The anxiety of learning. Interview by Diane L. Coutu

Despite all the time, money, and energy that executives pour into corporate change programs, the stark reality is that few companies ever succeed in genuinely reinventing themselves. That's because the people at those companies rarely master the art of transformational learning--that is, eagerly challenging deeply held assumptions about a company's processes and, in response, altering their thoughts and actions. Instead, most people just end up doing the same old things in superficially tweaked ways. Why is transformational learning so hard to achieve? HBR senior editor Diane Coutu explores this question with psychologist and MIT professor Edgar Schein, a world-renowned expert on organizational development. In sharp contrast to the optimistic rhetoric that permeates the debate on corporate learning and change, Schein is cautious about what companies can and cannot accomplish. Corporate culture can change, he says, but this kind of learning takes time, and it isn't fun. Learning is a coercive process, Schein argues, that requires blood, sweat, tears, and a certain level of anxiety to achieve the desired effect. In this article, he describes two basic types of anxiety--learning anxiety and survival anxiety--that drive radical relearning in organizations. Schein's theories spring from his early research on how American prisoners of war in Korea had been brainwashed by their captors. He cites the parallels between the "coercive persuasion" tactics the Chinese communists used to control their prisoners (isolating powerful ones and overseeing all communications) and the corporate boot camps that American companies use to indoctrinate their managers. Indeed, heavy socialization is back in style in U.S. corporations today, Schein says, even if no one is calling it that.     

In praise of boundaries. A conversation with Miss Manners. Interview by Diane L. Coutu

The past three decades have been a time of increasing informality in the American workplace. It's easy to characterize this growing comfort with the casual as a positive step for workplace culture, an outgrowth of the American democratic belief in workers' equality. Informal environments are said to be more trusting and open, and workers who are free to express their personalities are more comfortable and thus more creative--right? According to etiquette guru Judith Martin--known far and wide as Miss Manners--informality in the workplace may do more harm than good. Without some formality in social intercourse, Miss Manners argues, human interactions end up being governed by laws, which are too heavy-handed to serve as a guide through the nuances of personal--or professional--behavior. Since our earliest beginnings, we have developed formal rules to accompany shared human experiences, such as eating and mourning. Yet, says Miss Manners, something in us rebels against form and etiquette, and every so often, an anti-manners movement takes hold, and people come to believe that following etiquette is unnatural. One recent such movement has led to the belief that a distinction between our work life and our professional life is unnecessary. If we hope to reassure our customers that we are indeed professional, however, we need to be aware of the boundaries of professional behavior. On the whole, Miss Manners argues, informality in the workplace leads to a host of problems, from making employees feel pressured to "socialize" with coworkers during weekends and evenings to sexual harassment. Despite the shortcomings of informality in the American workplace, though, Miss Manners believes that we have the best code of manners the world has ever seen-in theory. In practice, American etiquette is undoubtedly still a work in progress.     

The science of thinking smarter. Interview by Diane Coutu

Advances in neurobiology have demonstrated that the brain is so sensitive to external experiences that it can be rewired through exposure to cultural influences. Experiments have shown that in some people, parts of the brain light up only when they are presented with an image of Bill Clinton. In others, it's Jennifer Aniston. Or Halle Berry. What other stimuli could rewire the brain? Is there a Boeing brain? A Goldman Sachs brain? No one really knows yet, says Medina, a developmental molecular biologist, who has spent much of his career exploring the mysteries of neuroscience with laypeople. As tempting as it is to try to translate the growing advances to the workplace, he warns, it's just too early to tell how the revolution in neurobiology is going to affect the way executives run their organizations. "If we understood how the brain knew how to pick up a glass of water and drink it, that would represent a major achievement," he says. Still, neuroscientists are learning much that can be put to practical use. For instance, exercise is good for the brain, and long-term stress is harmful, inevitably hurting productivity in the workplace. Stressed people don't do math very well, they don't process language very efficiently, and their ability to remember--in both the short and long terms--declines. In fact, the brain wasn't built to remember with anything like analytic precision and shouldn't be counted on to do so. True memory is a very rare thing on this planet, Medina says. That's because the brain isn't really interested in reality; it's interested in survival. What's more, and contrary to what many twentieth-century educators believed, the brain can keep learning at any age. "We are lifelong learners," Medina says. That's very good news indeed."     

