Launch and Learn To consistently turn out profitable new offerings, companies must integrate three distinct innovation portfolios.

Reining In the Overpaid (and Underperforming) Chief Executive Corporate governance expert Nell Minow explains the relationship between outlandish severance packages and the risky financial instruments linked to subprime mortgages.

We Are All Pirates Author Matt Mason takes a hard look at how established companies should face the growing threat of copyright piracy.

Speaking of Jargon If we hate it so much, why do we all use it?

Uncaptured Fortunes in Intellectual Property Finding competitive values in corporate technologies and intellectual property can help drive top-line growth.

Pankaj Ghemawat: The Thought Leader Interview The seer of “semiglobalization” argues for appreciating regional distinctions.

The Practical Visionary For the chief information officer (CIO), thinking strategically has never been more important. New technologies are changing how companies relate to their employees, customers, suppliers, partners, sales channels, and markets. The CIO can earn a seat at the senior leadership table by helping to set and realize long-term goals and by augmenting the capabilities of the entire enterprise.

China’s Shifting Competitive Equation Multinational companies must respond to China’s rising costs by bringing their own global best practices to its shores.

Twenty Hubs and No HQ A new form of global organization grounded in “gateway” countries can allow a company to operate profitably around the world.

New Life for Tired Brands How to discover the dormant vitality in an old product line.

Upturn Thinking in a Downturn Year Long-term strategic planners should not only take into account an impending recession, but also have a plan in place to capitalize on the economy as soon as that recession has ended.

The Digital Oil Field Advantage Interactive new technologies that collect and analyze data in the field are revolutionizing the oil industry and easing the widespread problems associated with labor shortages.

Oasis Economies An unexpected source of stability is emerging in the Middle East: diversified, open economies, no longer dependent exclusively on oil revenues. Is this growth evidence of a fertile, sustainable oasis — or the deceitful promise of a mirage? The answer depends on the paradoxical mind-set of the Middle East decision maker.

On Track for Growth Not long ago, the railroad industry was known for ever-lower expectations and diminishing service. Now, railroad companies, both public and private, are reinventing themselves as customer-conscious businesses. Amtrak, British Rail, Canada’s CN, and New Zealand Railways are discovering that the key to success isn’t privatization, but more attentive marketing.

Signals for the Coming Year Change may be certain, but for a business decision maker, some changes have more impact than others. Here are eight trends that will make the greatest difference in 2008.

Freeing Ideas from Their Silos How the U.S. Army has transformed its approach to sharing knowledge, and what businesses can learn from it.

Making Innovation Strategy Succeed Booz Allen Hamilton Vice President Barry Jaruzelski discusses the process and findings of the annual Global Innovation 1000 study.

Growing a New Niche in Retail Banking How some top performers are adapting to target the lucrative mass affluent market.

Bridging the Marketing–Sales Chasm A common, fundamental disconnect between getting the message out and closing the deal can lead to lost sales opportunities. But it doesn’t have to.

Saving Procurement from Itself It’s time for chief procurement officers to stop relying solely on functional depth and start increasing functional breadth.

Why Your Next CEO Should Come from Inside Harvard Business School professor Joseph L. Bower believes that only home-grown leaders have the sense of history and respect for culture to bring companies through major transitions. But not every insider is up to the job.

An Inside Job: Best Practices from Within The best solutions to an organization’s problems may be found among its members.

Keeping Marketing’s Promises Ads that trumpet, “We’re unique!” are meaningless if the stores say, “No, we’re not.”

Retail Banking’s Secret Weapon Even as financial-services organizations are reemphasizing the local branch, they continue to overlook the performance impact of successful branch managers. A recent study reveals how banks can recruit, retain, and develop the branch managers who will be sales leaders.

How Green Is My Value Chain? Transforming the value chain into a value loop can save natural resources and enhance a business’s long-term prospects.

Kevin George: Unilever’s Digital Media Strategy Unilever’s U.S. vice president and general manager of its deodorants division discusses his company’s approach to launching new products using a variety of new media channels.

Evolution on the Global Stage Their raw potential is clear, but Chinese companies will have to master the imperatives of “soft power” to reach the next level of international growth.

