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The realization of a strategy depends on countless employees. So it's no surprise that when a strategy fails, the reason cited is usually poor execution. But this view of strategy and execution relies on a false metaphor in which senior management is a choosing brain while those in the rest of the company are choiceless arms and legs that merely carry out the brain's bidding. The approach does damage to the corporation because it alienates the people working for it. A better metaphor for strategy is a white-water river, in which choices cascade from its source in the mountains (the corporation) to its mouth (the rest of the organization). Executives at the top make the broader choices involving longterm investments while empowering employees toward the bottom to make more concrete, day-to-day decisions that directly influence customer service and satisfaction. For the cascade to flow properly, a choice maker upstream can set the context for those downstream by doing four things: explaining what the choice is and why it's been made, clearly identifying the next downstream choice, offering help with making choices as needed, and committing to revisit and adjust the choice based on feedback. When downstream choices are valued and feedback is encouraged, employees send information upward, improving the knowledge base of decision makers higher up and helping everyone in the organization make better choices.

In a recent survey, HBR readers told us how well they think strategy is developed in their organizations, which obstacles get in the way of effective execution, what kind of impact the financial downturn has had, and more.

Special teams dedicated to innovation initiatives inevitably run into conflict with the rest of the organization. The people responsible for ongoing operations view the innovators as undisciplined upstarts. The innovators dismiss the operations people as bureaucratic dinosaurs. It's natural to separate the two warring groups. But it's also dead wrong, say Tuck Business School's Govindarajan and Trimble. Nearly all innovation initiatives build on a firm's existing resources and know-how. When a group is asked to innovate in isolation, the corporation forfeits its main advantage over smaller, nimbler rivals-its mammoth asset base. The best approach is to set up a partnership between the dedicated team and the people who maintain excellence in ongoing operations, the company's performance engine. Such partnerships were key to the successful launch of new offerings by legal publisher Westlaw, Lucent Technologies, and WD-40. There are three steps to making the partnership work: First, decide which tasks the performance engine can handle, assigning it only those that flow along the same path as ongoing operations. Next, assemble a dedicated team to carry out the rest, being careful to bring in outside perspectives and create new norms. Last, proactively manage conflicts. The key here is having an innovation leader who can collaborate well with the performance engine and a senior executive who supports the dedicated team, prioritizes the company's long-term interests, and adjudicates contests for resources.

If you want to get anything done in a large corporation, you need power. And it won't just fall into your lap: You have to go after it and learn how to use it. Many highly competent people get stuck because they're uncomfortable with that reality. Stanford University professor Pfeffer offers a primer on why power matters, how to get it, and how to use it to advance your organization's agenda-thus, not incidentally, furthering your career. When push comes to shove, the author explains, there are several things powerful people do to prevail. They mete out resources; deploy rewards and punishments to shape others' behavior; advance on multiple fronts; make the first move; co-opt antagonists; remove rivals (nicely, if possible); avoid drawing unnecessary fire; use a personal touch; persist; attend to important relationships; and make their vision compelling. Throughout, Pfeffer draws on real-world examples of people who exercised power skillfully to implement their plans-people ranging from the director of UCSF's breast cancer center to a successful software executive to an Indian cricket mogul. And Pfeffer identifies three big barriers that can make you your own worst enemy unless you learn how to get over them and embrace the power you need.

After his guitar was broken on a United Air Lines flight and the airline rejected his damage claim, musician Dave Carroll made the YouTube video "United Breaks Guitars," which more than 8 million people have viewed. Carroll is far from alone in having employed social media to lambaste a company for poor customer service. For example, one popular blogger advised her million-plus followers on Twitter not to buy Maytag appliances. But the very technologies that empower customers can also empower employees, write Bernoff and Schadler, of Forrester Research. Companies can build a strategy around freeing employees to experiment with new technologies, make high-profile decisions on the fly, and effectively speak for the organization in public. Companies that feel hesitant to give their employees such freedom can benefit from what the authors call the HERO Compact-whereby management, IT, and HEROes (for "highly empowered and resourceful operatives") agree to work together to manage technological innovations. Management contracts to encourage innovation and manage risk, IT to support and scale employees' projects, and HEROes to innovate within a safe framework. Best Buy, Black & Decker, Vail Resorts, and Aflac are among the companies that have empowered their employees to take full advantage of social media. But it takes a while for corporate cultures to embrace this sort of innovation. In the meantime, managers can move forward on their own-building internal communities, looking outside the company for creative strategies, reviewing their hiring practices, and reaching out to customer-facing departments.

