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Year-old Priceline.com has already changed the way many people shop for airline tickets, hotels, and even cars. Founder Jay Walker discusses his company's "demand collection" model and the revolutionary nature of e-commerce.

Companies facing attacks from competitors with copycat products often find they have little legal recourse. Two researchers suggest preemptive measures for protecting brand identity.

Information industries are at the core of the celebrated new economy; they may also be at the core of a sharp deterioration in the U.S. trade position.

Lending small amounts of cash to fledgling entrepreneurs has been successful in developing countries but hasn't worked as well in America. The authors suggest reforms for U.S. microcredit programs.

Delegating responsibility is hard. Not delegating can be disastrous. Former Oklahoma City fire chief Carl Holmes shares his best practices for efficient leadership.

Products without precedent are a tough sell; consumers stick with the goods they understand. The key to marketing breakthrough products is to educate the public before making any sales pitches.

Many companies have succeeded in reengineering their core processes, combining related activities from different departments and cutting out ones that don't add value. Few, though, have aligned their organizations with their processes. The result is a form of cognitive dissonance as the new, integrated processes pull people in one direction and the old, fragmented management structures pull them in another. That's not the way it has to be. In recent years, forward-thinking companies like IBM, Texas Instruments, and Duke Power have begun to make the leap from process redesign to process management. They've appointed some of their best managers to be process owners, giving them real authority over work and budgets. They've shifted the focus of their measurement and compensation systems from unit goals to process goals. They've changed the way they assign and train employees, emphasizing whole processes rather than narrow tasks. They've thought carefully about the strategic trade-offs between adopting uniform processes and allowing different units to do things their own way. And they've made subtle but fundamental cultural changes, stressing teamwork and customers over turf and hierarchy. These companies are emerging from all those changes as true process enterprises--businesses whose management structures are in harmony, rather than at war, with their core processes. And their organizations are becoming much more flexible, adaptive, and responsive as a result.

Many managers feel overwhelmed. They have too many problems--too many monkeys--on their backs. All too often, they say, they find themselves running out of time while their subordinates are running out of work. Such is the common phenomenon described by the late William Oncken, Jr., and Donald L. Wass in this 1974 HBR classic. They tell the engaging story of an overburdened manager who has unwittingly taken on all of his subordinates' problems. If, for example, an employee has a problem and the manager says, "Let me think about that and get back to you," the monkey has just leaped from the subordinate's back to the manager's. This article describes how the manager can delegate effectively to keep most monkeys on the subordinate's back. It offers suggestions on the care and feeding of monkeys and on how managers can transfer initiative. In his accompanying commentary, Stephen R. Covey discusses both the enduring power of this message and how theories of time management have progressed beyond these ideas. Management thinkers and executives alike now realize that bosses cannot just give a monkey back to their subordinates. Subordinates must first be empowered, and that's hard and complicated work. It means bosses have to develop their subordinates and establish trust. Perhaps even more important and relevant than it was 25 years ago, Covey says, this article is a powerful wake-up call for managers at risk for carrying too many monkeys.

This article reviews a central tension in management--the relationship between customers and innovation. It explores the contrast between serving and creating customers and examines the sometimes uneasy relationship between an innovation orientation and a customer orientation. From this discussion, the article develops a model that provides an inclusive paradigm of the different strategies that firms have used to resolve the tension and explores the dynamics of the change process for several well-known companies. It concludes by developing the managerial implications of the model, with particular emphasis on how new technology is changing the desirability of alternative strategies.

Organizations have been quick to realize that involving suppliers in new product/process/service development efforts has the potential for significant results. Numerous studies have shown that supplier participation in product development projects can help reduce cost, reduce concept-to-customer development time, improve quality, and provide innovative technologies that can help capture market share. However, not all efforts are successful. Supplier integration is most successful when driven by a formalized process that considers supplier capabilities, level of complexity of the technology, and degree of risk. Leading companies conduct a formal in-depth supplier evaluation and risk assessment prior to supplier involvement on the project team.

This article identifies the major enablers and inhibitors in the achievement of business-Information Technology (IT) alignment. Alignment involves the activities that management performs to achieve cohesive goals across the IT and functional (e.g., finance, marketing, manufacturing) organizations. Therefore, alignment addresses both how IT is in harmony with the business, and how the business should or could be in harmony with IT. IT requires strong support from senior management, good working relationships, strong leadership, appropriate prioritization, trust, and effective communication, as well as a thorough understanding of the business environment. This article develops a methodology that leverages the most important enablers and inhibitors to business-IT alignment.