Fearlessness: The Last Organizational Change Strategy Corporate courage has faltered in the wake of September 11, 2001, and the dot-com crash. Management expert Margaret Wheatley says that leaders must face reality — and maybe abandon e-mail.

The Situational Leader Jack Stahl, a former chief executive at Coca-Cola and Revlon, discusses how great leaders balance their broad strategic missions with constant attention to organizational detail.

How Causes Can Animate Companies Moving beyond the mission statement to find true motivation.

Are Internet Companies Overvalued (Again)? What we can learn from eBay’s acquisition of Skype.

Keeping Costs Cut When it comes time to cut costs again, look past the traditional structural approaches to the company’s DNA.

The Big Squeeze Can traditional legacy airlines find a way out of the “no-man’s-land” between the established low-cost carriers and the premium players?

How the U.S. Government Can Cut Overhead By using in-house agencies to provide services to other departments that need them, the federal government is saving tens of billions of dollars and learning what some in the private sector already know.

Covering the Cost of War Robert Hormats, an international finance expert and the author of The Price of Liberty: Paying for America’s Wars, describes the problems with current U.S. fiscal policy, and how to adjust the country’s spending for present and future global battles.

My Unfashionable Legacy Participative management has proven its remarkable capabilities again and again. So why is it passing into obscurity?

The Thought Leader Interview: Anne-Marie Slaughter The dean of Princeton’s Woodrow Wilson School shows how networks are fundamentally changing the nature of government.

Exercising Common Sense A 10-point checklist can help leaders of large-scale transformation put their wisdom into practice.

The Statecraft of Business How the frameworks of international relations can improve the debate about corporate strategy and globalization.

Context and Complexity Success in China requires a flexible approach for a diverse market.

Paving the Silk Road A number of factors put the Middle East in a prime position to play the role of trade hub, globally, regionally, and locally. First is its geographic location, and, second, is the changing nature of international shipping.

Who is Your Next Customer? Strategies for targeting potential consumers in foreign markets.

How to Be a Demographic Realist To prepare for the implications of aging populations, individuals, organizations, and society as a whole must confront assumptions that are no longer valid.

See for Yourself Firsthand observation on the front lines can offer the critical insights that make for inspired — and inspiring — leadership.

A Blueprint for Strategic Leadership To build an organization in which executives will flourish, the best leaders pay close attention to the design of the elements around them. They articulate a lucid sense of purpose, creative effective leadership teams, prioritize and sequence their initiatives carefully, redesign organizational structures, and, most importantly, integrate all these tactics into one coherent strategy.

Best Business Books 2007: Strategy On planning for uncertainty.

The Thought Leader Interview: Bill George There's no single path to authentic leadership, says the former Medtronic chief executive. We must all discover our own.

Protecting the Company Jewels in an Unprotected Country As governments wrestle over safeguarding intellectual property rights in China with no solution in sight, more and more companies are taking the problem into their own hands.

What’s a Chaebol to Do? The family-owned conglomerates made South Korea an industrial powerhouse, but their failure to adapt to new global business conditions, their insularity, and their outdated command-and-control management style are diminishing their competitiveness. While they’re showing some signs of reform, these organizations have a long way to go. And as one LG executive put it, “Samsung’s future is Korea’s future.”…Read More

An Industry for All Seasons What the apparel industry has gained in scale and scope over the past few decades it has lost in agility and speed. The resulting hit-and-miss nature of their merchandise forces them to employ markdowns at the store level—which in turn cannibalize high-margin items. But consistent industry leaders, like Spain’s Zara, use innovative product segmentation techniques to change their merchandise at the speed of fashion, and sell nearly everything at full price. Here’s how it works.…Read More

When Addressing Climate Change Is Good Business Smart companies are devising intelligent, comprehensive strategies to reduce their environmental impact. This can be a complicated task; challenges include accurately measuring enterprise-wide emissions, rigorously assessing solutions, and managing internal and external perception of the climate campaign. But proactively dealing with climate change is the only way to earn a voice in the imminent creation of regulatory policies. And as Duke Energy’s chief said, “If you’re not at the table when these negotiations are going on, you’re going to be on the menu.”…Read More

