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Does an organization's commitment to diversity--as reflected by CEO commitment, human capital, corporate communications (internal and external), and supplier diversity - result in competitive advantage and superior financial performance? Diversity can bring new voices and perspectives into the strategy dialogue, help managers understand and address the needs of a demographically diverse customer base, and stimulate a wider range of creative decision alternatives. However, the anticipated benefits of corporate diversity efforts may also be accompanied by costs that can affect shareholder wealth. In a study comparing the financial performance of the DiversityInc Top 50 Companies for Diversity to a matched sample, we find evidence that firms with a strong commitment to diversity outperform their peers on average. For commitment to diversity to become ingrained in corporate culture there must be visible and ongoing support from senior management, a clear articulation of the business case for diversity, line manager accountability, and training programs directed at communications, conflict resolution, and team building.     

The topic of formulating and implementing competitive strategy is usually considered from the perspective of a large, well established, and often time multi-divisional corporation. Achieving a sustainable competitive advantage, however, is every bit or even more critical to the survival of smaller startup businesses. Although much research has been performed on how startup companies create value for their constituencies and on how they launch products, few attempts have been made to apply classical large-company strategy ideas to startups. In this paper we consider eleven distinct differences between how large, established firms and their smaller startup counterparts consider strategy initiatives with an eye to guiding entrepreneurs toward higher probabilities of success. The eleven differences are building on market strengths, size of market, relationship to resources, presence of constraints, visibility of and by competitors, investor expectations, share¬holder/investor risk tolerance, process, portfolio management, triage, and time horizon for results.

Following the scandals involving Enron, WorldCom, and Qwest Communications, the accounting profession has spent the past several years trying to get back on track. While Sarbanes-Oxley may improve the decision-making of audit professionals, and help prevent future large-scale catastrophes that hurt stockholders and bring down firms, there is another problem in public accounting that few consider and nobody has proposed to solve: deviant workplace behavior. Previous research describes deviant workplace behavior as the voluntary behavior of organizational members that violates significant organizational norms and, in so doing, threatens the well being of the organization and/or its members. Building from recent work in various business literatures, this is the first research since the passage of Sarbanes-Oxley to examine workplace deviance at Big 4 accounting firms. Taking a cross-disciplinary, collaborative approach, the authors endeavor to explain why workplace deviance has infiltrated accounting firms and how it is undermining their effectiveness and derailing their long-term prospects for success. After describing its genesis and effects, the authors prescribe several managerial strategies for preventing deviance and minimizing its effects on a firm.

All executives would like their organizations to perform better, and most seek ways to make that happen. This paper focuses on how supply chains-- the series of activities through which products and services are created and then distributed to customers-- can enhance firm performance. For the last couple of decades, most firms have emphasized maximizing speed or minimizing costs within their supply chains. In the current business landscape, however, a broader approach is needed. We describe the main advantages of developing "best value supply chains" as a tool for enhancing performance. These chains differ from traditional chains in important ways. Best value supply chains are used by organizations as a central element of strategy, not simply as a means to move materials. Rather than focusing primarily on speed or cost, best value supply chains are designed to deliver superior total value to the customer in terms of speed, cost, quality, and flexibility. Our contention is that organizations that develop best value supply chains will enhance their performance. We support this contention with examples from leading firms that reflect a best value approach.

Traditional management thinking addresses either the service provider's or the client's individual competences and competitive advantage in service innovation. This is myopic in the extreme; value creation should be based on the simultaneous recognition of the interests and competencies of both parties. This article examines the service innovation strategies in the ICT field from the perspective of the resource-based view of the firm and the management competencies involved. First, the characteristics of three main types of service innovations (established service, incremental service innovation, and radical service innovation) are outlined, as these can be shown to require different value creation approaches. Second, a service strategy matrix is constructed illustrating the client-driven, provider-driven, and collaborative service innovation strategies. The article provides a recipe for managing the service co-creation modes, with guidelines given on how to succeed through collaborative capabilities and culture, as well as appropriate business models.

Service innovations reportedly involve innovating intangible products, but this article argues for a more radical service-logic perspective that challenges the traditional, attribute-based view of innovation. Rather than innovating products and services, the focus here shifts toward innovating customers' value co-creation roles. This article presents a case-based managerial framework that reveals how service-logic innovations change the customer's role as a buyer, payer, or user and shows how firms can innovate through smart offerings, different value integration approaches, and reconfigured value constellations.

