MIT Sloan Management Review

Earlier this month we told you we’d be interviewing Michael Watkins, author of Your Next Move. We invited you to submit questions to Watkins, an expert in leadership transitions. Here, as promised, are his responses.

Let’s start with a turnaround question. The first things a new leader at a company with a turnaround challenge has to do is assess the external and internal environments. What happens if the two aren’t aligned? For instance, what if the external market for your products is good but your products are doing poorly?

It’s a bad news, good news situation. The bad news is that your products are not presently meeting customer needs. The good news is that your industry is healthy, even in your business is not. This obviously is much better than being in a dying industry where you would be forced to radically shift the focus of the business.

The challenge (and the opportunity) here is eliminate the external-internal misalignment by rapidly bringing more attractive products or services to market. It’s here that you need to focus and get some early wins. Are there some modest adjustments you can make quickly to buy you some time? Are there products already in the pipeline on which you can place bets and organize to accelerate? Are there opportunities to license or acquire products to help fill the gap?

The fact that you are in a turnaround situation also is quite helpful. It means there already is a sense of urgency that you can use to create momentum. People are unlikely to be in denial about the need to take action and that will help you to drive things forward.

How can an employee transition from a small company (<100 employees) to a large one? (submitted by "jijesh")

This is a tough transition. The bad news is that most small-to-large company transitions mean you have to accept positions with narrower scope, as well as adjust to more convoluted processes, e.g. for approvals, and increased organizational politics. This can be a very hard adjustment for someone who has thrived in the broader, more flexible environments that characterize most successful small businesses. The key is to be prepared to accept these shifts and not rail against them. You need to pledge to yourself never to utter the words, “things were so much easier when I was at…” At the same time, keep in mind that successful larger companies do offer significant advantages to talented people. These include more resources that can be devoted to “big” projects, as well as greater opportunity for advancement, and (potentially) greater recognition from colleagues, friends and family that you work for a leading company.

Would love Michael’s insight/suggestions on the 50+ year old’s transition from a long term relationship with one company to the “wild-wild” west of job search and potentially a new industry/company. (submitted by Deborah Exo)

The key here is to demonstrate to potential employers that you have the learning agility and drive to thrive in a new environment. Potential employers will be primed to worry that your long-term commitment to one company signals either an aversion to change or a lack of ambition or both. So you need to craft a convincing story about why this is not the case. If you can authentically point to a record of advancement and achievement in your old company, and can make the case that you stayed for good reasons, then that’s what you should do. As to drive, one way to signal that the fires still burn is to come into interviews with an aggressive plan for what you would do in the first 30/60/90 days. Undergirding all this, of course, is the experience and wisdom that you bring to the table, something no 30 or 40-something can match.

Finally, of the transitions you list in the book, which is the most difficult and why?

I think the realignment challenge is the most difficult. Realignment is about proactively changing an organization, and not responding to a crisis/turnaround. Turnarounds are easier because the problem teaches the people; the severity of the issues facing the organization virtually guarantees that a sense of urgency exists. People may be in despair, but they are not in denial. In realignment situations, however, the storm clouds are on the horizon, but the storm has not yet broken. You need to teach people that there is a problem. And this can be extremely challenging because people may have entrenched interests that they seek to protect, or be in denial of the need for change, or both. So success in realigning organizations required a nuance understanding of the alignments of interests in the organization, very strong persuasive skills, and a whole lot of patience.

Are you managing a career transition? Please let us know about it in the comments below.

The Pile is our weekly guide to what we’re reading to become better managers. You can find earlier installments here and here and here. Some of the resources we point to may require registration or payment to read.

Last week it seemed like everyone else was reading the autobiography of a self-styled maverick, while we were keeping up with the work of someone who’s been studying business mavericks and corporate innovation for many years, William C. Taylor. In his Acid test of strategy column for the Washington Post, Taylor, the author of Mavericks at Work and the forthcoming Practically Radical, urges companies to think of strategy as advocacy:

“In any field, winning organizations don’t just offer competitive products and services. They stand for important ideas–ideas that help to shape the agenda for their field, ideas that reshape the sense of what’s possible for customers, employees, investors, and society. The most successful organizations don’t just out-compete their rivals. They redefine the terms of competition by embracing one-of-a-kind ideas in a world filled with me-too thinking.
Oftentimes, the most original and distinctive business ideas–ideas that make tons of money and create loads of wealth–have a huge impact on society as a well. Who cares what Southwest Airlines does for philanthropic purposes (although I’m sure it does some great stuff), given that its growth and success has democratized air travel in the United States, and made it possible for tens of millions of people to see things and do things and visit places they never would have seen, done, or visited without this fabulously successful business?”

