Last month Edward C. Prescott and Finn E. Kydland won the 2004 Nobel Prize in Economic Sciences for two important papers they coauthored that advanced the field of dynamic macroeconomics. As the Royal Swedish Academy of Sciences put it, Prescott and Kydland's work "has not only transformed economic research, but has also profoundly influenced the practice of economic policy in general, and monetary policy in particular." Knowledge@Wharton asked Prescott to explain the importance of his research to issues that confront our society today.

In our myths about leaders, we often visualize fearless warriors beating out paths to new visions and conquests.

Nothing could be further from the truth. Fear is a survival mechanism, a requirement for life and well-being. While having fear is very different than allowing fear to dictate, fear does exist.

Since virtually everyone has fears, to pose as fearless simply exposes a fear of seeming fearful!

Your ability to change is not a matter of willpower. Your willpower will be there when you take
three steps:
1. Admit your fears.
2. Identify whether your organization is complicating things with its own fears.
3. Take two simple measures to counter both.

As part of a comprehensive five-year study, Expertise Marketing looked at more than 500 IT service firms respondents' use and measurement of a variety of methods to attract and retain clients. Without having a single question on the survey questionnaire about a IT service firms's culture, it became statistically clear that a firm's "internal personality" or "cultural DNA" influences its eventual success - or failure - in using certain methods to attract or retain clients.

This paper proposes that a Strategy Implementation Monitoring System (SIMS) based on shareholder value, the Balanced Scorecard and ABC/ABM concepts can equip organisations with a complete insight into organisational performance. Such a system could be used as a communication channel between not only strategy formulators and strategy implementers, but also as a communication channel between the executive team and the investors.

Keep this link on hand for the ultimate list of statistical calculators. The site features good basic sample size calculators as well as calculators for more advanced research methodologies (see Power Calculators or Correlation and Regression Calculators). Remember that market testing and research are at the heart of good marketing ROI practices. The more insight you can gain into what marketing activities, campaigns, offers and segmentation are driving your profitability, the better to improve your returns. For the more sophisticated calculators, you'll need to have a good understanding of statistical terms, since these are student projects and there is no documentation to guide you. On the other hand, the site even offers a tool for those creative folks with "mathphobia" -- check out the RGB calculator, which will show you Web colors and the corresponding hexadecimal code. [WDFM Annotation]

Is it always possible to continue to reduce costs and improve efficiency? Some companies seem stuck in a mind-set that says only process excellence will drive their success and that efforts aimed at continuing to drive down costs will create competitive differentiation. Professor Rao examines the limits to this thinking and discusses how diminishing returns, ease of copying and competitive convergence can cause your company's reliance on this strategy to hit a wall.

Objective performance monitoring and analysis are essential to demonstrating the benefits that adopting the Shared Services model can bring to the client organization, helping it to attain its high performance goal. This Point of View focuses on how to realistically measure Shared Service Center operations. Examples of Key Performance Indicators and a Performance Measurement model are also included.

Great marketers figure out how to make lives better, with the goal of attracting lots of profitable and happy customers.

But to measure how well marketing efforts help build a large and loyal customer base, it's essential to identify (and rely on) the metrics that matter most.

"History is bunk" - Henry Ford

In general, most marketing experts have agreed with Ford's conclusion. While some researchers have advocated using historical or longitudinal approaches to study marketing phenomena, others have dismissed the vast field of history as inherently subjective and hopelessly unscientific.

There's more to wealth creation than financial value. Think what rainmaking, reputation, and relationships can do for you and your company.

The federation structure remains a viable model for nonprofit organizations - if managements transform themselves and affiliates collaborate more closely.

Despite years of discussion and debate, companies still typically use 340 applications for every 10,000 end users-most of them not integrated with one another, according to The Hackett Group's recent research. This finding flies in the face of the generally accepted view that it's critical to integrate multiple, disparate applications, data sources, and human resources to provide the necessary information and transaction processing for timely and effective decision making and productivity. Added to the challenge is the need to provide this type of integration across the extended enterprise, including customers, suppliers, and partners.