The Case for Pricey Acquisitions Seekers of cheap acquisition targets are adopting a cautious, short-term strategy—often simply because it is easy to justify to shareholders. But bargain-hunting often results in missed opportunity. Substantial research from UBS shows that comparatively expensive acquisitions are far more likely to result in lasting value creation. In M&A, it may actually be smarter to play for high stakes.…Read More

Culture Change: Calling on Philosophers and Engineers Even companies with great strategies fail. When this happens, executives often look for explanations in the organizational culture. Changing a company’s fundamental “DNA” is a difficult task and requires more than just a vision. In order to work, culture change needs to be rigorously implemented—and it needs to be inspiring. By blending the poetic with the quotidian, organizational strategies and cultures can find common ground.…Read More

The Dignitarian Way Author, activist, and former Oberlin College president Robert Fuller argues that the abuse of rank undermines creativity and creates dysfunction in nearly every organization. By conscientiously identifying this fundamental, pervasive feature of life within hierarchical structures, he believes we can mitigate the problem and grease the wheels of productivity.…Read More

Beyond the Borders Like the hordes of Americans who explored Europe in the 1960s and the droves of Japanese who traveled in the 1980s, a big wave of Chinese tourists is set to hit the global travel industry. Companies looking to grow in this segment will not be disappointed. To capitalize on the new boom, hotel operators, airlines, and touring companies should start building a good understanding of the travel habits and preferences of Chinese nationals traveling abroad, with particular attention to how they’re evolving.…Read More

Why Neuroscience Matters to Executives New findings in neuroscience are shedding light on management-related topics, like the failure of incentives and threats at creating organizational change. Straightforward concepts like sustained attention and the absence of over-stimulation have emerged as crucial factors in the formation of new neural connections—which are the biological corollary of learning and behavioral change.…Read More

Seven Counterintuitive Trends In order to predict the pressures which will catch industry by surprise, it’s instructive to take a close look at current trends which run contrary to conventional expectations. These include: a talent shortage in the energy sector, the rising use of software in manufactured goods, the trend toward simplicity in consumer technology, and a slowdown in the credit card industry. Amidst much global uncertainty, these seven observations may represent the first stirrings of important business events.…Read More

When Teams Fail: The Virtual Distance Challenge Team-based projects have a surprisingly high failure rate, and assembling productive groups is an imprecise art. The concept of “virtual distance” helps unravel this mysterious issue. Taking into account not only geography but also culture and technology, virtual distance explains why it’s possible to collaborate effectively over long distances with some people, yet have trouble communicating with the person in the cubicle next door.…Read More

Making the Most of Customers Henry Ford once said “If I had asked customers what they wanted, they would have told me they wanted a faster horse.” In other words: asking isn’t enough. The most innovative companies—like Netflix—go to great lengths to actually stand in customers’ shoes. This gives them the knowledge and the confidence to expand beyond their core competencies, think outside the box, and adjust their business dynamically to consumer needs.…Read More

Solid Connections in a Liquid World Booz Allen Hamilton’s chairman and chief executive, Ralph Shrader, discusses “minds on, hands off” leadership. As leaders gain more responsibility, it becomes increasingly important that they take things slowly, clearly communicating priorities to the rest of the organization and placing trust in their employees, rather than trying to control everything themselves. In today’s fluid world, flexible, deliberate leadership is more solid than rigid, instantaneous leadership. In other words, business leaders should work more like an automatic transmission than a manual clutch.…Read More

Big Impact in a Small Format In Europe and Latin America, small-format convenience stores are changing the competitive landscape. These stores are dynamic, convenient, and adept at targeting niche demographics like single-head households and small families in urban areas. Furthermore, with improvements in computerized ordering, and increased procurement and supply chain efficiencies, small stores are no longer saddled with higher prices or lesser quality than their larger counterparts. But will the U.S. market, which leans heavily towards large-format stores, prove receptive to this trend?…Read More

Make Manufacturing and Supply Chain a Winning Pair While successful companies dedicate lots of effort toward streamlining their supply chains, manufacturing networks tend to remain static. Streamlining the manufacturing network is no easy task, and it only succeeds when the changes are driven by customer requirements. As more executives realize the total supply chain costs of manufacturing in remote locations, rethinking these networks will be an area of paramount competitive importance.

