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When an executive makes a big bet, he or she typically relies on the judgment of a team that has put together a proposal for a strategic course of action. After all, the team will have delved into the pros and cons much more deeply than the executive has time to do. The problem is, biases invariably creep into any team's reasoning-and often dangerously distort its thinking. A team that has fallen in love with its recommendation, for instance, may subconsciously dismiss evidence that contradicts its theories, give far too much weight to one piece of data, or make faulty comparisons to another business case. That's why, with important decisions, executives need to conduct a careful review not only of the content of recommendations but of the recommendation process. To that end, the authors-Kahneman, who won a Nobel Prize in economics for his work on cognitive biases; Lovallo of the University of Sydney; and Sibony of McKinsey-have put together a 12-question checklist intended to unearth and neutralize defects in teams' thinking. These questions help leaders examine whether a team has explored alternatives appropriately, gathered all the right information, and used well-grounded numbers to support its case. They also highlight considerations such as whether the team might be unduly influenced by self-interest, overconfidence, or attachment to past decisions. By using this practical tool, executives will build decision processes over time that reduce the effects of biases and upgrade the quality of decisions their organizations make. The payoffs can be significant: A recent McKinsey study of more than 1,000 business investments, for instance, showed that when companies worked to reduce the effects of bias, they raised their returns on investment by seven percentage points. Executives need to realize that the judgment of even highly experienced, superbly competent managers can be fallible. A disciplined decision-making process, not individual genius, is the key to good strategy.

In the early 2000s, faced with an alarming gap between its growth goals and what its innovation pipeline was delivering, Procter & Gamble created a "new-growth factory"-a network of novel structures and capabilities to rapidly shepherd new products and even business models from inception to market. The resulting innovations range from a 33-cent razor for customers in emerging economies to Tide Dry Cleaners-establishments with drive-through windows and 24-hour drop-off and pickup. Brown, who is P&G's chief technology officer, and Anthony describe the factory's components and practices: new-business-creation groups, entrepreneurial "guides" to help them, an innovation manual, a disruptive-innovation "college," and more. They also offer six lessons for leaders seeking to set up new-growth factories of their own. Although the factory is still ramping up, its early successes suggest that collective creativity can be managed-and can generate sustainable sources of revenue growth no matter how big a company becomes.

Although most managers publicly acknowledge the need to explore new businesses and markets, the claims of established businesses on company resources almost always come first, especially when times are hard. When top teams allow the tension between core and speculative units to play out at lower levels of management, innovation loses out. At best, leaders of core business units dismiss innovation initiatives as irrelevancies. At worst, they see the new businesses as threats to the firm's core identity and values. Many CEOs take a backseat in debates over resources, ceding much of their power to middle managers, and the company ends up as a collection of feudal baronies. This is a recipe for long-term failure, say the authors. Their research of 12 top management teams at major companies suggests that firms thrive only when senior teams lead ambidextrously-when they foster a state of constant creative conflict between the old and the new. Successful CEOs first develop a broad, forward-looking strategic aspiration that sets ambitious targets both for innovation and core business growth. They then hold the tension between innovation unit demands and core business demands at the very top of the organization. And finally they embrace inconsistency, allowing themselves the latitude to pursue multiple and often conflicting agendas.

A few years ago the software development company Intuit realized that it needed a new approach to galvanizing customers. The company's Net Promoter Score was faltering, and customer recommendations of new products were especially disappointing. Intuit decided to hold a two-day offsite for the company's top 300 managers with a focus on the role of design in innovation. One of the days was dedicated to a program called Design for Delight. The centerpiece of the day was a PowerPoint presentation by Scott Cook, who realized midway through that he was no Steve Jobs: The managers listened dutifully, but there was little energy in the room. By contrast, an exercise that followed, in which the participants worked through a design challenge by creating prototypes, getting feedback, iterating, and refining, had them mesmerized. The eventual result was an organized program in which a team of nine design thinking coaches-"innovation catalysts"- from across Intuit were made available to help any work group create prototypes, run experiments, and learn from customers. The process includes a "painstorm" (to determine the customer's greatest pain point), a "sol-jam" (to generate and then winnow possible solutions), and a "code-jam" (to write code "good enough" to take to customers within two weeks). Design for Delight has enabled employees throughout Intuit to move from satisfying customers to delighting them.