With the global focus on service-led growth has come increased need for practical techniques for service innovation. Services are fluid, dynamic, experiential, and frequently co-produced in real time by customers, employees, and technology, often with few static physical properties. However, most product innovation approaches focus on the design of relatively static products with physical properties. Thus, many of the invention and prototype design techniques used for physical goods and technologies do not work well for human and interactive services. This article describes one technique-service blueprinting-that has proven useful for service innovation. Service blueprinting is securely grounded in the customer's experience and it allows the clear visualization of dynamic service processes. The technique is described in detail including real case examples that illustrate the value and breadth of its applications.

This article proposes a framework to address a central conundrum in strategic management: How can firms transcend the trade-off between the momentum that results from the strong strategic commitments needed to gain industry leadership with the need for strategic agility in the face of strategic discontinuities? The article develops an analysis of the meta-capabilities underlying strategic agility, which is clustered around strategic sensitivity (both the sharpness of perception and the intensity of awareness and attention), resource fluidity (the internal capability to reconfigure business systems and redeploy resources rapidly), and leadership unity (the ability of the top team to make bold decisions fast, without getting bogged down in "win-lose" politics at the top). Based on an in-depth study of Nokia's evolution over the past twenty years, this article shows how these three meta-capabilities interact over time and proposes a framework to enable a firm to maintain and regain strategic agility as it matures.

This article presents the "strategy diamond," which extends received strategic management theory by integrating the positional view and the resource-based view, the formulation and implementation of strategy, and the firm's internal selection environment into one relatively simple conceptual framework of dynamic forces driving firm evolution. The article suggests that this framework can be helpful in stimulating further research to drive towards a dynamic theory of strategy. The strategy diamond facilitates understanding the dynamic interplays between strategy logic and strategy execution, and its jargon-free "natural language form" may facilitate strategic conversations and help inculcate a strategic mentality into organizations. This framework has been useful for senior executives in two major corporations. Four case studies highlight how the framework may help instill strategic discipline in high-technology ventures operating in extremely dynamic environments.

Advances in neurobiology have demonstrated that the brain is so sensitive to external experiences that it can be rewired through exposure to cultural influences. Experiments have shown that in some people, parts of the brain light up only when they are presented with an image of Bill Clinton. In others, it's Jennifer Aniston. Or Halle Berry. What other stimuli could rewire the brain? Is there a Boeing brain? A Goldman Sachs brain? No one really knows yet, says Medina, a developmental molecular biologist, who has spent much of his career exploring the mysteries of neuroscience with laypeople. As tempting as it is to try to translate the growing advances to the workplace, he warns, it's just too early to tell how the revolution in neurobiology is going to affect the way executives run their organizations. "If we understood how the brain knew how to pick up a glass of water and drink it, that would represent a major achievement," he says. Still, neuroscientists are learning much that can be put to practical use. For instance, exercise is good for the brain, and long-term stress is harmful, inevitably hurting productivity in the workplace. Stressed people don't do math very well, they don't process language very efficiently, and their ability to remember - in both the short and long terms - declines. In fact, the brain wasn't built to remember with anything like analytic precision and shouldn't be counted on to do so. True memory is a very rare thing on this planet, Medina says. That's because the brain isn't really interested in reality; it's interested in survival. What's more, and contrary to what many twentieth-century educators believed, the brain can keep learning at any age. "We are lifelong learners," Medina says. "That's very good news indeed."

Multiplayer online role-playing games are sprawling cybercommunities that offer a sneak preview of tomorrow's business environment. Players who lead teams in these online worlds hone the skills that they will need as business leaders in the future. Games also provide an environment that makes being an effective leader easier and that today's businesses might try to replicate selectively in their own organizations. Those are the principal findings by Reeves, of Stanford University; Malone, of MIT's Sloan School; and O'Driscoll, of North Carolina State. As part of an analysis conducted by Seriosity, a company that develops game-inspired enterprise software, the authors studied people who headed up teams in online games. They also sought the insights of gamers who have led real-world business teams at IBM. The authors identified three distinctive characteristics of leadership in online games that, as workplaces and the overall business climate become more dynamic and gamelike, will be essential for tomorrow's leaders: speed, risk taking, and acceptance of leadership roles as temporary. The most important finding, say the authors, is that getting the leadership environment right can be as important as choosing the right leader. They point out two aspects of game environments that companies might consider adopting: One, nonmonetary incentives built into a game economy strongly motivate individuals to accomplish group aims. Two, hypertransparency of information about, for example, team members' capabilities and teams' real-time performance makes it simpler to match people with tasks and to empower individuals to manage themselves.