Taylor isn’t arguing against corporate philanthropy, to be sure. But he is arguing that philanthropy surely isn’t the only way companies can change the world.

One idea that many people are hoping will change one part of the world is the electric car. But are companies going about marketing the electric car correctly? The McKinsey Quarterly says the best way to sell electric cars is not to satisfy all consumer needs but to segment the market in new ways. In A new segmentation for electric vehicles, Nick Hodson and John Newman argue that electric car makers who go after today’s audience for electric cars, “affluent, environmentally conscious, or technically enamored buyers,” ignore the much larger number of auto buyers looking for “good value for money.” We’ll need to see more research to be convinced that the particular missions Hodson and Newman advocate targeting are the right ones, but anyone looking at the market can agree that “Focusing on designing and selling battery-powered vehicles to segments with specific driving missions also allows carmakers to articulate the values clearly to target buyers and to focus distribution strategies.”

Finally, we’re getting to the looking-toward-next-year part of this year. The Economist has released its World in 2010 annual and in Now for the long term, Matthew Bishop shows why it’s time for businesses to think about the future again. If the challenge over the past year has been about short-term survival, he says, the winners next year will be the ones who can look farther into the future. But Bishop is smart enough to know that simply changing a business’s time focus isn’t enough:

“There is a danger that long-termism, as it has often been in the past, will be used by bosses as an excuse for avoiding tough but necessary short-term decisions. Equally, bosses will be tempted to avoid costly or difficult long-term decisions on the ground that, as John Maynard Keynes put it, “In the long run we are all dead.” Yet, as executives shape their strategies for 2010 and beyond, one lesson from their recent experience should be clear: unless the business world takes a more sustainable approach, it is unlikely to be long before the next crisis comes around.”

Thinking long is no panacea. But not thinking long is a good way to ensure your business won’t be surviving long.

The coming weekend is a holiday weekend in the U.S.; we’ll be back with a new “Pile” on December 6. Meanwhile, please let us know in the comments what you are reading to be a better manager.

MIT Sloan Professor Simon Johnson gave a talk here at MIT today – with the cheery title of “The Next Financial Crisis.” Johnson, a former IMF chief economist who blogs about the economy at the Baseline Scenario website, wasn’t referring to a specific crisis he sees brewing right at the moment so much as systemic problems with the financial system that make another financial crisis, in his view, inevitable at some point. 

In particular, Johnson mentioned a recent paper by Andrew G. Haldane, Executive Director, Financial Stability, for the Bank of England. Haldane wrote about the idea of a  “doom loop” in the financial system. According to Johnson, the “doom loop” concept “is actually just another term for a cycle in which you have a boom, a bust and bailouts” — except the bailouts are done “in a sufficiently unconditional way” so that “the core structure of the financial system remains the same.”

The problem? Such a bailout may incentivize bankers to take excessive financial risks in the future. ”State support,” Haldane writes, “stokes future risk-taking incentives, as owners of banks adapt their strategies to maximise expected profits.”    

And the risk, according to Johnston, is that a future financial crisis could lead to a second Great Depression.

Johnson’s advice? Make megabanks smaller. He drew an interesting analogy to the development of antitrust law; in 1890, Johnson said, the idea of proposing a cap on the size of private business would have seemed ”ludicrous” in mainstream thinking. But then, over the next 20 years, Johnson argued, “we learned the hard way that having massive monopolies or trusts –as they were then called — develop was bad for society.” 

Similarly, today, when it comes to the banking system, “I think we have to extend our thinking,” Johnson said.

Jeffrey Hollender, a founder of Seventh Generation, spoke at the MIT Sloan School of Management today. Apparently he spoke several times around campus, but we caught him at a lunch time talk billed as “creating a game plan for transition to a sustainable economy.”