No investment in innovation is ever a sure bet. Typically, innovation success rates are low, and returns are slow to materialize-if they're generated at all. This makes innovation initiatives hard to justify when money is tight. But even then, it's still possible to launch new offerings that excite customers. The trick is to find the promising assets you already have in hand. According to strategy consultant Lance Bettencourt and consumer-products executive Scott Betten-court, almost every company has previous discoveries with overlooked market potential. The six most common types of in-hand innovations include products that failed to launch because of particular circumstances, which may have changed since then; previously developed capabilities and features addressing customer needs that have recently risen in prominence; products that customers like for unexpected reasons and that could take off if repositioned; extras created for bundled offerings that could be spun out as stand-alone products; separate components that could be combined into an enhanced offering; and overdesigned products that could be simplified to help the company reach new customer segments. With such innovations, much of the work has already been done. They can be brought to market with relatively minimal effort, resources, and risk and swiftly boost a company's bottom line.

A growing body of research shows that end users-customers, clients, patients, and others who benefit from a company's offerings-can be important allies for leaders. By serving as tangible proof of the consequences and purpose of employees' efforts, end users motivate people to work harder, smarter, and more effectively. In his research, the author invited a scholarship recipient to spend five minutes visiting with university fundraising callers, who generally had no contact with the beneficiaries of their efforts. One month later, callers showed, on average, 142% increases in weekly time spent on the phone and 171% increases in money raised. Leaders are not lone heroes who must rally their employees to do great things. They need partners who can enhance the meaning employees derive from their jobs. End users can inspire workers by demonstrating the impact of their efforts, showing appreciation for their work, and eliciting employees' empathy for them. To outsource inspiration effectively, leaders must identify end users (both past and present), collect their stories, introduce them to employees across the organization, and recognize workers' impact on customers' lives.

The "free" business models popularized in the digital world by companies such as Google, Adobe, and Mozilla are spreading to markets in the physical world. How should established companies respond? The authors have found that some are too quick to offer free products of their own. Many more either don't move quickly enough or simply fail to respond at all, even when they have the resources to win a head-to-head battle. Consider the reluctance of almost all U.S. newspapers to counter the attack on their classified advertising business from Craigslist. To determine the level of threat posed by a free-product rival, a company should assess the rate at which its own paying customers are defecting versus how quickly the entrant's user base is growing. Most incumbents can fend off the assault by introducing a better free offering and generating revenues and profits through up-selling, cross-selling, selling access to their customers, and bundling the free product with paid offerings. Embracing free strategies is not easy for managers at established companies. One obstacle is the profit-center structure, which makes it impossible to consider a product's revenues and costs separately. Another is the cost accounting system, which is not good for identifying the actual expense of generating additional offerings. To overcome these challenges, managers can push profit responsibility up, push revenue and cost responsibilities down to separate groups, and step back from the cost accounting system. They may find pricing flexibility they didn't realize they had.

The bottom of the economic pyramid is a risky place for business, but decent profits can be made there if companies link their financial success with their constituencies' well-being. To do that effectively, you must understand the nuances of people's daily lives, say Rangan and Chu, of Harvard Business School, and Petkoski, of the World Bank. Start by dividing the base of the pyramid into three segments according to people's earnings and related personal needs: (1) Low income: 1.4 billion people, $3 to $5 a day, (2) Subsistence: 1.6 billion people, $1 to $3 a day, and (3) Extreme poverty: 1 billion people, less than $1 a day. Next, consider the roles of various groups in the value-creation relationship: consumers, coproducers, and clients. Specific strategies work best with people in certain roles and at particular income levels. Success requires appreciating the diversity at the base of the pyramid and the importance of scale in undertaking ventures there. Witness Manila Water's success in the Philippines and Hindustan Unilever's in South Asia. Failure to appreciate those elements can foil base-of-the-pyramid ventures, as Microsoft and Procter & Gamble each discovered.

