How to avoid 10 potential issues in your outsourcing relationship.

The field of social-purpose investing is growing and becoming more sophisticated. Should investors expect lower returns to benefit society? A new Harvard Business School study examines the question.

Years ago, "lean" thinking captured the imaginations of manufacturers as they tried to eliminate much of the waste inherent in their production processes. Before long, companies began using the same lean principles in designing products. But of the popular approaches used to reduce design waste, most, if not all, had fatal flaws.

This paper, The Line on Design, introduces a fundamentally new approach to eliminating design waste. It describes A.T. Kearney's proprietary three-pronged approach, which a handful of companies are using to successfully reduce design waste and cut costs.

The approach is performed by two categories of teams-lean design teams and bookshelf project teams. Lean design teams "learn to see" design waste with the help of a cadre of waste identification tools, while bookshelf project teams validate the design improvement to ensure that it can be effectively incorporated into the product. Traditionally, the biggest disadvantage to design improvements has been the penalties they incur, such as lost revenues or margins due to a delayed product launch; the validation process, however, effectively mitigates this risk.

This paper outlines how to identify design cost reductions before, or in parallel with, new product development. It also introduces option strategies to manage risk and highlights key success factors, such as bringing material suppliers aboard early in the design process. Combined, lean design and lean manufacturing provide industrial companies with a complete arsenal to attack waste.

This is a nice little .pdf document that offers a blueprint for IT integration issues related to mergers and acquisitions on a month-by-month timeline.

Khanna, Palepu, and Srinivasan examine the relatively new S&P Transparency and Disclosure scores for 466 firms from Asian-Pacific countries. Consistent with theory, they find that the more the interaction with US firms, the more transparent the firm's disclosure practices. Specifically they find "a positive association between these disclosure scores and the following types of market interactions: business operations in the US, US listing, international equity ownership, US equity or direct investment in the company's home country, and business travel from the home country to the US." [FinanceProfessor.com Annotation]

The tricky thing about knowledge management is ensuring that all those programs and processes don't choke the imaginative sparks they try to grasp.

Metrics and Incentives are an important component of outsourcing relationships, but as executives use outsourcing more strategically, these become more critical than ever.

In this research study, we found that each type of outsourcing relationship calls for different metrics and incentives to some extent. More importantly, executives also use the same metrics and incentives in different ways to shape the outsourcing relationship they need. Tapping new sources of value means sharing ownership for results with an outsource partner. The more transformational the outsourcing agenda, the more blurred the lines of accountability and control become. Executives who operate at this cutting edge have loosened their white-knuckled grip on control and use metrics and incetives to foster commitment.

Editor's Note: this is an excellent article with very practical advice - I highly recommend it.

Communist China is morphing into something that will one day become a pillar of global society. In the meantime, foreign investors need to consider the many possible routes the country may take to get there.

Editor's Note: see related articles, "China's State-Owned Enterprises: prepare for a turbulent flight"
http://www.ebfonline.com/main_feat/in_depth/in_depth.asp?id=429

and Giles Chance on 'China's State-Owned Enterprises'
http://www.ebfonline.com/main_feat/in_depth/in_depth.asp?id=430

Peter M. Senge offers an excellent look at Peter Drucker's discipline of innovation (focus on mission, define significant results, and do rigorous assessment), providing along the way some of the best comments about mission and vision that I have ever read.

When no precedent exists to guide analysts in assessing the value of an alliance, the task of justifying a price to shareholders falls to those who lead the deal. A clear, strategic vision, well-articulated and linked to rigorous valuation and informed negotiation, will be a strong predictor of success.

Corporate espionage does more to damage business than any other security intrusion. Yet U.S. businesses have done little to protect themselves. The responsibility for safeguarding data and trade secrets rests with management. A smart CIO, armed with the latest technologies, can be the best line of defense.

It has become clear that leaders of leaders must, for themselves, as individuals, create a platform upon which they build their own identity, their own operating principles and their own set of beliefs and rules to guide their lives.

"Sports organizations are in a race to identify new, nontraditional revenue streams that are both profitable and sustainable over the long term. This race is complicated by a constantly shifting finish line and a barrage of new challenges and questions: How do I attract the global fan? Is there a way to draw high-value fans to the stadium without losing my traditional fans? Is the Internet simply a tool for dispensing information or could it be another channel for generating revenue? How can I give sponsors a more accurate picture of their investment? Is there real money in women's sports?

In this paper, the first in a series about the sports industry, we tackle these questions and more. Based on both our work with global sports organizations and industry research, it offers the A.T. Kearney perspective on the changing sports industry."