During a compact introduction, Dean David Schmittlein noted that introducing the notion of corporate responsibility into one’s business as Seventh Generation has, “adds complexity.” Hollender’s talk delivered some of that complexity.

Hollender is the “chief inspired protagonist” of Seventh Generation (some founders get to pick their own titles). As someone whose role at the company revolves around thinking, it’s no surprise that he started and ended his talk with words about consciousness in the most basic sense: the decisions you make are based on what you pay attention to. In world full of unintended consequences, he argued, “what you pay attention to helps you end up with more of the consequences you want.”

The consequences Hollender wants, for his business, his society, and his planet, are “revolutionary. Many of our problems will not be solved by the sort of incremental change that we see in the political process and in business.” He went on to diagnose our current predicaments (economic, environmental, and moral) and offered some possible ways out. Although the audience was a mix of students, faculty, and staffers, it was clear that it was the students he was talking to. “We don’t want to sustain the world we have,” he said. “We want to change it.”

“The single greatest challenge we face,” he said, “is the system we have created, embodied in academics and business. We have taken a world that is endlessly interdependent and divided it into countless pieces. There are two million NGOs that have taken a piece of the problem, same in business, but failed to realize that everything one does affects the other.” He celebrated cross-disciplinary collaboration (citing the global sustainabile food lab associated with MIT Sloan’s Peter Senge) and identified what he said are the “keys that are critical to what kind of solutions are necessary”:

• He talked how how business money in politics is “negative and disruptive, and it prevents the transition to a sustainable economy.” He advocates full public financing of elections.
• He argued for full cost accounting. “In our society, good things cost more than bad things. Why? Government rules lead to an incredible distortion in the economy … if you’re a business and you do the right thing you get no benefit from an institutional perspective.”
• He laid out an argument against the current structure and ownership of business and financial markets. “Things get more expensive even when there’s no increased demand. The purpose of business has become misguided, immoral even … we need the influence of government to be in line with the interests of society. Right now the deck stacked against sustainable businesses.”
  

Hollender’s proposed solutions are those he has made in print and in person before — businesses should practice radical transparency, treat their employees as their greatest assets, and exert leverage through supply chains (he spoke at some length on how WalMart has become a de facto regulator). During a brief question-and-answer session, he emphasized that his own company has far to go to live up to its own values. “Out biggest failure as company is that we have failed to make even marginal impact when it comes to justice and equity… We make compromises every day. The key is to be transparent about them.”

And Hollender concluded with a note about the contradictions inherent in the economics and politics of our time. He spoke of meeting a representative of the Service Employees International Union, who told him that, to get an acceptable return, “the SEIU pension fund invests in mutual funds that are full of companies who want to put labor unions out of business.” It’s quite complicated.

We’ve been on Twitter for some time and we joined Facebook more recently. Now we have a LinkedIn group, too. Please join us there if you’re on that network.

Conventional wisdom is to not be ruled by your email. Various productivity gurus offer sundry methods of keeping you away from your inbox at off hours; last year Google added a “mail goggles” feature to Gmail intended to help prevent late-night flames that you’ll regret in the morning.

Some people vow never to go to bed angry. Simon Cooper, president and COO of the Ritz-Carlton Hotel Co., never ends the evening with an email unanswered.

Every manager must decide on an approach to email. Are you available all waking ours? Are there strict off-limits rules you try to live up to? How are you managing email? Please let us know in the comments.

The Pile is our weekly guide to what we’re reading to become better managers. You can find earlier installments here and here. Some of the resources we point to may require registration or payment to read.

How’s your Great Recession coming along? Many publications, including MIT Sloan Management Review, are passing on the word that the real risk during a recession is not investing, and the most recent McKinsey Quarterly goes deep on Using the crisis to create better boards. The research at the heart of the report isn’t game-changing — no reader will be shocked to learn that “only half of the 186 directors responding thought their boards had met the demands of the crisis.” What is useful in this article are the three areas (culled from a report by the executive search firm Heidrick & Struggles) in which corporate boards need to improve: “the availability of directors for extra board meetings and discussions; the widespread absence of committees for special topics, such as audits, remuneration, nominations, and strategy; and the excessively long service of some directors.” Work on those areas and there’s a better chance you have a board built for these times.

