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Though the leadership deficit in India is widely recognized, few companies have successfully addressed it. The challenge manifests itself in a quantity deficit, where few qualified candidates for managerial positions exist and leaders do not retire soon enough; an experience deficit, where young, inexperienced managers are launched into senior positions; and a talent war, where competition for talent is intense and companies realize that leaders they have cultivated could be hired by rival firms at any time. The main causes of India’s leadership challenges are a) demographics: India is a young nation lacking a large supply of experienced leaders; b) the booming economy: the pace of growth has placed great demand on the supply of talent; and c) a technology mindset: Indian business leaders have focused on developing technology rather than people. Building leaders from the bottom up involves five steps: 1) Invest in senior management effectiveness; 2) Set up feeder roles and successor pools among the next tier of leaders under the top team; 3) Manage the technical ladder; 4) Identify and promote high-potential employees; and 5) Build quality cadres at the junior level.

The rate at which data and ideas are collected, viewed, and commented on is faster than ever due to the quick pace of technology innovation. With hundreds of platforms ranging from corporate open innovation to niche platforms, the value and success of individuals coming together to solve problems is well established. This article suggests five ways to leverage the principles of crowdsourcing to create a lasting impact within organizations: 1) From optimization to innovation: Multi-discipline ideation brings diverse audiences together to identify problems and opportunities and break down current models while creating new ones. 2) From customer service to customer experience: Co-creation is the act of building a product or service with customers and end users in an iterative manner (e.g. My Starbucks Idea). 3) From managing knowledge to collective intelligence: Distributed task management is the breaking up of large, complex tasks into micro tasks scattered across global populations. 4) From old money models to new money paradigms: Crowdfunding is the collective effort of individuals to support an initiative by pooling funds together (e.g. Kickstarter). 5) From corporate responsibility to community impact: Civic community building relies on individuals within communities to raise awareness of community issues and projects to address them, with the objective of gathering support.

China, whose most active multinational companies are state-owned enterprises (SOEs), is actively investing in various sectors overseas. While the role of the Chinese government in the global expansion of Chinese multinationals is significant, government support should not be confused with firms’ own goals. In Africa, Chinese investments have been mostly in sectors such as infrastructure and energy, but investors have recently become interested in services and manufacturing. Chinese telecom firms in Africa enjoy advantages linked to China’s political economy agenda, while Chinese resource companies also have a large stake in Africa. Western commentators tend to speak of “the Chinese” as a single, resource-hungry entity and rarely mention that vast amounts of oil extracted by Chinese firms are sold on the international market. Although strong ties exist between the Chinese government and Chinese national oil companies, similar linkages have often existed in the West. This article argues that Chinese SOEs are hybrid organizations that receive exceptional assistance from the state but also function as private companies competing against global corporations and against other Chinese firms.

The largest predictor of new product success is a differentiated high-value product or service, while the best predictor of new product failure is inadequate market research and customer knowledge. With the growth of microprocessor-based products, a proliferation of usage and form factors has led to a shift between embedded devices, appliances, and platforms. Failure to navigate the generational shifts has been a major cause of failure or market share loss. Most businesses must either move from a proprietary embedded system to a more platform-oriented solution, or else package a platform-based solution in such a way as to make it more like an appliance. There are many choices on how to innovate, including product innovation, process innovation, customer innovation, and business model innovation. The digitization of content has had a profound impact on many businesses, and bundling or unbundling legal rights is the new frontier in product differentiation for content. Types of rights include level of quality, number of devices on which content can be used, and resale and inheritance rights. What constitutes a product versus a service will continue to evolve, as the migration occurs from product to service to solution to experience.

Are leaders born or made? The answer is both. Indeed, good leaders are the product of a never-ending process of skill and character development. This article reveals ten pathways for learning to lead: 1) performing: excelling in a role; 2) risking: taking chances to lead and learn; 3) stretching: going beyond one’s own comfort zone; 4) learning: reflecting on past events to discern lessons; 5) self-awareness: seeking to know one’s strengths and weaknesses; 6) trusting: relying on one’s abilities and those of others in order to build a reputation of trustworthiness; 7) adapting: acting appropriately in different situations; 8) mentoring: learning from other leaders; 9) observing: watching in order to gain a better understanding; and 10) integrating: seeing the “big picture.” <br><br>This article shows that many leaders lack an early desire to be glorified as a leader and that good leadership can be learned by anyone with basic intelligence and a strong commitment to ongoing development and collaboration. Making time for continual learning and avoiding arrogance or closed-mindedness is crucial. One tech-sector billionaire reveals how he frequently cleans the family lavatory after work, as a reminder that all contributions are valued. Ultimately, CEOs must create channels for feedback, and “command and control” should make way for sharing control over decision making.

