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  • Does Management Really Work?

    HBR's 90th anniversary is a sensible time to revisit a basic question: Are organizations more likely to succeed if they adopt good management practices? The answer may seem obvious to most HBR readers, but these three economists cast their net much wider than that. In a decade-long study of thousands of organizations in 20 countries, they and their interview teams assessed how well manufacturers, schools, and hospitals adhere to three management basics: targets, incentives, and monitoring. They found that huge numbers of companies follow none of those fundamentals, that adopting the basics yields big improvements in outcomes such as productivity and longevity, and that good nuts-and-bolts management at individual firms shapes national performance. At 14 textile manufacturers in India, for example, an intervention--involving free, high-quality advice from a consultant who was on site half-time for five months--cut defects by half, reduced inventory by 20%, and raised output by 10%. A control group saw no such gains. The authors' global data set suggests that implementing good management at schools and hospitals yields change more slowly than at manufacturers--but it does come eventually. And the macroeconomic potential--for incomes, productivity, and delivery of critically needed services--is huge. A call for "better management" may sound prosaic, but given the global payoffs, it's actually quite radical.
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  • Inventing HBR

    Harvard Business Review was launched in 1922 by a Harvard Business School dean who wanted to equip managers-in-training with better tools of the trade. Its initial print run was only 6,000 copies, and its initial subscription price--$5--was a point of contention between the dean and his outside publisher. For the next 25 years the magazine barely broke even. But between its founding and World War II, the HBS faculty became competent at translating rigorous research into relevant reading for practicing managers, and by the end of the war HBR was poised to capitalize on the ensuing business boom. Circulation shot up from 14,000 in 1945 to 243,000 in 1985. Kirby, an editor at large for HBR, traces its history from the Roaring Twenties to the present day. "The threads being woven into HBR's fabric as the years passed," she writes, "were not just timely topics for consideration but distinct approaches to studying them." Those topics included "scientific management," women in the workforce, and the power of the consumer, to name just a few. And those distinct approaches brought names such as Peter Drucker, Michael Porter, and Robert S. Kaplan into our pages. Kirby writes as well about some of the colorful personalities behind the scenes at HBR, and about the magazine's falling and rising fortunes. As it enters its 90s, she says, "it does so with a special provenance, some special strengths, and a deeply informed notion of what the management agenda should be."
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  • A Whole New Way of Looking at the World

    The dean of Harvard Business School recalls the powerful effect that reading Harvard Business Review had on him as an undergraduate studying engineering in India. It was his first exposure to management thinking, and he witnessed HBR's impact firsthand when the company where he was interning one summer reorganized its largest plant according to the ideas in one HBR article--dramatically improving its productivity. Today the magazine, its website, and its book program help fulfill the HBS mission of educating many more business leaders around the globe, not all of whom can come to the school campus.
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  • Deal Making 2.0: A Guide to Complex Negotiations

    Most big deals--megamergers, major sales, infrastructure projects--are built on a series of smaller ones. Each component deal presents a tactical challenge, but sequencing the parts in a way that achieves the target outcome is a strategic challenge that can unfold over months or years. This process, which the authors call a negotiation campaign, must generally be conducted on several fronts, each involving multiple parties. A multifront campaign can be much more effective than direct negotiation. After failed talks between longshoremen and the Pacific Maritime Association--a group of shippers and port operators--the PMA's president turned away from the bargaining table and embarked on a campaign to align member--firms, the business community, the U.S. government, and the public around his target outcome: the deployment of new information technologies to help unclog busy ports. The result was an agreement that was ultimately mutually beneficial. Designing and executing a negotiation campaign involves identifying the relevant parties, grouping them into fronts according to shared interests, determining whether to combine fronts (if, for instance, doing so would unite your allies), and deciding which fronts to approach early on and which to engage only after you've made progress elsewhere. The deal between the PMA and the longshoremen involved high stakes, but many small-scale deals--such as gaining approval for a new product--also play out on multiple fronts. Going straight to a key decision maker often makes sense, but in many cases a multifront campaign is the only way.
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  • What You Can Learn from Family Business

