Charting your company's future

Few companies have a clear strategic vision. The problem, say the authors, stems from the strategic-planning process itself, which usually involves preparing a large document, culled from a mishmash of data provided by people with conflicting agendas. That kind of process almost guarantees an unfocused strategy. Instead, companies should design the strategic-planning process by drawing a picture: a strategy canvas. A strategy canvas shows the strategic profile of your industry by depicting the various factors that affect competition. And it shows the strategic profiles of your current and potential competitors as well as your own company's strategic profile--how it invests in the factors of competition and how it might in the future. The basic component of a strategy canvas--the value curve--is a tool the authors created in their consulting work and have written about in previous HBR articles. This article introduces a four-step process for actually drawing and discussing a strategy canvas. Readers will learn how one European financial services company used this process to create a distinct and easily communicable strategy. The process begins with a visual awakening. Managers compare their business's value curve with competitors' to discover where their strategy needs to change. In the next step--visual exploration--managers do field research on customers and alternative products. At the visual strategy fair, the third step, managers draw new strategic profiles based on field observations and get feedback from customers and peers about these new proposals. Once the best strategy is created from that feedback, it's time for the last step--visual communication. Executives distribute "before" and "after" strategic profiles to the whole company, and only projects that will help move the company closer to the "after" profile are supported.     

Beyond offshoring: assess your company's global potential

In the past few years, companies have become aware that they can slash costs by offshoring: moving jobs to lower-wage locations. But this practice is just the tip of the iceberg in terms of how globalization can transform industries, according to research by the McKinsey Global Institute (MGI). The institute's yearlong study suggests that by streamlining their production processes and supply chains globally, rather than just nationally or regionally, companies can lower their costs-as we've seen in the consumer-electronics and PC industries. Companies can save as much as 70% of their total costs through globalization--50% from offshoring, 5% from training and business-task redesign, and 15% from process improvements. But they don't have to stop there. The cost reductions make it possible to lower prices and expand into new markets, attracting whole new classes of customers. To date, however, few businesses have recognized the full scope of performance improvements that globalization makes possible, much less developed sound strategies for capturing those opportunities. In this article, Diana Farrell, director of MGI, offers a step-by-step approach to doing both things. Among her suggestions: Assess where your industry falls along the globalization spectrum, because not all sectors of the economy face the same challenges and opportunities at the same time. Also, pay attention to production, regulatory, and organizational barriers to globalization. If any of these can be changed, size up the cost-saving (and revenue-generating) opportunities that will emerge for your company as a result of those changes. Farrell also defines the five stages of globalization-market entry, product specialization, value chain disaggregation, value chain reengineering, and the creation of new markets-and notes the different levers for cutting costs and creating value that companies can use in each phase.     

How Managers' everyday decisions create or destroy your company's strategy

Senior executives have long been frustrated by the disconnection between the plans and strategies they devise and the actual behavior of the managers throughout the company. This article approaches the problem from the ground up, recognizing that every time a manager allocates resources, that decision moves the company either into or out of alignment with its announced strategy. A well-known story--Intel's exit from the memory business--illustrates this point. When discussing what businesses Intel should be in, Andy Grove asked Gordon Moore what they would do if Intel were a company that they had just acquired. When Moore answered, "Get out of memory," they decided to do just that. It turned out, though, that Intel's revenues from memory were by this time only 4% of total sales. Intel's lower-level managers had already exited the business. What Intel hadn't done was to shut down the flow of research funding into memory (which was still eating up one-third of all research expenditures); nor had the company announced its exit to the outside world. Because divisional and operating managers-as well as customers and capital markets-have such a powerful impact on the realized strategy of the firm, senior management might consider focusing less on the company's formal strategy and more on the processes by which the company allocates resources. Top managers must know the track record of the people who are making resource allocation proposals; recognize the strategic issues at stake; reach down to operational managers to work across division lines; frame resource questions to reflect the corporate perspective, especially when large sums of money are involved and conditions are highly uncertain; and create a new context that allows top executives to circumvent the regular resource allocation process when necessary.     

