Articles

The value of external knowledge sharing increases when work groups are more structurally diverse.

Faced with saturation of their core product markets, companies in search of growth are increasingly turning to services. A few companies have enjoyed success with this approach; others have not been so fortunate. The authors explain how managers can improve the odds of success by taking a systematic approach to creating services-led growth. Companies must begin by redefining their markets in terms of customer activities and customer outcomes instead of products and services. Customers seek particular outcomes, and they engage in activities to achieve them. These activities can be mapped along a customer-activity chain, which is the foundation for exploring services-led growth opportunities. Analogous to product-centric growth strategies such as product-line extension, product-line filling and brand extensions, customer-activity chains can be extended, filled, expanded or reconfigured with new services. The authors have developed a framework -- the service-opportunity matrix -- to help managers structure the investigation of new opportunities. For each quadrant of the matrix, they provide a set of questions to help companies determine whether a particular approach would work for them. In addition, they have devised another matrix, on risk mitigation, to help managers assess the pitfalls and risks that these opportunities represent.

If retaining employees is the goal, the answer is yes — and no.

Several recent spectacular management failures call into doubt the ability of nontechnical managers to supervise the complex engineered systems for which they are increasingly responsible. However, the author of this article believes effective generalist managers in technical fields need to understand the risks faced and must sufficiently grasp the technology to effectively "talk the talk" with their staff and colleagues. To accomplish this, he contends that managers should focus relentlessly on key corporate priorities, continuously measuring employee performance to emphasize these crucial metrics. The author also recommends establishing official and unofficial pathways for collecting unfiltered and accurate information -- in particular, by developing a "back channel" of direct personal contact with one or two trusted technical staff with real insight into the unvarnished truth. In the end, the author contends, an insistence on facts rigorously applied, along with a cultivation of a "push back" culture that encourages people to raise concerns must underlie the commitments a technical organization makes. In this way, the author insists, a healthy organization can effectively handle both routine activities and serious crises regardless of who's in charge.

A robust economy isn’t as far out of reach as some may think.

Fear is a four-letter word in companies today, but CEOs” rhetoric of & ldquo;love”

Companies often focus on creating organizational processes and structures that allow them to learn quickly. But recent research shows that organizations must also effectively manage how they forget. The authors present a new construct for companies to determine how best to remember the knowledge they should and forget the knowledge they shouldn't. According to them, forgetting can be categorized along two dimensions. The first differentiates between accidental and intentional forgetting. The former is most often associated with the loss of valuable knowledge, which thus reduces a company's competitiveness. Intentional forgetting, on the other hand, can benefit an organization by helping to rid it of knowledge that has been producing dysfunctional outcomes. The other dimension highlights the difference between knowledge that is entrenched versus new. The two dimensions form a matrix that categorizes the four types of organizational forgetting: 1. memory decay, 2. failure to capture, 3. unlearning and 4. avoiding bad habits. Each form is associated with a distinct set of processes and contexts that result in a specific set of challenges. As such, each of the four processes must be managed differently.

Despite studies indicating the contrary, many academics and practitioners assert that the business cycle can’t be predicted and therefore can’t be managed. However, managers who draw upon forecasting models, closely follow leading economic indicators and manage their business cycle proactively are likely to emerge from tough economic times intact, says the author. To this end, the “master cyclist” project has evaluated companies’ market literacy, forecasting capabilities and use of macroeconomic strategy. From the evaluation, it developed a set of managerial principles, defining how a market-literate management team would approach short-run functional decisions regarding inventory, production, marketing and pricing as well as more strategic choices regarding capital expansion, acquisitions and divestitures. According to the author, explicitly cycle-savvy companies like Johnson & ; Johnson, Southwest Airlines, DuPont and Duke Power weathered rough economic times well, while companies like Cisco Systems, which rejected the use of macroeconomic forecasting, was caught during the recent recession with crippling levels of product and supply-chain inventories. It follows then, according to the author, that strategic, tactical and functional decisions are better informed by intelligent speculations about the business cycle. As economic-forecasting indicators and techniques continue to improve, so should our understanding of both the business cycle and the principles associated with effectively managing it.

A review of recent and seminal work linking pricing decisions with operational insights.

The conventional planning process does not work for strategic experiments that are truly bleeding edge. Nevertheless, many companies cling to what they know & #8212; planning that holds managers responsible for numbers. But that is not practical for entering completely new territory, when numbers are essentially pulled out of a hat and their underlying assumptions rarely revisited. A better approach to planning comes from researchers at Dartmouth College’s Tuck School of Business. It emphasizes learning instead of numbers, and it draws on in-depth studies of such companies as New York Times Digital, Thomson Corp., Corning and Analog Devices. Their approach, theory-focused planning, diverges from conventional planning in six critical ways. Companies that use it concentrate on a few critical unknowns instead of the usual horde of details in conventional plans; they focus on the theory underlining the predictions rather than the predictions themselves; they look for trends rather than numerical benchmarks; they review the plan often, in response to important new data, instead of annually; in that review, they consider the experiment over time instead of just for the current period; and they emphasize leading indicators rather than financials. Companies still hold managers of strategic experiments responsible for performance, but performance is gauged according to how quickly managers learn from new data. To be successful in uncharted waters, the ability to learn from experience is paramount.