Why is it that so many smart, ambitious professionals are less productive and satisfied than they could be? Thomas DeLong, an academic and consultant to executives, and Sara DeLong, a psychiatrist, argue that it's often because they're afraid to demonstrate any sign of weakness. They're reluctant to ask important questions or try new approaches that push them outside their comfort zones. For high achievers, looking stupid or incompetent is anathema. So they stick to the tasks they're good at, even while the rest of the organization may be passing them by. In short, they'd rather do the wrong thing well than do the right thing poorly. They get stuck in this unproductive and unfulfilling pattern and can't break free. Of course, leaders in organizations bear some of the blame for this type of play-it-safe mind-set. They don't always want to hear that a person is struggling, nor do they necessarily reward risk taking, even though they might pay lip service to innovative initiative. The authors outline several steps that individuals can take to shake off fear and paralysis, including looking at past negative experiences from somebody else's point of view and seeking out safe ways to allow themselves to become vulnerable.

Kathy Giusti never had any desire to be an entrepreneur, especially not one in the nonprofit sector. She was on the fast track at a huge corporation-and loving it. Then at, the age of 37, she learned she had a deadly form of blood cancer. That life-altering news would put her on a new path: galvanizing efforts to find a cure. In the process, she would found two nonprofits, building unprecedented discipline into their mode of operation.

Adria, the head chef of elBulli-a Spanish restaurant regularly ranked the world's best-on efficient service culture, the best way to nurture talent, and the creative inspiration behind new foods like sea urchin foam and curry ice cream.

It's well known that China has been working to spur domestic consumption. But it's making faster progress than many outsiders realize; for example, China is already the first or second largest market in a number of important consumer categories. Here are some trends Western multinationals should be aware of, along with advice on how to better position themselves so that they don't get left behind.

Corporate social responsibility remains a deeply controversial issue. Vermaelen proposes a creative way to finance CSR initiatives: through equity spin-offs that create separate alternative businesses funded by shareholders who opt in, knowing they may see lower returns but enthusiastic about the cause.

A study of 10,000 accounts in a large German bank showed that customers obtained through referrals are both more loyal and more valuable than other customers, making referral programs well worth the cost. The effect is strongest among young people.

When professors Anita Woolley and Thomas Malone studied the factors that increased a group's collective intelligence, they made some surprising discoveries: A team's intelligence, as measured by performance on a range of tasks, had relatively little to do with the individual IQs of its members. But it had a lot to do with the gender of those members.

How you handle yourself in your final weeks and months in power will have a big impact on how you are remembered.

In theory, customer feedback, whether positive or negative, is good. In reality, it can be hard to figure out which online reviews are legitimate-and how responsive to be.

Viral features embedded in your product can have an explosive effect on adoption. Automatic notifications, which are passive, get the most hits. But personalized features, such as user-to-user invitations, are three times as effective per message.

Brands rushed into social media, viewing social networks, video sharing, online communities, and microblogging sites as the panacea to diminishing returns for traditional brand building routes. But as more branding activity moves to the Web, marketers are confronted with the stark realization that social media was made for people, not for brands. In this article, we explore the emergent cultural landscape of open source branding, and identify marketing strategies directed at the hunt for consumer engagement on the People's Web. These strategies present a paradox, for to gain coveted resonance, the brand must relinquish control. We discuss how Web-based power struggles between marketers and consumer brand authors challenge accepted branding truths and paradigms: where short-term brands can trump long-term icons; where marketing looks more like public relations; where brand building gives way to brand protection; and brand value is driven by risk, not returns.

Marketing is evolving into true participatory conversations. Once-tidy, controlled marketing communications with distinct, identifiable corporate spokespeople are giving way to a messy tangle of market-based communications consisting of multiple authors including customers, competitors, observers, employees, and interested collectives. Amidst this, we find consumer-generated content (CGC) that is predominantly antithetical to previous studies, which assumed CGC to be inspired by personal brand attachment and/or the desire to see discrete-authored CGC disseminated, or even motivated by monetary reward. Authorship of collaboratively-produced CGC is virtually untraceable, unknown, and monetarily uncompensated. The true reward is the process, and the outcome is not reliant on technical prowess but rather semiotic manipulation, narrative manipulation, and complex brand character development. Consumers-especially those who are members of active consumer collectives-are skillful, proficient, and prolific in the creation of CGC, with high resonance among very engaged consumers. We advocate harnessing collaborative CGC efforts toward long-term marketing objectives, and offer a brief tutorial.