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The authors, including the Tata Group's former chairman, say companies need "a deeper purpose.”

Today's knowledge and service-based economy presents opportunities for well-run companies to increase profits through strategic outsourcing.

Self-comparisons can be demoralizing, but strategically comparing yourself against your peers can be a tool for growth.

Leadership Collection Not every leader is wildly charismatic or cut from the same cloth as other leaders in the organization. This collection of articles from MIT Sloan Management Review examines the ways leaders can turn their weaknesses into strengths, overcome their personal deficits, and position themselves to stay ahead of the curve.

When people think of services, they often think about offerings that are neutral or routine. These tend to be services they use regularly -- for example, dry cleaning, haircutting or gardening. However, there is a third type of service that is not often considered or well understood. The authors refer to these as "negative" services because they are related to events most people hope they will not have to deal with: toothaches, leaky roofs or collision repairs, for example. Because the events that trigger the need for negative services are not everyday occurrences, many people are not equipped to diagnose the needs or to make informed judgments about the solutions required; furthermore, even after the service has been provided, most people are in a poor position to judge its quality or the price they paid for it. Negative services are offered by many kinds of companies in many industries, including health care, insurance, household repair, pest control, ambulance use and so on. Companies discussed in the article include Laidlaw International, Multiasistencia Group, American Home Shield, Terminix, Fresenius Medical Care AG, Enterprise Rent-A-Car and Sears. Sears HomeCentral, for example, is an attempt to turn negative services for homeowners into a profitable segment of Sears' overall business. Even companies that are not primarily negative-service providers have negative-service aspects to their offerings. For example, product companies often provide warranties as a means of staying competitive. Companies hoping to build positions in negative services face two major challenges: (1) how to access inexperienced customers who are not in a strong position to evaluate the service being provided and may have a poor idea of its cost and (2) how to organize and deploy their services to meet customer needs when demand is unpredictable.

Many companies leave risk management and business continuity to security professionals, business continuity planners or insurance professionals. However, the authors argue, building a resilient enterprise should be a strategic initiative that changes the way a company operates and increases its competitiveness. Reducing vulnerability means both reducing the likelihood of a disruption and increasing resilience. Resilience, in turn, can be achieved by either creating redundancy or increasing flexibility. Redundancy is the familiar concept of keeping some resources in reserve to be used in case of a disruption. The most common forms of redundancy are safety stock, the deliberate use of multiple suppliers even when the secondary suppliers have higher costs, and deliberately low capacity utilization rates. Although necessary to some degree, redundancy represents pure cost with no return except in the eventuality of disruption. The authors contend that significantly more leverage, not to mention operational advantages, can be achieved by making supply chains flexible. Flexibility requires building in organic capabilities that can sense threats and respond to them quickly. Drawing on ongoing research at the MIT Center for Transportation and Logistics involving detailed studies of dozens of cases of corporate disruption and response, the authors describe how resilient companies build flexibility into each of five essential supply chain elements: the supplier, conversion process, distribution channels, control systems and underlying corporate culture. Case examples of Land Rover, Aisin Seiki Co. (a supplier to Toyota), United Parcel Service, Dell, Baxter International, DHL and Nokia, among others, are offered to illustrate how building flexibility in these supply chain elements not only bolsters the resilience of an organization but also creates a competitive advantage in the marketplace.