Executing a new strategy nearly always requires new resources and capabilities-and most firms seek them out the wrong way. In a 10-year study of 162 telecom companies, the authors found that organizations deploying all the methods available to them outperform those that stick with a narrow approach. Yet most firms doggedly pursue one chief method, whether it's developing what they've already got internally, entering into contracts with providers, forming partnerships, or using M&A. The framework in this article will help companies weigh their options more strategically. To select the best tactics for the situation you face, ask whether your existing resources are relevant to your new needs. If the answer is yes, internal development makes sense; otherwise, you'll need to go outside the firm. Next, to figure out what kind of relationship you should pursue with a provider, determine whether all parties would have a shared understanding of the resources' value. If so, a purchase contract is a sensible choice; if not, consider a partnership or a corporate acquisition. Because M&A is the most complex option, reserve it for cases in which it really pays to have a deep relationship with the resource provider.

Two years ago Starbucks ran into trouble, and Schultz was called on to serve a second time as its CEO. In this edited interview, he talks about the effects of the financial crisis on Starbucks's sales, the surge of competition, the blogosphere, and retaining authenticity in spite of growth. Schultz calls values, culture, and Starbucks's reservoir of trust with its employees "the only assets we have as a company." He saw preserving and enhancing the integrity of those assets as his primary challenge. That meant declining to franchise the system or compromise on quality or change the company's generous health care coverage. One bold move was to take 10,000 store managers to New Orleans for a conference that began with more than 50,000 hours of community service and an investment in local projects of $1 million. The purpose of the conference was to galvanize the entire leadership of the company and to stress personal accountability and responsibility. Schultz believes that without that experience, he couldn't have turned things around for Starbucks.

The notion that companies must go above and beyond in their customer service activities is so entrenched that managers rarely examine it. But a study of more than 75,000 people interacting with contact center representatives or using self-service channels found that over-the-top efforts make little difference: All customers really want is a simple, quick solution to their problem. The Corporate Executive Board's Dixon and colleagues describe five loyalty-building tactics that every company should adopt: Reduce the need for repeat calls by anticipating and dealing with related downstream issues; arm reps to address the emotional side of customer interactions; minimize the need for customers to switch service channels; elicit and use feedback from disgruntled or struggling customers; and focus on problem solving, not speed. The authors also introduce the Customer Effort Score and show that it is a better predictor of loyalty than customer satisfaction measures or the Net Promoter Score. And they make available to readers a related diagnostic tool, the Customer Effort Audit. They conclude that we are reaching a tipping point that may presage the end of the telephone as the main channel for service interactions-and that managers therefore have an opportunity to rebuild their service organizations and put reducing customer effort firmly at the core, where it belongs.

Virtually all managers in consumer businesses recognize major social, economic, and technological trends. But many do not consider the profound ways in which trends-especially those that seem unrelated to their core markets-influence consumers' aspirations, attitudes, and behaviors. As a result, companies may be ceding to rivals an opportunity to transform the industry. For instance, the impact of the digital revolution on consumers' daily lives is hardly a revelation. But it may be less obvious that heavy digital users tend to focus on short-term goals, demand immediate gratification, and expect to multitask. That insight, the authors argue, is as important for a company that sells lipstick as it is for one that sells smartphones. The authors present a process for identifying the trends that could reshape a business and three strategies for leveraging trends to create new value propositions: Infuse aspects of the trend into the product category to augment traditional offerings, as Coach did with its lower-priced Poppy handbags. Combine aspects of the trend with attributes of the category to produce offerings that transcend it, as Nike did with its Nike+ sports kit and web service. Or counteract negative effects of the trend with new products and services that reaffirm the category's values, as iToys did with its ME2 video game, which encourages children to be physically active.

Affordability and sustainability, not premium pricing and abundance, are the new tenets of effective innovation. Westerners are struggling with the shift in mind-set, but a few emerging-market pioneers are showing the way: They're designing inexpensive products and manufacturing them with so little capital and on a scale so vast that their prices-1 cent for a one-minute telephone call, $2,000 for a car-are the lowest in the world. Nowhere is this approach, which the authors call "Gandhian innovation," more evident than in India. Smart companies have used it to penetrate the country's burgeoning mass market. This article provides a framework to help executives understand three types of Gandhian innovation that have brought corporations success: disrupting business models, as Bharti Airtel did when it shifted its focus from average revenue per user to gross profit and expanded its market reach; modifying existing business capabilities, as Computational Research Laboratories did when it came up with a whole new supercomputer design that used standard components; and creating or sourcing new capabilities, as Lupin did when it reversed the usual drug development process to create an affordable treatment for psoriasis.

