Larry Bennigson and Olubunmi Faleye work in the same town but had never met. Although they didn’t know each other, both men began exploring essentially the same corporate governance question with colleagues – Bennigson from the perspective of a former lead director of a publicly traded company, Faleye as an academic researcher. The two perspectives are complementary – as academic and business insights often can be.
Everyone wants an innovative corporate culture, but how do you develop one? This article posits that the ability of a culture to support innovation depends on six key building blocks: values, behaviors, climate, resources, processes and success. The article also includes a 54-element test developed to enable managers to assess a company’s “Innovation Quotient.” A case study in the article outlines the experience of a Latin American company with the assessment tool.
How can companies ensure that a promising initiative receives the necessary resources? And why do so many brilliant inventions fail while other seemingly mediocre offerings succeed? Such questions are addressed in two recent books — Unrelenting Innovation: How to Build a Culture for Market Dominance by Gerard J. Tellis and The Wide Lens: A New Strategy for Innovation by Ron Adner. The first book concentrates on a company’s internal workings, while the latter focuses on its external environment.
This article examines an experiment in open innovation applied to scientific research at Harvard Medical School. Harvard Catalyst, a pan-Harvard agency, modified the traditional grant proposal process to bring greater openness into every stage of research. In the end, 150 new hypotheses were proposed. The Harvard Catalyst experience suggests that open-innovation principles can be applied to a well-established research organization.
The high-profile scandals of the late 1990s have increased the oversight duties of independent directors. Has the increased focus on board oversight improved the quality of board monitoring? And can board oversight become detrimental to desirable objectives? This article focuses on three aspects of oversight: design and implementation of suitable executive compensation packages; removal of underperforming CEOs; and disclosure of earnings that reflect the company’s true financial conditions.
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Boards have two broad responsibilities: overseeing the protection of existing value and creating new value. Even though most boards take growth seriously, in practice board oversight has become unbalanced. The imbalance between risk and opportunity is a potentially serious problem. Correcting the imbalance will require an active, constructive partnership between the board and senior leadership — and a board that understands how the company maintains a high level of value-creating performance.
Although many organizations initiate business process outsourcing to reduce costs or acquire new skills, it can evolve into much more. Sometimes, service providers deliver substantial long-term improvements to the client’s operating efficiency and strategic performance. But these improvements seldom happen unless clients and providers implement a process that combines acculturation across organizations, a method for generating ideas, adequate funding and a system for managing change.
Wipro BPO, a business process outsourcing firm in Bangalore, India, was experiencing high turnover rates. In Wipro’s traditional onboarding program, new employees learned about the company. But when the onboarding focused, instead, on individual identity, employees were more than 32% less likely to quit their jobs during the first six months. The bottom line: By making small investments in socialization practices, companies can improve employee retention.
A company’s digital business model describes how the enterprise interacts digitally with its customers to generate value. If you lack a good digital business model, your customers may leave you behind. This article presents a framework to help enterprises compete digitally with three capabilities: their content, customer experience and platform. The framework is illustrated with case studies of top performers like Amazon, Apple, LexisNexis and USAA and results from an effective practices survey.
When it comes to recruiting, few studies examine the degree to which a company’s social reputation or other aspects of its reputation are more or less important than other, more utilitarian job choice factors. When a survey task simply asks people to rate the importance of a laundry list of job attributes such as corporate social responsibility, it hides the marginal value of each attribute to the potential employee. There is every indication it is not a case of one size fits all.
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Among charismatic executives, for every Steve Jobs, there is at least one Dick Fuld — maybe more. Fuld presided over the downfall of Lehman Brothers. Nor is Fuld alone: Six out of 18 of Germany’s most recent “Manager of the Year” winners were responsible for dramatic missteps, including Daimler’s disastrous acquisition of Chrysler Corp. under CEO Jürgen Schrempp. That raises a question: do charismatic business leaders typically outperform their more ordinary counterparts over the long run?
How many privacy policy updates does your credit card company send you each year? Companies often “manage privacy” and “keep consumers informed” by drafting their privacy policies as broadly as possible and consider their job done if they change the policy 10 times a year to fit with changing practices. However, managing privacy should not be seen by businesses as a burden. Instead, it can be a valuable way to generate and maintain a good relationship with your customers.
Strategic alliances are arguably more critical now than ever before. In this highly digital age, organizations rely increasingly on Internet-based or computerized products and services that require the simultaneous cooperation of multiple organizations. The authors’ research has shown that flexible IT systems can help enable successful partnerships. But the opposite — that inflexible IT systems can hinder partnerships — is true, too. And it’s something about which organizations should be careful.
The idea that messages go “viral” and diffuse through social networks is now a given in corporate marketing and the culture. But recent research suggests that the term “viral” marketing does not describe what happens most often online. In fact, true viral diffusion is rare, according to Sharad Goel, a senior researcher at Microsoft Research. For marketers, this research suggests that it may be time to abandon the idea that viral marketing will frequently lead to, say, tenfold organic growth.
Companies are increasingly engaging in CSR activities. But unless companies communicate their CSR achievements wisely to stakeholders, they fear being accused of greenwashing. A study of CSR communication practices in 251 European corporations yields seven guidelines for effective CSR communication. The authors conclude that many beliefs about the risks associated with CSR communication are exaggerated, and that companies that communicate honestly about their activities have little to fear.
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Executives from around the world agree that research and development is a global effort requiring collaboration. Yet many say their organizations must improve in this area — evolving from the centralized approach that’s prevalent today — to meet strategic goals. In other words, for today’s R&D organizations, there is a significant gap between knowing what to do and actually doing it. Vital as it is to their futures, the art of collaboration is one that many R&D organizations have yet to master.