Marketers are happy speaking their own language, replete with jargon like "awareness," "share of requirements" and "customer satisfaction." Such terminology works fine in the marketing department and with the advertising professionals who execute marketing plans. But there's a translation problem between that language and the language of profitability and stock price which is the mother tongue of corporate CEOs. "CEOs want to know what a 5% increase in customer satisfaction will do for the bottom line," says Wharton marketing professor David Reibstein.

Research shows that only 4% of dissatisfied customers ever bother to complain. Others just keep quiet. They may be putting up with an inferior product experience or silently shift to some other brand without a warning. What does this mean to the marketing manager?

Are you on board with enterprise risk management? You had better be. It's the future of how businesses will be run.

This article introduces a new approach to strategy that is built around the customer. By focusing on what the customer is trying to accomplish, and treating all offerings as solutions to their inherent issues, the new theory advises on positioning relative to the customer, as opposed to positioning relative to the competition. While competition remains a very important factor in strategy, rather than defeating the competitors in direct combat, this technique shows the way to win the battle before it actually starts.

Customer relationship management (CRM) represents a powerful and sophisticated set of software applications that are designed to leverage the efforts of customer-facing functions such as sales, marketing, and customer service. The CRM industry continues to flounder due to high costs and perceived high failure rates. Despite thousands of pages of analyst reports and hundreds of books written on the subject, the industry and the end user community appear to miss the point that the technology has outpaced the development of a management strategy to use it. Experience has shown and statistical research verifies that success comes when senior management is directing the effort with the right level of leadership. If the industry wants to reduce the "road kill" of failed projects and help user organizations get on track, it needs to adopt a new set of best practices that will lead to economic success and prosperity for the industry. This article is part of a two part series that will define the framework and rationale for such a set of best practices.

Vision statements come in a variety of shapes and sizes. A corporate vision may include statements about the future business environment, technology, and expected performance. Many express some overall theme, discuss core businesses and resources, and comment on how the company will interact with its key stakeholders. Regardless of length, the best visions establish a clear statement of "what we want to be." Several in-depth studies of major organizational change indicate that a clear vision is essential to most successful corporate revitalization efforts. The vision statement fits neatly into a process of defining what needs to change, communicating the required adjustments, and energizing people in the organization to make it happen.

Whether you're an individual who sells to corporations or a corporation that sells to individuals, at some point you have to communicate your core value to a specific person through a print ad, television commercial or a cold call-or at a networking event.

The good news is that you don't have to be a copywriter or a professional speaker to develop a hugely effective essential message.

You simply need to make sure that your essential message includes three psychological triggers.

Results from the Accenture Learning 2004 survey of 285 cross-industry learning executives reveal that a select group of "high-performance learning organizations" are leading the way when it comes to the impact of learning and training on overall performance.

John Seely Brown speaks to editor Sarah Powell about nurturing invention and managing innovation.

Not all products are created equal, so supplier integration schemes must be flexible.

This article discusses the challenges facing many organizations that are considering or have migrated into a multi-vendor outsourced enterprise. It will detail the employing and leveraging of IT Service Management best practices to address these issues and the impact of operating in such an environment. Lastly, it will detail a proactive approach to facilitate this outsourcing enviornment.

Anyone who has visited a supermarket or mass merchandiser recently has an appreciation for the explosion in the variety of products being offered for sale. Consumer product manufacturers have added brands, extended lines and altered pack sizes, shapes and colors to lure consumer dollars. In introducing these new products and variants, companies have made their businesses more complex.

Designing, marketing, forecasting, pricing, producing and distributing a growing legion of unique SKUs drives up cost, increases the risk of lost sales and dilutes management attention. Add to this the uncertainties about why, when and how to add a new item or prune the existing line, and the complexity challenge balloons even further.

The Complexity Challenge shares the results of A.T. Kearney's research study of complexity in the consumer products industry. Our findings? Increased complexity is almost inevitable as companies pursue business growth. Tomorrow's focus must be on complexity management, not simply complexity reduction. And there are strategic steps a company can take in order to effectively manage complexity.

In their search for the root causes of international financial meltdowns, politicians and bureaucrats have been looking in the wrong places. The best defense against economic crises is good, solid banks.