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Managing Emotional Fallout: Parting Remarks from America's Top Psychiatrist
Last fall, the United States was brutally thrust into a new and dangerous world. As the twin towers of the World Trade Center collapsed and the Pentagon burned, the horrible reality of terrorism seared the American consciousness. It touched more than the victims and their families; everyone who sat transfixed before the horrific images on TV lived through the trauma. In a sense, we were all eyewitnesses, and we must all cope with feelings of anger, stress, and anxiety. That poses a huge immediate challenge for business, because it is largely in the workplace--where we spend so many of our waking hours--that we will confront these emotions. What responsibility does a company bear for the mental well-being of its workforce? If companies help employees deal with depression and anxiety in the wake of terrorist acts, doesn't that put mental health care on the business agenda? To answer these questions, HBR senior editor Diane Coutu talked with Dr. Steven Hyman, the former director of the National Institute for Mental Health. In this interview, he suggests that September 11, 2001, may come to be seen as a tipping point--the moment when managers started to think about dealing with mental health issues on a regular basis. -
Beware the Busy Manager
Managers will tell you that the resource they lack most is time. If you watch them, you'll see them rushing from meeting to meeting, checking their e-mail constantly, fighting fires. Managers think they are attending to important matters, but they're really just spinning their wheels. For the past 10 years, the authors have studied the behavior of busy managers, and their findings should frighten you: Fully 90% of managers squander their time in all sorts of ineffective activities. A mere 10% of managers spend their time in a committed, purposeful, and reflective manner. Effective action relies on a combination of two traits: focus--the ability to zero in on a goal and see the task through to completion--and energy--the vigor that comes from intense personal commitment. Focus without energy devolves into listless execution or leads to burnout. Energy without focus dissipates into aimless busyness or wasteful failures. Plotting these two traits into a matrix provides a useful framework for understanding productivity levels of different managers. This article will help you identify which managers in your organization are making a real difference--and which just look busy. -
They're Not Employees, They're People
In this essay, business thinker Peter Drucker examines the changing dynamics of the workforce--in particular, the need for organizations to take just as much care and responsibility when managing temporary and contract workers as they do with their traditional employees. Two fast-growing trends are demanding that business leaders pay more attention to employee relations, Drucker says. First is the rise of the temporary, or contract, worker; 8 million to 10 million temp workers are placed each day worldwide. And they're not just filling in at reception desks. Today, there are temp suppliers for every kind of job, all the way up to CEO. Second, a growing number of businesses are outsourcing their employee relations to professional employee organizations (PEOs)--third-party groups that handle the ever-mounting administrative tasks associated with managing a company's employees. Temps and PEOs free up leaders to focus on the business rather than on HR files and paperwork. But if organizations outsource those functions, they need to be careful not to damage relationships with their people in the process, Drucker concludes. -
Are You Picking the Right Leaders?
When it comes time to hire or promote, top executives routinely overvalue certain skills and traits while overlooking others. Intuitively, for example, they might seek out team players, people who shine operationally, dynamic public speakers, or those who are demonstrably hungry for greater responsibility. But some attributes that seem like good indicators of leadership potential are, paradoxically, just the reverse. Team players and those who excel operationally often make better seconds in command. Unfortunately, few organizations have the right procedures in place to produce complete and accurate pictures of their top prospects. Assessments are often based on hearsay, gossip, and casual observation. A new evaluation process will help you avoid that trap. Candidates are assessed by a group of people who have observed their behavior directly over time and in different circumstances. -
Jack on Jack: The HBR Interview
There was a time when CEOs weren't celebrities, but that was before Jack Welch. Over the past 20 years, Welch, more than any other business leader, has changed the way people view the role of the CEO. There was no General Electric separate from Welch and no Welch separate from General Electric. Through his bold and sweeping reinvention of the company--thanks in no small part to the force of his personality--Welch created the CEO not just as public figure but as icon. Indeed, Welch's legacy and life have been analyzed, lauded, and excoriated by the public and the media alike. Small wonder, then, that his recent book--Jack: Straight from the Gut--has garnered the same degree of publicity. In this frank and wide-ranging interview with HBR senior editors Harris Collingwood and Diane Coutu, Welch replies to his critics and offers a detailed look at his theory and practice of business. Candidly answering questions about his personal style and his upbringing, Welch also gives readers a detailed glimpse of the practices that shape the distinctive GE culture: the meetings, the "deep dives" and, most important, the transmission of powerful ideas throughout GE's far-flung organization. -
Will the Legacy Live On?
