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In earlier work, the author has argued for the concept of open innovation -that companies should both organize their innovation processes to be more open to external knowledge and ideas and also let more of their ideas and knowledge flow to the outside when not being used internally. Yet initial discussion of open innovation contrasted it to traditional R&D and product development; this had the effect of placing the focus more on product and technology innovation than on service innovation. Open innovation works somewhat differently in service businesses, in part because the role of the customer is different; in a service business, the customer is often involved in an iterative process with the company that results in a customer experience. In addition, innovation processes work differently in services. Few companies have formal R&D operations for the services they provide, and the customer may need to participate throughout the service innovation process. Some of the concepts of open innovation apply readily to service innovation. For example, Amazon. com has not only created open service innovation by bringing the "outside in"-think of customer reviews on Amazon.com and third parties selling products via Amazon's site -but also by taking the"inside out,"by, for example, using internal knowledge and infrastructure to create a business selling cloud computing services to other companies. Companies interested in moving toward open service innovation can try techniques such as working closely with customers to develop new solutions for them; focusing offerings on utility for customers, rather than on products; and embedding the company in a customer's organization. Companies that have traditionally been product oriented may need to make some organizational changes, such as changing service pricing, as they move to a more service-oriented approach.

This is an MIT Sloan Management Review article. MIT Sloan Management Review's second annual Sustainability & Innovation survey -exploring the current and projected sustainability-related practices of organizations and executives -was fielded during a year of bad public news for sustainability advocates. Between last year's much-publicized delay in reaching an international agreement on climate change in Copenhagen and the continuing economic malaise, it was hard to predict how sustainability would fare as a management priority. Would companies begin to scale back their efforts to adopt more efficient business practices and become less focused on sustainability-related issues? Would they put existing programs on hold? What assessments would they make about the implications for managers of the changing sustainability landscape, and how were their strategic plans for competing in the future being affected by sustainability concerns? This article is a first look at the results of the 2010 Sustainability & Innovation Executive Study -focusing especially on 12 top-line observations drawn from the survey data and separate in-depth executive interviews. The survey respondents included more than 3,107 managers and executives, representing every major industry and region of the world. This article offers answers to such questions as, Where does sustainability now fit on top management's agenda? Do top-performing companies see things differently? Who drives the agenda within companies? What does the C-suite think? And how do top managers go about making sustainability-related investment decisions when tangible information for weighing costs and benefits is often lacking?

The authors argue that today's leaders suffer from a common logical fallacy: they tend to see what they want to see and don't ask the harder questions that might lead in other directions. As a result, they fall victim to their own thinking -- to a willingness to 'mash together' competing logics without giving it a second thought. The remedy, they argue, is to dig deeper into the logic of opposing choices, to test your assumptions and explicitly seek to understand the ways in which conditions and consequences are linked. They explain how 'integrative thinkers' explicitly use the tensions between opposing ideas to generate new and better solutions.

Most of the problems we face in life are ill-defined, in that uncertainty is inherent not only in whether the goal can be reached, but in how best to conceive of the current state and the goal state. To deal effectively with such 'wicked' problems, the authors argue that thinkers must know how to develop a problem formulation that transforms the ill-defined problem into a well-defined one that can be tackled. Two widely researched approaches to achieving this are convergent thinking and divergent thinking. While these remain important, the authors argue that they are not sufficient to solve ill-structured problems. They propose that a third skill is imperative: the ability to 'break frame'. They describe all three of these thinking skills and show how a certain type of problem - the insight problem -- can be used to encourage the ability to break frame.

Leaders often focus on gaining employees' intellectual acceptance of a new strategy and view this as an early milestone in successful implementation. The problem is, this approach isn't working very well: study after study demonstrates that the 'knowing-doing gap' is alive and well, and that many carefully-constructed strategies continue to be ignored or dismissed by the employees whose behavior must change in order to make them work. The author argues that feeling strategy must accompany knowing it. She explains what it means to 'feel' strategy -- to experience it in an emotional as well as a cognitive way, and describes the four key components of fostering strategy as experienced in your organization.

In this interview, the author argues that 'winner's brains' - the brains of highly successful individuals in a wide range of fields -- operate quite differently than the average brain. He describes the five 'brain power tools' that are characteristic of the winner's brain, including an 'opportunity radar' and a 'goal laser'. He also explains how we can all take better care of our brains throughout our lives and work toward developing a winner's brain.