The Globalization of White Collar Work Offshore outsourcing has changed dramatically. Where it used to be a tactical cost-saving exercise, it is now part of an essential strategic imperative to compete for global talent. Research by Duke and Booz Allen Hamilton reveals that offshoring is increasingly used to bridge shortages in local talent rather than to replace onshore jobs, and that the persisting impediments to its success are primarily internal and organizational.

Seven Reasons Divestitures are Harder than You Think Divesting noncore businesses is often an attractive option for executives, especially while the market remains flooded with buyers sitting on piles of cash. But divestiture poses more challenges than most people realize, and it often has a negative impact on not only the divested entity, but the seller. It can be worth the trouble. But companies looking to make a sale should understand these seven key hurdles before moving forward.

Nondestructive Creation Nobel Laureate Edmund Phelps is revolutionizing the way economists think about entrepreneurship. He dissembles the prevailing wisdom— that entrepreneurship has a chaotic, destabilizing effect on the economy—arguing that it can generate sustained, long-term growth. And the riskier the venture, the better.

Thought Leader: Gary Pisano A leading student of the biotech industry articulates the tension between its scientific aims and its business models, and proposes new approaches to financing and R&D that will help push the industry forward.

The Energy-Efficient Supply Chain As factors such as rising fuel prices, limited energy resources, and climate change drive companies to get serious about energy consumption and carbon footprints, the supply chain is emerging as an area where significant efficiency gains are attainable. Once it is understood where in the supply chain energy is being wasted, companies can adopt energy-efficient practices to reduce their carbon footprint and realize significant cost savings. Better transparency and coordination between suppliers and customers is often the key to unexpected, mutual reductions in energy costs and environmental impact.

Barclay’s Global Acceleration Four years ago, Barclays Bank had fragmented operations that relied too heavily on the United Kingdom market. To turn the business around, Barclays’ deployed a companywide initiative to unify and globalize the business by setting a vision, adopting a universal banking model, and focusing on customer relations. Today the bank enjoys the best performance numbers in its 300-year history. Barclays’ chief executive explains how an ambitious plan to improve performance brought about organizational change.

Making Health Care Work The time is finally ripe for a transformation of the global health care industry, from a wholesale into a true retail marketplace. New formats like “mini-clinics,” new modes of payment, and increased transparency may make the difference that legislators alone cannot. A survey of consumers and physicians shows what’s needed to close the gap.

Too Much Money Until recently, excess liquidity seemed like a smart strategy. But with stabilizing cash flows and rising interest rates, the benefits of large cash holdings are diminishing, and many companies are faced with the challenging process of strategic decapitalization. Justin Petit discusses optimal capital structures and the role of allocations like dividends, share repurchases, and pension funding.

Tourism: China’s New Diaspora Like the hordes of Americans who explored Europe in the 1960s and the droves of Japanese who traveled in the 1980s, a big wave of Chinese tourists is set to hit the global travel industry. Companies looking to grow in this segment will not be disappointed. To capitalize on the new boom, hotel operators, airlines, and touring companies should start building a good understanding of the travel habits and preferences of Chinese nationals traveling abroad, with particular attention to how they’re evolving.

Lessons of the Last Bubble Most people assume that the majority of internet startups in the dot-com era were failures. In fact, more than half of them succeeded, and from an economic optimization perspective, there were probably too few busts rather than too many. The real problem was that not enough companies placed modest, sensible bets. Concepts such as "first mover advantage" and "get big fast" led to unreal growth expectations and resulted in a herd mentality among venture capitalists that threw too much funding in too few companies—so when they failed, they failed big.

The Game Maven of New Haven For Yale economist and entrepreneur Barry Nalebuff, having a winning business strategy means not just beating the competition, but redesigning the playing field. Drawing on the mathematical discipline of game theory and his own Honest Tea Company, Nalebuff is teaching managers how to rewrite the rules.

Smart Spenders: The Global Innovation 1000 Booz Allen Hamilton’s second annual study of the world’s 1,000 largest corporate R&D budgets shows that high investment can’t buy success. But Black & Decker, Dentsply, SanDisk, and 91 other “high-leverage innovators” have figured out an answer: They consistently spend less than their competitors on R&D yet outperform their industries.

