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Many companies want to enter emerging markets, but this requires changing their approach to innovation. Rather than innovating for Western consumers who want advanced product features, here they must innovate for the bottom of the pyramid. The first key factor in frugal innovation is affordability, and many firms have turned profits even when selling products at a fraction of normal prices. A second major success factor is understanding target customers’ circumstances, such as Nokia did in designing phones for the Indian market that withstood exposure to dust and high variations in ambient temperatures, or when the telecom firm Safaricom realized that many Africans, though using mobile phones, were not using traditional banking services and so introduced fund transfers through text messaging. A third key factor is flexible value chains, meaning firms are often required to tweak their value chains at both ends — suppliers/vendors and distributors/channels. GE showed a strong distribution model when it partnered with the State Bank of India to provide no-interest loans to rural Indian doctors in order to sell its ECG device. This article provides an analysis of and framework for these three key factors in frugal innovation.

Despite China’s rapid economic and technological development, its intellectual property rights (IPR) protection environment is inadequate. Foreign companies and Chinese technology firms like Lenovo, Huawei, and Haier are pressuring the Chinese government for stronger protection. The government, in turn, wants to enhance innovative capacity in science and technology to boost economic progress, climb the value chain, and reduce dependence on foreign technologies. Patent applications in China have dramatically increased, particularly technology patents for strategic or defense purposes. The quality of the de facto IPR system and enforcement varies across regions, being more robust in the coastal provinces and major cities. Previous studies on IPR have mostly focused on the United States and Europe, not China, yet it is crucial for firms operating in China to understand its IPR environment. This article proposes four strategies for patenting in the country.<br><br>1) Incremental patenting is a strategy for complex technological products (i.e. semiconductors, communications, computers) in regions with weak IPR protection. It focuses on the lesser known utility-model patents, which are cheaper, granted faster, and shorter in duration than invention patents. 2) Effectual patenting is for complex technological products in regions with good IPR protection. It is suited to firms with technological products of higher strategic value. 3) Augmented patenting is for discrete technological products (i.e. chemicals, biotech, pharmaceuticals, life sciences) in regions with weak IPR protection. It is ideal for products with higher economic value. 4) Foundational patenting is for discrete technological products in regions with strong IPR protection. This strategy provides the strongest IPR protection possible.

Firms with higher information technology (IT) spending and expertise often achieve greater margins, yet many business leaders still lack IT savvy. Recent decades have witnessed the migration of information systems from specialized divisions to all parts of firms, but a lack of IT-savvy employees has led to underperforming IT investments. IT savvy is not a technical skill, but rather a basic understanding of technology, a knowledge of technology’s evolution, and an ability to scan the environment for new and innovative technological trends. Firms must gain familiarity with cloud technology, mobile platforms, digital strategies, social media, and big data. IT-savvy executives should include IT use in job descriptions, implement rewards and incentives that promote information and systems sharing, measure the performance of IT investments, create technical support functions, and create information systems and resources that are accurate, relevant, and shareable.

Despite leaders’ best intentions, the execution of strategy is often fraught with obstacles. This is frequently due to hidden, unobvious commitments lying beyond leaders’ awareness that counteract their espoused commitments. There are four key areas that contribute to leaders’ ability to perform: 1. Are they smart enough to manage complexity? 2. Do they possess the knowledge and skills required? 3. Do they care enough about their work? 4. Are they mature enough to manage relationships? <br><br> This article distinguishes between technical challenges (complex and critically important work with known solutions) and adaptive challenges (such as creating a corporate culture more oriented to innovation). Adaptive challenges can only be addressed through changes in employees’ priorities, beliefs, and habits. Overcoming these challenges depends greatly on how much a leader cares about his or her organization. This article suggests that leaders focus too much on running a business and meeting technical challenges, and not enough on changing a business and addressing adaptive challenges. In order to meet adaptive challenges, leaders should know their main priorities, understand their hidden commitments and faulty assumptions, and apply this learning to their teams.