If you want to understand how much business has changed in the past 50 years, set Alfred P. Sloan's 1963 classic, My Years with General Motors, beside Jack Welch's current bestseller, Jack: Straight from the Gut. Proper, reserved, more Brahmin than baron, Mr. Sloan (never "Al") managed to conceal one of the most creative minds of the first half of the twentieth century beneath a quiet belief in painstaking consensus building. Brash and audacious, a guy's guy, everywhere in the press, Jack (never "Mr. Welch") is the embodiment of the CEO as icon--the epitome of individual star power. But for all their differences, the two are both, essentially, organization men. Sloan invented the concept of the modern corporation; Welch made it work. The question when it comes to Welch is, "How did he do it?" Was it through his oft-publicized strategy of selecting, trusting, and funding the right people and then setting them afloat in a sea of ideas? Or was it through the force of his personality--his preternatural passion, his total dedication to the organization to the exclusion of any private pursuits? In the answer lie the seeds of Welch's legacy. The next generation of CEOs will be quick to emulate the strategy, but not the monomaniacal passion. Nor should they. Tomorrow's leaders, operating in more uncertain times, should seek breadth in their perspectives, openness in their thinking, and roundness in their lives. -
Avoid the Four Perils of CRM
Customer relationship management is one of the hottest management tools today. But more than half of all CRM initiatives fail to produce the anticipated results. Why? And what can companies do to reverse that negative trend? The authors--three senior Bain consultants--have spent the past 10 years analyzing customer-loyalty initiatives, both successful and unsuccessful, at more than 200 companies in a wide range of industries. They've found that CRM backfires in part because executives don't understand what they are implementing, let alone how much it will cost or how long it will take. The authors' research unveiled four common pitfalls that managers stumble into when trying to implement CRM. Each pitfall is a consequence of a single flawed assumption--that CRM is software that will automatically manage customer relationships. It isn't. Rather, CRM is the creation of customer strategies and processes to build customer loyalty, which are then supported by the technology. This article looks at best practices in CRM at several companies, including the New York Times Co., Square D, GE Capital, Grand Expeditions, and BMC Software. It provides an intellectual framework for any company that wants to start a CRM program or turn around a failing one. -
Getting the Truth into Workplace Surveys
There's no doubt that companies can benefit from workplace surveys and questionnaires. Good surveys accurately home in on the problems the company wants information about. They are designed so that as many people as possible actually respond. And good survey design ensures that the spectrum of responses is unbiased. In this article, the author, a former research scientist at the University of Michigan and currently the president of a survey design firm, explores some glaring failures of survey design and provides 16 guidelines to improve workplace assessment tools. Applied judiciously, these rules will not only make a tangible difference in the quality and usefulness of the data obtained, but will also produce an increased response rate. The guidelines--and the problems they address--fall into five areas: content, format, language, measurement, and administration. Following the guidelines in this article will help you get unbiased, representative, and useful information from your workplace survey. -
Making Across-the-Board Incentives Work
Companywide incentives often produce disappointing results; individuals assume they will receive rewards regardless of their efforts. But at Continental, such a program resulted in more efficient employees and more timely flights. Here's how the airline did it. -
Safeguarding Your Critical Business Information
Media companies have used digital rights management to protect their copyrighted materials from infringement. These technologies may also help companies shield proprietary information from digital attacks. -
Business's Dirty Little Secret
Ethical considerations aside, U.S. companies damage their long-term business interests when they turn a blind eye to the "dirty money" that flows through their coffers. Policy strategist Raymond Baker explains why. -
Reverse Supply Chain
Companies should make design and manufacturing decisions with eventual recycling and reconditioning of their products in mind. Here are the five key activities for establishing a reverse supply chain. -
Marketing for Muggles: The Harry Potter Way to Higher Profits
Mainstream marketing has become so obsessed with rigor, quantification, and scientific rectitude that it has lost sight of the importance of magic, mystery, and imagination. We need to restore the balance somewhat, and the way to do that is to take a look at the boy wizard who has captivated the hearts and minds of readers the world over--and turned marketing on its head. Close examination reveals that Harry Potter is more than a mere passing marketing fad. Harry is different because the books are as much about marketing as the outcome of marketing. They deal with marketing matters, they are full of marketing artifacts, they contain analyses of marketplace phenomena, and they provide insights into the contemporary marketing condition. The books refer to almost every element of the marketing mix, as well as aspects of buyer behavior, environmental conditions, and marketing research. Harry Potter unknowingly has the power to transform the modern marketing paradigm from the positivistic trappings of modern marketing into the magical, mysterious, imaginative substance of postmodern marketing. -
Fresh Look at Industry and Market Analysis
Today's strange, new business world needs an augmented model of industry and market analysis that reflects recent developments in industry dynamics, such as globalization, entrepreneurship, technological advances, and the Internet. Here is such an updated model, built on and expanding the basic premises that underlie Michael Porter's Five Competitive Forces Model. Suggestions are offered for how managers can position their businesses for success in the current competitive environment. Competitive rivalry (the force with the greatest influence on ROI and risk) includes both substitute products and the threat of potential entrants, combined because they are so highly interrelated. The presence of durable barriers to imitation is the most powerful deterrent to destructive turbulence. Strategic positioning in competitive markets requires creating a market-focused organization, a new market space, and relationships with key customers and suppliers. Strategy must be conceived as a series of real options. -