    Though the term "family business" may call to mind visions of local mom-and-pop firms, family- controlled companies play a huge role on the global stage. Not only do they include sprawling corporations like Walmart and Tata Group, but they account for more than 30% of all companies with sales in excess of $1 billion. And over the long term, their financial performance exceeds that of traditional public companies, according to a new study by BCG and Ecole Polytechnique. Family-controlled companies surpass their peers because they focus on resilience, not short-term results. During economic booms, this approach leads them to forgo some opportunities (and hence do slightly worse than their counterparts), but it puts them in a position of strength during downturns, when they shine. The researchers identified seven specific ways in which family-run businesses build their resilience: 1) They're frugal in good times and bad; 2) They set a high bar for capital expenditures; 3) They carry little debt; 4) They acquire fewer (and smaller) companies; 5) They're more diversified; 6) They're more international; and 7) They retain talent better than their competitors do. Though these practices come more naturally to executives who feel an obligation to be stewards for the next generation, executives at any corporation can adopt them. Indeed, the researchers uncovered a number of nonfamily-controlled companies that mimicked the behaviors of family firms and saw very similar patterns of performance.
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  • Which Products Should You Stock?

    Getting product assortment right isn't easy, yet it's absolutely critical to retail success. Unlike inventory management and pricing, where retailers have lots of data and analytical tools to guide decision making, assortment optimization is still much more art than science. And making the wrong call can be disastrous. A new approach to assortment planning addresses this deficiency. The foundation for the approach is the notion that most of the time customers don't buy products; they buy a bundle of attributes. For instance, when customers consider buying a TV, they think about screen size, resolution, price, LCD or plasma, and brand. The new method uses sales of existing products to estimate the demand for their various attributes and then uses those estimates to forecast the demand for potential new products on the basis of their attributes. This technique helps retailers do a better job of replacing slow sellers with new ones, understanding whether customers are likely to settle for another choice if they don't find their ideal product, and customizing assortments of individual stores or clusters of stores.
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  • Mumbai's Models of Service Excellence

    Think you need exceptional employees, advanced IT, or rigid controls to build a high-performance organization? The dabbawalas of Mumbai prove otherwise. Six days a week, these 5,000 self-managed, semiliterate workers deliver upwards of 130,000 lunches from customers' homes to their offices with astonishing precision--negotiating the crowded city by train, bicycle, and handcart, without the aid of any technology or even cell phones. The 100-year-old service is legendary for its reliability: Despite monsoons, floods, riots, and terrorist attacks, mistakes by the dabbawalas are extremely rare. Thomke, an HBS professor, studied the dabbawalas to find the keys to their success. He uncovered a unique system with four pillars: organization, management, process, and culture. A flat structure, consisting of autonomous units of 25 people each, is well suited to providing low-cost service. The tight schedule of the train lines over which meals are ferried regulates everyone's work. Buffer capacity is built in to address extremely thin margins of error; each unit has extra workers who fill in wherever they are needed, and members are cross-trained in all activities. Variations that might derail the works are discouraged; the lunchboxes used, for instance, are all a standard size. A simple coding system helps workers quickly sort lunches and get them where they need to go. And democratic decision making and deep emotional bonds among workers promote a high degree of cooperation. The dabbawalas show that with the right system, even ordinary workers can achieve the extraordinary.
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  • A Campaign Strategy for Your Career

