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Former Supreme Court Justice Sandra Day O'Connor on overcoming gender discrimination in the legal profession, building rapport and consensus with her colleagues, being a "mother hen" to her clerks, and the lessons she learned growing up on a ranch.

Gary Burnison had a lot of faith in Korn/Ferry's brand when he became a significant investor, back in 2001. The company was suffering in the aftermath of the dot-com bust, but he believed he could help--so he came on board as chief financial officer and worked with the rest of the executive team to lead a turnaround. A major portion of the problem was Korn/Ferry's near-total reliance on executive recruiting fees for its revenue. Burnison's ambition was to move the company into other aspects of talent management. He saw the growth of LinkedIn as an opportunity as well as a threat: It gave the firm an additional channel for gathering rich and individualized data on professionals. Korn/Ferry's close C-suite relationships, strong financial position, and that powerful brand aligned the company for success. And clients have embraced the firm's metamorphosis: One has increased its spending from $300,000 a year to $6 million; another's annual billing has gone from $700,000 to $10 million.

Attention is the basis of the most essential of leadership skills--emotional, organizational, and strategic intelligence. And never has it been under greater assault. If leaders are to direct the attention of their employees toward strategy and innovation, they must first learn to focus their own attention, in three broad ways: on themselves, on others, and on the wider world. Every leader needs to cultivate this triad of awareness, in abundance and in the proper balance, because a failure to focus inward leaves one rudderless, a failure to focus on others renders one clueless, and a failure to focus outward may cause one to be blindsided. The good news is that practically every form of focus can be strengthened. The author of "Emotional Intelligence," "Social Intelligence," and many other books on the power of cultivating awareness here explains why focus is crucial to great leadership. Focused leaders can command the full range of their own attention: They are in touch with their inner feelings, they can control their impulses, they are aware of how others see them, they can weed out distractions and also allow their minds to roam widely, free of preconceptions.

Those who study "data smart" companies believe that we've already lived through two eras in the use of analytics--we might think of them as "before big data" and "after big data"--and are entering a third. It represents a far-reaching resolve to apply powerful data gathering and analysis not just to a company's operations but also to its customer services and products. This strategic change in focus means a new role for analytics. Companies will need to recognize a host of related challenges and respond with new capabilities, positions, and priorities. Requirements will include: multiple types of data, often combined; a new set of management options; faster technologies and methods of analysis; embedded analytics; data discovery; cross-disciplinary data teams; chief analytics officers; prescriptive analytics; analytics on an industrial scale; and new ways of deciding and managing. These new capabilities can't be developed using old models for how analytics supported the business. The big data model was a huge step forward, but it will not provide advantage for much longer. Companies must once again fundamentally rethink how the analysis of data can create value for themselves and their customers.

High-performing knowledge workers often question whether managers actually contribute much, especially in a technical environment. Until recently, that was the case at Google, a company filled with self-starters who viewed management as more destructive than beneficial and as a distraction from "real work." But when Google's people analytics team examined the value of managers, applying the same rigorous research methods the company uses in its operations, it proved the skeptics wrong. Mining data from employee surveys, performance reviews, and double-blind interviews, the team verified that managers indeed had a positive impact. It also pinpointed exactly how, identifying the eight key behaviors of great Google managers. In this article, Harvard Business School professor Garvin describes how Google has incorporated the detailed findings from the research into highly specific, concrete guidelines; classes; and feedback reports that help managers hone their essential skills. Because these tools were built from the ground up, using the staff's own input, they've been embraced by Google employees. Managers say that they've found their training to be invaluable, and managers' ratings from direct reports have steadily risen across the company.

Fifty years after the expression "garbage in, garbage out" was coined, we still struggle with data quality. Studies show that knowledge workers waste a significant amount of time looking for data, identifying and correcting errors, and seeking confirmatory sources for data they do not trust. When data are unreliable, managers quickly lose faith in them and fall back on their intuition to make decisions, steer their companies, and implement strategy. They're also much more apt to reject important, counterintuitive implications that emerge from big data analyses. The good news is that improving data quality is often not as hard as you might think, the author asserts. The solution is not better technology: It's better communication between the creators of data and the data users; a focus on getting the process right going forward rather than on cleaning up existing bad data; and, above all, the shifting of responsibility for data quality away from IT folks, who don't own the business processes that create the data, and into the hands of managers, who are highly invested in getting the data right.