It happens all the time. Two parties with common interests fail to reach an agreement--about a sale, a merger, a technology transfer--because they have different expectations about the future. They are both so confident in their prediction, or so suspicious of the other side's motives, that they refuse to compromise. Such impasses are hard to break through. Fortunately, they can often be avoided altogether by using a straightforward but frequently overlooked type of agreement called a contingent contract. The terms of a contingent contract are not finalized until the uncertain event in question--the contingency--takes place. In some areas of business, such as compensation, contingent contracts are common: a CEO's pay is tied to the company's stock price, for instance. But in many business negotiations, contingent contracts are either ignored or rejected out of hand. That's a mistake, according to the authors. In an increasingly uncertain world, flexible contingent contracts can actually be more rational and less risky than rigid, traditional ones. In particular, contingent contracts offer six benefits: they enable a difference of opinion to become the basis of an agreement, not an obstacle to it; they cancel out the biases of negotiators; they level the playing field by reducing the impact of asymmetric information; they provide a means of uncovering deceitful dealings; they reduce risk by sharing it among parties; and they motivate parties to fulfill their promises. While contingent contracts are not appropriate in all instances, they are much more broadly applicable than managers may think.

Hiring good people is tough, but keeping them can be even tougher. The professionals streaming out of today's MBA programs are so well educated and achievement oriented that they could do well in virtually any job. But will they stay? According to noted career experts Timothy Butler and James Waldroop, only if their jobs fit their deeply embedded life interests--that is, their long-held, emotionally driven passions. Butler and Waldroop identify the eight different life interests of people drawn to business careers and introduce the concept of job sculpting, the art of matching people to jobs that resonate with the activities that make them truly happy. Managers don't need special training to job sculpt, but they do need to listen more carefully when employees describe what they like and dislike about their jobs. Once managers and employees have discussed deeply embedded life interests--ideally, during employee performance reviews--they can work together to customize future work assignments. In some cases, that may mean simply adding another assignment to existing responsibilities. In other cases, it may require moving that employee to a new position altogether. Skills can be stretched in many directions, but if they are not going in the right direction--one that is congruent with deeply embedded life interests--employees are at risk of becoming dissatisfied and uncommitted. And in an economy where a company's most important asset is the knowledge, energy, and loyalty of its people, that's a large risk to take.

Eager to stay ahead of fast-changing markets, more and more high-tech companies are going outside for competitive advantage. Last year in the United States alone, there were 5,000 high-tech acquisitions, but many of them yielded disappointing results. The reason, the authors contend, is that most managers have a shortsighted view of strategic acquisitions--they focus on the specific products or market share. That focus might make sense in some industries, where those assets can confer substantial advantages, but in high tech, full-fledged technological capabilities--tied to skilled people--are the key to long-term success. Instead of simply following the "buzz," successful acquirers systematically assess their own capability needs. They create product road maps to identify holes in their product line. While the business group determines if it can do the work in-house, the business development office scouts for opportunities to buy it. Once business development locates a candidate, it conducts an expanded due diligence, which goes beyond strategic, financial, and legal checks. Successful acquirers are focused on long-term capabilities, so they make sure that the target's products reflect a real expertise. They also look to see if key people would be comfortable in the new environment and if they have incentives to stay on board. The final stage of a successful acquisition focuses on retaining the new people--making sure their transition goes smoothly and their energies stay focused. Acquisitions can cause great uncertainty, and skilled people can always go elsewhere. In short, the authors argue, high-tech acquisitions need a new orientation around people, not products.

In 1998, Silicon Valley companies produced 41 IPOs, which by January 1999 had a combined market capitalization of $27 billion--that works out to $54,000 in new wealth creation per worker in a single year. Multiply the number of employees in your company by $54,000. Did your business create that much new wealth last year? Half that amount? It's not a group of geniuses generating such riches. It's a business model. In Silicon Valley, ideas, capital, and talent circulate freely, gathering into whatever combinations are most likely to generate innovation and wealth. Unlike most traditional companies, which spend their energy in resource allocation--a system designed to avoid failure--the Valley operates through resource attraction--a system that nurtures innovation. In a traditional company, people with innovative ideas must go hat in hand to the guardians of the old ideas for funding and for staff. But in Silicon Valley, a slew of venture capitalists vie to attract the best new ideas, infusing relatively small amounts of capital into a portfolio of ventures. And talent is free to go to the companies offering the most exhilarating work and the greatest potential rewards. It should actually be easier for large, traditional companies to set up similar markets for capital, ideas, and talent internally. After all, big companies often already have extensive capital, marketing, and distribution resources, and a first crack at the talent in their own ranks. And some of them are doing it. The choice is yours--you can do your best to make sure you never put a dollar of capital at risk, or you can tap into the kind of wealth that's being created every day in Silicon Valley.

Walk into any organization and you will get a snapshot of the company in action--people and products moving every which way. But ask for a picture of the company and you will be given the org chart, with its orderly little boxes showing just the names and titles of managers. Now there's a more revealing way to depict the people and operations within an organization--an approach called the organigraph. The organigraph is not a chart. It's a map that offers an overview of the company's functions and the ways that people organize themselves at work. Perhaps most important, an organigraph can help managers see untapped competitive opportunities. Drawing on the organigraphs they created for about a dozen companies, authors Mintzberg and Van der Heyden illustrate just how valuable a tool the organigraph is. For instance, one they created for Electrocomponents, a British distributor of electrical and mechanical items, led managers to a better understanding of the company's real expertise--business-to-business relationships. As a result of that insight, the company wisely decided to expand in Asia and to increase its Internet business. As one manager says, "It allowed the company to see all sorts of new possibilities." With traditional hierarchies vanishing and newfangled--and often quite complex--organizational forms taking their place, people are struggling to understand how their companies work. What parts connect to one another? How should processes and people come together? Whose ideas have to flow where? With their flexibility and realism, organigraphs give managers a new way to answer those questions.