    Organizations are inherently political, and pretending they're not is just plain impractical. But strategizing like a politician to advance your career doesn't have to mean compromising your integrity. You can craft a campaign plan that actually gets results without making you feel sullied. So argues Clark, who has worked with top-tier politicians and business executives as they strive to achieve their goals. She recommends that in business, as in politics, aspiring leaders choose their career milestones from the get-go and plan precisely what reaching each one will demand. That means taking inventory of the skills you'll need to acquire and figuring out exactly where and how you'll develop them. The best career planners work backward on the calendar: They start with the end points and carefully mark, in reverse, all the steps along the way. Then they set out on the course, identifying influential people whose favor they need to win and getting specific about how to garner it. They use power maps to home in on the most influential individuals and groups, and they aren't shy about courting votes. "Being political" still sounds negative to many people in business, but learning how to play the game doesn't have to be a Machiavellian endeavor. Indeed, harming people in the process won't help you at all, but if you eschew the political process altogether, you'll only harm yourself.
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  • Life's Work: Ian McEwan

    The critically admired author of 16 novels talks about the silence and mental rambling out of which his ideas emerge. "Characters walk to you as through a mist," he says. He values hesitation, loves solitude, and thinks one of the most potent forms of satisfaction available is achieving total absorption in something that interests and challenges him.
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  • The Flattened Firm: Not as Advertised

    For decades, management consultants and the popular business press have urged large firms to flatten their hierarchies. Flattening (or delayering) typically refers to the elimination of layers in a firm's hierarchy and the broadening of managers' spans of control. The alleged benefits flow primarily from pushing decisions downward to enhance market responsiveness and improve accountability and morale. Has flattening delivered on its promise? This article demonstrates that flattening management layers can have the opposite effect from their intention. In fact, flattened firms typically exhibit more control and decision making at the top.
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  • Celtel's Founder on Building a Business on the World's Poorest Continent

    Back in the late 1990s Ibrahim, who was running a software and consulting company in the UK, regularly worked with big telecom companies. He began asking them why they were ignoring the huge opportunities to develop mobile communications in Africa, especially in countries where licenses would be free. The telecom executives who were his clients simply saw Africa as too unknown and too risky. One of them cited Idi Amin as a barrier--but Amin had been gone from Uganda for 15 years. Convinced that the potential market was too big to pass up, Ibrahim decided to develop it himself. He began with just five employees and initial funding from his consulting firm, and subsequently had to spend a significant amount of time raising capital--$300 million during the first five years. To establish credibility, he recruited an experienced and respected board and instituted rules to prevent bribery and corruption. The company began in Uganda and a few other countries where the pent-up demand was almost overwhelming. In Gabon, for example, customers actually knocked down the door in one of its offices trying to get in. "That's how badly people wanted to make phone calls," Ibrahim writes. The challenges he faced in meeting that demand were infrastructural as well as political and cultural: Some places lacked roads, so helicopters had to move the heavy equipment. The company had to supply its own electricity and water and to refill its batteries and generators every day. Nevertheless, Ibrahim succeeded in building a large company and creating an even larger economy to support it. When Celtel was sold to Zain, in 2005, it was operating in 15 African countries under licenses that covered more than a third of the continent's population.
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  • The True Measures of Success

    When it comes to assessing performance, business executives can be a lot like old-time baseball scouts, who have been around so long that they've developed a gut feel for which statistics matter most. But as Michael Lewis describes in "Moneyball," the Oakland Athletics discovered that the metric the team's scouts used to choose players had nothing to do with whether those players would score runs. They had been measuring the wrong thing, and executives may be making the same mistake. Theory and empirical research show only a shaky connection between value creation and two of the most popular performance measures: earnings per share (EPS) growth and sales growth. Yet executives cling to those metrics because they are overconfident in their intuition, they misattribute the causes of events, and they do not escape the pull of the status quo. The most useful statistics reliably reveal cause and effect. They have two defining characteristics: They are persistent, showing that the outcome of a given action at one time will be similar to the outcome of the same action at another time, and they are predictive--that is, there is a causal relationship between the action the statistic measures and the desired outcome. To choose the right statistics, you must define your governing objective, assess the financial and nonfinancial drivers of that objective, and figure out which employee activities support those drivers. You must also regularly reevaluate your metrics. The drivers of value creation change, and so must your statistics.
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  • Big Data: The Management Revolution

