Leadership →
- 19 Nov 2009
- Working Paper Summaries
Management and the Financial Crisis (We Have Met the Enemy and He is Us …)
We have spent the past year mired in a global financial crisis that few saw coming and that will plague us for years to come. Such crises are gut-wrenching. Collectively and individually, we search for causes and solutions. Too often, we look for quick fixes that do long‐term damage, or we put the equivalent of duct tape on obvious problems, missing the true root causes. HBS professor William A. Sahlman argues that the macroeconomic problems were the result of terrible microeconomic decisions. The root cause of bad decision‐making resides in the nexus of culture, incentives, control and measurement, accounting, and human capital. We now have a unique opportunity to force a review of all the players in the financial system, from individual consumers to politicians and regulators to management teams at financial services firms. Key concepts include: Management needs a new kind of comprehensive analysis monitor. The new entity would take an objective, hard‐nosed look at major financial services firms on a holistic basis. The new monitor would learn from working with many players in an industry. Auditing the best and worst firms would create powerful tools for improving practice. Beyond introducing this new player to the broad system of corporate governance, the most important and most difficult changes are those required of managers, who must look hard at risk and reward. Closed for comment; 0 Comments.
- 09 Nov 2009
- Research & Ideas
Come Fly with Me: A History of Airline Leadership
A new book looks at the history of the U.S. aviation industry through the eyes of its entrepreneurs, managers, and leaders—men like Pan Am's Juan Trippe and Southwest Airlines' Herb Kelleher—each emerging at different stages of the industry's evolution from start-up to rebirth. Who comes next? An interview with coauthor Anthony J. Mayo. Key concepts include: While disruptive forces can change an industry, so too can leaders themselves by the manner in which they run their enterprises. Different archetypes of leaders emerged as the U.S. airline industry evolved from start-up phase through deregulation and the shock of September 11, 2001. Airlines seem ripe for a new form of leadership to reenergize the industry. Closed for comment; 0 Comments.
- 13 Oct 2009
- Research & Ideas
7 Lessons for Navigating the Storm
Leading in crisis requires a combination of skills and behaviors—personal and professional—that can be mastered, says HBS professor Bill George. Open for comment; 0 Comments.
- 05 Oct 2009
- Research & Ideas
The Vanguard Corporation
In the book SuperCorp, Rosabeth Moss Kanter lays out a model for 21st-century companies that care as much about creating value for society as they do value for shareholders and employees. The best part: It pays to be good. Key concepts include: Companies with a very strong sense of purpose use it to guide and speed up innovation. All the vanguard companies studied, save one, outperformed their peers during the recession. Leaders must engage employees in discussions around principles and the applications to the business. Vanguard companies are dynamic places to work, with employees having a say on when and where they work. Closed for comment; 0 Comments.
- 01 Oct 2009
- What Do You Think?
Can the “Masks of Command” Coexist with Authentic Leadership?
Summing up. "Instructors seek case studies that provoke discussion on both sides of an issue and raise many questions. We seem to have found such an issue this month," says Professor Jim Heskett, reviewing nearly 80 insightful comments. (Online forum now closed; next forum begins November 4.) Closed for comment; 0 Comments.
- 21 Sep 2009
- Research & Ideas
Excessive Executive Pay: What’s the Solution?
Now that the worst fears about economic meltdown are receding, what should be done about lingering issues such as over-the-top executive compensation? Does government have a role? Is it time we rethink corporate governance? HBS faculty weigh in. From the HBS Alumni Bulletin. Key concepts include: With White House support, congressional leaders are intent on shifting the balance of power in the boardroom away from management. Skeptics say more than two decades of well-meaning attempts to constrain ever-soaring corporate pay and to reform governance through legislation, regulation, and shareholder pressure have, for the most part, failed or even backfired. According to Professor Brian Hall, it is not a given that executive pay practices had a role in creating the financial crisis. Director independence on boards is a mixed blessing. Independence has a downside when directors don't understand the business, says Professor Jay Lorsch. We need to rethink corporate governance structure in fundamental ways for the 21st century, according to Professor Rakesh Khurana. Closed for comment; 0 Comments.