From December 2000 to February 2008, the top 15 companies in the pharmaceutical industry lost roughly $850 billion in shareholder value. Although a number of factors - including the rise of generics, pricing pressures, regulatory requirements, and legal entanglements - are to blame, Garnier, the CEO of GlaxoSmith-Kline, believes that declining R&D productivity is his industry's primary problem. The way to solve it, he says, is to return power to the scientists - by reorganizing R&D into highly focused groups headed by inspirational leaders, seeking the best science outside as well as inside a company, fixing broken processes, and promoting a strong culture of innovation and passion for excellence. GSK has replaced its organizational pyramid with 12 "centers of excellence." The company has worked to untangle the quest for breakthrough drugs from the effort to develop best-in-class offerings and has overhauled incentives for the scientists who actually make discoveries. It has also pursued contractual relationships with academia and biotech companies in a bid to secure the best science, wherever it may reside. When the company began a sweeping reengineering of its R&D, it had only two products in late-stage development. Today it has 34 - the most in the industry. But much more remains to be done, the author says. Significant cost efficiencies could be achieved by offshoring clinical trials. Development of new blockbuster drugs could be simplified and accelerated if researchers targeted only a limited segment of the potential patient population and then expanded to others over time. The innovation malaise in pharmaceuticals is not unique, Garnier says. Many other industries face the same challenges. A cultural revolution and a broad transformation of the organization are necessary first steps to rebuilding the R&D engine.

In the heat of competition, executives can easily become obsessed with beating their rivals. This adrenaline-fueled emotional state, which the authors call competitive arousal, often leads to bad decisions. Managers can minimize the potential for competitive arousal and the harm it can inflict by avoiding certain types of interaction and targeting the causes of a win-at-all-costs approach to decision making. Through an examination of companies such as Boston Scientific and Paramount, and through research on auctions, the authors identified three principal drivers of competitive arousal: intense rivalry, especially in the form of one-on-one competitions; time pressure, found in auctions and other bidding situations, for example; and being in the spotlight - that is, working in the presence of an audience. Individually, these factors can seriously impair managerial decision making; together, their consequences can be dire, as evidenced by many high-profile business disasters. It's not possible to avoid destructive competitions and bidding wars completely. But managers can help prevent competitive arousal by anticipating potentially harmful competitive dynamics and then restructuring the deal-making process. They can also stop irrational competitive behavior from escalating by addressing the causes of competitive arousal. When rivalry is intense, for instance, managers can limit the roles of those who feel it most. They can reduce time pressure by extending or eliminating arbitrary deadlines. And they can deflect the spotlight by spreading the responsibility for critical competitive decisions among team members. Decision makers will be most successful when they focus on winning contests in which they have a real advantage - and take a step back from those in which winning exacts too high a cost.

When products become commodities, manufacturing companies may seek to differentiate themselves with value-added services - a potentially profitable strategy. Unfortunately, companies often stumble in the effort. Reinartz and Ulaga conducted in-depth studies of 18 leading companies in a broad variety of product markets to learn what distinguished the successes from the rest. They discovered four steps to developing a profitable services capability. Recognize that you already have a service company. You can identify and charge for simple services - as Merck did when it stopped quietly absorbing shipping costs. Switching services from free to fee clarifies their value for managers as well as for customers. Industrialize the back office. To prevent delivery costs from eating up service-offering margins, build flexible service platforms, closely monitor process costs, and exploit new technologies that enable process innovations. The Swedish bearings manufacturer SKF provided off-site access to an online monitoring tool that could warn of potential failure in customers' machines. Create a service-savvy sales force.Services require longer sales cycles and, often, decisions from high up in a customer's hierarchy; what's more, product salespeople may be inimical to change. Schneider-Electric did a major overhaul of its sales organization and trained its people to switch from cost-plus pricing to value-based pricing. Focus on customers' processes and the opportunities they afford for new service offerings. You may need to acquire new capabilities to take advantage of those opportunities: The industrial coatings specialist PPG had to learn how painting robots function after it offered to take over Fiat's Torino paint shop. Services can both lock in customers and help acquire new accounts. They should be developed with care and attention.