Sense and reliability. A conversation with celebrated psychologist Karl E. Weick. Interview by Diane L. Coutu

Most of us see the organizations we operate in--our schools or companies, for instance--as monolithic and predictable, subjecting us to deadening routines and demanding dehumanizing conformity. But companies are more unpredictable and more alive than we imagine, according to Karl Weick, a psychology professor at the University of Michigan and an expert on organizational behavior. Weick says executives can learn a lot about managing the unexpected from organizations that can't afford surprises in the workplace--nuclear plants, firefighting units, or emergency rooms, for instance. In this conversation with HBR senior editor Diane Coutu, Weick examines the characteristics of these high-reliability organizations (HROs) and suggests ways that other organizations can implement their practices and philosophies. The key difference between high-reliability organizations and other companies is the mindfulness with which people in most HROs react to even very weak signs that some kind of change or danger is approaching. For instance, nuclear-plant workers Weick has studied immediately readjust dials and system commands when an automated system doesn't respond as expected. Weick contrasts this with Ford's inability to pick up on weak signs in the 1970s that there were lethal problems with the design of the Pinto gas tank. HROs are fixated on failure. They eschew plans and blueprints, looking instead for the details that might be missing. And they refuse to simplify reality, Weick says. Indeed, by cultivating broad work experiences and enlarging their repertoires, generalist executives can avoid getting paralyzed by "cosmology episodes"--events that make people feel as though the universe is no longer a rational, orderly system.     

Putting leaders on the couch. A conversation with Manfred F. R. Kets de Vries. Interview by Diane L. Coutu

Much of the business literature on leadership starts with the assumption that leaders are rational beings. But irrationality is integral to human nature, and inner conflict often contributes to the drive to succeed. Although a number of business scholars have explored the psychology of executives, Manfred F.R Kets de Vries has made the analysis of CEOs his life's work. In this article, Kets de Vries, a psychoanalyst, author, and instead professor, draws on three decades of study to describe the psychological profile of successful CEOs. He explores senior executives' vulnerabilities, which are often intensified by followers' attempts to manipulate their leaders. Leaders, he says, have an uncanny ability to awaken transferential processes--in which people transfer the dynamics of past relationships onto present interactions--among their employees and even in themselves. These processes can present themselves in a number of ways, sometimes negatively. What's more, many top executives, being middle-aged, suffer from depression. Mid-life prompts a reappraisal of career identity, and by the time a leader is a CEO, an existential crisis is often imminent. This can happen with anyone, but the probability is higher with CEOs, and senior executives because so many have devoted themselves exclusively to work. Not all CEOs are psychologically unhealthy, of course. Healthy leaders are talented in self-observation and self-analysis, Kets de Vries says. The best are highly motivated to spend time on self-reflection. Their lives are in balance, they can play, they are creative and inventive, and they have the capacity to be nonconformist. "Those who accept the madness in themselves may be the healthiest leaders of all," he concludes.     

A reading list for Bill Gates--and you. A conversation with literary critic Harold Bloom. Interview by Diane L. Coutu

In today's technology-driven world, who has time to pick up a 400-page novel? Most executives don't--they have urgent e-mails to answer, training seminars to attend, meetings to lead, and trade publications to scan. But according to Harold Bloom, one of America's most influential scholars, they should make time in their hectic schedules to read great works. In a wide-ranging conversation with HBR senior editor Diane Coutu, Bloom discusses the importance of literature: every individual--regardless of profession--needs to stretch his or her mind and reflect now and again on the human condition. "By reading great imaginative literature, you can prepare yourself for surprise and even get a kind of strength that welcomes and exploits the unexpected," he says. Because there are so many great works and there is so little time, Bloom presents a reading list for busy executives. Shakespeare's King Lear can teach businesspeople about change. Ralph Waldo Emerson's essays capture the ethos of the American spirit--individualism and inventiveness. Bloom says Sigmund Freud's conceptions "form the only Western mythology that contemporary intellectuals have in common." And people will never fully understand some aspects of themselves until they read Miguel de Cervantes's Don Quixote. In short, Bloom believes the humanities have much to offer businesspeople: great books broaden their awareness and their range of sensibility, he says. But reading literature will not make businesspeople more moral, he cautions. Bloom also discusses other topics such as how to read well, the state of popular fiction, the role of irony, and the subject of change.     