Singapore Airlines is widely regarded as an exemplar of excellence in an industry whose service standards are tumbling. What's not so well known is that the company is also one of the civil aviation industry's cost leaders. SIA's success in executing a dual strategy of differentiation and cost leadership is unusual. Indeed, management experts, such as Michael Porter, argue that it's impossible to do so for a sustained period since dual strategies entail contradictory investments and organizational processes. Yet SIA, and a few other emerging-economy companies, view the dualities as opposites that form part of a whole. SIA executes its dual strategy by managing four paradoxes: Achieving service excellence cost-effectively, fostering centralized and decentralized innovation, being a technology leader and follower, and using standardization to achieve personalization. The results speak for themselves: SIA has delivered healthy financial returns; it has never had an annual loss; and except for the initial capitalization, the Asian airline has funded its growth itself while paying dividends every year.

Executives stay with an organization for only 3.3 years, on average. But does switching employers offer a fast-track to the top jobs? Research suggests the answer is no. In fact, that's one of four career fallacies identified in a study examining how managers get ahead. Fallacy 1: Job hoppers prosper. An analysis of the career histories of 1,001 CEOs and 14,000 non-CEOs in top corporations shows that the more years executives stay with the company, the faster they make it to the top. Lesson: Build a resume that demonstrates a balance between external and internal moves. Fallacy 2: A move should be a move up. Among the executives studied, about 40% of job changes were promotions, 40% were lateral, and 25% were demotions. Lesson: While a downward move will detract from your CV, a lateral move can often lead to a promotion or enhance your CV when the new company conveys brand value. Fallacy 3: Big fish swim in big ponds. When making a move, 64% of executives trade down to smaller, less-recognized firms. They gain better titles or positions, cashing in on the brand value of their former employer. Lesson: Join top companies as early in your career as you can, and transfer to a lesser company only if the job is very attractive. Fallacy 4: Career and industry switchers are penalized. It's not always a bad move to change industries, or even careers, as is often assumed. Firms hire employees from different businesses for many reasons: For example, another industry might simply offer superior human capital. Lesson: Look for industries where your skills represent a genuine asset. Every career is unique; what's important is to look at each move with a critical eye.

The inventor of the bagless vacuum cleaner talks about what innovation means to him and why experience is overrated.

This is an MIT Sloan Management Review article. Many companies are well aware of the need to make their businesses more sustainable but stumble badly in making that transition. Often they mistakenly assume that the sustainability initiative will require a single, sustained effort over years when, in fact, it will entail three distinct phases, each needing different leadership skills on the part of the executive heading the effort. In phase 1, the sustainability leader must be able to communicate a compelling vision and gain buy-in from key opinion formers in the organization. In addition, the leader must help identify, define and develop a specific set of business processes that are geared to manage previously unquantified risks and capture new opportunities. When a company emerges from phase 1, commercial orientation becomes the key competence. Now the task is to translate high-level commitments into a comprehensive change program with clearly defined initiatives and hard commercial targets. To make this happen, sustainability leaders in phase 2 must excel at delivering results, and they must have a strong commercial awareness. At the end of this phase, sustainability becomes an organization-wide imperative that is tracked through economic, environmental and social metrics over the business planning cycle. In phase 3, the need for commercial orientation continues unabated but is matched by a strong strategic orientation. The sustainability leader must be adept at anticipating and evaluating long-term sustainability trends, spotting new opportunities and developing strategies to reposition the organization to benefit from them. The goal is to have sustainability become embedded in the organization's DNA, such that it is a core value and the organization is unconsciously proactive about it.

