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What's wrong with executive compensation, and what can we do about it? HBR and the University of Delaware's Center for Corporate Governance convened a roundtable of compensation experts last October on the university's campus in Newark, Delaware. The 12 panelists, from CEOs to investors, from the professionals who advise them to a chief justice who rules on their disputes, provided an extraordinary diversity of viewpoints. The panelists began by debating ways to align the interests of the senior executives with the long-term interests of the company. But the discussion expanded to cover broader questions of corporate governance and company values. It was a lively and wide-ranging discussion of one of business's most pressing issues.

What has long been recognized by teachers, physicians, and behavioral scientists holds true for management: One person's expectations shape another person's behavior. If a manager has high expectations, employees are likely to excel; if expectations are low, employees will likely respond with poor performance. In this HBR classic article from 1969, J. Sterling Livingston draws on numerous case studies and other research to demonstrate the importance of managerial expectations to individual and group performance. Consider the insurance executive who identified his six best agents and assigned them to his most capable manager. Not surprisingly, this group surpassed its already ambitious target. Equally unsurprising was what happened to a group of low producers assigned to the company's least capable manager. Their performance declined even further. But what happened to the group of average agents assigned to an average manager? That group increased its productivity by a higher percentage than the top group, because the manager refused to consider herself--or her agents--less capable than the superstars. And managers' beliefs about themselves influence how they view and treat their employees.

In this 1970 classic HBR article, Harry Levinson shares practical insights into the mysteries of motivation and takes a fresh look at the use and abuse of the most powerful tools for inspiring and guiding complex organizations. He argues that to motivate people successfully, management must focus on the question, "How do we meet both individual and organizational requirements?" When we make assumptions about individual motivations and increase pressure based on them, we ignore the fact that people work to meet their own psychological needs. Commitment must derive from the individual's wishes to support the organization's goals. Yet, the individual's desires are entirely absent from most performance measurement systems; managers assume that these desires are perfectly aligned with corporate goals and that if they're not, the individual should move on. Self-motivation occurs when individual needs and organizational requirements converge. Successful management systems begin with the employee's objectives. The manager's task is to understand the employee's needs and then, with the employee, assess how well the organization can meet them.

Nowadays, with organizations growing ever flatter and responsibility being pushed further down the ranks, admitting to a desire for power is a little out of fashion. But as the research in this 1976 classic HBR article shows, power is essential to good management. In fact, when it comes to managing big companies, the desire for power--that is, a manager's desire to have an impact, to be strong and influential--is more important than the need to get things done or the wish to be liked. The need to achieve, while important in small companies, actually becomes counterproductive in large, complex organizations, leading managers to try to do things themselves rather than spread tasks among many people. And managers who need to be liked tend to make exceptions for particular subordinates' needs, undermining morale. But seeking power is not the same as seeking glory. People who want power only to further their own careers, rather than the goals of the organization, tend to have subordinates who are loyal to them but not to the company, making them less effective on the whole. And wanting power is not the same as throwing it around. Correlations between employee morale and sales figures show that individuals who manage by fiat are less effective than those whose style is more democratic. As the many examples show, top executives can learn to tell who the good managers are likely to be and to train existing ones to be more effective. McKinsey Award Winner.

Unlike the traditional factors of production--land, labor, and capital--knowledge is a resource that can't be forced out of people. But creating and sharing knowledge is essential to fostering innovation, and it is the key challenge of the knowledge-based economy. To create a climate in which employees volunteer their creativity and expertise, managers need to look beyond the traditional tools at their disposal. They need to build trust. The authors studied the links among trust, idea sharing, and corporate performance for more than a decade. They explored why managers of local subsidiaries so often fail to share information with executives at headquarters, and they studied the dynamics of idea sharing in product development teams, joint ventures, supplier partnerships, and corporate transformations. They offer an explanation for why people resist change even when it would benefit them directly. In every case, the decisive factor is what the authors call "fair process"--fairness in the way that a company makes and executes decisions. The elements of fair process are simple: Engage people in decisions that directly affect them, explain why decisions are made the way they are, and clarify what will be expected of them after the changes are made.

