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Asking customers about their wants increases the probability that they will be dissatisfied.

Too much familiarity with customers can backfire, but engaging in multisided conversations can manage the risks.

Most managers see strategy development as serious business. It is ironic, then, that some of the most remarkable strategic breakthroughs in organizations emerge not from well-ordered processes but from messy, ambiguous and sometimes irrational activities -- pursuits that can best be described as play. Referring to research in the fields of developmental psychology and anthropology, the authors argue that play can stimulate the development of cognitive, interpretive skills and engender an emotional sense of fulfillment. It can help establish a safe environment for introducing new ideas about market opportunities, generating debate about important strategic issues, challenging old assumptions and building a sense of common purpose. The authors draw on their own experiences working with managers at the Imagination Lab Foundation and Templeton College, Oxford University, and they make sure to point out that play is no substitute for rational, conventional strategy development. Indeed, after the creative sessions are over, plenty of hard work remains to translate the ideas and insights into processes and actions. However, the authors argue that organizations seeking to differentiate themselves from competitors and overcome strategic obstacles can benefit by making time for managers to interact creatively with follow-up on the insights that emerge.

The principle that financial markets accurately reflect the underlying value of traded stocks has been widely accepted in the investment world since the 1960s. It is predicated on the assumption that investors make buy or sell decisions based on a rational view of a company's future cash flow, after considering all the relevant information. The role of the markets is to allocate capital to companies efficiently. Recently, however, this rational view has been under attack from adherents of behavioral finance, who argue that stock markets do not reflect economic fundamentals as well as people think they do. The authors maintain that there are instances when stock market valuations can and do make significant and lasting deviations from a company's intrinsic value. However, according to the authors' analysis, the significant discrepancies between market value and intrinsic value are both rare and short-lived. The article cites several examples, including the late 1970s, when inflation-conscious investors pushed stock valuations too low, and the "Internet bubble" of the late 1990s. On the whole, the authors argue, financial markets value investments efficiently -- even if some people invest irrationally some of the time. Although managers may occasionally find ways to take advantage of short-term discrepancies, the authors say the only way they will be able to do so is by understanding the real underlying values.

In this article, the authors review various streams of research suggesting that although companies are increasingly under pressure to manage conflicting or difficult-to-reconcile stakeholder demands, managers are still largely behind the curve in recognizing, justifying and developing the capabilities to do so. In contrast to primary stakeholders such as customers, suppliers and shareholders, secondary stakeholders are often difficult to identify beforehand, or they may not be willing or able to engage, negotiate, compromise or clearly articulate their positions -- a phenomenon the authors refer to as stakeholder ambiguity. Citing examples involving companies such as Monsanto, Conoco-Philips, Texaco and the French oil company Perenco, the authors present research indicating that managers are often ill-prepared to deal with the idiosyncratic and context-specific nature of stakeholder ambiguity and typically revert to formulaic decision-making frameworks, such as discounted cash flow and cost-benefit analysis, which misrepresent the challenges. Some research indicates that stakeholder ambiguity may actually erode the competitive advantage of large multinationals. Although such companies possess significant competencies, technological capabilities and economies of scale, they may be at a disadvantage when trying to determine and align the interests of secondary stakeholders.

Recent research has greatly improved management's ability to anticipate customer wants.

The importance of properly identifying the strategies, and anticipating the actions, of rivals.

To succeed, executives must manage a myriad of relationships.

Corporate executives typically have strategic explanations for their acquisitions: that buying the company in question makes sense geographically or that the products are synergistic. However, if you inquire two years later how the company has benefited, managers tend to focus on the "softer" factors with comments like, "They made us rethink our decision-making processes," or "They introduced us to a new approach to product development," or simply "They shook up our culture." To understand this apparent contradiction, the author analyzes the acquisitions and performance of a number of large, successful companies. Several of the companies included in the research suffered from rigidity. However, the author found that companies were able to use acquisitions to restore a sense of vitality to their businesses and unleash a subsequent surge in performance. The acquired companies often stimulated the acquiring companies to develop new perspectives and different ways of doing things at critical times. Acquisitions kept their organizations fresh and vital. Even if the enterprises did not pursue acquisitions for this reason, the process of buying businesses and deciding how to integrate them into their corporate structures enabled acquirers to renew themselves before their products and operating methods became outdated.

Good communication is a prerequisite for good teamwork. But how much is enough?