You might not associate a company best-known for decades-old postage meters for the latest in innovation ideas, but, in Integrated Innovation at Pitney Bowes, from strategy+business, you can find some useful and unexpected lessons. After a bit of the convention wisdom we’ve been referencing (”We’ve chosen to increase our innovation spending in this economic downturn.”), Pitney Bowes exec David Dobson gets past the rhetoric and describes what the company is doing:

“We implemented a program called New Business Opportunity (NBO), intended to generate a pipeline of new ventures with significant revenue possibilities. Typ­ically, NBO ventures involve the participation of several of our business units; we provide leadership and small teams, with funding from both corporate and business units. In launching one of these businesses, we do a lot of in-market testing and development; if we find the early results disappointing, we’ll adapt our strategy or simply kill the idea and move on to the next opportunity.”

For another take on this, we recommend Alexander Kandybin’s Which Innovation Efforts Will Pay?, in the fall issue of MIT Sloan Management Review.

Finally, One of the signs of a good column is that it informs or entertains you even when you disagree with it. “Schumpeter,” in The Economist, is a young column, but it lives up to that criterion. This week’s column, The cult of the faceless boss, offers at least one laugh-out-loud sentence (”Henry Ford was as close as you can get to being deranged without losing your liberty.”) and a cogent yet wide-ranging argument for why the current crop of keep-your-head-down CEOs are not what companies need. As the column concludes:

“Few people pay any attention to the identikit bosses who keep popping up to hum their corporate muzak about doing well by doing right. The best ambassadors for business are the outsized figures who have changed the world and who feel no need to apologise for themselves or their calling. There is no long-term comparative advantage in being forgettable.”

That’s not the popular view of the moment, but it’s a tough-minded counter to the conventional wisdom, which every manager and every board need to hear. For a different take, here’s a different perspective on superstar CEOs.

What are you reading to become a better manager? Please share what you’ve learned in the comments below.

Vivienne Cox, former executive vice president of BP Alternative Energy who recently retired from BP after 28 years, gave a lunchtime presentation here at MIT earlier this week. Her subject? The challenges of providing energy to today’s world — and the threat of climate change.

Interestingly, Cox came not only to speak but also to listen. She spent a portion of the one-hour presentation encouraging the audience who had come to hear her to talk in small groups among themselves, sharing their views about how serious the world’s energy and environmental challenges are — or whether they can be addressed through technological advances.

Cox herself didn’t sound very sanguine — except about the supply of fossil fuels in the coming years. (”It’s my view that there’s plenty of fossil fuels around,” she said.) But on environmental issues — from climate change to fish populations — her tone was more somber.  ”We just cannot sustain the resource-intensity of the last 20 years,” Cox said at one point.  

While she observed that there is a growing consensus around the science about climate change, Cox admitted that she worries that our “system is stuck” on a path that will not allow the  problem of climate change to be addressed until it’s too late. “I have to say I am not optimistic,” she said. However, she added, “I do not believe that that is in any sense an excuse for inaction.”

Here’s a paraphrase of a discussion-starting question Cox posed to the attendees at her presentation. On a scale of  -10 to +10 — where +10 means we are fundamentally mismanaging the resources of the planet in a way that’s unsustainable and -10 means that technology will solve the problems – where do you each stand? What’s your personal perception about how serious the earth’s environmental and climate change problems are?

We’re wary of using pop culture references to make management points. When you do that, even with pieces of pop culture that are, in part about business and management, like the television series Mad Men, you usually get articles about how to become better managers from thinking hard about a television show, or, laughably, something like this.

But let’s stick with Mad Men for a second. It’s a show about work and one of the things it shows is how people are passionate about that work. In this past weekend’s final episode, which even one of the smartest management thinkers we know is raving about, the show’s star tries to convince his boss to come along with him on a new endeavor. He says:

“I’m sick of getting batted around like a ping pong ball. Who the hell is in charge, a bunch of accountants trying to turn a dollar into a dollar ten? I want to work. I want to build something of my own, how do you not understand that?”

This is art, not real life, so let’s not go overboard on drawing management lessons from a few lines of TV dialogue. But he has a point. He wants to work. He wants to build something. That’s a good pair of goals for any manager, real or fictional.

P.S. We can’t find an embeddable clip of Draper saying those words. Please let us know if you see one.

