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Too often, companies launch sustainability programs with the hope that they'll be financially rewarded for doing good, even when those programs aren't relevant to their strategy and operations. They fail to understand the trade-offs between financial performance and performance on environmental, social, and governance (ESG) issues. Improving one typically comes at a cost to the other. But it doesn't have to be this way. It's possible to simultaneously boost both financial and ESG performance--if you focus strategically on issues that are the most "material" to shareholder value, and you develop major innovations in products, processes, and business models that prioritize those concerns. Maps being developed by the Sustainability Accounting Standards Board, which rank the materiality of 43 issues for 88 industries, can provide valuable guidance. And broad initiatives undertaken by three companies--Natura, Dow Chemical, and CLP Group--demonstrate the kind of innovations that will push performance into new territory. Communicating the benefits to stakeholders is also critical, which is why integrated reports, which combine financial and ESG reporting, are now gaining in popularity.

In the past few years, a new methodology for launching companies, called "the lean start-up," has begun to replace the old regimen. Traditionally, a venture's founders would write a business plan, complete with a five-year forecast, use it to raise money, and then go into "stealth mode" to develop their offerings, all without getting much feedback from the people they intended to sell to. Lean start-ups, in contrast, begin by searching for a business model. They test, revise, and discard hypotheses, continually gathering customer feedback and rapidly iterating on and reengineering their products. This strategy greatly reduces the chances that start-ups will spend a lot of time and money launching products that no one actually will pay for. Blank, a consulting associate professor at Stanford, is one of the architects of the lean start-up movement and has seen this approach help businesses get off the ground quickly and successfully. He believes that if it's widely adopted, it would reduce the incidence of start-up failure. In combination with other trends, such as open source software and the democratization of venture financing, it could ignite a new, more entrepreneurial economy. There are numerous indicators that the approach is catching on: Business schools and universities are incorporating lean start-up principles into their curricula. Even more interesting, large companies like GE are applying them to internal innovation initiatives.

Salesmanship is central to a start-up's success, but many entrepreneurs ignore this simple fact. They may believe that their idea will sell itself or that there's no point visiting a prospective customer without a finished product in hand. Those who search for sales advice find mostly tools and techniques for established companies. In a study of 120 entrepreneurs in six countries, more than half fully developed their products before getting feedback from potential buyers. Looking back, most said that was a mistake. Those who did start selling early did not spend enough time listening to prospects' reactions. Other mistakes included offering discounts to close initial deals, making early sales to family and friends, and failing to choose first customers strategically. When they did go on sales calls, the entrepreneurs fielded tough questions about the efficacy of their products, their credibility and experience, the size of their companies, their prices, and the cost of switching to an unproven offering. A sales model geared to entrepreneurs accounts for the fact that information gleaned during the sales process can be crucial in designing (or redesigning) the product itself. The model calls for meeting with prospects as soon as an idea is conceived to learn if it has broad appeal. The answer to that question determines whether the entrepreneurs jettison the idea, return to the drawing board, or proceed to prototype development and further testing with potential customers.

As the director of private equity for the Kauffman Foundation and a former venture capitalist, Mulcahy has observed the industry closely. In 2012 she and two Kauffman colleagues published a report titled "We Have Met the Enemy . . . and He Is Us," based on a comprehensive analysis of the foundation's more than 20 years of experience investing in nearly 100 VC funds. Her research and experience lead her to advise aspiring entrepreneurs against falling victim to these common myths about venture capital: (1) It's the primary source of start-up funding. (Actually, angel investors fund 16 times as many companies, and in 2012 more than 18,000 entrepreneurs raised nearly $320 million through a single crowdfunding site.) (2) VCs take big risks with start-ups. (Often they're insulated against risk by hefty annual fee streams.) (3) Most VCs offer great advice and mentoring. (To avoid disappointment on this front, ask the CEOs of other portfolio companies how they'd rate the firm.) (4) VC generates spectacular returns. (Since 1997, less cash has been returned to VC investors than they have invested.) (5) Bigger is better. (Research shows that fund performance declines as fund size increases above $250 million.) (6) VCs are innovators. (Apparently not. The innovation is coming from online platforms such as AngelList and SecondMarket.)