    Big data, the authors write, is far more powerful than the analytics of the past. Executives can measure and therefore manage more precisely than ever before. They can make better predictions and smarter decisions. They can target more effective interventions in areas that so far have been dominated by gut and intuition rather than by data and rigor. The differences between big data and analytics are a matter of volume, velocity, and variety: More data now cross the internet every second than were stored in the entire internet 20 years ago. Nearly real-time information makes it possible for a company to be much more agile than its competitors. And that information can come from social networks, images, sensors, the web, or other unstructured sources. The managerial challenges, however, are very real. Senior decision makers have to learn to ask the right questions and embrace evidence-based decision making. Organizations must hire scientists who can find patterns in very large data sets and translate them into useful business information. IT departments have to work hard to integrate all the relevant internal and external sources of data. The authors offer two success stories to illustrate how companies are using big data: PASSUR Aerospace enables airlines match their actual and estimated arrival times. Sears Holdings directly analyzes its incoming store data to make promotions much more precise and faster.
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  • Data Scientist: The Sexiest Job of the 21st Century

    Back in the 1990s, computer engineer and Wall Street "quant" were the hot occupations in business. Today data scientists are the hires firms are competing to make. As companies wrestle with unprecedented volumes and types of information, demand for these experts has raced well ahead of supply. Indeed, Greylock Partners, the VC firm that backed Facebook and LinkedIn, is so worried about the shortage of data scientists that it has a recruiting team dedicated to channeling them to the businesses in its portfolio. Data scientists are the key to realizing the opportunities presented by big data. They bring structure to it, find compelling patterns in it, and advise executives on the implications for products, processes, and decisions. They find the story buried in the data and communicate it. And they don't just deliver reports: They get at the questions at the heart of problems and devise creative approaches to them. One data scientist who was studying a fraud problem, for example, realized it was analogous to a type of DNA sequencing problem. Bringing those disparate worlds together, he crafted a solution that dramatically reduced fraud losses. In this article, Harvard Business School's Davenport and Greylock's Patil take a deep dive on what organizations need to know about data scientists: where to look for them, how to attract and develop them, and how to spot a great one.
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  • Making Advanced Analytics Work for You

    Senior leaders who write off the move toward big data as a lot of big talk are making, well, a big mistake. So argue McKinsey's Barton and Court, who worked with dozens of companies to figure out how to translate advanced analytics into nuts-and-bolts practices that affect daily operations on the front lines. The authors offer a useful guide for leaders and managers who want to take a deliberative approach to big data--but who also want to get started now. First, companies must identify the right data for their business, seek to acquire the information creatively from diverse sources, and secure the necessary IT support. Second, they need to build analytics models that are tightly focused on improving performance, making the models only as complex as business goals demand. Third, and most important, companies must transform their capabilities and culture so that the analytical results can be implemented from the C-suite to the front lines. That means developing simple tools that everyone in the organization can understand and teaching people why the data really matter. Embracing big data is as much about changing mind-sets as it is about crunching numbers. Executed with the right care and flexibility, this cultural shift could have payoffs that are, well, bigger than you expect.
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  • 10 Rules for Managing Global Innovation

    More and more companies recognize that their dispersed, global operations are a treasure trove of ideas and capabilities for innovation. But it's proving harder than expected to unearth those ideas or exploit those capabilities. Part of the problem is that companies manage global innovation the same way they manage traditional, single-location projects. Single-location projects draw on a large reservoir of tacit knowledge, shared context, and trust that global projects lack. The management challenge, therefore, is to replicate the positive aspects of colocation while harnessing the opportunities of dispersion. In this article, Insead's Wilson and Doz draw on research into global strategy and innovation to present a set of guidelines for setting up and managing global innovation. They explore in detail the challenges that make global projects inherently different and show how these can be overcome by applying superior project management skills across teams, fostering a strong collaborative culture, and using a robust array of communications tools.
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  • What Ever Happened to Accountability?