Henry Mintzberg, the management scholar and professor at McGill University, is someone we pay a good deal of attention to here. Our editor Martha Mangelsdorf interviewed him on debunking management myths and let’s not forget that he was one of the people who predicted the economic meltdown. And now you can view him talking to The Economist about “the paltry nature of oaths, phoney leadership, and nobility that ends in the classroom.”

UPDATE: And don’t forget Minztberg’s talk on “Managers Not MBAs: Debating the Merits of Business Education” at MIT World:

Last week, we inaugurated The Pile, a guide to what we’re reading to become better managers. Here’s this weekend’s installment.

The most useful management reading over the past week comes from Gina Trapani, the founder of the Lifehacker website, over at Harvard Business. In A More Practical Creative Sabbatical, Trapani takes on something that has bothered us and makes sense of it. We’re big fans of the work of designer Stefan Sagemeister, but a recent TEDtalk about how he takes off every seventh year to concentrate on experiments was troubling. His presentation was effective and inspiring, but it’s not particularly replicable: not many among us can abandon our jobs so regularly. Trapani recognizes this and, in her usual make-every-moment-count approach, walks through ways to create “micro-sabbaticals,” habits we can work into our normal workdays. Her advice is modest — maximize your commute time, find some freedom in a repetitive physical activity, get away from your desk — but her underlying argument is a welcome one: you don’t have to take a full-blown sabbatical to give yourself some space to grow.

In the current economic climate, however, too many of us are stuck on forced sabbaticals. And it has become a truism in management circles that a downturn is no time to stop investing in research and development. Our recent special report on managing in the downturn covers this. So does Success and the Power of Research from the latest issue of Design Mind, the magazine about business, technology, and design from the Frog Design consultancy. In the article, Henry Tirri, head of the Nokia Research Center, argues that investing in R&D in an economic downturn isn’t just a good idea: it’s critical. He makes the usual arguments and looks back at how Finland’s business R&D’d its way out of its deep early-’90s recession. Most interesting is when he elaborate on his notion that the very purpose of research is to give companies choices:

“The question then becomes, which choices should be made? As in a game of speed chess, where players have to make their best move within a strict time limit, research teams working in a downturn must focus on choosing the best opportunities they have within the constraints presented to them. Teams have to start making optimal decisions based on short-term goals rather than long-term plans. Under this sort of pressure, a good, approximate decision is better than a great decision made at the expense of time. Most researchers have a tendency to go with the most optimal decision, but economic situations create a need to move fast. This means selecting the most promising and mature projects, and accelerating the most disruptive products as well. There still is substantial risk in this process. People and companies are naturally impatient, and they don’t tolerate failures before wins. But it still may take time for the efforts of research to come to fruition. For those organizations that have the discipline, however, the benefits can be enormous.”

Finally, everyone wants to develop the habits that will make them successful. Everyone from Stephen Covey to David Allen offer borderline-cult-like methods for being more efficient or effective. Nowhere is this obsession with habits more blatant than among writers. What brand pencil do you use? What time of day to you write? Lined or unlined index cards? In How To Write a Great Novel, The Wall Street Journal checks in on the habits of 17 celebrated purveyors of fiction and comes up with some amusing ones: Nicholson Baker dresses up as his characters, Anne Rice insists on writing in 14-point Courier font, and MIT’s Junot Diaz locks himself in the bathroom and perches himself on the edge of the bathtub. We present these tips to you not because we think you should replicate them — they’re idiosyncratic to the life of each writer — but because of what they all have in common: a smart, committed professional trying all sorts of wacky things until he or she finds something that works. Sounds to us like an approach to management.

What are you reading to become a better manager?

Next week we’re going to be interviewing Michael Watkins. He’s a cofounder of Genesis Advisors and he’s best-known for The First 90 Days, a primer for making sure that your first three months in a new position work out as well as possible. (We’ve all seen what happens when someone starts a new job and finds himself or herself adrift.)

Watkins has a new book, Your Next Move, which considers how best to handle all sorts of career transitions: promotions, international moves, and more. What do you do, for example, when people who were your peers last week are now reporting to you?

When I write we’ll be interviewing Watkins next week, I really mean we. You have plenty you’d like to know about making the right moves. Here’s a chance to find out from an expert in leadership transitions. Put your questions for Watkins in the comments box below and he’ll answer the best of them. Career transitions are moments of great risk and opportunity. Here’s a chance to ask an expert how best to transition into your next role.