According to the author, a former CEO of IKEA, a company needs four building blocks to ensure success: 1) A vision that incorporates a social ambition and a strong value base. IKEA’s founder wanted to enable those with limited financial means to have access to home furnishings of good design and quality. 2) Product range and differentiation achieved by control of the entire value chain. Differentiation of products and prices gives a company the opportunity to meet basic customer needs and build a competitive advantage that is difficult to copy. Indeed, many retailers now develop their own product ranges. 3) Market leadership and a balanced portfolio of outlets in emerging and mature markets. IKEA has established a balance of retail markets with growth potential and profitability. It adapts to different markets, offers competitive prices (especially in emerging markets), has a strong value base to fit different cultures, and has a solid, profitable home base to finance its activity. 4) A company that is controlled by a committed owner. The author argues in favour of an owner with majority control who takes a long-term perspective and takes risks. Institutional owners or employed CEOs (non-owners), he suggests, will not stay long enough to meet a firm’s needs.

A robust infrastructure is needed for a community — and a country — to thrive. Too much of Canada’s infrastructure is crumbling and neglected, this long-time elected official writes. He exposes the consequences of such neglect and explains how Canadians can locate the political will and financial resources to repair the problem. Attention is also given to infrastructure investments in Asia and the shifting economic clout of some of the world’s top cities.

This management thinker and author writes that the central challenge in the Western world now is not to make existing organizations more efficient and allocate resources; that struggle has moved to the East. The main challenge in the West is for it to reinvent its economies, innovate, and create wealth. Leaders will learn which tactics and tools they can use to achieve these extremely important goals. The author discusses the tools of power, management, leadership, and culture.

Many people who attended a meeting with Steve Jobs said that being there was like going on a magical mystery tour. The brilliant Apple leader was indeed ingenious, with his ability to entrance, enthrall, and bring others around to his way of thinking. Jobs was also difficult to decipher and many employees and competitors wondered where his amazing ideas came from. This author, a former employee at Apple, says that Jobs’ magic and mystery was informed by what he calls “re-framing” — or mental model innovation — a talent that only a very few leaders have.

Hiring a “proven winner” in major-league sports is usually seen as the solution for jump-starting a moribund team. But this is not necessarily true, at least in the National Hockey league, where hiring a winning coach or general manager from another team can make a team that is already skating uphill struggle even more. This Ivey professor has lots of compelling data to support this argument. As it turns out, a “proven winner” in one organization develops a skill set that won’t always translate into success in another.

The lack of female leaders may not be due to boards’ unwillingness to promote women to the position of CEO. Rather, it may be the result of women not being promoted while at lower and middle levels of an organization. As the author describes it, the challenge is not a glass ceiling, but rather a sticky floor. The author surveys compensation disparities, rewards for good management, and the relatively sudden interest in the compensation gap.

When a product that has been in development for one year can be copied and brought to market in days, first-mover advantage has lost its advantage. Imitation, once stigmatized, is now acceptable. In fact, this author says that to stay competitive and not fall behind, firms must imitate. In this article, he describes why imitation is as valuable as innovation, and argues that imitation can and should be strategically conceived and systematically executed. Consideration is given to the three main types of imitators, the correspondence problem (converting an imitation target into a copy that preserves the favourable outcome of the original), the value proposition of imitation, and overcoming imitation defenses.

New research by the author indicates that Canadian executives perform well on strategic intent, but have difficulty converting intent into results. Through a better understanding of the gaps that exist in the foundational pillars important to achieving a high-performance culture, executives and managers can focus on closing these gaps to support strategic execution, improve employee morale and engagement, and drive marketplace success. This article includes the findings of a survey based on the Corporate Organizational Vitality Index, which provides insights into how Canadian executives perceive their corporate culture.

Introspection and reflection have never been appreciated for their ability to steady a leader. However, practitioners and consultants have come to appreciate the importance of looking within. This article seeks to guide the reader to an understanding of reflection’s power, potential, and value as a key to maximizing their journey and being better prepared to thrive in an ever-complex world. Wisdom from the ancient Greeks is used here to inform the leadership “odysseys” of modern leaders.

Contrary to what seems to be the current practice advocated by the Project Management Institute (PMI), an influential organization that qualifies project managers globally, project management processes must also consider how to engage employees from the beginning so that they come to see any initiative as their own, and not simply as something to be done because they are told. This article stresses the importance of employee adoption of change, the integration of project management and change management, and organizational change management (OCM).