- 10 Aug 2009
- Research & Ideas
High Commitment, High Performance Management
High commitment, high performance organizations such as Southwest Airlines, Johnson & Johnson, McKinsey, and Toyota effectively manage three paradoxical goals, says HBS professor Michael Beer. His new book explains what all companies can learn. Q&A Key concepts include: High commitment, high performance (HCHP) firms carry out performance alignment, psychological alignment, and the capacity for learning and change. HCHP transformations are a unit-by-unit process. HCHP firms allow employees to speak to power in honest, collective, and public conversations. Leaders must make conscious, principled choices. Leaders develop an institution that cares about people while understanding the importance of profits. Closed for comment; 0 Comments.
- 29 Jul 2009
- Working Paper Summaries
Firsthand Experience and the Subsequent Role of Reflected Knowledge in Cultivating Trust in Global Collaboration
How can workers better collaborate across vast geographical distances? Distributed collaboration—in which employees work with, and meaningfully depend on, distant colleagues on a day-to-day basis—allows firms to leverage their intellectual capital, enhance work unit performance, face ever-changing customer demands more fluidly, and gain competitive advantage in a dynamic marketplace. Research over the last decade, however, has provided mounting evidence that while global collaboration is a necessary strategic choice for an ever-increasing number of organizations, socio-demographic, contextual, and temporal barriers engender many interpersonal challenges for distant coworkers and are likely to adversely affect trust between and among workers across sites. In this paper that examines employee relations at a multinational organization, HBS professor Tsedal Beyene and MIT Sloan School of Management professor Mark Mortensen find that firsthand experience in global collaborations is a crucial means of engendering trust from shared knowledge among coworkers. Their findings reinforce the important role of others' perceptions in our own self-definition, and suggest a means of addressing some of the problems that arise in cross-cultural global collaborations. Key concepts include: As organizations increasingly move toward more global designs, with greater intersite communication and mobility, a more highly socialized view of global collaborations is required. Direct knowledge entails knowledge about physical space and facilities, cultural traits of coworkers, work processes, people, and relationships. Reflected knowledge enables people to view how their home office is both presented to and perceived by others. In global collaboration there is the distinct and important role played by reflected knowledge as opposed to direct knowledge. Both types impact trust. While direct knowledge may help to identify barriers to collaboration, there is no guarantee that any particular person can ameliorate them. In contrast, reflected knowledge provides feedback about our own context and related factors that are more likely to lie within our control. While technology may be designed to mirror the other's view, it cannot provide the full breadth of reflected information typically gained while on-site. Managers would be wise to provide for subsequent reciprocal visits to ensure that the hosts of any first meeting gain firsthand experience of their collaborators' sites. Closed for comment; 0 Comments.
- 06 Jul 2009
- Research & Ideas
Conducting Layoffs: ’Necessary Evils’ at Work
"The core challenge for everyone who performs necessary evils comes from having to do two seemingly contradictory things at once: be compassionate and be direct," say Joshua D. Margolis of Harvard Business School and Andrew L. Molinsky of Brandeis University International Business School. Their research sheds light on best practices—typically overlooked—for the well-being of those who carry out these emotionally difficult tasks. Q&A Key concepts include: Most managers who conduct layoffs feel a mix of emotions that may catch them by surprise: sympathy, sadness, guilt, shame, anxiety, and perhaps anger. Best practice for managers includes understanding yourself and recognizing your limitations. Recognize ahead of time the emotional cocktail that you will likely experience when performing a layoff, say the researchers. Companies should focus not only on getting the task done and on ensuring the well-being of victims, but also on the well-being of those who perform the layoff. Conduct training beforehand; have pairs or teams perform the tasks together; provide a good physical environment in a nonpublic, quiet area of the organization; and later allow those who carried out the layoffs to decompress and debrief. Closed for comment; 0 Comments.
- 29 Jun 2009
- Sharpening Your Skills
Sharpening Your Skills: Leading Change
Nothing like a global recession to test your change-management skills. We dig deep into the Working Knowledge vault to learn about building a business in a down economy, motivating the troops, and other current topics. Closed for comment; 0 Comments.