Harvard economist Kenneth Rogoff gave a fascinating guest lecture at MIT earlier this week — looking at commonalities in a number of financial crises. Rogoff, who recently coauthored a new book, This Time is Different: Eight Centuries of Financial Folly with Carmen M. Reinhart, is a former chief economist of the International Monetary Fund. Together, Reinhart and Rogoff compiled a database looking at financial crises in 66 countries over a period of 800 years.

The biggest surprise that data revealed, according to Rogoff? The universality of financial crises. More specifically, Rogoff in his talk compared the current financial crisis in the U.S. to a number of other post-WW-II financial crises. (Interestingly, he pointed out, there’s little difference in the frequency of banking crises in advanced economies and emerging ones.)

Here are some of the features of the aftermath of a typical post-WW-II financial crisis, according to Rogoff:

• From peak to trough, housing prices go down a historical average of 35.5% in a financial crisis — and the duration of the downturn in housing prices is an average of 6 years.

• Similarly, peak-to-trough real equity prices drop an average of 55.9% — and the average duration of the downturn in equity prices is 3.4 years.

• The unemployment rate in the aftermath of a financial crisis goes up an average of 7 percentage points — and the duration of the employment downturn is an average of 4.8 years.

• In the aftermath of financial crises, central government debt often “explodes” in amount, Rogoff noted. On average, central government debt increases 86%.

Not a cheery picture overall. But Rogoff pointed out that it could be worse. Six to eight months ago, he observed, you could have worried with a straight face that we might have another Great Depression. But, Rogoff indicated, he thinks the chances of that happening now are small.

For more on Rogoff and Reinhart’s findings and analysis, check out this recent segment from The NewsHour with Jim Lehrer:

Last month we reported on the BIF-5 Collaborative Innovation Summit. We noted that videos for the talks would be posted and that happened yesterday. Here are two well worth your time.

Roger Martin, dean of the Rotman School of Management, talked about fixing MBA education so it no longer produces, as The Economist calls them, “jargon-spewing economic vandals.” He spoke in detail about moving the MBA curriculum from shallow to deep, narrow to broad, static to dynamic.

John Maeda, formerly of MIT and now president of the Rhode Island School of Design, talked about how fundamental “hand-based” knowledge is being lost as part of our transition to new technologies and new models.

If these intrigue you, there are plenty more.

Rita Gunther McGrath (Photo credit: Lisa Berg)

Why do established corporations’ new ventures often fail? The new issue of Business Insight, MIT Sloan Management Review’s collaboration with The Wall Street Journal, includes an interview with Rita Gunther McGrath about problems traditional business planning processes encounter when dealing with uncertain new ventures.

McGrath, an associate professor at Columbia Business School, explains that one pitfall is to “take the untested assumptions that underlie the [business] plan and treat them as facts” — and then make expensive business decisions based on those assumptions.

What’s the alternative? McGrath recommends writing down your assumptions when you write a business plan — so you remember what assumptions you made and can check them. Then figure out ways to test and evaluate your assumptions inexpensively as the business progresses.

The nations of the world are in a “peaceful competition” to develop the energy technologies that will power the 21st century  – and the nation that wins that competition will be the nation that will lead the global economy, U.S. President Barack Obama told an audience at MIT today. “And I want America to be that nation. It’s that simple,” Obama added.

Obama visited the MIT campus to deliver an address about American leadership on clean energy. In his speech about the topic, Obama evoked the pioneer history of the U.S., noting that the American people have always sought new frontiers. Todays’ pioneers, he suggested, include entrepreneurs, inventors and researchers.  As a nation, Obama said “we have always been about innovation. We have always been about discovery.”

Obama noted that the stimulus bill represented the largest single boost in scientific research  in history. He discussed the need to transform our energy system into one that’s far cleaner and more efficient – and said that transformation will be made as swiftly and carefully as possible. Obama said that the Pentagon has declared dependence on fossil fuels a security threat.

On October 23, President Barack Obama will deliver at MIT “an address about American leadership on clean energy.” This blog will cover the talk, of course, and you can watch it live, October 23 at noon. If there is any problem with the stream, as there sometimes are with live events, MIT World will post a video by 3 p.m.