    When leaders don't fire incompetent executives, they send a bad message to the whole organization. A case in point is the U.S. Army. "To study the change in the army across the two decades between World War II and Vietnam," Ricks writes, "is to learn how a culture of high standards and accountability can deteriorate." In this essay, adapted from his new book, The Generals: American Military Command from World War II to Today, Ricks illuminates the contrast between General George C. Marshall, an unlikely figure of quiet resolve who became a classic transformational leader, and the disastrous generals of the Vietnam era. In Vietnam, he writes, the honesty and accountability of Marshall's system were replaced by deceit and command indiscipline. If inadequate leaders are allowed to remain in command of an enterprise, their superiors must look for other ways to accomplish its goals. In Vietnam commanders turned to micromanagement, hovering overhead in helicopters to direct (and interfere with) squad leaders and platoon leaders on the ground. This both undercut combat effectiveness and denied small-unit leaders the opportunity to grow by making decisions under extreme pressure. In Iraq and Afghanistan, Ricks writes, though U.S. troops fought their battles magnificently, their generals often seemed ill equipped for the tasks at hand--especially the difficult but essential job of turning victories on the ground into strategic progress. This brief but powerful history of the army since World War II holds stark lessons for business leaders.
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  • Execution as Strategy

    Dozens of multinational companies from emerging markets are roaring out of obscurity to compete head-to-head with the world's great corporations--without paying much attention to the kind of strategy making that is typically taught in business schools. Unencumbered by complicated or calcified rules about which markets to focus on and how to grow, these firms are achieving success by executing first and analyzing later, pursuing headlong expansion, and embracing turbulent markets. Mauro F. Guillen of the Wharton School and Esteban Garcia-Canal of the University of Oviedo in Spain say that these companies' tendency to make strategy on the fly may be the reason they don't garner the kind of respect in the developed world that is showered on the likes of GE, IBM, and P&G. In this article, the authors take a close look at three firms--Mexico's Bimbo, the number one bread baker in the world; India's Ocimum Biosolutions, a contract R&D and research firm; and Egypt's Orascom, a conglomerate operating in many of the world's most chaotic regions--to understand how their mind-set feeds their success. In today's world, all companies need to be able to function in unpredictable business environments. Emerging multinationals already know how to do that--it's what they're used to. Lessons from their success are applicable to global firms wherever they're from and wherever they do business.
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  • No, You Can't Have It All

    Many of us are struggling to chart a path toward success in our careers and a sense of fulfillment in all aspects of our lives. But we can't excel simultaneously in every role. Instead, at various points in life we must choose what to emphasize and what to relinquish. The goal is to make that decision consciously instead of unwittingly letting go of the most important item. The author presents a framework he designed with Howard Stevenson, a business professor who has played many roles throughout his life, to help ambitious executives understand their limits and make tough trade-offs. It starts with considering all the dimensions of your life, developing a vision of yourself for the present and for the future, and then evaluating how your options advance you toward your goals. 1) Where do your options fall on the needs-wants spectrum? Most things fall somewhere in the middle. Some wants are so strong that it's difficult to separate them from needs. 2) What are the investment and opportunity costs? Most decisions involve both kinds of costs. The challenge is to understand if incurring them will help you achieve your goals. 3) Are the potential benefits worth the costs? Does the benefit you'll receive warrant the investment you'll have to make? 4) Can you make a trade? Many of us try to exchange something we have for something else that we want. But sometimes the two items can't be traded. Money, for instance, cannot buy health. 5) Have you considered sequencing your most valued options? Consciously staggering your goals may enable you to be equally successful in many dimensions over time.
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  • Life's Work: Barbra Streisand

    The entertainment icon discusses work-life balance, overcoming stage fright, and working in the nonprofit sector.
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