Many different factors influence the way individuals make sense of the world and translate that sense making into an orientation toward leadership. We've isolated two major categories of influence-era and individual factors-and a critical intervening set of events and relationships (or crucibles) that go a long way toward explaining how successful leaders extract wisdom from experience. This research note describes our preliminary conceptual model of the process through which leaders grow and evolve.

Note: Darwin Magazine is now dead. Some articles are moving to CIO. I will try to update the links when I have time...

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Welcome to the boulevard of broken PC dreams - where
de-acquisition is a slippery art.

Note: TWM articles ARE still available BUT: (1) you must be a member (free for existing members, not free for new members)   (2) you must be logged-in for the link to work. If you get an error page, visit the homepage, login and then try the link again.

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"Do you have an annual appraisal system? Why? Before expending energy on a process so complicated and potentially controversial, it makes sense to ask what you hope to achieve. Most companies do not know why they have one. They just do.

What is an appraisal for? To provide feedback? To provide a measure of `how you are doing'? To identify prospects for promotion? To decide on salary levels? To keep personnel managers employed? With the exception of the last - and I have nothing against personnel managers - these are all worthy reasons. The problem is that among all these reasons, the last objective is usually about the only one an appraisal system meets. Few of them are really directly linked to salary reviews, and some are even kept as separate as possible from them. Even fewer are used to identify promotion potential.

So what about giving feedback? If appraisal systems really did this, they would be worth all the money they cost. Feedback is vital..."

How Baxter International's chief Harry Kraemer learned to stop worrying and love sustainability.

At the invitation of Arthur D. Little, executives representing the "Best-of-the-Best" companies in customer management met to discuss their vision of the future customer-driven company, as well as the challenges that lie in the path toward that ideal.

While most companies recognize the need for a stronger external orientation, few have been able to realize it in practice. They know the value of customer loyalty. They are aware that a 5 percent increase in customer retention can generate a 25 to 85 percent improvement in profitability. They know that it costs five to ten times more to get a new customer than it does to retain an existing one. They recognize that their customers' expectations are rising at unprecedented rates, competition is intensifying, and customers are becoming far more rigorous in choosing vendors. And they realize that as customer choice and negotiating power increase, they must find new ways to differentiate their offerings through characteristics other than price - while managing their costs. However, very few have succeeded in their efforts to institutionalize their customer-driven objectives.

Editor's Note: this article was written back in 1995 before CRM was a household term...

Given the increasingly critical role technology plays in the competitive positioning of an organization-from adaptive supply chains to innovative customer relationships-the gap between companies that use their technology effectively and those that don't is destined to widen. How can a company build an IT organization that fosters innovation and creates long-term value for the business?
An A.T. Kearney study conducted by Harris Interactive asked executives from the United States and Europe how they manage and use information technology to create measurable business value and position their companies for future competitive advantage. According to the study, leaders consistently master the following:
- Move beyond IT alignment toward integration of business and technology
- Manage IT as a portfolio of capabilities-from operational costs to innovative opportunities
- Invest in leading-edge, innovative IT as an organizational activity aimed at delivering business value
- Integrate measurement into the evaluation and strategic decision-making for IT investments
- Anticipate the next wave of technology and define its impact on businesses and industries

Personal aspirations collide with firm realities; conflicts rage among a person's competing interests. Outstanding professionals-stars-are inherently ambitious and restless, creating a certain amount of unavoidable turmoil for themselves and their colleagues.

Editor's Note: I read a lot of so-called "work-life balance" articles and frankly, most of them are useless. I found this one different - very insightful and a good read (though a bit long).

To protect their competitive position in the marketplace, companies need to incorporate future indicators of boomer spending into marketing projections, rather than focus on historical data.

Last November, green-business insiders converged on Los Angeles for Business for Social Responsibility's 2003 conference, titled "Building and Sustaining Solutions." The following is an excerpt from the keynote address by Hewlett-Packard CEO Carly Fiorina, which offered up an inspiring view of the Big Picture without losing sight of the real triumphs and challenges down on the production floor.

It's becoming easier to be a hacker and harder to defend an enterprise. A 10-point road map can help CIOs keep attackers at bay.

"our research finds that the CEOs whose companies are best weathering the recent downturn are practicing old-fashioned, pragmatic management by the numbers - what we call yellow-light leadership. This conclusion is based on an onging Booz Allen Hamilton study of about 40 Fortune 500 companies, conducted with the Center for Effective Organizations at the University of Southern California and initiated in 2001.

This finding is significant because it casts doubt on the conventional wisdom that says there are only two models of leadership. One is visionary, or 'green-light,' leadership, appropriate to periods of economic growth. The other is crisis, or 'red-light,' leadership, best applied when companies, industries, and economies are tumbling. Our ongoing research suggests that while there is value in both the green-light and red-light models, neither extreme is effective in times of uncertainty."

Note: CEO Refresher articles are no longer free...

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With a few short changes in strategy, your meetings can become meaningful encounters in which people work hard, produce outcomes, and leave with a sense of accomplishment.

Even a corporate revamping inspired by state-of-the-art design principles won't succeed if not driven by a powerful, well-timed business idea adapted to social realities.

Note: Older EBF articles are not currently online. I'm not sure if this is temporary or permanent. If you click you will be taken to the Archive.org site to find an archived copy.