The author argues that the emerging discipline of Business Design requires a particular combination of mindsets, methods and thinking skills that exercise the 'whole brain' and help develop a well-rounded capacity for agile thinking and adaptive doing. She explains how a combination of the right mindset (being) and a rigorous methodology (doing) unlock a person's thinking and describes six skills under each of the three headings (being/doing/thinking) that foster bilateral thinking and create a platform for enterprise success.

Is our memory involved in the development of new insights? If so, in what ways? In this article the author attempts to connect the dots between memory and insight -- two thought processes that are normally treated independently. In so doing, he shows that the connecting thread among the dots involves the 'making of meaning', and that the needle for weaving the connecting thread is the concept of co-creation. A better understanding of this, he argues, can deepen our knowledge about consumer behavior and improve research methods and marketing practice.

Is your fund manager's sudden bullishness the result of some special insight, or is it the result of the torrid love affair he is engaged in providing a hormonal charge to his perception of the facts? Is your chairman's congratulatory smile addressed at you, or, rather, to the other people around the table, whom he intends to see him smiling at you so that they don't think he bears you a grudge - which, unfortunately, he actually does? Welcome to the ZOO -- the Zone Of Oblivion, both yours and that of others. The ZOO is a special place: it comprises all of the facts, feelings and experiences that make a huge difference to you and your business, but which you neither know about, nor know that you don't know. The author provides guidance for thriving in this murky, ambiguous - yet entirely human environment.

'Synthesis' is defined as a process or result of building up separate elements, especially ideas, into a connected whole. The author argues that this is an essential element of the skill of designing everything from products to services to strategies. He proposes that synthesis consists of two key stages: sensemaking and framing, describing in detail how each works. A better understanding of these concepts, he argues, will lead to the emergence of a professional methodology for 'innovation by design'.

While a master chef or painter may welcome the freedom and flexibility associated with an enlarged set of options, does the average person benefit from more choice during problem solving? The authors show how the increased complexity inherent in increased options affects people and describe the research that led them to conclude that both individual and situational factors play a role in influencing creativity. They identify two important variables that managers must pay attention to in the quest for creative outcomes.

While there are many roads to innovation, there is reason to believe that it often arises from the adaptation of known solutions to new problem domains. The good news is that people have a remarkable facility to make analogies - to notice similarities between domains that, on the surface, are not much alike. The authors argue that this ability to make analogical inferences is crucial to problem solving. When solving any new problem, the problem statement is only a partial match to the known solutions; the key to analogical problem solving is to find known problems that have the same structure as the problem being solved. The authors describe how to improve our 'analogical retrieval' and provide several tools for analogical innovation.

Private moments of doubt and fear come even to managers who have spent years on the job. Any number of events can trigger them: An initiative is going poorly; you get a lukewarm performance review; your new assignment is daunting. HBS professor Linda Hill and executive Kent Lineback have long studied the question of how managers grow and advance. Their experience brings them to a simple but troubling observation: Most bosses reach a certain level of proficiency and stay there-short of what they could and should be. Why? Because they stop working on themselves. The authors offer what they call the three imperatives for every manager who seeks to avoid this stagnation: Manage yourself. Who you are as a person, the beliefs and values that drive your actions, and especially how you connect with others all matter to the people you must influence. Manage your network. Effective managers know they cannot avoid conflict and competition among organizational groups; they build and nurture ongoing relationships. Manage your team. Team members need to know what's required of them collectively and individually and what the team's values, norms, and standards are. The authors include a useful assessment tool to help readers get started.

Corporate strategy often seems abstract to managers on the ground, who struggle to translate it into a realistic plan of action. But a process called strategy briefing, which originated with the military, can help them overcome that challenge. Bungay, the director of the Ashridge Strategic Management Centre, describes in this article how briefings can move managers and their reports from confusion about a complex set of goals and performance measures to clarity about just which objectives each person needs to focus on and in what order. Using a fictional case study as an illustration, Bungay outlines the five critical steps of the process: (1) State your intent, or what you are expected to do and why, (2) Revise it in the context of your company's situation, (3) Determine which measures indicate whether you're achieving your goal, (4) Define the tasks implied by your intent, (5) Define the boundaries, or constraints, that limit your team. A single strategy briefing can help a team perform better, but the real magic happens when briefings roll down through an entire organization. When that occurs, the company's strategy is broken into a cascade of discrete but linked elements. In the end, people will be strategically aligned and operationally autonomous-a combination that is one of the hallmarks of high-performance organizations.