How to restore the fiduciary relationship. An interview with Eliot Spitzer. Interview by Louise O'Brien

Eliot Spitzer's investigations into the mutual fund and investment-banking industries have made the New York State attorney general the de facto flag bearer of corporate reform. His exposure of conflicts of interest between investment bankers and research analyst in Wall Street firms led to the $1.4 billion global settlement between regulators and banking houses in 2003. In this interview, Spitzer describes the challenge of protecting public markets from conflicts of interest, paying particular attention to how such conflicts get institutionalized in an industry. "The cases that have gotten me and my fellow regulators most upset are the ones where we've seen senior management being tolerant of rank abuses," he says. "Because then you know that the entire structure is rotten." He also points the finger squarely at boards, maintaining that board members are drawn from pools of company and industry insiders. He cites "a void in values in a lot of boardrooms," holding up executive compensation as a powerful example. "Board compensation committees ... are self-selected and interwoven--it's a rigged marketplace." He continues, "It would be interesting to see what the world would look like if CEO pay packages had to be submitted to shareholder votes." Spitzer suggests that what's really needed is for all business leaders to reinstill throughout their organizations the critical notion of a fiduciary duty--whether it is to the shareholder or to the customer. Using the mutual fund industry as an example, he also contrasts the value of enforcement with that of regulation and articulates an important--and surprisingly limited--role for government in protecting free markets.     

Leading through rough times. An interview with Novell's Eric Schmidt. Interview by Bronwyn Fryer

Few large companies have soared as high, sunk as low, and struggled as long as the 18-year-old networking software maker Novell. For years, the company dominated the market for local area networks, but by 1997, it had faltered due to misguided acquisitions, product missteps, and large unsold inventories. That's when Eric Schmidt arrived from Sun Microsystems to take over as Novell's third CEO. He turned the company around with a deft combination of cost reductions, divestitures, and new product rollouts, and by 1998, it was back in the black. Unfortunately, the good times didn't last, and like most technology companies, Novell is once again struggling with a slowdown in demand. But Schmidt is optimistic about returning Novell to good health, and his strategies suggest ways for other organizations to handle themselves during downturns. He counsels against being overly cautious during such times. It may be necessary to eliminate excess inventory, cut costs, and reduce the size of the staff and the management team in order to stabilize a company. Working to retain those employees whom he calls the "smart people" and keeping them motivated will have long-term payoffs. Further, Schmidt says it is necessary to acknowledge and overcome a "culture of fear," the deadening environment of cynicism in which employees suppress thoughts and feelings because they're worried about layoffs. His additional advice: keep new products coming out to sustain the interest of customers and the press, pay attention to your cash position, stay focused on your desired outcomes, and take heart from other industry leaders.     

Mastering the value chain. An interview with Mark Levin of Millennium Pharmaceuticals. Interview by David Champion.

As today's business leaders are all too aware, a new scientific or technological break-through can quickly transform an industry's competitive landscape. The upheaval is often traumatic for the companies involved, forcing them to rethink their strategies and redefine their boundaries. But an industry in flux also creates vast opportunities. To seize them, companies must see how the current upheavals will affect the future distribution of profits--and then reinvent themselves to capitalize on the new sources of value. In this interview with HBR senior editor David Champion, Mark Levin, the founder and CEO of Millennium Pharmaceuticals, describes his vision of the future of the pharmaceutical industry in the wake of the genetics revolution and new technologies that have altered the economics of drug development. No company, he argues, will create serious long-term value by staying in just one or two stages of the value of chain. That's why Millennium, which started out doing basis research into genes and proteins and selling its findings to pharmaceutical giants, has moved downstream - toward the patients who actually use and pay for the drugs. He explains why the research end has become less lucrative than the more mechanical tasks of identifying, testing, and manufacturing molecules. Levin talks about the changes Millennium has undergone since its inception in 1993-from 30 workers to more than 1,000, and from one end of the value chain to the other. He discusses the company's cultural transformations as well as the partnerships and acquisitions that have helped millennium become involved in every stage of the chain-from gene to patient. Levin's vigorous approach to balancing long-term strategy with short-term tactics offers important lessons to any executive facing an industry upheaval.     