Why do companies have so little to show for their investments in big data? The biggest reason is that they aren't doing a good job using the data they already have. They don't know how to manage the information embedded in their operating systems, analyze it in ways that enhance their understanding, and then make changes in response to new evidence and insights. The few companies that have adopted evidence-based decision making ensure that all decision makers have performance data at their fingertips every day. They also follow four practices: (1) Agree on a single source of truth. Using performance data from just one source yields a more accurate view of costs and profitability. (2) Use scorecards. Perhaps the best way to teach people how to use data to create business benefits is to provide them with data about their own performance. (3) Explicitly manage business rules. Little data can have a big effect on performance when managers use the data to assess and improve the business rules that govern their operations. (4) Use coaching to improve performance. Adopting evidence-based decision making is a big cultural shift. Employees need help learning how to base their decisions on data instead of on instinct. Fortunately, companies that make the shift don't usually go back, and they improve their operations in ways that rivals can't easily replicate.

A good financial system is essential for a well-functioning and efficient economy. It allocates capital to its most productive uses and manages risk. However, financial systems are fragile, and this fragility can cause financial crises which usually impact the real economy, as Japan and the United States have experienced. The causes of a financial crisis are many and varied, but commonalities exist. Financial crises usually create long periods of slow economic growth.

In this article, we present an overview of corporate social responsibility (CSR) in the financial sector. We focus on how socially responsible investment and shareholder activism have been integral parts of corporate social responsibility in the financial sector. We examine how the financial sector and its firms are evaluated and rated via a sustainability index, the Dow Jones Sustainability World Index, and show that even leading financial institutions do not employ proactive practices regarding socially responsible investment and shareholder activism. Finally, we provide examples of two companies, UBS AG and the Co-operative Banking Group, that do utilize proactive practices.

In this Executive Focus article, Emory Zink and Travis Selmier interview John Succo, an expert on derivatives securities and securities trading, who discusses the technical nature and the policy debates regarding how high frequency trading (HFT) and so-called 'dark pools' affect equity trading. Succo, a co-founder of one of the world's largest derivatives-trading hedge funds, deflates the arguments that HFT adds to liquidity, showing us how the mechanism of HFT actually removes liquidity from the market. Wondering why regulatory authorities accepted speed in lieu of liquidity, he finds politics and lobbying as key factors. Dark pools, on the other hand, are trading arrangements that benefit both their members and the general trading public by dampening stock price swings. This interview addresses many questions about HFT and dark pools.

In 1995, the European Union passed Directive 95/46/EC, which set the legal framework for European Union citizens to own the rights to their personal data. However, American law bestows ownership to the holder of the data, not the individual, and officials feared the European Union initiative might disrupt data sharing among United States and European Union affiliates. Thus, they negotiated the 2000 Safe Harbor Agreement to allow companies to voluntarily submit to yearly certifications that fulfilled European Union demands, but kept U.S. businesses in control of their data; nevertheless, the Agreement does not include financial and banking services. Instead, the United States argued that the privacy protections within the Gramm-Leach-Bliley Act adequately fulfilled European Union guidelines. The European Union disagreed and financial data sharing has operated under a moratorium for the past decade. However, the 2008 financial crisis has governments and clients clamouring for more data transparency to determine risk in the financial system. These global efforts, the European Union's recent push to strengthen the Directive, and the Dodd-Frank Act have pushed data sharing to the policy forefront. This article asserts that transatlantic data sharing will ultimately have to accommodate the privacy cultures in both the United States and the European Union, but firms must be prepared to cope with demands on their data by establishing government relations offices, standardizing information systems, enhancing education for compliance officers, and improving business school curricula.