Many philanthropists have big ambitions, but even the richest individuals and largest foundations don't have enough money to end poverty, reverse climate change, or cure cancer. And many donors impose substantial costs on their grantees by, for instance, becoming excessively involved in program design or imposing burdensome reporting requirements. To achieve breakthroughs, donors need a multiplier effect-an approach that delivers many dollars' worth of impact for each dollar invested. In short, they need an investment model. To develop a sound model for philanthropy, donors must understand the methods of change that breakthrough results require. These include building robust nonprofit organizations, modifying public policy, establishing intermediaries, and facilitating research. The Draper Richards Foundation, for example, helps direct-service nonprofits build their capacity and capabilities; the James Irvine Foundation created an intermediary organization to improve high school education in California. Donors must also understand how they can best support those efforts-through the roles they play, the resources they devote, and the relationships they develop. Michael J. Fox, for instance, has used his celebrity and credibility in his foundation's efforts to cure Parkinson's disease. Developing a clear investment model doesn't have to be complicated or expensive, just deliberate. Without one, donors risk adding little value and imposing steep costs.

Now that the global recession is officially over, multinationals are starting to weigh their options for foreign investment. But everywhere they look, negatives vie with positives, and government actions and contradictory economic trends confuse the picture: Brazil is planning to spend while Australia is cutting back. Trade tensions are rising between the United States and China. Indonesia tempts inflation by keeping rates low. Managers need a way to cut through the chaos and figure out which countries are the best bets and which pose the greatest risks. The authors, drawing on Eurasia Group's political analyses and on economic databases, have assigned scores to a selection of countries on the basis of their macroeconomic conditions and foreign investment environments. The result is a practical guide for determining where growth is likely, which governments are encouraging or impeding foreign investment, and which sectors provide the greatest opportunities. Some of the results are surprising.

After working with hundreds of leaders in a wide variety of organizations and in countries all over the globe, the authors found one very clear pattern: When it comes to meeting their leadership potential, many people unintentionally get in their own way. Five barriers in particular tend to keep promising managers from becoming exceptional leaders: People overemphasize personal goals, protect their public image, turn their competitors into two-dimensional enemies, go it alone instead of soliciting support and advice, and wait for permission to lead. Troy, a customer service manager, endangered his job and his company's reputation by focusing on protecting his position, not helping his team; when a trusted friend advised him to change his behavior, the results were striking. Anita's insistence on sticking to the tough persona she'd created for herself caused her to ignore the more intuitive part of the leadership equation, with disastrous results-until she let go of the need to appear invulnerable and reached out to another manager. Jon, a personal trainer who had virtually no experience with either youth development programs or urban life, opened a highly successful gym for inner-city kids at risk; he refused to be daunted by his lack of expertise and decided to simply "go for it." As these and other examples from the authors' research demonstrate, being a leader means making an active decision to lead. Only then will the workforce-and society-benefit from the enormous amount of talent currently sitting on the bench.

Within a period of 23 months, Lois Quam found herself with a dizzying level of responsibility, both at work-as research director at UnitedHealthcare and head of the company's public-sector services division-and at home, with newborn twins and a toddler. But rather than bend under the weight of either pressure, Quam found ways to thrive in both areas of her life. Namely, she focused on big-picture goals, doing what was required to be the kind of mother and manager she wanted to be. She wasn't shy about letting her worlds overlap, taking her children to work and even allowing their visibility to work in her favor as she advocated for affordable health care for families. Now head of her own successful company, Quam carved out a place for herself as a successful working mother before work/life balance was a corporate buzzword.

Wynton Marsalis grew up in a family of New Orleans jazz musicians and received his first trumpet as a sixth birthday present from bandleader Al Hirt. At 14 he debuted with the Louisiana Philharmonic; at 17 he moved to New York, where he attended Juilliard, joined Art Blakey's Jazz Messengers, assembled his own band, and began a prolific composing and recording career. He talks here about leadership and creativity.

When the chief executive of Maclaren USA learned about a rise in finger injuries to children involving the hinges on his strollers-which were similar to those used for almost all strollers on the market-he and his colleagues immediately began working with the U.S. Consumer Product Safety Commission to plan a voluntary "recall," during which the company would send protective hinge covers to anyone who wanted them. Maclaren saw this as an opportunity to educate parents about stroller safety as well as to protect children. But news of the recall was leaked early in a sensationalist report, and the company was unprepared to cope with the response. Thousands of concerned parents tried to reach Maclaren, causing its communications systems to crash: Callers got a busy signal; e-mails went into the ether; the website froze. The company's executives realized they would need four times as many extra employees and three times as many hinge covers as they'd originally thought. Rastegar explains how and why their careful planning fell short, discusses the lessons he and Maclaren learned, and affirms his commitment to pursuing industrywide safety standards.