- 24 Jun 2009
- Working Paper Summaries
Don’t Just Survive—Thrive: Leading Innovation in Good Times and Bad
The financial crisis provides a sobering reminder of what happens when innovation fails to drive productive economic growth. For over a decade, money from around the world poured into the United States seeking innovation. Despite these massive investments, when adjusted for inflation, U.S. GDP grew slowly with much of the growth coming from government, professional, and business services, including real estate and outsourcing. What's more, inflation adjusted wages stalled for many, even as consumer spending increased. This paper argues that innovation is not a side business to a real business: rather, innovation is the foundation of a successful business. Key concepts include: Entrepreneurs can be found and a culture of entrepreneurship can be developed in companies of any size and age. Entrepreneurial leaders must relentlessly—but not recklessly—pursue opportunity. They must look beyond the resources currently controlled to harness the power, resources, and reach of their organizations and networks. Breakthrough innovations that change people's lives and the very structure and power dynamics of industries cannot be managed as "silos," tucked away in corporate, university, or government research labs, in incubators, or within venture capital funded entrepreneurial start-ups. Access to the marketplace is needed to help speed commercialization and adoption. Emerging opportunities must be nurtured and the transition to high growth must be managed. Once breakthrough innovations catch hold, growth must be funded and managed to exploit the full value of the opportunity. Incremental innovations must ensure that businesses that have passed through the high-growth stage can continue to deliver the resources, capabilities, and platforms needed to fuel the emerging opportunities of the future. Different organizational structures, cultures, governance and risk management systems, and leadership styles are needed to manage the business innovation lifecycle from an initial idea to a sustainable business that leverages entry position and capabilities to exploit the full potential for growth and evolution over time. Closed for comment; 0 Comments.
- 17 Jun 2009
- Working Paper Summaries
Innovation Communication in Multicultural Networks: Deficits in Inter-cultural Capability and Affect-based Trust as Barriers to New Idea Sharing in Inter-Cultural Relationships
What makes sharing new ideas across cultural lines so difficult? Given that disclosing new ideas makes one person vulnerable to the other, innovation communication requires trust. The literature on workplace relationships distinguishes affect-based trust—feelings of socio-emotional bond with the other—and cognition-based trust—judgments of the other's reliability and competence. Recent organizational psychology research on capabilities needed to work across cultures has also identified affect-relevant strengths such as confidence and nonverbal communication. HBS professor Roy Y.J. Chua and Columbia Business School professor Michael W. Morris survey a sample of business executives with diverse professional networks, assessing their inter-cultural capability and measuring both kinds of trust as well as idea sharing in their working relationships. Key concepts include: A diverse professional network is not sufficient for cultural idea exchange and cross-pollination. In the study, individuals with low inter-cultural capabilities did not share new ideas across inter-cultural ties due to deficits of affect-based trust, but not cognition-based trust. Inter-cultural capability may be particularly predictive of affect-loaded interactions and relationships, such as mentoring an employee or inspiring an audience, rather than more intellectual tasks, such as evaluating performance. Individual differences play a role in harnessing the power of multiculturalism for creativity. Closed for comment; 0 Comments.
- 15 Jun 2009
- Research & Ideas
GM: What Went Wrong and What’s Next
For decades, General Motors reigned as the king of automakers. What went wrong? We asked HBS faculty to reflect on the wrong turns and missed opportunities of the former industry leader, and to suggest ideas for recovery. Closed for comment; 0 Comments.
- 09 Jun 2009
- Research Event
Business Summit: Enterprise Risk Management
Risk management is a key to sustained firm growth, says professor Robert S. Kaplan. Key ingredients to a successful risk management program include the proper culture, clear parameters, discipline, measurement, and accountability. Closed for comment; 0 Comments.
- 14 May 2009
- Sharpening Your Skills
Sharpening Your Skills: Managing Teams
The ability to lead teams is fast becoming a critical skill for all managers in the 21st century. Here are four HBS Working Knowledge stories from the archives that address everything from how teams learn to turning individual performers into team players. Closed for comment; 0 Comments.