Crowdsourcing can be defined as the application of social media to the process of open innovation. It leverages social media to enable brands, places, and entrepreneurs to engage and seek input from online communities who contribute powerful, creative ideas. Crowds should reflect a diversity of opinions, be independent, be geographically dispersed, and be able to aggregate private judgements into a collective decision. Culture can be an impediment to a firm’s adoption of crowdsourcing, if the firm is not open to receiving external input. Crowdsourcing also presents various risks, such as low participation due to a lack of awareness by an audience, controversy over intellectual property ownership, and confusion within a crowd about a task. Best practices in pursuing crowdsourcing include: 1) Ensure support: All ideas and contributions should be appreciated, and executive power for developing the contributions must exist. 2) Be clear with definitions: The company must understand how social media is being used internally. 3) Do demos and pilot: Try out different solutions and approaches and find what works best for an audience. 4) Think of what you want to ask: Explain the challenge in a way that resonates with the audience and elicits concrete contributions. 5) Give kudos: Reward the best contributors.

Analytics is often seen as a threat by senior managers, yet good analytics can inform decision makers and lead to better decisions. Senior executives are likely to react negatively if their deeply held intuition is challenged by results derived from data that use analytics that they do not understand. However, a manager’s job is enriched when it changes from an operations-level, decision-making function to a role in which a complex system is supervised. While leadership and interpersonal skills remain crucial, executives must now possess the ability to critically assess and utilize the innovations emerging from data and advanced analytics. Big data can also lead to new business models, such as when retailers determine the precise needs of their customers and no longer need retail space. This article suggests ways that managers can mine big data to enable their firm to establish and sustain a competitive advantage. It illustrates how Dell analysts were able to define a lucrative product line of pre-configured computers and how IBM Research partnered with Industrial and Commercial Bank of China, the world’s largest bank by market capitalization, to develop a highly successful branch network optimization system.

The tendency of firms during an economic slowdown to wait for the economy to improve and then plan to act often leads to stagnation. Lack of resources has been identified as a major challenge that firms face in implementing strategy. Lean innovation, despite a negative reputation, is an effective means of harnessing resources and eliminating excessive complexity in business. Lean innovation both frees up resources so that they can be applied to innovation projects, and creates a morale boost through eliminating waste. Ideas, the author suggests, are often found from suppliers, employees, and customers, not just R&D departments. Central to the lean innovation framework is the generation, refinement, and spread of ideas. In determining how to refine our ideas, it helps to frame the situation with a question: “What problem is being solved?” The importance of an innovation culture is illustrated by the example of Kodak, which lacked such a culture and went bankrupt after the spread of digital cameras. Indeed, incumbent firms are often unprepared to deal with the appearance of a new model and fail to adapt. Conversely, Netflix embodies the spirit of an innovation culture, as it was willing to introduce video on demand even if it meant eroding growing revenues from its traditional video rental delivery service.

Google has been ranked as the best place to work in the United States. It practices a time allocation method of 70-20-10, with 70 per cent of employees’ time devoted to Google’s core business of search and advertising, 20 per cent to off-budget products, and 10 per cent to ideas based on personal interests and competencies. Luxury perks and generous rewards for employee innovations improve the likelihood that employees stay at Google instead of forming competing ventures. The firm is notable for its employee loyalty and investor confidence; the two founders and the CEO, Eric Schmidt, even took an annual salary of $1 just before the initial public offering in 2004. Schmidt’s leadership practices can be summarized as follows: 1. Get to know your employees. 2. Create new ways to reward and promote your high-performing employees. 3. Let your employees own the problems you want them to solve. 4. Allow employees to function outside the company hierarchy. 5. Have your employees’ performance reviewed by someone they respect for their objectivity and impartiality. This article concludes with the eight qualities of Google’s leader-managers, which relate to coaching, empowering, well-being, productivity, communication, career development, vision, and technical skills.

