One chief executive with whom I recently met did not have kind words for teams. This fellow, who heads a multibillion-dollar consumer products company, said that in his experience most teams degenerate into committees and "committees never get anything done." To have a team, you have to have a team leader. Leaders are the people in charge--the ones who are responsible and are held accountable. They are the people who create the teams in the first place and make them work. True, putting someone in charge creates hierarchy, but some hierarchy is needed, he said. To make teams work, they must be managed. Simply starting them is not enough.
That thought forms the conceptual bridge between two articles in this issue of Strategy & Business. One article, by Jay Conger, the executive director of the Leadership Institute at the University of Southern California, asks a variant of the question first posed by Plato in the Meno dialogue--Can leadership be taught? His research shows that it can, but that it is not easy. In his article, he describes the best way to design programs that do accomplish their goals.
In the same issue, David A. Nadler, founder of the Delta Consulting Group, talks about teams. He explores how to build, manage and effectively lead teams at the top. Mr. Nadler, a consultant and former professor whose picture has graced the cover of Business Week, uses his background in business and psychology to form his views; Mr. Conger, a professor of business administration and a student of leadership, brings both a personal and analytical view to his topic.
When most people think of re-engineering, they think of cost cutting. But for many high-growth companies, especially those in fast-expanding markets like Asia, the issue is not so much cost cutting but reorganizing the business to make the most of growth opportunities. The reason business process re-engineering is important to expanding companies, writes Bud Moeller, a vice president at Booz-Allen & Hamilton in its Singapore office, is that it offers insights "into how work is actually being conducted." As a consequence, it can be a useful tool for enhancing speed and service while keeping costs under control.
Strategy is a subject that is often talked about, yet its impact is rarely measured. In this issue, Charles E. Lucier, Booz-Allen's chief knowledge officer, and Amy Asin, a principal in the firm's San Francisco office, present some of their preliminary findings based on case studies and research on 1,828 companies listed on American stock exchanges. Their research indicates that much of the conventional wisdom about growth is at least partly wrong. The businesses that create the largest gains in shareholder value--those in the top 25 percent of all listed companies--are the ones that pursue the most innovative strategies and create what the authors call "growth engines." Without these strategies, even the best-managed companies rarely become top performers when measured by the creation of shareholder value.
The management of information was a big theme in the 1980's, when companies were suddenly inundated with an avalanche of data. But what is really crucial is the management of knowledge, writes Thomas H. Davenport, a professor of information systems and director of the Information Systems Management program at the University of Texas, Austin. Mr. Davenport is the author of dozens of articles and several books, including "Process Innovation: Re-engineering Work Through Information Technology." Many credit that book with kicking off the re-engineering revolution. Mr. Davenport supports his arguments with a case study of the Hewlett-Packard Company.
How do you manage the world's largest company? According to Minoru Makihara, the subject of this issue's Thought Leader interview, you do it through trust. As a consequence, Mr. Makihara, the president of the Mitsubishi Corporation, which has about $176 billion in revenues, puts a high value on communication. Not only does he use all of the latest technologies for getting his message out, he also sends his staff around the company to make certain those messages are getting through. If there is a blockage--some part of the organization that is left in the dark about a new strategy, direction or tactic, for example--it is the job of Mr. Makihara's staff to find out why and to fix it. But communication is not the only way that Mr. Makihara manages. He also uses return-on-equity targets for each of his seven business groups. That concept, well-known in the West, is only now making its way to Japan.
While a number of countries appear to be slowing down in terms of economic growth, the overall global picture is rosy, according to the latest forecasts from the Wharton School's Project Link, the global economic model under the direction of Nobel Laureate Lawrence Klein. This model and an analysis undertaken by the United Nations Economic Survey Unit view the world economy as primed to expand through the end of the century at a rate not seen in more than a decade. Such good news has prompted a number of leading economists--always a gloomy lot--to wonder whether there is enough capital available to finance that growth. Without sufficient capital, the economists suggest, interest rates would rise and growth would be stopped. In an analysis of the question, Edwin S. Rubenstein, an economist, author and political consultant, argues that if governments get their budgetary houses in order, there will be plenty of capital available to underwrite a new era of global prosperity.
Also in this issue: Lawrence M. Fisher, a writer for The New York Times, on alliances in biotechnology; Jay Marshall, a vice president at Booz-Allen in Dallas, and Daryl R. Conner, chief executive of ODR Inc., a company that specializes in change management, on why change initiatives fail; and Timothy M. Laseter, a vice president in Booz-Allen's Cleveland office, on purchasing. Barbara Presley Noble, Robert Cranny and Leo D’Acierno have contributed book review.
Joel Kurtzman, Editor
Joel Kurtzman is editor-in-chief of Strategy+Business.