Demand better results--and get them

This HBR classic, first published in 1974, asks and answers one of management's most important questions: Why do so few organizations reach their productivity potential? The answer: because most senior executives fail to establish expectations of performance improvement in ways that get results. They fail because making heavy demands involves taking risks and threatens those who have the demands imposed on them. It's safer to ask for less. To avoid facing the reality of underachievement, managers may rationalize that their subordinates are doing the best they can or that better performance requires more authority or greater resources. They may put their faith in incentive plans that don't need their personal intervention. They may actually set high goals but let subordinates escape accountability for results. To get out of these doldrums, executives have to be willing to invest time and energy; responsibility can be delegated only so far. The key to the recovery strategy is to set a specific, modest, measurable goal pertaining to an important problem in the organization. If this goal is met, management uses the success as a springboard for more ambitious demands, each one carefully supported by plans, controls, and persistence directed from the top. Resistance can be expected from many levels. But as the organization registers genuine achievement, consciousness-raising in the form of recognition transforms expectations into positive factors. The fact is, most people like to work in a results-oriented environment. In a retrospective commentary, the author writes that while companies today are more impressed with the need for performance improvement, the ability to establish high expectations is still the most universally underdeveloped managerial skill.     

世界如何才能更美好

今年的奥斯卡最佳外语片奖,授予了丹麦影片《更好的世界》。印象中,这是我第一次接触丹麦电影。看之前,心里存有这样一个疑惑：在北欧那样高度成熟的社会,还能拍出什么类型的电影来呢？高福利的生活环境,会极大降低个人陷入困厄和灾难的几率,而电影离开了这些元素,又怎么展开故事呢？     

如何克服节能项目投融资障碍

在北京召开的2008中国能源投资论坛上，中国资源综合利用协会能源资源综合利用专委会执行主任王树茂指出，我国节能工作要靠“政策”和“市场”两条腿走路，要靠“技术”和“融资”两个臂膀运动     

上篇:金融生态如何好起来

中共中央政策研究室副主任郑新立认为:发展区域性的股份制中小银行是改善金融生态的根本途径     

企业如何取得战略成本优势

企业成本管理的目的不仅在于降低成本,更重要的是为了建立和保持企业的长期竞争优势.能提高企业长期竞争力的成本优势即战略成本优势,为此,企业必须探求提高其竞争地位的成本降低途径.通过价值链分析,有助于企业形成规模经济,提高竞争优势;战略定位分析是企业在分析内外部环境的基础上所确定的竞争战略;战略成本动因分析为企业改变成本地位,增强竞争力提供了契机.     

How SmithKline Beecham makes better resource-allocation decisions

Major resource-allocation decisions are never easy. For a pharmaceuticals company like SmithKline Beecham, the problem is this: How do you make good decisions in a high-risk, technically complex business when the information you need to make those decisions comes largely from the project champions who are competing against one another for resources? In 1993, the company experimented with ways of depoliticizing the process and improving the quality of decision making. In most resource-allocation processes, project advocates develop a single plan of action and present it as the only viable approach. In SB's new process, the company found an effective way to get around the all-or-nothing thinking that only reinforces the project-champion culture. Project teams were required--and helped--to create meaningful alternatives to current development plans. What would they do with more money? With less? With none at all? In another important departure from common practice, SB separated the discussion of project alternatives from their financial evaluations. In doing so, SB was able to avoid the premature evaluations that kill both creativity and the opportunity to improve decision making. The new process at SB has allowed the organization to spend less time arguing about how to value its R&D projects and more time figuring out how to make them more valuable. In the end, the company learned that by tackling the soft issues around resource allocation--such as information quality, credibility, and trust--it had also addressed the hard ones: how much to invest and where to invest it.     

How to make experience your company's best teacher

In our personal life, experience is often the best teacher. Not so in corporate life. After a major event--a product failure, a downsizing crisis, or a merger--many companies stumble along, oblivious to the lessons of the past. Mistakes get repeated, but smart decisions do not. Most important, the old ways of thinking are never discussed, so they are still in place to spawn new mishaps. Individuals will often tell you that they understand what went wrong (or right). Yet their insights are rarely shared openly. And they are analyzed and internalized by the company even less frequently. Why? Because managers have few tools with which to capture institutional experience, disseminate its lessons, and translate them into effective action. In an effort to solve this problem, a group of social scientists, business managers, and journalists at MIT have developed and tested a tool called the learning history. It is a written narrative of a company's recent critical event, nearly all of it presented in two columns. In one column, relevant episodes are described by the people who took part in them, were affected by them, or observed them. In the other, learning historians--trained outsiders and knowledgeable insiders--identify recurrent themes in the narrative, pose questions, and raise "undiscussable" issues. The learning history forms the basis for group discussions, both for those involved in the event and for others who also might learn from it. The authors believe that this tool--based on the ancient practice of community storytelling--can build trust, raise important issues, transfer knowledge from one part of a company to another, and help build a body of generalizable knowledge about management.     