Performativity and the politics of identity: Putting Butler to work

Judith Butler occupies centre-stage in debates about gender identities. Butler's key concept is performativity: the ways in which gender identity is embodied and enacted, rather than a more or less adequate reflection of some underlying bodily reality. Butler draws on Foucault in several respects, not least her stress on the physicality of individual and social life, and her concern to understand identity as a social process. Identity is always provisional rather complete, a deeply ambiguous and unstable moment. Performativity is not reducible to performance and the degree of choice involved in identity construction both makes it appear more ‘natural’ for the individual and also open to reinterpretation. This is where Butler finds political hope. Foucauldian research on contemporary work identities has largely ignored Butler. Corporate, professional and occupational identities are too often portrayed as simply imposed on individuals in ways that leave little scope for ambiguity or negotiation. Butler's notion of performativity provides a way of understanding the ambiguities and paradoxes of contemporary identities at work.     

Reawakening your passion for work

All of us struggle from time to time with the question of personal meaning: "Am I living the way I want to live?" For millions of people, the attacks of September 11 put the issue front and center, but most of us periodically take stock of our lives under far less dramatic circumstances. This type of questioning is healthy; business leaders need to go through it every few years to replenish their energy, creativity, and commitment--and their passion for work. In this article, the authors describe the signals that it's time to reevaluate your choices and illuminate strategies for responding to those signals. Such wake-up calls come in various forms. Some people feel trapped or bored and may realize that they have adjusted to the frustrations of their work to such an extent that they barely recognize themselves. For others, the signal comes when they are faced with an ethical challenge or suddenly discover their true calling. Once you have realized that it's time to take stock of your life, there are strategies to help you consider where you are, where you're headed, and where you want to be. Many people find that calling a time-out--either in the form of an intense, soul-searching exercise or a break from corporate life--is the best way to reconnect with their dreams. Other strategies include working with a coach, participating in an executive development program, scheduling regular time for self-reflection, and making small changes so that your work better reflects your values. People no longer expect their leaders to have all the answers, but they do expect them to try to keep their own passion alive and to support employees through that process.     

Match your sales force structure to your business life cycle

Although companies devote considerable time and money to managing their sales forces, few focus much thought on how the structure of the sales force needs to change over the life cycle of a product or a business. However, the organization and goals of a sales operation have to evolve as businesses start up, grow, mature, and decline if a company wants to keep winning the race for customers. Specifically, firms must consider and alter four factors over time: the differing roles that internal salespeople and external selling partners should play, the size of the sales force, its degree of specialization, and how salespeople apportion their efforts among different customers, products, and activities. These variables are critical because they determine how quickly sales forces respond to market opportunities, they influence sales reps' performance, and they affect companies' revenues, costs, and profitability. In this article, the authors use timeseries data and cases to explain how, at each stage, firms can best tackle the relevant issues and get the most out of their sales forces. During start-up, smart companies focus on how big their sales staff should be and on whether they can depend upon selling partners. In the growth phase, they concentrate on getting the sales force's degree of specialization and size right. When businesses hit maturity, companies should better allocate existing resources and hire more general-purpose salespeople. Finally, as organizations go into decline, wise sales leaders reduce sales force size and use partners to keep the business afloat for as long as possible.     

How to build your network

Many sensational ideas have faded away into obscurity because they failed to reach the right people. A strong personal network, however, can launch a burgeoning plan into the limelight by delivering private information, access to diverse skill sets, and power. Most executives know that they need to learn about the best ideas and that, in turn, their best ideas must be heard by the rest of the world. But strong personal networks don't just happen around a watercooler or at reunions with old college friends. As Brian Uzzi and Shannon Dunlap explain, networks have to be carefully constructed through relatively high-stakes activities that bring you into contact with a diverse group of people. Most personal networks are highly clustered--that is, your friends are likely to be friends with one another as well. And, if you made those friends by introducing yourself to them, the chances are high that their experiences and perspectives echo your own. Because ideas generated within this type of network circulate among the same people with shared views, though, a potential winner can wither away and die if no one in the group has what it takes to bring that idea to fruition. But what if someone within that cluster knows someone else who belongs to a whole different group? That connection, formed by an information broker, can expose your idea to a new world, filled with fresh opportunities for success. Diversity makes the difference. Uzzi and Dunlap show you how to assess what kind of network you currently have, helping you to identify your super-connectors and demonstrating how you act as an information broker for others. They then explain how to diversify your contacts through shared activities and how to manage your new, more potent, network.     