The New York Audubon Society (NYCAS), founded in 1979, became the National Audubon's largest chapter, with a city-wide membership of more than 10,000 members. Prior to 1993, NYCAS' services were provided entirely by volunteers working in a committee structure, with the board composed primarily of committee chairmen. The nature of the organization transformed as it grew in size and complexity from focusing on bird conservation to broader environmental advocacy. In 1993, the board undertook a dramatic change and hired an executive director, primarily for fundraising purposes. Discusses fund accounting and nonprofit accounting practices, as well as the NYCAS' experiences dealing with organizational growth, investment management, grant acquisition and use, fundraising, nonprofit status, and financial disclosure.

Discusses the role of professionals in the Enron debacle. Argues that professionals failed to prevent or predict Enron's collapse because of the conflicts of interest they faced. Concludes with observations on management and regulation of conflicts of interest facing professionals.

A new associate in a consulting firm attempts to navigate his way through the norms and culture of a new setting and to manage his relationships with his superiors and peers, which got off to a poor start. PLEASE NOTE: This case was revised in January 2014. Some language and incidents have been lightly edited, to bring the case up-to-date.

Describes the challenge of starting new ventures or new activities in established companies, especially if they diverge from the mainstream of ongoing commitments. Fledgling ventures require a different kind of management that acknowledges their uncertainty, intensity, and need/desire for freedom from mainstream constraints. One challenge is how integrated or not the new activity should be with the rest of the organization. Provides criteria for making this choice and offers some examples.

This case tracks McKinsey's evolution from its origin in 1926 to 2002, emphasizing the institutional heritage of the firm. It closes with a description of the challenges facing the firm's leadership in 2002.

In their guarded use of language, CEOs reveal more about themselves and their companies than they realize, says Stanford linguist and NPR commentator Geoffrey Nunberg.

A small software company has remarkable success repairing its dysfunctional organizational dynamics through a form of improvisational theater. The key is an exercise in which actions truly speak louder than words.

For better or worse, investors now view chief executives as the primary determinant of corporate performance. But the reality is that most companies perform no better after they dismiss their CEOs than they did in the years leading up to the dismissals. Worse, the organizational disruption created by a rushed firing can leave a company with deep and lasting scars. The blame for such poor results, the author argues, lies squarely with boards of directors. Boards often lack the strategic understanding of the business necessary to give due diligence to choosing a replacement CEO. Concern over restoring investor confidence quickly--rather than doing what's right for the company--drives the selection process. And all too often, companies continue to be dogged by the same old problems after the new CEOs come on board. But a good board can make a CEO replacement pay off if its members first develop a better understanding of the business context, worry less about pleasing the investment community and more about a replacement's strategic fit, and take an active role in overseeing the new CEO and the performance and direction of the company. In the long run, such approaches are likely to foster stability at the helm--making it less likely that a company will have to fire its CEO in the first place.

Presents profiles written by six members of the HBS Class of 1976 from the 10th and 20th reunions. The six alumni represent a cross section of the class of 1976 and provide a snapshot of life at the time of the reunions.

Presents profiles written by six members of the HBS Class of 1976 from the 10th and 20th reunions. The six alumni represent a cross section of the class of 1976 and provide a snapshot of life at the time of the reunions.

Presents profiles written by six members of the HBS Class of 1976 from the 10th and 20th reunions. The six alumni represent a cross section of the class of 1976 and provide a snapshot of life at the time of the reunions.

Presents profiles written by six members of the HBS Class of 1976 from the 10th and 20th reunions. The six alumni represent a cross section of the class of 1976 and provide a snapshot of life at the time of the reunions.

Presents profiles written by six members of the HBS Class of 1976 from the 10th and 20th reunions. The six alumni represent a cross section of the class of 1976 and provide a snapshot of life at the time of the reunions.

Presents profiles written by six members of the HBS Class of 1976 from the 10th and 20th reunions. The six alumni represent a cross section of the class of 1976 and provide a snapshot of life at the time of the reunions.

This case series presents profiles written by six members of the HBS Class of 1976 from the 10th and 20th reunions. The six alumni represent a cross section of the class of 1976 and provide a snapshot of life at the time of the reunions. "Profiles of the Class of 1976" is to be used with case supplements: 403081, 403082, 403083, 403084, 403085, and 403086.