In 1987, John Peterman started the J. Peterman Co. with a $500 investment and a $20,000 unsecured loan. What began with an ad in the New Yorker and a single product prospered for years. But in 1998, the company slid harrowingly into bankruptcy proceedings. What happened? As Peterman tells it, it all started with a trip he took to Jackson Hole, Wyoming, where he bought a coat. It was a long, sweeping cowboy duster, and he liked the way wearing it made him feel. He suspected that other people would like to buy something that made them feel romantic and individualistic, too. He was right. With Don Staley writing the copy, Peterman issued the first catalog in 1988. It contained just seven items. By 1989, the company did $4.8 million in sales; by 1990, that figure had grown to $19.8 million. But the business model was always implicit--a mistake. They should have developed a precise mission statement. In hindsight, Peterman says, it would have been easy. The business concept could have been summed up in six words: unique, authentic, romantic, journey, wondrous, and excellent. The most successful items evoked all of those things. The business grew, and as more items were added to the catalog and the retail stores expanded, everyone in the company had difficulty focusing. Rapid expansion in the late 1990s brought more staff, more backers, more risk, more rules, and less focus. Time ran out when a cash-flow crisis ultimately squeezed the life out of the company. Looking back, Peterman draws a number of transferable lessons about creating a dream and building a culture, and about the nature of trust and control in a growing organization.

Software applications are now a mission-critical source of competitive advantage for most companies. They are also a source of great risk, as the Y2K bug has made clear. Yet many line managers still haven't confronted software issues--partly because they aren't sure how best to define the quality of the applications in their IT infrastructures. Some companies such as Wal-Mart and the Gap have successfully integrated the software in their networks, but most have accumulated an unwieldy number of incompatible applications--all designed to perform the same tasks. The authors provide a framework for measuring the performance of software in a company's IT portfolio. Quality traditionally has been measured according to a product's ability to meet certain specifications; other views of quality have emerged that measure a product's adaptability to customers' needs and a product's ability to encourage innovation. To judge software quality properly, argue the authors, managers must measure applications against all three approaches. Understanding the domain of a software application is an important part of that process. The domain is the body of knowledge about a user's needs and expectations for a product. Software domains change frequently based on how a consumer chooses to use, for example, Microsoft Word or a spreadsheet application. The domain can also be influenced by general changes in technology, such as the development of a new software platform. Thus, applications can't be judged only according to whether they conform to specifications. The authors discuss how to identify domain characteristics and software risks and suggest ways to reduce the variability of software domains.

The Toyota Production System is a paradox. On the one hand, every activity, connection, and production flow in a Toyota factory is rigidly scripted. Yet at the same time, Toyota's operations are enormously flexible and responsive to customer demand. How can that be? After an extensive four-year study of the system in more than 40 plants, the authors came to understand that at Toyota it's the very rigidity of the operations that makes the flexibility possible. That's because the company's operations can be seen as a continuous series of controlled experiments. Whenever Toyota defines a specification, it is establishing a hypothesis that is then tested through action. This approach--the scientific method--is not imposed on workers, it's ingrained in them. And it stimulates them to engage in the kind of experimentation that is widely recognized as the cornerstone of a learning organization. The Toyota Production System grew out of the workings of the company over 50 years, and it has never actually been written down. Making the implicit explicit, the authors lay out four principles that show how Toyota sets up all its operations as experiments and teaches the scientific method to its workers. The first rule governs the way workers do their work. The second, the way they interact with one another. The third governs how production lines are constructed. And the last, how people learn to improve. Every activity, connection, and production path designed according to these rules must have built-in tests that signal problems immediately. And it is the continual response to those problems that makes this seemingly rigid system so flexible and adaptive to changing circumstances.

Most senior managers want their product development teams to create breakthroughs--new products that will allow their companies to grow rapidly and maintain high margins. But more often they get incremental improvements to existing products. That's partly because companies must compete in the short term. Searching for breakthroughs is expensive and time consuming; line extensions can help the bottom line immediately. In addition, developers simply don't know how to achieve breakthroughs, and there is usually no system in place to guide them. By the mid-1990s, the lack of such a system was a problem even for an innovative company like 3M. Then a project team in 3M's Medical-Surgical Markets Division became acquainted with a method for developing breakthrough products: the lead user process. The process is based on the fact that many commercially important products are initially thought of and even prototyped by "lead users"--companies, organizations, or individuals that are well ahead of market trends. Their needs are so far beyond those of the average user that lead users create innovations on their own that may later contribute to commercially attractive breakthroughs. The lead user process transforms the job of inventing breakthroughs into a systematic task of identifying lead users and learning from them. The authors explain the process and how the 3M project team successfully navigated through it. In the end, the team proposed three major new product lines and a change in the division's strategy that has led to the development of breakthrough products. And now several more divisions are using the process to break away from incrementalism.