The innovation function — the starting point for creating new advantages — is ineffective in most companies. Warning signs that an innovation process is broken can be grouped into six categories. 1. Innovation is episodic. Innovation should be continuous and systematic, yet it is often downsized during a company’s financial struggles and is sometimes suppressed if a new idea threatens existing business models. 2. The innovation process is invented from scratch. Companies often neglect the wealth of educational opportunities and coaching, as well as the vast literature on venturing and entrepreneurship. 3. Resources are held hostage by incumbent businesses. Allowing existing businesses to determine where employees and funds are allocated does not enable or support innovation. 4. Innovations are force-fitted into existing structures. New businesses should be given combinations of people, assets, and resources that suit their particular needs. 5. Applying the same criteria to evaluate both an innovation and the core business. It is wrong to use the same planning, budgeting, and control processes for things that are predictable and those that are not. 6. Insisting on the venture meeting the plan. Many innovation leaders try to defend past assumptions even after they have been proven wrong.

Corporate directors should look for three criteria in executives: competencies, commitment, and character. This article focuses on leadership character, the least understood of the three criteria. The authors met with over 300 business leaders on three continents, who identified character weaknesses or defects — including overconfidence, lack of transparency, and lack of accountability — as central to the Global Financial Crisis. The authors posit 11 dimensions of character — integrity, humility, courage, humanity, drive, accountability, temperance, justice, collaboration, transcendence, and judgment. They examine why character has not been studied extensively, given its relation to the crisis, and point to the lack of resources that the private and public sectors have spent on studying character (in contrast to competencies), as well as the common misperception of character as a “soft,” non-quantifiable construct. Character is revealed by how individuals behave in particular situations, and a full character assessment requires a deep and wide-ranging examination of a person’s life and work history over an extensive time period. Directors can influence character development in their organizations by discussing dimensions of character during appraisal processes, developing formal leadership profiles, and introducing character-focused discussion into their own board assessments.

With the leaders of global organizations increasingly unable to individually grasp the full complexity of firms’ worldwide operations, the task more than ever falls to groups of leaders at the top. These groups of leaders must be diverse in expertise and experiences and yet also synchronized in directing global organizations. These two imperatives often lead to conflict, but leaders can overcome difficulties by forming “leadership ensembles.” Effective leadership ensembles are characterized by foresight and preemptive change, agility rather than fixed governance roles, and the application of synthetic intelligence. Research on top executives has yielded four blueprints for decision making that successful ensembles follow. “Incubators” value a cohesive corporate culture and emphasize cultural fit with any new addition. “Diplomats” allow flexibility between local businesses and headquarters. “Engineers” try to optimize organizational structures and processes and tie their firms together, as well as foster a single culture. “Directors” want decisions to be made by those closest to the operations. Global leadership ensembles can improve their decision making significantly by understanding which blueprint leaders prefer; continually assessing how their preferred blueprint helps or hinders the organization’s goals for global expansion; and understanding the connection between the blueprint and how the ensemble operates.

There is arguably no more important role for senior leaders than to prepare organizations for risk. Firms face different types of risk, including strategic, operational, market, liquidity, credit, and reputational. This article starts by exploring risk leadership at TD Bank Group and Maple Leaf Foods Inc. In 2002, TD Bank’s leadership lowered its risk tolerance following years of volatile and uneven performance. It avoided excessive risk (including sub-prime lending) and grew from the 55th-largest North American bank in terms of market capitalization to the sixth in 2012. Maple Leaf Foods Inc., a large food-processing company, underwent a crisis in 2008 when its processed meats were implicated in 23 deaths due to Listeriosis. The firm then developed a world-leading food-safety culture, mobilized an increased industry focus on food safety, and recovered financially. <br><br>Five activities that lead to the establishment and maintenance of a strategically driven culture are described. “Think it” stresses the need for a deliberately conceived culture, rather than one that is merely emergent. “Talk it” emphasizes the need for messages and expectations to be articulated forcefully and clearly. “Walk it” suggests that leaders must not deviate from messages about a desired culture, and should offer organizational rewards for culturally congruent behaviours. “Reinforce it” states that leaders should celebrate the success of their organizational culture, while exercising caution. “Check it” suggests that leaders must link their current culture with their desired future culture and prevent the emergence of unplanned, undesired manifestations of culture.