How to get banks to take less risk and disclose bad news

There is wide agreement that before the recent financial crisis, financial institutions took excessive risk in their investment strategies. At the same time, regulators complained that banks did not reveal the extent of their difficulties in a timely fashion thus reducing the effectiveness of government intervention to prevent or mitigate the deleterious effects of the financial crisis. The purpose of this paper is to investigate how regulators can best use certain tools at their disposal to motivate banks to take less risk and to provide adverse information to regulators early. We argue that two tools, namely (i) allowing bank payouts to equity holders even when banks report they are in trouble and (ii) constraining banks’ future investment strategy when they are in trouble can achieve both goals. We show that, in some cases, it is optimal to use both of these tools in combination. That is, in such cases it is optimal to allow equity payouts when banks report they are in trouble, even though such payouts increase the incentive for banks to take excessive risk and even though these payments are financed by taxpayers. We also show that the more socially costly is constraining the bank’s portfolio selection or the more complex are the bank’s assets, the more likely it is that allowing larger payouts and fewer constraints is optimal. Finally we discuss how changes in bank capital requirements interact with inducing disclosure and preventing excessive risk taking.     

Volatility timing: How best to forecast portfolio exposures

This paper investigates how best to forecast optimal portfolio weights in the context of a volatility timing strategy. It measures the economic value of a number of methods for forming optimal portfolios on the basis of realized volatility. These include the traditional econometric approach of forming portfolios from forecasts of the covariance matrix. Both naïve forecasts using simple historical averages, and those generated from econometric models are considered. A novel method, where a time series of optimal portfolio weights are constructed from observed realized volatility and direct forecast is also proposed. A number of naïve forecasts and the approach of directly forecasting portfolio weights show a great deal of merit. Resulting portfolios are of similar economic benefit to a number of competing approaches and are more stable across time. These findings have obvious implications for the manner in which volatility timing is undertaken in a portfolio allocation context.     

Making the best of best-of

This paper extends the analytical valuation of options on the maximum or the minimum of several risky assets in several directions. The first extension consists in including more assets in the payoff and making the latter more flexible by adding knock-in and knock-out provisions. The second extension consists in pricing these contracts in a multivariate jump-diffusion framework allowing for a stochastic two-factor term structure of interest rates. In both cases, explicit formulae are provided which yield prices quasi instantaneously and with utmost precision. Hedge ratios can be easily and accurately derived from these formulae.     

寻求最佳解决方案

一场九小时的谈判 2012年4月1 7日晚上九点半,中国出口信用保险公司(简称:中国信保)会议室仍是灯火通明,会议桌上凌乱地放着一瓶一瓶的空矿泉水瓶,会议室内的白板上,写满了一个一个的谈判方案.谈判室外,不时开门从会议室内走出谈判的人员,或私下讨论,或是电话对外请示.     

The best of intentions

Cynthia Mitchell has finally gotten a plum management opportunity at AgFunds, a Houston-based company that provides financial services to farmers and farmer-owned cooperatives. Peter Jones, regional vice president, has recruited Cynthia to revive the Arkansas district, which has been losing customers for 15 years. The sales force there isn't bad; it's just been poorly managed by an indifferent boss for too long. Still, Cynthia knows she'll need at least one powerhouse sales rep to get things back on track. She thinks she's found that person in Steve Ripley, this year's top trainee at AgFunds, who is inexplicably available three months after the training period is over. In the interview, he proves to be ambitious, intelligent, and personable. But several of Cynthia's colleagues suggest that Steve might not be the best fit for the job: He's a black man in a company whose customer base is mostly conservative and white. Uncomfortably recalling her own experiences at AgFunds--she'd been rejected for a position in a territory that was deemed too unfriendly to female sales reps--Cynthia addresses the issue with Peter. The mostly white farmers in Cynthia's district just won't trust their books to a black professional, Peter explains. And other minority professionals at AgFunds have derailed their careers trying to make inroads in unfriendly districts. "Steve deserves to start out in a more hospitable district. Once the right opportunity opens up, he'll be hired, and he'll do brilliantly," Peter reassures Cynthia, but she's still uncertain. Should she ignore her customers' biases and hire Steve, possibly setting him up to fail? Or would it be better to let Steve wait for a friendlier opportunity? Four experts comment on this fictional case study.     

Finding the best strategy for service distribution

To determine appropriate levels of care and access, while maximizing quality and capital resources, a service distribution plan fully defines: How the organization will serve the market, How each of the system's operations will relate to other operations, How clinical resources will be organized and deployed, The financial impact of the service distribution plan on the overall organization.     

危机中坚持做最好的自己

2008年以来,全球经历了一场前所未有的金融危机,其波及范围之广、影响程度之深、冲击强度之大为20世纪30年代以来所罕见.在过去两年里,由美国次贷危机引发的金融危机穿透资本市场、货币市场和信贷市场,从金融领域扩散到了实体经济领域,从局部发展到全球,给世界各国经济发展和人民生活带来了严重影响.受全球金融危机的影响,国内银行面临着很大的风险和压力,银行信用卡业务也面临着严峻的市场挑战.信用卡坏账和风险增加,跨国银行卡公司对国内信用卡市场的争夺更为激烈,因经济景气程度降低造成社会消费意愿下降,信用卡交易增速放缓.     

正视新的挑战 做好培训工作--中国注册会计师协会全国培训工作会议召开

本刊讯 中国注册会计师协会全国培训工作会议于2002年3月1～3日在重庆召开.各省、自治区、直辖市注册会计师协会、资产评估师协会,计划单列市资产评估师协会、深圳市注册会计师协会主管培训工作的秘书长和负责培训工作的同志参加了会议.中注协副秘书长刘萍到会讲话.中注协培训部主任岳公侠总结了2001年培训工作,介绍了2002年度培训工作的指导思想和具体计划.中注协与北京国家会学院和上海国家会计学院还共同对2001年度培训工作先进单位进行了表彰奖励.