- 11 May 2009
- Research & Ideas
The IT Leader’s Hero Quest
Think you could be CIO? Jim Barton is a savvy manager but an IT newbie when he's promoted into the hot seat as chief information officer in The Adventures of an IT Leader, a novel by HBS professors Robert D. Austin and Richard L. Nolan and coauthor Shannon O'Donnell. Can Barton navigate his strange new world quickly enough? Q&A with the authors, and book excerpt. Key concepts include: The role of CIO is one of the most volatile, high-turnover jobs in business. Why? The driving cause is more than rapid change in IT. Rather, IT is at the crossroads of major organizational change. Barton soon realizes that IT-specific knowledge is not a key to success. Instead, he must take care to collaborate equally with the senior management team and his own staff. Like Barton, today's senior executives are continuously confronted with situations with multiple uncertainties, needing collaboration and input from experts who may know more than they do about the specifics. Closed for comment; 0 Comments.
- 27 Apr 2009
- Research & Ideas
Building Businesses in Turbulent Times
An economic crisis is a charter for business leaders to rewrite and rethink how they do business, says Harvard Business School professor Lynda M. Applegate. The key: Don't think retrenchment; think growth. Key concepts include: Companies that survive the financial crisis by identifying and exploiting innovation will serve as economic growth engines in the future—and will be the industry leaders of tomorrow. This is a time of unprecedented opportunity to rethink offerings, markets, business processes, and organizational structure—and to improve them to achieve growth. Success will depend on leaders who are able to stabilize the company as they identify and exploit opportunities, find new market niches, create innovative new offerings, and restructure and reposition. Closed for comment; 0 Comments.
- 24 Apr 2009
- Working Paper Summaries
Corporate Social Entrepreneurship
Accelerated organizational transformation faces a host of obstacles well-documented in the change management literature. Because corporate social entrepreneurship (CSE) expands the core purpose of corporations and their organizational values, it constitutes fundamental change that can be particularly threatening and resisted. Furthermore, it pushes the corporation's actions more broadly and deeply into the area of social value creation where the firm's experiences and skill sets are less developed. The disruptive social innovations intrinsic to the CSE approach amplify this zone of discomfort. Fortunately, the experiences of innovative companies such as Timberland and Starbucks show how these challenges may be overcome. Key concepts include: Values-based leadership, the synergistic generation of social and economic value, and strategic cross-sector alliances are key ingredients to achieving a sustainably successful business. For companies to move their corporate social responsibility (CSR) activities to the next level, they need to rethink their current approaches to CSR, tapping into the creativity of each individual. Like all entrepreneurship, CSE is about creating disruptive change in the pursuit of new opportunities. It combines the willingness and desire to create joint economic and social value with the entrepreneurial redesign, systems development, and action necessary to carry it out. Closed for comment; 0 Comments.
- 02 Apr 2009
- Working Paper Summaries
The Flattening Firm and Product Market Competition: The Effect of Trade Liberalization
Corporate hierarchies are becoming flatter: Spans of control have broadened, and the number of levels within firms has declined. But why? Maria Guadalupe of Columbia University and HBS professor Julie M. Wulf investigate how increased competition in product markets—and, in particular, product market competition resulting from trade liberalization—may be fundamentally altering how decisions are being made. Guadalupe and Wulf also shed light on the possible reasons behind certain organizational choices and on the importance of communication and decision-making processes inside firms. Key concepts include: As firms become flatter, they also fundamentally alter how decisions are made. Greater international competition following trade liberalization leads to flatter firms. When competition increases the value of quick and responsive decision-making, firms eliminate layers to improve the quality and speed of the transmission of information or increase the authority of division managers to become more adaptive to local information. U.S. firms in manufacturing industries more exposed to the trade liberalization reduce the number of hierarchical levels, broaden the span of control for the chief executive, and increase total pay and incentive-based pay for division managers. Closed for comment; 0 Comments.
Management’s Role in Reforming Health Care
Health care managers are the missing link in debate over reform. Their skills and ideas are needed to sustain and improve upon multiple advances in the delivery of health care for the benefit of patients. An interview with HBS professor Richard M.J. Bohmer, MD, and an excerpt from his book Designing Care: Aligning the Nature and Management of Health Care. Key concepts include: Many health-care delivery issues are managerial rather than policy issues. Much debate on the U.S. stage assumes the current health-care delivery system is a given. Yet innovations in care delivery could potentially help patients and the U.S. health-care system overall. Bohmer's book explains how to create more knowledgeable, flexible, and responsive delivery organizations. Routine medical practice is a fertile source of innovations in care, in both what to do and how to do it. Closed for comment; 0 Comments.