During World War II two Harvard University psychologists - Gordon W. Allport and Leo Postman - studied wartime rumors and came up with a mathematical formula that described the way a rumor works and suggested ways to control or eliminate a rumor.

What gets measured gets done for better or worse. Too many companies chase growth in earnings per share, only to find themselves employing too much capital at too low a rate of return and thereby eroding shareholder value. Economic Value Added(1) offers a beguiling solution: an easy-to-understand measure that recognizes improvements in earnings only to the extent that they exceed the cost of the capital employed to secure them.

Eminently sensible, but for one critical flaw: EVA discourages growth. The conceptual problems have been there all along; the empirical evidence is beginning to mount. At a time when renewing growth represents the major competitive challenge facing most companies, dependence on EVA can become a major obstacle to building shareholder value. Fortunately, there are better alternatives.

Good accounting results and rising share prices can mask trouble ahead, and companies can create substantial value despite falling share prices. Developing a holistic picture of the health of a company-its ability to generate and sustain value-is difficult but doable.

In a recent Harvard Business Review article, professor Robert Simons wrote about how organizations can design jobs for maximum performance. In this excerpt, Simons discusses what he terms the four basic "spans" of a job-control, accountability, influence, and support-and how managers can adjust those spans as if on sliders to make employees more effective.

Catlin & Cookman Group has developed an innovative diagnostic tool based on what they've learned about leadership through working with CEOs to build their companies' Profit Spiral. It is designed to enable you to analyze your performance in the three key roles of a CEO:
• Company leader
• Manager of your direct reports
• Executive team leader

The chief responsibilities you have in fulfilling each of these roles are broken out in a manner that makes it easy to score how well you're doing in all aspects of your job. In addition, you can note ideas for improvement as you evaluate your performance in each area. Finally, you are asked to develop an action plan for making improvements in those areas that can add the most value to your company.

Imitation comes naturally to human beings. Despite our vaunted individualism, we are the most imitative animals on Earth. The trick is merely to avoid imitating stupidly. And it seems reasonable to believe that we do so by imitating success. But in a 2001 paper pointedly titled "In Search of Excellence: Fads, Success Stories, and Adaptive Emulation," two Cornell University researchers remind us that our natural urge to shun failure and imitate success can also be hazardous. They blame a chronic fascination with business success stories for the tendency of corporate management theories to rise and fall in wildly faddish (not to say foolish) cycles.

It's been said that no one is a prophet in his own land, but can anyone be a prophet in his or her own organization? Apparently, the ancient adage seems to hold true even in our modern temples of commerce, says Professor Jeffrey Pfeffer. People in most companies, he has found, value knowledge possessed by outsiders more than they do knowledge possessed by members of their own organization.

Congratulations! You're the new boss. And your former colleagues don't like it.

In the M&A marketplace, leading practitioners have shifted their focus from the mechanics of the deal to the value-creating potential of integration. And no aspect of the process is more critical than post-merger organization design.

Editor's Note: nothing really new in this article, but sometimes message repetition is useful...

There are no guarantees of success when it comes to large-scale change in complex organizations. However, a leader can substantially increase the odds if he understands the challenges of change management. This article points out that he must also know how to manage a transition, including how to establish a transition structure, build an integrated change agenda, get people on board, manage healthy attrition, and monitor implementation.

Every leader goes through passages, significant or even transformative personal and professional life experiences. Some passages are positive; others are upsetting, even damaging. For an organization, learning how to help a leader - or potential leader - negotiate these passages will deliver lasting and satisfying benefits. As this author states, it will help an organization better recruit, measure and develop people to become leaders of others.

Understanding how and why employees gradually lose their enthusiasm and begin to disengage can help us see how we, as managers, can salvage key talent at many points along the decision path. It's important to realize that employee turnover is not an event--it is really a series of events, a process of disengagement that can take days, weeks, months, or even years until the actual decision to leave occurs (if it ever does).

Multinational corporations increasingly see China as a vital part of their global operational network, but opportunities for discussing the challenges this poses are few. In this special report, experts at the Boston Consulting Group and Wharton weigh in on such issues as developing management talent, R&D operations, sourcing of high-tech and traditional goods, and logistics. In addition, the CEO of TCL, one of China's largest global companies, discusses the problems his company has faced in going global.

Recruiters hiring business-school grads see a clear difference between male and female candidates.

Some employers are afraid of handbooks. They believe that setting down rules and regulations in writing will somehow lead them into court. In fact, this may be true for some employers. An employer who does not want to act consistently, or who intends to act fairly but has ill-trained staff, may be better off without an employee handbook. This article suggest that there is no better way for employers to communicate with employees about what the organization expects from them, and what they may expect from the organization: its rules and policies, the way it assesses performance, the procedures it will follow, and the benefits it will provide. [BNET Annotation]

FinanceProfessor.com provides an overview of and link to an article by Del Guercio, Wallis, and Woidtke which looks at whether boards of directors actually listen to their voting shareholders and if they do hear shareholders, what the reaction is.

Jay Forrester's computer models show the nonlinear roots of calamity and reveal the leverage that can help us avoid it.

Editor's Note: Forrester is the father of system dynamics.

This article demonstrates the advantages of using Excel's outline feature to summarize data without having to hide the detail data.

Workers' general notions about the effectiveness of male and female managers can be as important as their actual leadership abilities or business results, according to a recent Wharton Executive Development program entitled, "Women in Leadership: Legacies, Opportunities & Challenges." As a result, women executives need to be exceptionally aware of their own leadership styles and strengths -- as well as changes underway in their organizations -- in order to make an impact. Participants also discussed the role a strong corporate culture has played in the success of such companies as cosmetics giant Mary Kay Inc.

This series of interactive exhibits depicts the shape-and scope-of India's remarkable economic transition and its effects on consumers and businesses and then examines some of the challenges facing the country.

Four years ago less than 2% of the companies in the U.S. were making any attempt to measure new hire quality. By 2002 that had edged up towards 10%, still a very small and inexcusable proportion for such a critical measure. And then by the spring of 2003 the total was approaching 30%. There is still more talk than measurement, but the talk is getting more serious and coming from more senior levels. This article and discusses and asserts the importance of measuring new hire quality. [BNET Annotation]

This is a short post from Seth Godin's blog. The key idea: "The fact is, though, that unless you want to be a consultant or an i-banker (where a top MBA is nothing but a screen for admission) it's hard for me to understand why this is a better use of time and money than actual experience combined with a dedicated reading of 30 or 40 books."

Why this is interesting is not so much the post but the various TrackBacks that reference it.

The influence of the top marketing chief in many organizations is increasing-news that no doubt will warm the hearts of CMOs everywhere who've been craving a seat at the executive management table.

But with that rising profile comes a much larger and potentially more daunting set of challenges. No longer is the CMO focused solely on driving the next media buy or PR campaign. Our survey shows that the CMO's primary challenges reflect not just marketing but the very essence of business: commoditization, new and more innovative competitors, and overall economic conditions.

What technology can (and can't) do to help companies optimize their most valuable asset.

The purpose of the article is to outline the way in which Indians negotiate and the difficulties that such a style may pose for North Americans. We also explore the possible strategies that the North American manager may employ in his or her interactions with the Indians. We begin by outlining some of the dominant Indian cultural values, and subsequently assess their impact on the Indian negotiating style.