuclear power plants, firefighting units, or hospital emergency rooms, for instance. In this edited conversation with HBR Senior Editor Diane Coutu, Weick examines the characteristics of these high-reliability organizations (HROs) and suggests ways that other organizations can implement their work practices and philosophies. The key difference between HROs and other companies is the mindfulness with which people in most HROs react to even very weak signs that some kind of change or danger is approaching. Weick contrasts this kind of watchful updating at HROs with Ford's inability to pick up on weak signs in the 1970s that there were potentially lethal problems with the design of the Pinto gas tank.

How can you plan for every crisis that might occur, even for ones you can't imagine? The authors' 20 years of research shows that three out of four Fortune 500 companies are prepared to handle only the types of calamities they've already suffered, and not even all of those. That's unfortunate because the research also shows that the crisis-prepared companies fare better financially, have stronger reputations, and ultimately stay in business longer than their crisis-prone counterparts. Crisis-prepared companies use a systematic approach to focus their efforts. In addition to planning for natural disasters like flood and fire, they divide man-made calamities into two sorts--accidental or "normal" ones, like the Exxon Valdez oil spill, and deliberate or "abnormal" ones, like product tampering. Then they take steps to broaden their thinking about such potential crises. They imagine themselves as terrorists, for instance, or consider threats that would be common in other industries. And they seek creative outside input from investigative journalists, lawyers, and even reformed criminals. But if they think broadly about possible threats, they think narrowly about implementation. Each year, smart companies focus their resources and attention on a few facilities picked at random. That reduces the probability of an attack on the entire organization even as it allows the business to migrate steadily to a higher level of crisis readiness.

This case provides a career retrospective as of 2003 on Goldman Sachs strategist Abby Joseph Cohen. It reviews Cohen's career path and progress through key decision points.

Examines knowledge sharing in business environments and cultures that are hostile to knowledge sharing, focusing on knowledge sharing as it relates to individual behavior. Looks at knowledge hoarding, apprehension about failures, and the Not-Invented-Here syndrome, drawing on the examples of six Russian companies, including three with western ownership. In knowledge-sharing hostile environments, it is inadequate to apply traditional means for managing knowledge-sharing processes. Instead of encouraging, stimulating, and aligning incentives, managers need initially to force knowledge sharing to transform their organizations into knowledge-embracing cultures. Outlines concrete guidelines for overcoming the barriers to knowledge sharing.

Supplements the (A) case.

Maple Leaf Foods is a leading global food processing company with operations in Canada, the United States, Europe, and Asia. The CEO and vice-president of Six Sigma (an approach and methodology for eliminating defects in any process) embarks on a revolutionary journey in this previously change-resistant multinational food business to upgrade the firm's leadership capabilities. The project was rolled out to three of the 10 independent operating companies, and he must analyze the launch to determine whether it is on track and what can be done differently or better.

Presents an overview of a method for diagnosing and developing an organization's capability to achieve its goals and implement its strategy, with exercises for application. A rewritten version of an earlier exercise.

Chrysler and Daimler-Benz shareholders approved the largest corporate merger in history. After months of talks, the chairman of the German-based Daimler-Benz management board and the chairman and CEO of the U.S.-based Chrysler Corp. were preparing for when the two companies would officially combine forces to create the fifth largest automobile company in the world. These two managers were officially charged with the responsibility of amalgamating two enterprises that were vastly different from each other. Chrysler was known for its efficient production and economically priced vehicles. Daimler-Benz sold only luxury vehicles, and its reputation was based on craftsmanship, quality, and safety. Chrysler executives were in the habit of limiting business expenses; Daimler-Benz executives were not. Between the two companies, there were huge discrepancies in cultures, market segments, product lines, salaries, and attitudes. Aware of the excitement of their investors and the concern of their critics, the two leaders are expected to forge and promote the vision on which Daimler-Chrysler will base its future.

When Bruce Chizen took over as president and CEO from Adobe's legendary founders in 2000, he knew he had to confront the skeptics who doubted he had the technological grounding to lead the company. In this interview, Chizen describes how he won converts by acknowledging his shortcomings and discusses the leadership lessons he learned along the way.

Think hard about the problems in your organization or about potential upheavals in the markets in which you operate. Could some of those problems--ones no one is attending to--turn into disasters? As Harvard Business School professors Michael Watkins and Max Bazerman illustrate in this timely article, most of the "unexpected" events that buffet companies should have been anticipated--they're "predictable surprises." Such disasters take many forms, from financial scandals to disruptions in operations, from organizational upheavals to product failures. The bad news is that all companies, including your own, are vulnerable to predictable surprises. The good news is that recent research helps explain why that's so and what companies can do to minimize their risk. The authors contend that organizations' inability to prepare for predictable surprises can be traced to three sets of vulnerabilities: psychological, organizational, and political. To address these vulnerabilities, the authors recommend the RPM approach. More than just the usual environmental scanning and contingency planning, RPM requires a chain of actions--recognizing, prioritizing, and mobilizing--that companies must meticulously adhere to. Failure to apply any one of these steps, the authors say, can leave an organization vulnerable.

The causes of many corporate governance problems lie well below the surface--specifically, in critical relationships that are not structured to support the players involved. In other words, the very foundation of the system is flawed. And unless we correct the structural problems, surface changes are unlikely to have a lasting impact. When shareholders, management, and the board of directors work together as a system, they provide a powerful set of checks and balances. But the relationship between shareholders and directors is fraught with weaknesses, undermining the entire system's equilibrium. As the authors explain, the exchange of information between these two players is poor. The authors suggest several ways to improve the relationship between shareholders and directors: Increase board accountability by recording individual directors' votes on key corporate resolutions, separate the positions of chairman and CEO, reinvigorate shareholders, and give boards funding to pay for outside experts who can provide perspective on crucial issues.

Hardly anyone has a good word to say about hierarchies. They routinely transform motivated and loyal employees into disaffected Dilberts. Yet, the intensity with which we struggle against hierarchies only serves to highlight their durability. In this article, organizational behavior expert Harold J. Leavitt presents neither a defense of human hierarchies nor another attack on them. Instead, he offers a reality check, a reminder that hierarchy remains the basic structure of most, if not all, large, ongoing human organizations. That's because although they are often depicted as being out of date, hierarchies have proved to be extraordinarily adaptive. Over the past 50 years, for example, they have co-opted the three major managerial movements--human relations, analytic management, and communities of practice. Hierarchies also persist because they deliver real practical and psychological value, and they fulfill our deep need for order and security. Despite the good they may do, however, hierarchies are inevitably authoritarian.

The CEO initiated a cultural change process at Prudential Financial to support a major business reorientation. Prudential, historically a privately held ("mutual") insurance company, went public in 2001. The cultural change was intended to prepare the organization to be a publicly traded financial services firm in which speaking up was encouraged at all levels of the organization.