While you’re waiting for Obama’s address on sustainability to start, read our special report on the business of sustainability.

A while back we published a special report on design thinking in which design luminaries such as Edward Tufte, Donald Norman, and Nancy Duarte and Garr Reynolds gave practical advice on how managers can do their jobs better by thinking like designers.

Our interest in the topic didn’t end when we published the report; we still aim to keep up with the latest in thinking about design thinking and share it with you. Here are three new books pushing the field forward:

The Design of Business: Why Design Thinking Is the Next Competitive Advantage by Roger Martin is a tough-minded elegant survey of why design thinking shouldn’t be considered some soft thing that’s nice for business at the edges but not necessary at the core. Martin is the dean of the Rotman School of Management at the University of Toronto (he’s written eloquently on why business schools need to change). His brief but comprehensive volume is full of examples from the usual suspects (Procter & Gamble, Cirque du Soleil, the folks who make BlackBerrys), but he finds new wrinkles in old stories and perspectives others have missed. If you ever thought analytical thinking alone was enough to run your business, Martin will set you straight. (For more, Martin summarizes his arguments in the current BusinessWeek.)

Thoughts on Interaction Design by Jon Kolko is an underground classic. It was published independently in 2007; its 1000-copy print run sold out quickly and photocopies have been passed around samizdat-style. Kolko is an associate creative director for the innovative consultancy frog design (the company also publishes one of our favorite interdisciplinary magazines, design mind). In this book, he collects essays (by himself and others) that capture the state of interaction design and give such designers, his primary audience, the tools necessary to explain the value of what they do to the businesspeople on your team. Managers: give yourself a competitive edge by knowing this before the designers on your team have to tell you.

Streams, Walls, and Feeds: 107 Design Guidelines for Improving Notifications, Messages, and Alerts Sent Through Social Networks and RSS by Janelle Estes, Amy Schade, and Jakob Nielsen is the most tactical of the three new volumes. The Nielsen Norman Group, which produced this report, is a leader in usability research and consulting; its reliance on original research is what makes it such a successful consultancy. In its latest report, the company evaluates how companies communicate via some of the most popular and cutting edge social media. As it usually does, Nielsen Norman finds most companies wanting. This report shows why satisfaction levels of most people who interact with companies via social networks are so low and what companies can do to improve them. The link at the beginning of this paragraph leads to a summary of the report. The full thing, 209 pages long, is expensive and outlined here. Like the other books here, it emphasizes how important design thinking is to maximizing your business operations.

With its reporting of how political power is wielded in Washington, the only leadership lessons you’re likely to get from The Washington Post most of the time are case studies of what not to do. But the website’s video interviews with business leaders occasionally offer some positive models, too.

When we reported on the BIF-5 Collaboration Innovation Summit earlier this month, we noted how struck we were by a comment from Saul Kaplan, the event’s “founder and chief catalyst,” who said “innovation requires a vulnerability most people are not comfortable with.” Vulnerability, the willingness to fail and to do so openly, should be a core competency for many leaders, but it is often taken as a sign of weakness.

That’s where the Washington Post video comes in. In it, Paul Schmitz, CEO of the nonprofit Public Allies, discusses how admitting to failings makes you a better leader, not a weaker one. (Warning: there is a brief ad at the beginning of the video.)

What do you think? How vulnerable should a leader be?

Next month, MIT Sloan Management Review editor-in-chief Michael S. Hopkins will speak at the Opportunity Green business conference at UCLA. He’ll be expanding on our recent special report on the business of sustainability. For a hint of what he’ll discuss, there’s an interview with him on the conference website. Some highlights:

One of the most baffling results from your survey is that while 92% of respondents said their company was “addressing sustainability in some way,” 70% said they still had not developed a clear business case for it.

That is the contradiction that gets to the heart of the issue, and as we continue with the second round of the survey that is probably where we’re going to do the most digging. It’s one thing for an executive to understand that sustainability is going to have a major impact. It doesn’t mean they understand how to make a case for investing in products that will capitalize on it.

One reason for this contradiction is this enormous gap between experts, or “thought leaders,” and novices. Novices recognize sustainability is going to have a big impact, but they are stuck in the “green” silo. To them, sustainability can seem like a cost rather than a benefit. Unfortunately, that’s not going to drive company behavior.