The Tragedy of the Commons refers to the depletion of a shared resource by individuals acting independently and rationally, according to self-interest, despite knowing that an abuse of the common resource is contrary to their long-term interests. The Tragedy is a model of many of society’s resource-based problems, including over-irrigation, habitat destruction, over-fishing, traffic congestion, and air pollution. The Free Rider problem refers to when an individual benefits from another’s work without paying for it. The two practical ways to overcome this problem are through compulsory participation (e.g. carbon tax, cap-and-trade) and through linking the public good to a desirable private good (getting people to pay voluntarily). Both methods are controversial and politicized. <br><br> Social entrepreneurs have attempted to solve the Free Rider problem, including Verdant Power, a developer in the design and application of marine renewable energy. The obstacles it faces are the same as those that stymie most social entrepreneurs. The firm lacks revenue streams and profits, is at the mercy of private equity investors and/or the government, and must counter existing bureaucratic and regulatory impediments. The good news, however, is that institutional support for social entrepreneurs has grown enormously into a support ecosystem. Ultimately, the problem for social entrepreneurs may not be opportunity recognition as much as obstacle recognition and finding solutions within this burgeoning ecosystem.

The 21st century has witnessed colossal missteps by corporate leaders, from Enron to Wall Street. While business spent the first half of the 20th century searching for and securing capital, it spent the latter half devoted to the use and flow of those funds. The second half of the 20th century witnessed the space race, the introduction of the computer and Internet, the expansion of food distribution, and the interconnectedness of global finance. What made this rapid development possible might have been the innovative ideas of management. Over successive decades since 1950, universities have educated and informed management students using a range of tools and concepts. While these can be influential and transformative, they can also be misused. Leaders have gradually allowed their authority to become eroded as their attention has shifted from purpose to performance. Management’s ideas and concepts have become a substitute for leadership and this leadership vacuum has had three primary negative effects. 1. Shareholders and stakeholders have lost confidence. 2. Generations X and Y have lost significant respect for business. 3. Boards of directors, who are supposed to provide organizational oversight, are now scrutinized and less autonomous. In the 21st century, leaders must allocate time for serious reflection on strategy, understand the boundaries and limitations of management protocols, appreciate the untapped value of collaboration, and communicate with integrity.

The state-owned copper miner Codelco is the largest contributor to the Chilean treasury and has helped the Latin American nation prosper through the global financial crisis. Notwithstanding the Chilean government’s prudent austerity measures and savings, it has deprived Codelco of much of the profits needed to increase competitiveness and production capacity, and has not addressed the firm’s inefficiency and lack of productivity. After examining this state-owned enterprise (SOE), this article describes ten best practices to turn around SOEs. 1. An agreement between the state and the SOE. 2. Cut through the old arguments for and against change. 3. History, relationships, and causality matter. 4. Transforming an SOE is more about execution than strategy. 5. The CEO can only manage what he/she measures. 6. The most sustainable turnarounds focus on both revenue and cost. 7. Arrange performance metrics to encourage value creation. 8. Empower functions that allow the “little things” to be done well. 9. Ensure that the ability to innovate is dispersed across the SOE. 10. Accept the fact that there will never be complete agreement. Most SOE mergers and acquisitions of the past decade have occurred in a resource-grab phase that has resulted in bloated, inefficient organizations, where acquiring SOEs export bad practices to acquired companies. As this article contends, moving to a talent-grab phase furthers the end point of acquisition strategy (efficient asset management), makes SOEs appear less threatening, reduces resource myopia, and matures an SOE’s management philosophy.