Israel’s prowess in developing successful, cutting-edge high-tech companies is well known. But such success overshadows the failure of traditional Israeli industry to be more agile and innovative. With this in mind, the Israeli government has established several key programs that aim to facilitate and accelerate innovation in Israel’s less successful industrial firms. Readers will learn about these programs — including an R&D grant fund, cooperation between companies and academic research institutions, and a forum where low- and high-tech firms share best practices — by two people who have been instrumental in building Israel’s reputation for innovation.

Many established global companies discount the need to innovate when competing in emerging markets. After all, innovation is expensive and risky. So, how can it make sense to spend heavily on an innovation for a market in which customers have so little money? Readers will find out just why it does make a lot of sense. The article discusses five gaps separating the needs of consumers in developed and developing countries, including performance, infrastructure, sustainability, regulatory, and preference gaps.

Ryan believes that a CEO should spend more time on recruiting and managing people than on any other activity, and that the head of HR is one of the most important people in the company. He insists on his freedom to bypass managers and speak with any employee at any time. And he espouses certain talent-management principles, such as that your best people are usually underpaid (reward them with performance pay) and that people leave jobs mainly because they don't like their managers. Recruiting at Gilt Groupe focuses on references more than on resumes and interviews because, Ryan says, resumes only establish basic qualifications for a job, and interviewers can't help being influenced by well-spoken or attractive people. But reference checks need to go beyond the names supplied by a candidate: Employers should dig up people in their networks who are willing to speak candidly.

As the global economy vacillates between signs of recovery and omens of collapse, businesses and governments are clamping down. But the world doesn't need austerity; it needs audacity--bold, inventive ideas that take on big problems. So HBR asked experts from a range of disciplines to propose them. Robert J. Shiller believes an innovative form of national financing can solve the global debt crisis. Enric Sala has a radical but simple idea for saving the oceans. Bruce Gibney and Ken Howery want venture capitalists to bet on breakthrough start-ups. Bruno S. Frey and Margit Osterloh argue that corporations have been hurt by pay-for-performance schemes and should toss them. Ellen Gustafson says we can end obesity and famine by changing the way we produce food. Gregg Easterbrook thinks NASA must find an affordable way to reach Mars. Doc Searls argues that companies should ditch their data and let consumers direct transactions. Ellen Goodman believes we can change the way we die. Wayne Porter has a new vision for Afghanistan. Linda A. Hill and Kent Lineback say crowdsourced reviews will make executives better managers. Parag Khanna and Karan Khemka think for-profit universities will jump-start the global economy. Arun Majumdar is looking for a battery to serve the bottom of the pyramid. And Eric Schmidt thinks social-impact bonds could transform the prison system.

Capitalism remains the most powerful, flexible, and robust system for driving broad-based prosperity and enhancing quality of life. But keeping capitalism on track will depend on our ability to rethink the priorities that guide everyone in the system, from entrepreneurs to regulators to investors. In particular we will need to throttle back the headlong pursuits of competition and ROE, and that process begins with recognizing them for what they are: runaways. The runaway, a concept from evolutionary biology, is explained best by the peacock's tail. That feature grew ever more flamboyant across the centuries thanks to a simple fact: Peahens showed a preference for large-tailed mates. But after many generations the tail created a problem: It required more nutrients and was heavy, slowing down its owner and making him easier prey--eventually causing the peacock population to decline. Capitalism is on a similar runaway trajectory, say Meyer and Kirby, mostly because it has taken the ideas of competition and ROE--brilliant in their time--too far. By reining in these metrics and developing new ones more suited to today's world, we can reformulate capitalism and break the runaway cycle.

Gross domestic product has long been the chief measure of national success. But there's been a lot of talk lately about changing that, from economists and world leaders alike. GDP is under siege for three main reasons. First, it is flawed even on its own terms: It misses lots of economic activity (unpaid household work, for example) and, as a single-number representation of vast, complex systems, is inevitably skewed. Second, it fails to account for economic and environmental sustainability. And third, readily available alternative measures may reflect well-being far better, by taking into account factors such as educational achievement, health, and life expectancy. HBR's Justin Fox surveys historical and current views on how to assess national progress, from Jeremy Bentham to Robert Kennedy to Nicolas Sarkozy. He also looks at where we may be headed. The biggest success so far in the campaign to supplant or at least supplement GDP, he finds, is the UN's Human Development Index--on which the United States has never claimed the top spot.