Articles

Companies have four ways of building businesses from within their organizations. Each approach provides certain benefits — and raises specific challenges.

Consumer dissatisfaction can be far more potent than satisfaction.

Has enterprise software become too complex to be effective?

Consumer preference is determined by how their options are presented.

Responding to the growing threat of identity theft.

While most managers would think long and hard before bringing to market a product that lacked patent protection and could be easily imitated, many invest in sales promotions -- sweepstakes, coupons, time-limited price discounts, free gifts or samples, special events, displays, membership rewards, consumer- directed promotions and so on -- that are easier to imitate than the simplest new product. Others sign off on plans so generic that they seem unrelated to the brand or company offering them, despite the fact that sales promotions may absorb a significant portion of a company's promotional dollars -- currently a reported 31% of marketing budgets. By contrast, a strategic focus -- considering how customers and competitors will react to any promotional effort, as well as the message delivered and the stature in the marketplace of the brand delivering it -- leads to promotions that defy or delay imitation and yield disproportionate benefit for companies that have already developed a strong competitive position. The authors suggest that when all these strategic factors are aligned, the result is a successful promotion, and they illustrate that with successful promotions conducted by General Motors, Home Depot and Procter & Gamble, among others. However, the authors caution, such promotional strategies require inventiveness, originality and swift action -- qualities neither present nor encouraged in many corporate cultures in which familiarity and predictability are prized. Managers in such organizations, then, not only must tailor a promotion successfully to its intended market, they must also skillfully shepherd it through internal barriers. Knowing why, how and for whom sales promotions will most likely be profitable surely will help in that regard.

In studying teams at large companies in Europe and the United States, the authors found that diversity and complexity are becoming the rule. Diverse teams bring to bear a range of experiences and attitudes to tackle companies’ hardest challenges. Paradoxically, however, the very nature of team diversity often creates conditions that reduce teams’ innovative capacity. The authors observed many failures in collaboration and knowledge-sharing that resulted from faultlines & #8212; subgroups or coalitions that emerge naturally within teams, typically along demographic lines such as age, gender and functional background. Yet the authors found that some teams were able to collaborate and share knowledge despite the presence of faultlines. A defining factor was the behavior of the team leader and, in particular, the extent to which the leader was task-oriented or relationship-oriented. Where it is likely strong faultlines will emerge, many leaders tend to encourage team members to come together. However, simple socializing can make people’s differences more apparent and cause faultlines to solidify. The authors recommend that leaders vary their leadership style according to how long a team has been together. The article outlines four steps for successful functioning of diverse teams. First, leaders should diagnose the likely extent of faultlines in a new team. (The article contains a survey for gauging this probability.) Next, leaders should focus on task orientation when a team is newly formed. They then should consider when a switch in leadership style would be most appropriate. Finally, leaders should build a relationship-oriented style. Switching from task orientation to relationship orientation will be successful only when a team has developed a clear protocol for communication and coordination and an established operational structure.

Strategy can be thought of as a loop with four steps: making sense of a situation, making choices, making things happen and making revisions.

Avoiding the pitfalls in leveraging customer data.

How innovators identify the critical things they don’t even know that they don’t know.