Thought leaders see sustainability in system-wide terms. Improving products, motivating employees, lowering costs, and improving relationships with governments, the public, the capital markets — even competitors. They think about many, many different things — it’s a bigger way to think. Suddenly opportunities to create value seem much more obvious.

According to your survey, improving company reputation seems to be the major driver of sustainability. Do you see this as a weakness, going forward?

I can see it cutting both ways, both for good and for ill. Depending on how well we do in ferreting out green-washing. For the typical company, reputation is the reason they think they’re doing sustainability, so if they got away with making false claims, that would be bad. And yet as a driver of activity, what’s wrong with reputation being a good return loop, a good feedback loop?

Reputation is very complex when it comes to sustainability. One of the examples is Nike. They have made amazing progress in improving the sustainability of their products, by redesigning them to use fewer materials, for example. But they are really in a quandary because they don’t feel they can promote that fact, because they worry it stands in direct contrast with what their customers want them to do.

Nike fears that by going out and saying look what we’ve done — and it’s really win win — customers will say “wait, I thought you created your product solely to make sure I got the best performance out of it. Sustainability has to compromise your other goal.” Nike is really worried about it, and as a result, they’re quite decidedly not pushing it.

I think reputation benefit is driver now, but will greatly diminish. As time passes, reputation will just be table stakes. Already seeing that in certain parts of the food industry: almost becomes difficult to find a product that is environmentally sound because they all claim that they are.

How is sustainability changing the way companies operate?

When you talk to people that are trying to do sustainability initiatives in companies, it’s a completely different business process, because it requires collaboration across all different boundaries, both inside and outside the firm. Inside firms, sustainability often requires collaboration across divisions and departments that don’t have to deal with each other. Outside, it requires collaboration with governments, NGOs, communities, citizen groups, and competitors about standards and practices. It requires an ability to collaborate that is unprecedented. Most execs don’t have it, or don’t know how to do it.

It also means companies will have to find ways to be more transparent about their practices and activities. People want to collaborate with people they can trust. If Company A runs their operation in a way that allows me to see inside it, then I’m more likely to collaborate with them. Certain things about management, like accounting and financial reporting, have to change.

It’s the same with the greening the supply chain, where suppliers are being asked to go into detail about manufacturing processes, materials, etc. Of course, some suppliers say “thanks, but no thanks” we’re not going to share that information with you. Herman Miller’s response is, well then we’re going elsewhere. Plenty of people would rather hold their cards close to their chest, but it is going to be less beneficial to do so, and more beneficial to be more transparent.

Sustainability issues are going to drive management harder towards transparency than almost any other challenge we’ve seen.

Sounds like a tall order — I’m thinking of companies trying to survive in a highly competitive market. Why risk being more transparent?

The risks far outweigh the rewards. Like for instance, protecting patents. A lot of companies don’t care about patents at all. Patents aren’t going to protect them, if [competitors] know what they do and how they work, by the time they copy it they’re on to the next thing. Companies need to think about service.

Also, companies will begin to see that in an age where it’s harder to get capital than it used to be, if you can be the kind of company to make outside providers of capital more comfortable, you’re going to attract more capital.

There are a lot of green companies that are glad about the widespread mistrust of sustainability – they realize that “because these other folks are too scared, I have a competitive advantage. My competitors are in the stone age.”

One would think that, during the current downturn, sustainability initiatives would be the first programs cut, but your survey shows fewer than 25% of respondents had cut their sustainability initiatives recently.

Honestly, I don’t understand it. I have posited a thesis to others which is that in some measure, especially early on in the trajectory, sustainability is often about savings and waste, and so there are ways in which a downturn can push a company to invest more in efficiency. “If we use less materials and cut emissions, we know it can save us money.” There is a menu of sustainable activities that look more attractive when you’re in a downturn.

Could it be that sustainability is a “growth industry,” and thus immune to the downturn?

I am hesitant to say its because it’s a growth industry, because I think the typical business person is still an novice, and I don’t think they believe it’s a big enough business opportunity yet. But, that 92% [who believe it is important] number is huge, and that fact plays into this. People really do believe they’re likely to keep paying attention to it because they don’t want to be blindsided.