When to trust your gut

Many top executives say they routinely make big decisions without relying on any logical analysis. Instead, they call upon their "intuition," "gut instinct," "hunches," or "inner voice"--but they can't describe the process much more than that. What exactly is gut instinct? In this article, author Alden Hayashi interviews top executives from companies such as America Online and Johnson and Johnson to find out how they make decisions. Hayashi also presents the research of leading scientists who suggest that our emotions and feelings might not only be important in our intuitive ability to make good decisions but may actually be essential. Specifically, one theory contends that our emotions help us filter various options quickly, even if we're not consciously aware of the screening. Other research suggests that professional judgment can often be reduced to patterns and rules; indeed, truly inspired decisions seem to require an ability to see similar patterns across disparate fields. A CEO who possesses that ability can craft a perfect strategy by detecting patterns that others either overlook or mistake for random noise. But various traits of human nature can easily cloud our intuitive decision making. One potential pitfall is our tendency to see patterns where none exist. Thus, continual self-checking and feedback are crucial, and some organizations have made these processes part of their corporate culture.     

How to motivate your problem people

Managers who motivate with incentives and the power of their vision and passion succeed only in energizing employees who want to be motivated. So how do you motivate intractable employees--the ones who never do what you want and also take up all your time? According to Nigel Nicholson, you can't: Individuals must motivated themselves. Nicholson advocates a method that turns conventional approaches to motivation upside down. Instead of pushing solutions on problem employees, the manager should pull solutions out of them by creating circumstances in which the employees can channel their motivation toward achievable goals. That means addressing any obstacles-possibly even the manager's own demotivating style--that might be hindering the employees. The author's method demands that a manager take charge of a difficult situation and resolve it. An investment of time is required, but it will bring the manager to a resolution sooner than other means would. Using detailed examples, Nicholson walks the reader through his method, pointing out potential pitfalls along the way. First, the manager creates a rich picture of the problem person. Second, the manager exercises flexibility and reframes goals so that the employee can meet them. Third, in a carefully staged, face-to-face conversation, the manager meets with the problem employee on neutral ground. Whether a problem is solved or simply resolved, the payoffs from using this method extend beyond the specific employees who have been difficult to motivate. Besides increasing a manager's chances of motivation problem people, the method can inspire an entire team by signaling that the organization deals with difficult people rather than discarding them.     

实施公共财政精细化管理的建议

精细化管理理论已经成为西方管理同行们的行为意识。结合财政工作对精细化管理作一些思考，尝试拟出以下建议。[编者按]     

How to map your industry's profit pool

Many managers chart strategy without a full understanding of the sources and distribution of profits in their industry. Sometimes they focus their sights on revenues instead of profits, mistakenly assuming that revenue growth will eventually translate into profit growth. In other cases, they simply lack the data or the analytical tools required to isolate and measure variations in profitability. In this Manager's Tool Kit, the authors present a way to think clearly about where the money's being made in any industry. They describe a framework for analyzing how profits are distributed among the activities that form an industry's value chain. Such an analysis can provide a company's managers with a rich understanding of their industry's profit structure--what the authors call its profit pool--enabling them to identify which activities are generating disproportionately large or small shares of profits. Even more important, a profit-pool map opens a window onto the underlying structure of the industry, helping managers see the various forces that are determining the distribution of profits. As such, a profit-pool map provides a solid basis for strategic thinking. Mapping a profit pool involves four steps: defining the boundaries of the pool, estimating the pool's overall size, estimating the size of each value-chain activity in the pool, and checking and reconciling the calculations. The authors briefly describe each step and then apply the process by providing a detailed example of a hypothetical retail bank. They conclude by looking at ways of organizing the data in chart form as a first step toward plotting a profit-pool strategy.     