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It would probably be hard to find anyone these days to argue against the idea that all activities of a business should be responsive to customer needs. It is our contention in this article, though, that being customer-oriented is not enough in the present complex economic environment. Successful players need to be market-driven, a concept that broadens customer orientation to other key market actors (distributors, competitors and prescribers) and which implies that superior customer value creation is the responsibility of all individuals across all functions of the organisation.

The objective of this paper is to consider three fundamental questions.
1. What does it mean for a firm to be market-oriented?
2. How can we measure the level of market orientation in a firm?
3. Does stronger market orientation lead to superior business performance?

In an article from Negotiation, expert Deborah M. Kolb offers tips for deflecting the other side's power grab.

There are three sets of nations from whom Russia can learn about how to integrate into the global economic system. The developed countries such as United States, Britain, Germany, France, and Japan demonstrate how developments over several decades if not couple of centuries can influence national business systems and hence international competitiveness. They also show how a country's national business system responds to international relationships before and after membership in multilateral trade organizations such as the WTO and its predecessor, the GATT. A second set of countries from which some lessons could be learned is the newly industrializing countries (NICs) such as Korea, Brazil, and India. Here the key issue is the long time for transition that these countries got to transit into a more open trade regime. Also, the experience of Chile in making the transition by planned, pre-announced, and progressive reduction of tariffs could have some lessons. Finally, a large, centrally planned economy such as China holds some instructive lessons in the sequencing of domestic policy and institutional changes and opening of trade regimes.

Editor's Note: though focused on Russia, this article discusses some interesting national business systems issues and goes into a fair amount of detail about China in particular. If this interests you, check out another good article, "Profits and Perils in China, Inc." at
http://www.mbadepot.com/links/links.php?ID=3564

New wireless technologies will soon broadcast customers' personal information, including their presence, preferences, and priorities. Providing services based on this digital information will require careful consideration of the six items of customer insight we call customer "context." Companies that are able to integrate and use this information on a moment-by-moment basis will reap better and more profitable customer relationships.

Two concerns IPO researchers have are the apparent short-run underpricing (the stock trades up in the secondary market) and the longer run underperformance (stock falls during long event window). Previous research has been only partially successful in explaining the continued existence of these two conflicting and seemingly contradictory anomalies. Some of these previous attempts include Chowdry and Nanda 1996 who show that stabilization activity can explain some of the initial underpricing. Fama (1998) suggests that the difficulty of matching samples may explain the apparent long run underperformance. However due to disagreement of studies, IPO pricing remains troubling. Derrien models these two findings and shows that if noise traders (presumed to be individual investors) are overly optimistic, they will bid up prices even when the initial price is higher than most valuation models would predict. That is: because the price is going to go higher, informed investors will participate in the offering since they can profitably trade out of the security in the aftermarket. If this is true (and it is supported by a sample of French IPOs that demonstrate initial return and turnover is positively related to individual investor demand), then investment bankers knowingly overprice the issue (relative to intrinsic value) but underprice relative to the short-run demand. Why underprice? One explanation is that by knowingly overpricing the shares, the investment banker would be exposed to higher stabilization (and legal) costs if the noise traders realized the shares were in fact overpriced. (Interesting!) [FinanceProfessor.com Annotation]

The public's misconception of what auditors do stands as a yawning fissure between CPAs and investors. How will the profession solve the problem?

The San Francisco Chronicle has a great article on why the dollar has fallen and why it matters.

Remediation programs have historically given companies little satisfaction while costing them millions. Leading companies today, however, are finding ways to gain increased control over their remediation programs and greater value from their expenditures. These programs go beyond the largely reactive approaches of the past to build longterm company value by emphasizing a business focus and strategic action. They achieve consensus for realistic solutions through better communication with all stakeholders in remediation projects. And they use measures that enable companies to track real progress and target areas for improvement. At a two-day colloquium, Arthur D. Little's senior managers facilitated a discussion among executives from nine companies whose remediation management practices represent the "Best of the Best." They explored how their remediation strategies are helping them improve business results.

You are about to meet 20 organizations that are in the business of changing expectations. They reshape reality - so that poor kids can attend college, so that people in the destitute corners of the world can get better health care, so that victims of human-rights abuses can be heard. Most of us see the world's most daunting problems as impossible challenges. But these groups see the world's problems as just . . . problems, ones that can be fixed with the right ideas and enough passion. And they see how the systems that produced those problems can be reinvented. So they get to work.

These groups and leaders are neither idealistic dreamers nor neo-hippie do-gooders. They are entrepreneurs in the truest sense of the word. They are adept at marshalling resources behind an idea, at creating organizations that operate both efficiently and effectively. They apply sound management tools and discipline, and they demand results.

They are the winners of our inaugural Social Capitalist Awards. Fast Company, with considerable assistance from Monitor Group, the global consulting firm, has spent months assessing entrepreneurship in the social sector. We have measured organizations' actual innovations and their impact. We have gauged their aspirations and their sustainability. This endeavor is the first to make these types of quantitative comparisons across a group of organizations with such diverse social missions and business structures.

If introducing a new product line creates a small probability of losing a few million dollars and a large probability of earning many billions of dollars, it seems clear that the new product line should be introduced. But does what we know about managerial decision making suggest that the new product line will be introduced?

Why many companies are using metrics from the cash flow statement, and not just the income statement, to measure annual performance and award bonuses.

Note: Darwin Magazine is now dead. Some articles are moving to CIO. I will try to update the links when I have time...

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The good news is hiring is going up. The bad news is the competition is really fierce. Here's how to get a leg up.