Commitment and competence are embedded in how each employee thinks about and does his or her work and in how a company organizes to get work done. It is, according to Dave Ulrich, a firm's only appreciable asset. As the need for intellectual capital increases, companies must find ways to ensure that it develops and grows. There are five tools for increasing competence in a firm, site, business, and plant. 1. Buy. The company goes outside to hire new talent. 2. Build. Managers invests in employee learning and training. 3. Borrow. A company hires consultants and forms partnerships with suppliers, customers, and vendors to share knowledge, create new knowledge, and bring in new ways to work. 4. Bounce. The company removes those employees who fail to change, learn, and adapt. 5. Bind. The firm finds ways to keep those workers it finds most valuable. Companies also need to foster employees who are not only competent but committed. Employees with too many demands and not enough resources to cope with those demands quickly burn out, become depressed, and lack commitment. A company can build commitment in three ways: 1. Reduce demand on employees by prioritizing work, focusing only on critical activities, and streamlining work processes. 2. Increase resources by giving employees control over their own work, establishing a vision for the company that creates excitement about work, providing ways for employees to work in teams, creating a culture of fun, compensating workers fairly, sharing information on the company's long-range strategy, helping employees cope with the demands on their time, providing new technologies, and training workers to use it. 3. Turn demands into resources by exploring how company policies may erode commitment, ensuring that new managers and workers are clear about expectations, understanding family commitments, and having employees participate in decision making. Only by fostering competence and commitment together can a company ensure the growth of intellectual capital, says the author.

Forming close relationships with suppliers or customers is a popular business strategy, but such partnerships can develop problems. The authors observe that many close business relationships -- whether joint ventures or loose alliances -- fail. They describe a phenomenon they call the "dark side" of close relationships and maintain that close relationships that seem quite stable can, in fact, be vulnerable to decline and destruction. The authors draw both on their own surveys of business relationships and on other examples. The authors point out that the same factors that strengthen a partnership can also open the door to relationship problems. For example, when an automaker and a supplier built up personal relationships between employees at the two firms to facilitate their alliance and just-in-time manufacturing process, the trust and personal relationships also enabled the supplier more easily to cut corners in the production process. While observing that business relationships with problems can linger on for a surprisingly long time, the authors recommend strategies to prevent the "dark side" from taking over a business relationship. One such strategy is to ensure that both parties in the relationship make investments in it, in effect swapping "mutual hostages." If, however, damage to the relationship has already occurred, possible strategies include turning the crisis into an opportunity to improve the partnership, rotating in new personnel, reconfiguring the relationship or terminating it.

Which e-businesses will prevail? New research on e-fulfillment may hold the key. After all, getting a customer’s online order is not enough: E-businesses also must show that they can deliver products quickly and efficiently. Hau L. Lee and Seungjin Whang, professors of operations, information and technology at Stanford University’s Graduate School of Business, have studied a few successful online companies and their innovative ways of applying order-fulfillment strategies. Although the principles are not new, Internet technologies enable them to be applied in new and expanded ways. The two core concepts for improving e-fulfillment efficiency are making more use of information flows instead of physical product flows and capitalizing on existing pipelines and infrastructures. Those concepts underlie five key e-fulfillment strategies: logistics postponement, dematerialization, resource exchange, leveraged shipments and clicks-and-mortar. Whether the strategy expands on time-tested models or is a breakthrough, the trick is to determine the best one for a given situation. A computer company might use logistics postponement. By capturing more-accurate information, it could assemble final goods on demand and thereby save money by postponing delivery decisions until after receiving the final word on what the customer wants. Other companies might use dematerialization, converting physical products into information flows, just as a music CD can be converted to MP3 format or Egreetings.com substitutes digital flows for paper greeting cards sent by regular mail. With resource exchange, an e-company that needs to move a load from Hong Kong to San Francisco might borrow a ship from another company that needs a cost-effective way to return its empty vessel to California. Webvan uses the leveraged-shipment strategy, making the most of existing networks. With its clicks-and-mortar model, CVS covers the last mile by having customers pick up their online orders. Some online purchasers in Japan do the same: 7dream.com utilizes the ubiquitous 7-Eleven stores to enable a group of Japanese companies to do bulk deliveries. Pointing out ways that companies are extending e-fulfillment value beyond cost containment, the authors also demonstrate how secondary opportunities are taking companies beyond the last mile.

Software product development at Microsoft allows teams to retain the autonomy of small groups by frequently synchronizing and stabilizing continuous design changes.