Generation X managers are different from those in the baby boom generation. They are more skeptical, cooler and have different values. The way to get this independent group to perform is to make them understand.

Companies keep driving into the same traps in the budgeting process. The fallout can be serious in boom times; in the current economic climate, foibles can take an organization so far off course that it never gets back into the game. Here are the most common traps - from no-brainers to complex pitfalls - and tips for sidestepping them.

Is it time to add wireless access to your employees' desktops? Such a loaded question is inevitably answered with some head shaking and hand wringing from business-technology managers. For some, wireless has been a priority since the early 1990s. But even for companies without a strategic need--without a single application around which to rally a wireless strategy--wireless technologies can still offer modest productivity gains that are worthwhile.

Editor's Note: for more on wi-fi wireless technology and its impact, see the A.T. Kearney article, "How Wireless Changes the Way We Work: Tracking Disruption"
http://www.atkearney.com/main.taf?p=5,3,1,76

Should your global strategy optimize scale or exploit differences? HBS professor Pankaj Ghemawat suggests a mix-and-match strategy in this excerpt from Harvard Business Review.

Companies can transform the attitudes and behavior of their employees by applying psychological breakthroughs that explain why people think and act as they do.

For companies that want to make sustainable development a reality, building organizational learning capabilities can be invaluable. Organizational learning has proven very effective in bringing about lasting change and fundamental innovation. In fact, every company interested in capturing growth through innovation and change has needed to develop critical organizational learning capabilities to meet its goals.

When these approaches take hold in an arena such as sustainable development, exponential increases in the rate of innovation become possible, leading to compelling breakthroughs in new products and processes, as well as cost savings from energy efficiency and reduced materials use and waste. Moreover, assumptions behind sustainable industrial design, such as dematerialization, cradle-to-cradle product responsibility, and "natural" strategies for growth, cooperation, and competitive success (i.e., strategies based on patterns observed in nature), shake up existing industrial habits of thinking and doing and spur people to fresh solutions. Finally, sustainable approaches to business challenges can reduce exposure to incident and liability risks.

Investors have long exhibited a "home country bias" whereby they hold more shares of firms from their own country than would seem warranted based off of typical diversification theory. This seeming anomaly has been partially explained in many ways (my favorite is Butler's view that when markets fall, the correlation is actually greater than the long run correlation, hence overstating the value of diversification). Li looks at this from a different perspective by trying to examine how risky the foreign marklets would have to be before investor behavior would make sense. He finds that "in order to hold predominantly domestic equities, each G7 investor has to believe that the risk of foreign investment is several times higher than the actual risk." [FinanceProfessor.com Annotation]

"Silverstein and Fiske [authors of Trading Up]...say people buy New Luxury items because of a 'relatively small set of emotional drivers, both positive and negative.' They describe four 'emotional spaces' that influence consumption: Taking Care of Me, Connecting, Questing, and Individual Style. Home furnishings are typically Taking Care of Me goods, while Connecting goods (food, liquor, jewelry) help buyers to impress a potential mate or show affection. Questing is about adventure -- traveling to exotic locales or sampling the latest new cuisine. Individual Style is about consumption as self-expression. Silverstein and Fiske say consumers increasingly split their purchases between commodities and items they really care about. The authors convincingly predict companies that focus on selling conventional midprice goods -- things that are neither great values nor compelling -- will suffer 'death in the middle.'"

Editor's Note: read a similar, more detailed discussion in the article, "The Price is Right" at
http://www.fastcompany.com/magazine/76/priceisright.html

All over the globe, executives in the private, public and non-profit sectors think entrepreneurial behavior is key to the overall success of their organization and the competitiveness of their countries. Yet the entrepreneurial spirit is proving elusive. Only four in ten executives think their organizations are very entrepreneurial today. Why?

We conducted interviews with 880 senior executives in 22 countries to identify barriers to entrepreneurial behavior.

MNCs face the most difficult dilemmas because they operate in countries with widely diverging socio-economic and environmental conditions. The lesson from the last decade or so is that regulation and self-regulation are both needed.

Pleasing stakeholders is like any other relationship: If you're not communicating with them and adjusting to their needs, you won't know they're unhappy until it's over.

Are Emily and Brendan More Employable than Lakisha and Jamal?

Though racial inequality in the U.S. labor market is understood as a persistent problem even today, it has been difficult to measure how such discrimination works. Do employers actively discriminate against African-American job applicants? Can such discrimination be proven? What is the effect of improved credentials for African-Americans? A new study offers the answers.