In today's complex world, companies often find themselves facing confounding strategy problems. These issues are not just tough or persistent; they're "wicked" - a label used by urban planners for problems that cannot be definitively resolved. Poverty and terrorism are classic examples. A wicked problem has innumerable causes, morphs constantly, and has no correct answer. It can be tamed, however, with the right approach. In this article, Camillus, a professor at the Katz Graduate School of Business, explains how executives can tell if they're dealing with a wicked strategy problem. In a 15-year study involving 22 companies, he identified five key criteria. If a problem involves many stakeholders with conflicting priorities; if its roots are tangled; if it changes with every attempt to address it; if you've never faced it before; and if there's no way to evaluate whether a remedy will work, chances are good that it's wicked. According to the author, the need for faster growth is, in all likelihood, a wicked issue for Wal-Mart. Traditional linear processes - identifying the issue, gathering data, studying all the options, choosing one strategy - don't work with wicked problems. They instead demand social processes that constantly engage stakeholders, explore related issues, reevaluate the problem's definition, and reconsider the assumptions of stakeholders. A strong corporate identity is essential: It serves as a rudder that helps the enterprise navigate a sea of choices. Because it's impossible to tell which options are appropriate, executives should stop analyzing them and start experimenting with actions. Eventually they will make progress by muddling through. Envisioning possible futures and identifying moves that will realize the one the company hopes for will uncover promising remedies. That's how PPG Industries, a 100-year-old manufacturer, has successfully coped with its wicked strategy issues.

We all know that people "hire" products and services to get a job done. Surgeons hire scalpels to dissect soft tissue. Janitors hire soap dispensers and paper towels to remove grime from their hands. To find ways to innovate, it's critical to deconstruct the job the customer is trying to get done from beginning to end, to gain a complete view of all the points at which a customer might desire more help from a product or service. A methodology called job mapping helps companies analyze the biggest drawbacks of the products and services customers currently use and discover opportunities for innovation. It involves breaking down the task the customer wants to accomplish into the eight universal steps of a job: (1) defining the objectives, (2) locating the necessary inputs, (3) preparing the physical environment, (4) confirming that everything is ready, (5) executing the task, (6) monitoring its progress, (7) making modifications as necessary, and (8) concluding the job. Job mapping differs substantively from process mapping in that the goal is to identify what customers are trying to get done at every step, not what they are doing currently. For example, when an anesthesiologist checks a monitor during a surgical procedure, the action taken is just a means to the end. Detecting a change in patient vital signs is the job the doctor is trying to get done. Within each of the discrete steps lie multiple opportunities for making the job simpler, easier, or faster. By mapping out every step of the job and locating those opportunities, companies can discover new ways to differentiate their offerings.

Measuring the effectiveness of marketing investments can be frustrating - especially if a company focuses on a long-term outcome like increasing customer equity. Though there are decision-support models to help marketers allocate their budgets, until recently such models aimed to maximize near-term sales, which aren't always consistent with long-term brand health. Now, however, Wachovia has created a model that helps it make customer-equity-driven marketing-mix decisions. The model's architects - Hanssens, a professor at UCLA; Thorpe, a senior vice president at Wachovia; and Finkbeiner, an executive VP at TNS - began by parsing customer equity, or the lifetime value of customers, into three measurable components: customer acquisition, customer retention, and share of wallet. They then assembled data on past marketing activities and changes in the components - a daunting task, given the decentralized nature of previous investments. Once the database was created, a model of how investments affected outcomes could be built and used to design equations focusing on marketing-mix questions. Wachovia now has, for example, an equation to estimate how an increase in cable TV advertising will affect customer acquisition in a market. Just as important, the model highlights how much factors beyond the control of marketing, such as economic swings, affect outcomes. After Wachovia began using the model, it found, as suspected, that a marketing mix with maximum short-term impact would not achieve the biggest increase in customer equity. Wachovia learned that it was overinvesting in traditional channels and underinvesting in emerging ones. The introduction of this decision-making tool has also supported a broader cultural shift at the company toward competing on analytics.

The authors argue that consumer valuations of goods and services are a lot more arbitrary than we may think, and are affected by several 'arbitrary' components and biases. They describe the phenomenon of 'Tom's Law', whereby Mark Twain's Tom Sawyer discovered a great law of human behavior: that in order to make a person covet a thing, it is only necessary to make the thing difficult to attain. They introduce the concept of 'coherent arbitrariness' and show how arbitrariness is enhanced by ambiguity in a good or bad experience.

The top tier of society's income and wealth distribution has become a widespread emulative target, and there are implications for consumer satisfaction and collective well-being. The author describes the roots of the problem and how three shifts--in wealth and income distributions, of women into corporate hierarchies, and of the growing importance of electronic media--have led to an escalation of North Americans' consumer aspirations. She then shows how quality of life has been affected in at least three important ways and ponders a sustainable way forward.

The authors describe their research, which found that when a quantity of a given resource - such as food, money, or cigarettes - is physically divided into smaller quantities, it reduces both the total quantity consumed and the speed of consumption. For marketers, these results suggest that simple forms of packaging have the ability to create dramatic variations in consumption. For consumers, the message is simple - for consumption that you want to control (but that is tempting), the simple act of partitioning the resource will help curb consumption.