In the traditional business world, strong ties refer to firms or individuals who interact frequently, invest significant time and effort in a relationship, and transfer high-quality information and complex industry knowledge. Weak ties involve looser networks between individuals or firms, infrequent contact, a wide range of additional connections, and access to diverse information and resources. The modern business environment is characterized more by weak ties, due to the Internet and the widespread use of social media (1.5 billion users globally). Firms are organized in radical new ways such as virtual work groups, and transparency is more important than ever, with firms judged mercilessly on their response to customer feedback. <br><br> This article explores six key points in the art of building business relationships through social media: 1. Individual employees are likely to be seen as social media ambassadors, with their online activities reflecting on the company. 2. A firm should create specific social media management roles. 3. Connections should be forged with key influencers or critical enablers. 4. Significant cultural and structural changes may be needed to support relationship-building through social media. 5. Developing a trusted expert or key influencer position in a niche will generate a network of followers. 6. A qualitative and long-term approach is needed to evaluate the benefits of investments in relationship-building through social media.

Though China’s foreign investment in Africa is still relatively small, it is growing at a phenomenal rate and attracting international attention. Investment is especially pronounced in the mining and energy sectors, as China consumes a quarter of the world’s annual production of minerals and Africa accounts for thirty per cent of the world’s mineral reserves. This article views China’s foreign investment in Africa through the lens of the mining industry and argues that supply and demand considerations, not political factors, are the primary drivers of Chinese investment. China has designated seven Special Economic Zones in Africa that make broad contributions to economic development in various countries by supporting industries ranging from seafood processing to the production of ceramics, textiles, medicines, and furniture. Various large infrastructure projects exist, like the 2008 Sicomines resource-for-infrastructure deal in the Democratic Republic of Congo. With $6 billion earmarked for road, railway, and water projects, it will represent the largest infrastructure upgrade in Congo since colonization. Western investors, meanwhile, face pressure from shareholders to keep activities focused and are narrower in their infrastructural contributions. On the negative side, Chinese state-owned enterprises are insufficiently transparent (e.g. in the reporting of local tax payments). Their environmental record invites scrutiny, and some critics argue that Chinese SOEs show a laissez-faire attitude and exploit weak institutional structures. Ultimately, the reality of Chinese foreign investment in Africa is neither one of “saints nor sinners.”

For most of the 20th century, innovation happened largely through co-location — that is, within one country, sometimes at different locations, where employees shared the same context and culture. This can no longer remain the norm, as the knowledge and skills needed for innovation are dispersed across the globe. There is only limited understanding of the difference between these two approaches, and this contributes to reluctance to embrace the opportunities of global innovation. Planning and managing global projects requires that the means of communication, co-ordination, and collaboration be approached differently. Organizational stability is a prerequisite for global innovation projects. Teams that are new to global projects and trying to build the necessary competence should start with small, non-critical collaborations between two or three geographically dispersed sites. It is important that the product or service architecture in a global project be thoroughly defined before development commences. Global projects require at least a small degree of competency overlap between sites. Senior managers of global projects, far from easing into informal roles, must not only champion projects but keep them together. A lead site should be designated in order to avoid inefficiency and lack of leadership. Communication must be built into the project, and an overreliance on information and communication technology should be avoided. Finally, multicultural managers should be sought out and the burden of managing subcontractors should be limited.

The Ivey Business Journal interviews Aldo Musacchio, associate professor at Harvard Business School and an expert on state-owned enterprises (SOEs). Defining state capitalism as the widespread influence of a government in an economy, Musacchio contends that the current debate on state capitalism and the efficiency or inefficiency of SOEs is outdated. Most observers compare today’s SOEs to Soviet-era SOEs, which often failed to comply with international financial standards or focus on profitability. The rise of SOEs dates to the 19th century, when governments tried to solve basic market failures and intervene to provide public services. The second stage of state capitalism, from the 1930s to the 1980s, was characterized by the state venturing into firms across many industries. The third stage saw SOEs being run more like private corporations, with governments as the majority owners. <br><br>While the Fortune Global 500 lacked an SOE in the top ten firms in 2005, it contains four in 2013. Two common forms of modern state capitalism are a) the government influencing investment decisions of private companies through majority ownership in publicly traded corporations and b) smaller government investments or loans. In recent years, large SOEs have gained more autonomy from governments, especially in financial terms. Chinese SOEs have been aggressively buying stakes in resource firms, and acquisitions that would have formerly been considered “imperialism” are now mainstream. In fact, flagship SOEs in large countries are moving towards a model in which management is quite sophisticated.