VC-entrepreneur partnership agreements often contain flaws that become highly damaging as the parties come up against issues of power, trust, and much more. Yet many of the flaws are systematic and predictable--and hence preventable. The author, a longtime consultant to the VC industry, outlines four recommendations for entrepreneurs sitting down at the table with prospective funders. Understand your leverage. Your leverage is not only a function of your alternatives; it has a lot to do with the VC's as well. Seek to understand them, and be prepared to educate the VC about why his exercising too much power could hurt both parties in the long term. (1) Maximize trust. Beneath all the financial projections, the VC negotiation is a process in which people are deciding whom they want to associate with for years to come. If the VC is vulnerable, use the opportunity to build trust rather than to take advantage. (2) Focus on value--not just valuation. Nonfinancial considerations such as control are also important. (3) Strive for understanding. Seemingly abstruse provisions can be highly consequential. And bear in mind that the choices a VC makes when negotiating can contain important clues about her assessments and expectations. Above all, when you're negotiating with a VC, think not only about what will look good in a press release today but also about what will help you create and capture value over the long run.

In the 1990s, just out of college, Andreessen went knocking on VC doors in Silicon Valley, looking to fund what became the breakthrough web browser Netscape Navigator. Within 18 months the company had gone public and he'd become a symbol of the internet generation. Now he's a cofounder and partner of Andreessen Horowitz, a venture capital fund that looks for smart tech start-ups. In this edited interview he talks with HBR's editor in chief about what kind of entrepreneur his firm likes to fund, why start-ups are still feeling the effects of the last boom and bust in tech stocks, what they should do to prepare for an IPO, the role of hedge funds, and more.

No organization can fulfill every hope and desire of its employees, so it helps to know which ones matter most to people. Goffee and Jones have identified the six most essential imperatives for creating an ideal work environment. Their insights come from surveys and interviews of hundreds of executives from all over the world. Few organizations embody all six attributes of the dream organization, many are difficult to achieve, and some even conflict with one another. But they nonetheless stand as an agenda for executives who wish to create the most productive, most rewarding workplace imaginable. Agenda: (1) Let people be themselves. (2) Unleash the flow of information. (3) Magnify people's strengths. (4) Stand for more than shareholder value. (5) Show how the daily work makes sense. (6) Have rules people can believe in. This list contains no surprises, but implementing the elements is no easy task. Almost all of them require leaders to carefully balance competing interests and to reallocate their time and attention. Companies like Arup, LVMH, Waitrose, and even McDonald's are doing it to varying degrees. Your challenge is to match--and then to exceed--what they have managed to accomplish.

The Cleveland Clinic has long had a reputation for medical excellence. But in 2009 the CEO acknowledged that patients did not think much of their experience there and decided to act. Since then the Clinic has leaped to the top tier of patient-satisfaction surveys, and it now draws hospital executives from around the world who want to study its practices. The Clinic's journey also holds lessons for organizations outside health care that must suddenly compete by creating a superior customer experience. The authors, one of whom was critical to steering the hospital's transformation, detail the processes that allowed the Clinic to excel at patient satisfaction without jeopardizing its traditional strengths. Hospital leaders: (1) Publicized the problem internally. Seeing the hospital's dismal service scores shocked employees into recognizing that serious flaws existed. (2) Worked to understand patients' needs. Management commissioned studies to get at the root causes of dissatisfaction. (3) Made everyone a caregiver. An enterprisewide program trained everyone, from physicians to janitors, to put the patient first. (4) Increased employee engagement. The Clinic instituted a "caregiver celebration" program and redoubled other motivational efforts. (5) Established new processes. For example, any patient, for any reason, can now make a same-day appointment with a single call. (6) Set patients' expectations. Printed and online materials educate patients about their stays--before they're admitted. Operating a truly patient-centered organization, the authors conclude, isn't a program; it's a way of life.

In 1965, a time when quantitative, computer-driven planning was very much in vogue, Royal Dutch Shell started experimenting with a different way of looking into the future: scenario planning. Shell's practice has now survived for almost half a century, and has had a huge influence on how businesses, governments, and other organizations think about and plan for the future. The authors interviewed almost every living veteran of the Shell scenario planning operation, along with top Shell executives through the years. They identify several principles that both define the process at Shell and help explain how it has survived and thrived for so long. For instance, Shell scenarios are stories, not predictions, and are designed to help break the habit, ingrained in most corporate planning, of assuming that the future will look much like the present. They must above all be plausible, with a logical storyline, in order to encourage intuition and judgment. They create a safe space for dialogue and for acknowledging uncertainty. They must also be relevant, not simply disruptive and challenging. And they need some quantification to be credible--but the numbers must flow from the stories, rather than the other way around. Otherwise, there's always the danger that quantitative models will hide assumptions and constrain thinking rather than refine it. Because scenarios follow a rhythm distinct from the annual strategy cycle, they allow an organization to see realities that would otherwise be overlooked.