High tech the old-fashioned way. An interview with Tom Siebel of Siebel Systems. Interview by Bronwyn Fryer

There is a growing awareness among corporations that the quality of the customer experience they provide directly affects their bottom line. Many are turning to high-flying software maker Siebel Systems for help in managing those relationships. The young company holds a leadership position in an explosive market-enterprise application software. But customer satisfaction, not dot-com chic, is foremost on the mind of Siebel Systems' founder, chairman, and CEO, Tom Siebel. The buttoned-down Siebel rejects the freewheeling management style and culture that characterize many Silicon Valley companies. As the former CEO of Gain Technology and a former executive at Oracle, Siebel believes in putting customers ahead of technology, discipline ahead of inspiration. In this interview, conducted at the company's San Mateo, California, headquarters, Siebel describes how this obsessive focus on customer satisfaction has been the driving force behind the company's success. He talks about how the organization remains true to its core values: a deep commitment to providing customer satisfaction; responsible fiscal practices that have created a cash-positive business amid today's cash-negative dot-coms; and general professionalism. "The notion of dressing in jeans and a T-shirt to greet the CEO of a major financial institution who just got off the plane from Munich is not acceptable," he says. Siebel Systems rejects the concept of going to war with rivals; instead, the CEO says, the company has forged an ecosystem of partnerships that allows it to support and integrate its own systems with other companies' software products and ultimately ease the customer's software installations. Indeed, Siebel says, the CEO's most important job is to understand what customers need and deliver that.     

Fast, global, and entrepreneurial: supply chain management, Hong Kong style. An interview with Victor Fung. Interview by Joan Magretta

Li & Fung, Hong Kong's largest export trading company, has been an innovator in supply chain management--a topic of increasing importance to many senior executives. In this interview, chairman Victor Fung explains both the philosophy behind supply chain management and the specific practices that Li & Fung has developed to reduce costs and lead times, allowing its customers to buy "closer to the market." Li & Fung has been a pioneer in "dispersed manufacturing." It performs the higher-value-added tasks such as design and quality control in Hong Kong, and outsources the lower-value-added tasks to the best possible locations around the world. The result is something new: a truly global product. To produce a garment, for example, the company might purchase yarn from Korea that will be woven and dyed in Taiwan, then shipped to Thailand for final assembly, where it will be matched with zippers from a Japanese company. For every order, the goal is to customize the value chain to meet the customer's specific needs. To be run effectively, Victor Fung maintains, trading companies have to be small and entrepreneurial. He describes the organizational approaches that keep the company that way despite its growing size and geographic scope: its organization around small, customer-focused units; its incentives and compensation structure; and its use of venture capital as a vehicle for business development. As Asia's economic crisis continues, chairman Fung sees a new model of companies emerging--companies that are, like Li & Fung, narrowly focused and professionally managed.     

"贷款新规"立意高远求实效——访中国民生银行行长洪崎

2009年以来,中国银行业监督管理委员会先后正式发布<固定资产贷款管理暂行办法>、<项目融资业务指引>、<流动资金贷款管理暂行办法>和<个人贷款管理暂行办法>(并称"三个办法一个指引"或"贷款新规"),受到金融界和经济界的广泛关注.     

真理光芒背后的人--访陈敏之先生

盛夏七月,我们如约见到了陈敏之先生——这个一直致力于将其亡兄顾准的思想发扬光大,而自己却从不张扬,永远在真理光芒背后默默奉献的八旬老人。虽已86岁高龄了,但陈敏之先生的精神仍很矍铄,思维敏捷,目光如炬。我们谈到:“作为顾准的亲弟弟,您算是与顾准最亲近的人了,在顾准文     

对银行处理信用证单据的法律探析

在信用证业务中,银行处理的是单据而不是货物本身,银行处理单据的合法与否事关重大。根据相关国际惯例和各国法律实践,着重分析银行在审单中的独立性原则、银行审单的标准及发现不符单据后的有效拒付问题,以期对银行的实际操作有所借鉴。     

推动国际审计准则的全球协调——访国际审计实务委员会主席迪兹·马丁先生

6月11日至15日,国际审计实务委员会在北京召开会议,讨论有关国际审计准则.我刊记者借此机会,专门采访了国际审计实务委员会主席迪兹·马丁(Dietz Mertin)先生.     

《企业所得税法》相关政策衔接问题思考

在《中华人民共和国企业所得税法》(以下简称《企业所得税法》)及其《实施条例》颁布实施后,尽快出台与之配套的政策措施和管理制度是确保新、老税制平稳过渡的有效保障。本文从政策执行的层面,就目前《企业所得税法》实施过程中与旧税制政策衔接的有关"冲突"问题进行探讨。