To Agree or Not to Agree: Legal Issues in Online Contracting
E-commerce for merchants and consumers is more than just establishing or visiting an attractive web site to conduct business over the Internet. For companies and consumers alike, conducting business in cyberspace entails not only the traditional risks of sales and contracting, but also a new set of risks related to the electronic environment. For entities of all sizes, important components of those risks involve such legal issues as jurisdiction, contract formation, contract validity, contract changes and errors, authentication and attribution, message integrity, and nonrepudiation. Becoming familiar with these issues can help avoid costly disputes in e-business. -
Changing the Channel: A Better Way To Do Trade Promotions
This is an MIT Sloan Management Review article. In theory, trade promotions should benefit everyone involved. In practice, however, manufacturers and retailers often use trade promotions as weapons in a zero-sum game, and consumers are sometimes left out altogether. It need not be that way. Over the past three years, David Bell, an associate professor of marketing at the University of Pennsylvania's Wharton School, and Xavier Drèze, a visiting assistant professor of marketing at UCLA's Anderson School, have examined the theoretical and practical problems associated with trade promotions, and they explain how the right kind of deal can be created -- a transparent system that generates mutual trust and provides benefits to both manufacturers and retailers. The key is proper implementation of what is thus far a little understood tool: the pay-for-performance trade promotion, in which retailers get rewarded according to how much they sell, not how much they buy. The authors explain how the most accepted way of doing promotions today -- which rewards retailers for effective buying rather than effective marketing -- creates a variety of inefficiencies that drain resources from their intended purpose. Using a hypothetical case involving much-simplified mathematics, they go on to demonstrate how manufacturers can design pay-for-performance options that retailers can embrace. They also illustrate how one national beverage company made pay-for-performance deals work in practice. Finally, they offer practical advice to help senior managers rethink the elements of organizational culture that stand in the way of a more effective approach to trade promotions -- and, by extension, block better, more profitable relationships all along the channel. -
Strategy as Improvisational Theater
This is an MIT Sloan Management Review article. In following the traditional model of strategy development, a company seeks to craft the best possible plan so that it can be handed off for a predetermined course of execution involving a predictable set of events and a specific final goal. This scripted approach resembles traditional theater: The actors speak the same lines and the action comes to the same satisfying conclusion, night after night. The model works well when business is going through a relatively stable period. The current situation, however, is not stable: Companies are still trying to navigate the technological tsunami created by the Internet. Under the circumstances, it makes much more sense for companies to follow an improvisational model -- that is, to throw out the script, bring in the audience and trust the actors to innovate on the spot. The metaphor of improvisational theater helps executives think about the way in which an entire organization can become an arena for staging experiments that can transform a company's overarching strategy. Harvard Business School professor Rosabeth Moss Kanter lays out the six elements of strategic improvisation and illustrates how companies have made use of each one to get the most out of new technologies. Senior managers who understand these elements can create an atmosphere in which improvisational theater thrives; change then becomes an organic process rather than a painful reaction to circumstances beyond the company's control. Although this approach does not advocate a big plunge into something totally new, it is anything but conservative. Companies that engage in continual improvisation through innovative projects of all sizes and shapes are much better equipped to explore highly threatening disruptive technologies and embrace quite radical changes. -
Weird Ideas That Spark Innovation
This is an MIT Sloan Management Review article. Managers don't have to be told that to innovate they need to embrace drastically different practices from the ones they use for routine work. So why don't they do it? According to Robert I. Sutton, co-director of Stanford University's Center for Work, Technology and Innovation, when business leaders see what innovation actually requires, they often recoil. The right practices seem strange, even wrongheaded. Understandably, it's hard for any executive to take action that will lose money today in order to test ideas that might never make money -- in hopes one idea will make money tomorrow. Nevertheless, Sutton contends, that is just what cutting-edge companies do, bravely tackling ideas that at first blush seemed weird. From his research on such organizations, Sutton has developed eight techniques to move teams and companies from working by rote to innovating. The first two techniques are designed to provoke emotions that interrupt mindless action (provoke unpleasant emotions in others; make yourself uncomfortable). The second two are for smashing mindsets (treat everything like a temporary condition; ignore the experts). The third two help people identify and reject their dearest beliefs (plan to do something ridiculous; hold a sacred cow workshop). The last two are for exploding the composition of organizations and teams (bring in some slow learners; keep changing the composition of teams). Sutton cautions, however, that the exact methods a company uses to spark novel ideas and actions should differ depending on the situation. He recommends giving people freedom to play around with a wide variety of offbeat notions until bringing in new knowledge and helping people see old things in new ways finally enables the company to break from the past. -
Insiders or Outsiders: Who Should Have More Power on a Board
Most parties today agree that insiders should hold the balance of power on a board. Perhaps so, but there is also a third way, write these authors, who suggest that insiders and outsider should have equal power. -
The Effective Leader: Understanding and Applying Emotional Intelligence
Emotional intelligence can be misunderstood and misrepresented. But the bottom line is that the manager who can think about emotions accurately and clearly may often be better able to anticipate, cope with, and effectively manage change.