Rakuten is Japan's version of Amazon, but it offers a very different shopping experience. The goal of its founder in 1997 was to allow small and midsize merchants to set up shop on the internet very easily and to provide the kind of hospitality and customer service that even chain restaurants offer in Japan. Mikitani didn't want an internet superstore; he wanted something more like a bazaar, where shop owners would curate the merchandise and interact with customers. He believes that people need communication and connection: "A human being can listen to understand your needs, and can tell you the stories behind the products you're considering," he writes. Rakuten hosts more than 40,000 merchants in Japan. To control the risk of quality or service problems, the company has a tight screening process for people who want to open a store on the site. It monitors transactions, maintains a customer feedback program (shops that consistently receive poor ratings are ejected), and offers refunds for goods that don't arrive. Today it is the world's third-largest e-commerce marketplace, with global sales in 2012 of $15 billion.

CEOs often complain that the financial markets simply don't understand their companies' strategy. The author's recent findings show that they may well have a point. Many good strategies are complex and thus hard to understand. A proper analysis of Monsanto, for example, requires expertise in pharmaceuticals, agricultural chemicals, and agricultural biotechnology--but on Wall Street those three industries are analyzed separately. Back in 1999 one analyst wrote, "Monsanto will probably have to change its structure to be more properly analyzed and valued." Zenger was intrigued by the possibility that complex or unique strategies are systematically ignored by analysts or undervalued by capital markets. He and two colleagues undertook to investigate the question, by examining all 7,630 companies that were publicly traded in U.S. capital markets from 1985 through 2007. They devised a way to measure uniqueness and complexity and counted the number of analysts covering each company. Their analysis determined that although many factors--such as company size and trade volume--influence analysts' decisions about what companies to cover, the greater effort required for a complex or unusual strategy discourages coverage. And although their uniqueness measure is actually associated with higher market value, this premium is, on average, lower than it would be if the company got more coverage. CEOs who face the uniqueness challenge have two options: They can make strategic information more accessible--by issuing tracking stocks, marketing directly to investment banks, or paying for independent equity research--or they can find sympathetic investors who believe in the company, which may mean taking it private.

Most businesses rely on traditional capital-budgeting tools when making strategic decisions such as investing in an innovative technology or entering a new market. These tools assume that decision makers have access to remarkably complete and reliable information--yet most strategic decisions must be made under conditions of great uncertainty. Why are these traditional tools used so often even though their limitations are widely acknowledged? The problem is not a lack of alternatives. Managers have at their disposal a wide variety of tools--including decision analysis, scenario planning, and information aggregation tools--that can help them make smart decisions under high degrees of uncertainty. But the sheer variety can be overwhelming. This article provides a model for matching the decision-making tool to the decision being made, on the basis of three factors: how well you understand the variables that will determine success, how well you can predict the range of possible outcomes, and how centralized the relevant information is. The authors bring their framework to life using decisions that executives at McDonald's might need to make--from the very clear-cut (choosing a site for a new store in the United States) to the highly uncertain (changing the business in response to the obesity epidemic).

As one of the world's preeminent advisers to CEOs, Ram Charan has spent the past 35 years on the road, helping hundreds of executives deal with their toughest challenges. In this edited interview, he shares what he's learned about decision making over the decades. Getting to the right answer is a lot harder today than it was 10 years ago, Charan points out. Leaders have to contend with more variables and constituencies than ever before. They must be able to cut through all that complexity and to make subjective judgments about highly ambiguous, and constantly changing, factors. The best executives know which decisions to focus on (and which to delegate), when to make a decision, and what the risk of not making a decision is. When opportunities arise and vanish quickly, timing is critical. In this environment, good decisions involve a lot more than analytics. They demand perceptual acuity, or the ability to see change coming; qualitative judgment, which allows leaders to formulate and select the right options; and credibility, which helps them gain acceptance for decisions. All three traits can be developed over time by practicing the right habits, such as listening to diverse and contradictory views, thinking through second- and third-order consequences, and socializing decisions by demonstrating transparency and explaining their performance payoff.