Masters of the Breakthrough Moment For 50 years, Edith and Charles Seashore have taught people how to increase productivity by confronting conflict and misunderstanding head-on. The design of many innovative management approaches — high-performance teams, diversity awareness, peer coaching, and more — can be traced back to their fundamental insight: You can affect a whole system by making people more aware of the way they operate in groups.

Next-Generation Global Sourcing Opportunities in the Consumer Products Industry Outsourcing continues to grow at an explosive pace, yet the consumer products industry has been slow to adopt it and benefit from its potential to boost cost efficiency and business effectiveness. Booz Allen Hamilton believes that global sourcing is a significant untapped lever for generating value for the consumer industry.

Mastering the Challenges of the Middle East Aviation System The Middle East aviation system faces tremendous challenges in the coming years. While many airports in the region have embarked on massive expansion programs, few have fully considered market demand and the competitive landscape. Furthermore, heavy regulation has limited service and pushed up consumer prices in the region. In this report, Booz Allen Hamilton proposes a strategy, which includes privatizing airlines and deregulating the market, that could help the Middle East aviation system achieve long-term success.

Making Partnerships Work – A Relationship Guide for Chinese and Foreign Companies Many foreign companies first choose to do business in China through partnerships with local companies, either via joint ventures or minority stake and without overall management control. Unfortunately, most of these companies have not had a very positive experience. But Booz Allen Hamilton has identified the steps foreign and local companies can take to align interests, make partnerships work, and realize combined success in China.

Lessons from the Shop Floor: Applying Sales & Operations Planning to Financial Services Manufacturers face relentless pressure on margins and are constantly looking for new ways to improve the bottom line. One successful approach focuses on interdepartmental coordination. Called sales and operations planning (S&OP), this method helps business units strike the right balance when competing for the same resources. With just a few tweaks to the way S&OP is applied in the manufacturing business, Booz Allen Hamilton demonstrates how it could prove just as useful for financial services companies that also have business units competing for the same resources.

Capturing Hidden Value – Eight Principles for Optimizing Business Processes Companies can save up to 50 percent of their cost base by strategically transforming their processes, according to this report by Booz Allen Hamilton. By distilling its findings into eight principles, including how to focus on the right value levers and organize for sustainability, Booz Allen has created a blueprint to help companies to plan, execute, and—most important—realize value from their process improvement efforts.

Thought Leader: William G. Ouchi William Ouchi, a champion of public school reform for 25 years, argues that the only way to fix the nation's ailing school system is to leave control of budgets, curriculum and staffing decisions in the hands of local school principals. Ouchi's research -- backed by real world implementations in Boston, Oakland and other cities -- suggests principals are best-suited to identify and address the issues plaguing the nation's school districts.

The Neuroscience of Leadership Change is pain, behaviorism doesn’t work, focus is power, and the key to leadership is attention density. New research in cognitive science shows how organizational change initiatives can finally succeed.

CEO Succession 2005: The Crest of the Wave It was another record year for CEO turnover in 2005, with more than one in seven of the world’s largest companies replacing their CEO in 2005. Booz Allen Hamilton’s fifth annual CEO survey examines the reasons behind the increasing turnover, and brings to light traits of some of the world’s most successful corporate leaders.

The Captain's Challenge Whether it’s in the board room or at the bow of a 65-foot sailboat, the best leaders cope with turbulence and uncertainty by preparing for the worst, and reinforcing the risk tolerance of those around them. Eric Best, president of Best Partners SC and a former managing director of Morgan Stanley, learned this lesson first hand. When he attempted to sail his boat from San Francisco through the Panama Canal, Best found that the ability to overcome the unexpected was just as important at sea as in the office.

Complementary Genius IBM, Google, and Intel have each unearthed competitive advantages by investing in innovations that, at first glance, seemed unrelated to their core businesses. What’s their secret? Nicholas Carr offers five questions that leaders can ask themselves to help uncover opportunities in the ecosystem their company operates in. His point: By understanding the ecosystem, leaders can often find innovation opportunities in products that complement their core business.