A growing middle class in the Arab world yearns for progress and modernity, but has no interest in abandoning its religious traditions. Companies that gloss over the interplay between culture and religion ignore a critical factor for success in the region.

Leaders with a cross-cultural mind-set are in high demand. Gaining that perspective takes great effort, but it also allows you to create value for your company. So argue Unruh and Cabrera, who chart a clear path for business leaders who aspire to join the global elite. The process starts with learning to think and act globally. It requires extensive study, foreign travel, cultural exploration, and interpersonal experiences that must be undertaken with an open mind and heart. Once you enter the global elite, there's no coasting. You'll have to suss out cross-cultural divergences and convergences--and build diverse networks--to give your company a leg up. But you should be inspired less by figures on an income statement than by a sense of global citizenship. That's what makes members of the global elite a rare, influential breed that achieves both measurable and ineffable results.

The acclaimed American writer Maya Angelou on the creative process, bridging cultural divides, and what makes a great leader.

High-performers, whether they be star CEOs, world-class salespeople, great product developers or professional services rainmakers, exist at the tail end of the distribution in terms of ability and impact. They have high aptitude, sought-after skills and the ability to ply their trade almost anywhere around the globe. How can leaders engage these brilliant, talented individuals and bring out their very best, sustained performance? Two veteran leaders - Roger Martin in business and Bob Brett in the realm of championship tennis - provide their expertise in this interview.

Over the next two decades, one of the fiercest battles in business will be for the billions of people joining the middle class in emerging markets-a group that will make up 30 per cent of the global population by 2020. Yet even many multinational companies who are already active in emerging markets are not prepared to tap into this new stream of revenue growth because, the authors argue, their business models were not designed to reach the new middle. They describe four steps to business model innovation that can help a company capture this critical emerging market.

Why did United Airline's TED and Delta's Song fail while Southwest's similar model for low-cost air travel thrived? According to the author, it all comes down to company culture. Culture is one of those fuzzy terms that makes business analysts roll their eyes, he says, but its true power lies in the fact that, unlike other competitive advantages, it is nearly impossible to copy. He defines culture as 'the things that people in an organization do without thinking, often because of a precedent set by management'. As he shows, the roots of culture go very deep, and they lead companies like Southwest, Costco and IBM to the top of their industries.

David Rock, founder of the NeuroLeadership Institute, believes that the secrets to high performance lie in our ability to master humankind's greatest asset: the brain. In this interview, he argues that the brain requires three things to function optimally: moderate stress, positive affect (i.e. emotion) and a good night's sleep. He also shows that workplace engagement and productivity are closely related to the brain's primal 'threat and reward' function, which has repercussions for manaaqgers.

Waiting in line is a ubiquitous consumer experience, but it doesn't have to be a negative one. The author argues that service providers can foster positive experiences in several ways, by paying attention to the psychology involved in waiting. The 'psychology of time' includes three key factors: the important of progress; social comparisons; and the desire for social justice. When a service is designed with these in mind, the waiting doesn't have to be the hardest part.

Social media has created widespread confusion in many organizations. Some all but beg people to 'like' them on Facebook, while others badger consumers to follow them on Twitter. The fact is, hundreds of millions of dollars are spent each year on social media marketing strategies, and most of it achieves very little in the way of creating a sustained following. Successful social movements, by contrast, have long managed to capture and sustain followers over long periods of time-for a tiny fraction of what private companies spend on marketing. The authors describe five lessons business can we learn from social movements and their organizers.

At the world's most innovative companies, 'Skunk Works' has become the standard approach for running top secret projects with elite special teams. The hallmarks of a Skunk Works project include high-quality designs in a short time frame with limited resources. The author describes how it all started, at Lockheed Martin in the 1940s, and how the approach has evolved to inspire Apple and other modern innovators.

Big data' is hailed as the next mega-problem for business, and rightly so, says the author. He argues that business has to solve two different sets of problems here: prediction problems (what will happen if we do this?) and optimization problems (what is the best way to get this to happen?) Intelligence is not enough to tackle these issues, he says: big data requires ingenuity. He defines 'the ingenuity effect' and shows that it entails three key skills: modeling, coding and sensing.