This is an MIT Sloan Management Review article. Information systems are traditionally designed to impose structure on processes, while innovation activities require a tolerance for ambiguity and failure and the flexibility to redefine goals when opportunities or roadblocks arise. Yet the potential of information systems to improve the innovation process is too great to dismiss them out of hand. Undertaking research to learn how leading innovators have used IT to make their innovation activities more effective and efficient, the authors found that companies require three things in order to do so. First, they need specific IT-enabled organizational capabilities, which are formed by combining their IT assets with non-IT assets to enable the across-the-board processes essential to developing and applying innovations. Second, companies need a strong set of IT-based tools to effectively sustain the central activities required for innovation and to support the analytical work that innovators need to transform ideas into products, processes and services. Third, companies need a system of control that allows workers to access and use the IT resources effectively. The authors'research provides numerous lessons for an organization's innovation leaders, IT managers and top leadership -- particularly the CEO. The primary lesson for innovators, for example, is that the IT department can be an active partner in innovation, not an enemy. When all of these stakeholders understand the role that information technology can play in streamlining and accelerating the innovation process, a company will be well on its way toward producing more innovations, and better innovations, with the resources at its disposal.

This is an MIT Sloan Management Review article. Established companies in industries as diverse as airlines, media, and banking have seen their markets invaded by new disruptive business models. The newcomers succeed not only by stealing customers from the established firms but also by attracting new customers into the market. As a result, established companies need to decide how to keep their existing customers while taking advantage of the new ones. One options is to use existing business models to cater for both markets. Another is to develop a new business model specifically for the new market. This is not an easy decision because entering a new market can be risky. But if a firm decides to do so, it must decide on what business model to adopt and then make sure that the new business model co-exists peacefully next to its existing business model. Based on research into 65 companies that chose to enter markets created by disruptive business models (including Nestlä, Edward Jones, Waitrose, Reuters, and Tesco), the authors say that established firms should develop new business models that are different from their existing business models and different from the business model of the disruptor. However, designing these business models is not only difficult in its own right but also raises the challenge of how to operate two different and conflicting business models in the same company. The authors argue that the usual prescription of creating a separate unit to house the new business model is not enough. The company needs to achieve a delicate balance: establishing enough separation between the two business models to avoid conflicts, but not so much to take advantage of synergies between the two. To achieve this balance, the company needs to create an ambidextrous organizational environment.

When a crisis strikes, brands can avert backlash from consumers -- and even strengthen the brand -- with well-considered and thoughtfully deployed communication. Based on scientific research on persuasion, the authors present a comprehensive crisis communication framework to help restore consumer trust, illustrating these recommendations using cases of both successful and unsuccessful recovery from brand crises. The authors draw heavily on Toyota's recent experience in responding to the unintended acceleration of some of its vehicles. Toyota's responses provide examples both of what to do, and what not to do, when a company is accused of wrongdoing. The authors contend that there is no one best communications path to follow when a company is in crisis. Rather, they say, the best approach will depend on the answers to three central questions: Is the accusation prompting the crisis true? Is the crisis severe? Has the company established its brand as something that customers closely identify with? Taking these factors into account, a company might best be served by some combination of seven communications strategies. These strategies range from admitting error and apologizing on the one extreme to defiantly denying and wrongdoing and even attacking the accuser on the other. In addition to describing these seven communications strategies, the authors also lay out four lessons on corporate crisis communications that emerge from the Toyota debacle. One, in the Internet age, speed of response is imperative. Second (and a corollary to the need for speed), companies need to be ready for a crisis at all times, and have at hand a step-by-step protocol to follow when bad things happen. Third, it is essential that in a time of crisis, the CEO him or herself -- not lower level management--needs to step forward and publicly articulate the company's responses. And fourth, companies must not delude themselves that they can skate by while ignoring a crisis. Response is essential.

In recent years, much has been written about evidence-based- or fact-based- decision making. The core idea is that decisions supported by hard facts and sound analysis are likely to be better than decisions made on the basis of instinct, folklore or informal anecdotal evidence. And many organizations have invested heavily in data processing infrastructure and analytical tools based on assumption that better evidence-based decision will follow from these investments. But research by the authors suggests that evidence is not as frequent an input to a decision process as managers like to think. Instead, what occurs is decision-based evidence making -sometimes without managers even understanding, that it's happening. The authors address three key questions: Why does decision-based evidence making occur in organizations? Is decision-based evidence making the necessarily bad? And, if decision-based evidence making is inevitable in organizations, what can be done to lessen its negative impacts? To help answer those questions, the authors explain how decision making is affected by the contexts in which problems are presented- and how those contexts can demand different ways of using evidence, depending on whether the evidence is being used to make, inform or support a decision.

Incumbents will beat new rivals for at least the next few decades because they're the ones that can handle cars' design complexity.

The most common reason workers aren't frank with you isn't fear of retribution. It's a sense of futility.