Though a few superbright people may have the almost magical ability to consistently make good decisions, the rest of us just get by--or so conventional wisdom holds. But new research contradicts that thinking. A recent study by MIT's Sandy Pentland and his colleagues shows that anyone can become a good decision maker. The key is to constantly conduct "social exploration," or seek out a wide range of new people and ideas. In 2011, Pentland's team gathered data on 1.6 million users of eToro, an investment site that lets day traders see and copy one another's moves. Information on the site is extremely transparent, so the researchers were able to plot the return each trader achieved against the amount of social exploration he or she did. The traders who had the right level of diversity of ideas and people in their networks experienced a return on investment that was 30% higher than the return of the isolated traders. They equally outperformed the traders who were too interconnected to one group and got trapped in an "echo chamber," where similar ideas kept recirculating. What's more, by offering incentives and nudges, the researchers were able to help more traders attain the model idea flow. The results? The profitability of all traders on eToro doubled. Although these findings involve only stock investments, the researchers believe that many kinds of organizations can apply them to improve their internal decision making.

The past decade has seen a wealth of research on decision making, yet business executives seem impervious to its lessons. The problem is not that they lack the desire to make better decisions. It's that the bulk of the research does not apply to the kind of decision that's most challenging for them. Decisions vary along two dimensions. The first considers whether the decision maker can influence the terms and the outcome. The second addresses whether the aim is to do well or to do better than others. Before making any decision, the most important thing is to understand what kind it is. Decision research has produced good advice for routine choices and judgments, such as personal investment decisions, where people are choosing among the products before them, have no ability to change them, and are not competing with anyone. For these decisions, research has shown, it's important to avoid common biases. But strategic decisions, such as entering a new market or acquiring another company, are completely different. Executives can actively influence outcomes. Furthermore, success means doing better than rivals. For these decisions, executives need more than an ability to avoid common biases. They require a talent for clear-eyed analysis and the ability to take bold action.

For decades, the basic idea that governed economic thinking was that markets work: The right price will always find a buyer and a seller, and millions of buyers and sellers are far better than a few government officials at determining the right price. But then came the Great Recession, when the global financial system seemed on the verge of collapse--as did prevailing notions about how the economic and financial world is supposed to function. The author has followed academic economics and finance as a journalist since the mid-1990s. To him, three shifts in thinking stand out: (1) Macroeconomists are realizing that it was a mistake to pay so little attention to finance. (2) Financial economists are beginning to wrestle with some of the broader consequences of what they've learned over the years about market misbehavior. (3) Economists' extremely influential grip on a key component of the economic world--the corporation--may be loosening. In the early 1930s, he concludes, policy errors by governments and central banks turned a financial crisis into a global economic disaster. In 2008 the financial shock was at least as big, but the reaction was smarter and the economic fallout less severe.

Sales leaders have long fixated on process discipline, monitoring reps' conformance to "optimal" behaviors and their performance of specified activities. Recently, however, this sales machine has stalled. The approaches that once led to predictable progress in a sale do not work with today's customers, who are empowered with more information than ever before. The new environment favors creative and adaptable sellers who challenge customers with disruptive insights into their business--and offer unexpected solutions. Such "insight selling" gives reps latitude to discover what the customer has already concluded about its needs and the available solutions, determine who the decision makers are, look for signals that the customer is receptive to a new insight about its business, and then figure out how best to proceed. A study of 2,500 B2B sales professionals found that most organizations, despite faltering sales performance, still have a climate that emphasizes compliance rather than judgment. To create a judgment-oriented sales climate, managers must serve as connectors within and beyond their teams, providing a continual flow of information that supports reps as they exercise their judgment on individual deals. These managers must also focus on the long term, monitoring customers' behaviors and directing reps' creativity and critical thinking to the most promising opportunities. And they need to hire professionals--not necessarily those with sales backgrounds--who can thrive in the new climate.

At 57, Christine Lagarde has held top jobs in government, in the private sector, and now at a big global institution, the International Monetary Fund, where she became managing director in 2011. It was a doubly challenging time to take the helm: Lagarde's predecessor, Dominique Strauss-Kahn, was embroiled in scandal, and the global economy remained in dire straits. In this interview with HBR's editor in chief, Lagarde talks about what it takes to be an effective leader, the differences between "masculine" and "feminine" leadership styles and what women bring to the table in times of crisis, ideas for strengthening the IMF, and opportunities for the Fund and the world's governments to create a more vibrant global economy.