Rethinking the Value of Talent Leaders often evaluate employees based solely on their individual role, with no regard to how critical their role is to the overall success of the organization. To maximize employee value, leaders must assess individual performance and gauge the effect of that performance on corporate strategy. When done successfully, leaders will recruit more effectively and maintain a workforce that will compete competently in the global marketplace.

Tandem or Solo: Selecting an Ownership Approach in China It’s one of the most critical decisions facing a company when entering a foreign market: whether to enter independently or set up a joint venture with a local partner who has a better understanding of the market. During the 1990s, most companies entering China opted for joint ventures. But in the last decade, the majority of new entrants have decided to go it alone in China. Each approach has its advantages; the choice depends on each company's strategy for the Chinese market and for the role of China in its global operations.

Managing Discontinuities in China Executives often find it difficult to fully grasp the opportunities and dangers in China, especially when there are sudden and severe supply and demand-side discontinuities. But according to a Booz Allen Hamilton study, companies with the right organizational DNA that have strong leaders who are adaptive, resilient, and have an entrepreneurial mindset, will be best prepared to respond to discontinuities. The challenges are significant, but for those who can choose the right metrics to measure supply and demand and build flexibility into their business ventures, the payoff potential is unprecedented.

Are Boards Worrying About the Wrong Risks Boards spend so much time on compliance issues that long-term strategic planning is suffering, according to this study by Booz Allen Hamilton which appeared in the March/April 2006 issue of The Corporate Board. Compliance risks can lead to losses, but poor strategy carries even greater risk to shareholder value.

The Majority of New Hires Are Found Online Social networking sites and advances in recruiting technologies are beginning to impact the way employees find jobs and employers fill openings. Last year, more than half of new hires at leading U.S. companies were sourced through the Internet, according to a study conducted by Booz Allen Hamilton on behalf of the DirectEmployers Association. As a consequence, employers say that the quality of hires is improving and that new technology is facilitating a higher return on recruiting investment.

The Four Dimensions of Intelligent Innovation Companies have made great strides in retooling their innovation engines, but even a Ferrari does not know where to drive. Inspiration and insight are increasingly the critical challenges facing innovation executives and answering those challenges requires different, more outward-looking techniques. Booz Allen Hamilton has identified a new approach to idea generation called Intelligent Innovation, which focuses on the operational tactics needed to think globally, include customers in the ideation process, create innovation-based incentives, and identify opportunities ten to twenty years out.

Love Your "Dogs" What if the conventional wisdom about managing business unit portfolios is wrong? What if investing in your “dogs,” or poor performing units could bring better returns than investing in your “stars,” or best performing units? It’s a counterintuitive strategy, but based on the insights and research of behavioral finance, it could lead to unconventional success.

Sharpening Your Business Acumen How do executives at leading companies like Thomson Corporation, GE, Apple, and Verizon anticipate external trends and craft their strategies accordingly? They follow a six-step thinking process.  Here’s how to apply the process to any business, big or small.

Why Managing By Facts Works Empirical analysis of results is the shortest path to the best business decisions.  It may seem obvious, but you’d be surprised at how many companies make major decisions in the dark.

Thought Leader: Yossi Sheffi Truly resilient companies treat security as an integral part of their strategy, says MIT leading supply chain expert. Here’s how to make your company resilient by nature.

Commit and Deliver From the outside, a CEO’s job looks difficult. From the inside, it’s merely impossible -- unless you take charge of the company’s agenda. Here's how.

Format Invasions: Surviving Business’s Least Understood Competitive Upheavals It’s every executive’s nightmare: to be a struggling incumbent in an industry upended by the likes of Toyota or Southwest -- an upstart that reworks an industry’s accepted ways of doing business and does it at lower cost. But there’s good news for executives of established companies: Format invasions are not overnight successes; there is time to respond.

Don’t Let Sarbanes-Oxley Drive Your Strategic Risk Agenda Most companies reacted to Sabanes-Oxley, or "SOX," with an outsized fear of risk exposure. But even as they deal with SOX, executives can still plan for growth by embedding risk management into corporate strategy. Here’s a five-point plan for doing that.