New development: Putting a 25-year experiment to the test

This article explains the current state of accounting by the US federal government. Key hurdles for the US reporting model and financial management are discussed. An open data system, able to aggregate cost by programme, would greatly improve the usefulness of cost information and facilitate integration of cost with performance information.     

Limiting losses may be injurious to your wealth

Theory tells us that if return distributions are independent over time, an expected utility maximizing logarithmic-utility investor will almost surely accumulate the most long-run wealth. This paper examines the robustness of the result. Specifically, it examines the expected and unexpected long-run and short-run consequences of imposing Value at Risk and other loss constraints on power-utility investors with a numerical example and empirically in an asset-allocation setting covering the 1934–2008 period. In addition, it examines the expected and unexpected long-run consequences of imposing Conditional Value at Risk constraints on power-utility and prospect-theory (kinked linear-utility) investors.     

Just Say No to Wall Street: Putting a Stop to the Earnings Game

CEOs and CFOs put themselves in a bind by providing earnings guidance and then making decisions designed to meet Wall Street's expectations for quarterly earnings. When earnings appear to be coming in short of projections, top managers often react by suggesting or demanding that middle and lower level managers redo their forecasts, plans, and budgets. In some cases, top executives simply acquiesce to increasingly unrealistic analyst forecasts and adopt them as the basis for setting organizational goals and developing internal budgets. But in cases where external expectations are impossible to meet, either approach sets up the firm and its managers for failure.
Using the experiences of several companies, the authors illustrate the dangers of conforming to market pressures for unrealistic growth targets. They argue that an overvalued stock, by encouraging overpriced acquisitions and other risky, value-destroying bets, can be as damaging to the long-run health of a company as an undervalued stock.
Putting an end to the "earnings game" requires that CEOs reclaim the initiative by avoiding earnings guidance and managing expectations in such a way that their stocks trade reasonably close to their intrinsic value. In place of earnings forecasts, management should provide information about the company's strategic goals and main value drivers. They should also talk about the risks associated with the strategies, and management's plans to deal with them.     

面向整体安全的立体防御体系

当前,病毒的“互联网化”十分明显,各种流行软件、浏览器插件、网站漏洞层出不穷,盗号木马病毒数量暴增,木马盗号、挂马网站越来越猖獗,新病毒呈“井喷式”增长,而通过U盘和网络大肆传播的病毒,更是企业网络所面临的重大威胁。瑞星认为,面对来势汹汹的安全威胁,传统杀毒软件显然已经力不从心。企业只有建立了一个有层次的、面向企业整体安全的立体的防病毒体系,才能有效制止病毒在网络内部的蔓延和传播,全面保障企业信息安全。     

你如何挖掘员工最大潜力

给予过多的关注，员工可能会缺乏动力，但是却有助于提高员工忠诚度，当员工觉得被赋予权力时，通常能协助迅速解决问题，提高客户满意度。     

Three questions you need to ask about your brand

Traditionally, the people responsible for positioning brands have concentrated on the differences that set each brand apart from the competition. But emphasizing differences isn't enough to sustain a brand against competitors. Managers should also consider the frame of reference within which the brand works and the features the brand shares with other products. Asking three questions about your brand can help: HAVE WE ESTABLISHED A FRAME?: A frame of reference--for Coke, it might be as narrow as other colas or as broad as all thirst-quenching drinks--signals to consumers the goal they can expect to achieve by using a brand. Brand managers need to pay close attention to this issue, in some cases expanding their focus in order to preempt the competition. ARE WE LEVERAGING OUR POINTS OF PARITY?: Certain points of parity must be met if consumers are to perceive your product as a legitimate player within its frame of reference. For instance, consumers might not consider a bank truly a bank unless it offers checking and savings plans. ARE THE POINTS OF DIFFERENCE COMPELLING?: A distinguishing characteristic that consumers find both relevant and believable can become a strong, favorable, unique brand association, capable of distinguishing the brand from others in the same frame of reference. Frames of reference, points of parity, and points of difference are moving targets. Maytag isn't the only dependable brand of appliance, Tide isn't the only detergent with whitening power, and BMWs aren't the only cars on the road with superior handling. The key questions you need to ask about your brand may not change, but their context certainly will. The saviest brand positioners are also the most vigilant.