Tag Archives: Harvard Business Review

Microsoft Reorg Only First Step Toward Innovation

By John Kotter, Contributor

News of Microsoft’s corporate restructuring received hopeful applause from those who’ve been concerned about the company’s dwindling innovation. One observer, my colleague Randy Ottinger, says this is only the first step toward a corporate transformation. Randy Ottinger, an expert and executive coach on large-scale corporate transformations, said that Microsoft CEO Steve Ballmer must put several more pieces into place in order to complete the cultural change that will get Microsoft innovating again. In Fortune.com and Seekingalpha.com, Ottinger said the reorg is a great first step toward kick-starting innovation but, “The real question is what are they going to do post-reorganization to actually change the culture.” Ottinger’s main concern was whether new types of incentives will be put in place to change the way people behave and act. Ottinger was also interviewed by Lydia Dishman for FastCompany, saying, “It is going to be less about telling people what they need to do differently and more about engaging their hearts and minds to pursue the exciting opportunities ahead for Microsoft.” Analysts and investors will continue to watch and see if Microsoft will ride this momentum, continuing to take the further needed steps in order to institute sustained cultural change throughout the organization. Randy Ottinger is an Executive Vice President at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations. John Kotter is the chief innovation officer at Kotter International, and is the Konosuke Matsushita Professor of Leadership, Emeritus, at Harvard Business School. *** For more about how organizations can develop the agility required to succeed in today’s rapidly changing world, read Dr. Kotter’s recent article, Accelerate!” available from the Harvard Business Review. Follow John Kotter: On Twitter: @KotterIntl On Facebook: http://www.facebook.com/KotterInternational On LinkedIn: http://www.linkedin.com/in/johnkotter Sign up for the Kotter International Newsletter. …read more

Source: FULL ARTICLE at Forbes Latest

Why Well-Paid Employees Are Good for Business

By Matt Brownell

Filed under: , , ,

Alamy

It’s no secret that the retail sector depends on minimum-wage labor — when President Obama proposed raising the federal minimum wage in his State of the Union address, the National Retail Federation was one of the first groups to express its opposition.

But as we noted at the time, not every retailer supports paying its employees the legal minimum. Last month Costco came out in favor of a higher minimum wage, noting that it pays its employees at least $11.50 an hour. And Costco (COST) isn’t alone in going above and beyond the industry standard when it comes to employee compensation.

Dan Fastenberg at AOL Jobs has an interesting story today that looks at the best jobs in retail. Costco is on the list, as is Trader Joe‘s, which starts its employees at a salary of $40,000 to $60,000. But as Fastenberg notes, these companies aren’t just paying higher wages out of the goodness of their hearts — there’s evidence that paying a higher wage also translates into real benefits for the retailers.

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Zeynep Ton, a visiting professor at MIT’s Sloan School of Business, argued last year in the Harvard Business Review that “the presumed trade-off between investment in employees and low prices can be broken.” The likes of Trader Joe‘s and Costco, she points out, are able to maintain low prices and strong financial performances despite their relatively high wages. While cutting staffing levels and suppressing wages may be a good short-term strategy for maintaining margins, in the long term it may make more sense for some service businesses to treat their employees better.

Indeed, Costco CEO Craig Jelinek made this very point last month when discussing why the company eschews the low-wages strategy employed by the likes of Walmart (WMT).

“We know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty,” he said last month.

Check out the full story at AOL Jobs.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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Source: FULL ARTICLE at DailyFinance

Reinvent You're Personal Brand

By Scott Edinger, Contributor Like so many of you reading this blog, my “to read” stack is piled halfway to the ceiling. Some books and longer articles that I want to read, and others, that for one reason or another, I need to read. Add to that stack the deluge of emails, daily periodicals, and of course, blogs like Forbes, and I sometimes wonder how I’ll get through my stack. The books are all good by virtue of having made it into my stack, so I prioritize my stack from “must read now,” because of valuable information that I presently need, to “read eventually. This month, the book that made it to the top of my stack is Reinventing You, published by Harvard Business Review Press written by my friend and colleague, Dorie Clark. The criteria for me was that, like so many of you, I am continually looking for how to improve my brand and I always find Dorie’s writing, in her blogs on this site as well as Harvard Business Review, to have great pragmatic insights. …read more
Source: FULL ARTICLE at Forbes Latest

Is an Amazon Kindle Phablet Incoming?

By Evan Niu, CFA, The Motley Fool

Filed under:

There’s been no shortage of speculation on an Amazon.com Kindle Phone of some sort over the years. After all, in the age of mobile computing, smartphones and tablets go hand-in-hand and the e-tailer has made quite a dent in the tablet market to date with the Kindle Fire.

The most recent rumor about the alleged “Kindle Phone” is that the device may feature a 4.7-inch screen, which could potentially qualify it as a Kindle Phablet. What does Amazon have up its sleeve?

Rumor has it
Taiwanese rumor mill DIGITIMES is fueling the speculative flames today, citing “industry supply chain sources” that say Amazon has its sights set on a 4.7-inch display, up from its previous plan to go with a 4.3-inch display.

The trade up was reportedly due to the observable consumer trend toward larger displays, even though the data shows that large devices are still a relatively niche, albeit growing, segment of the broader smartphone market. For a device with “just” a 3.5-inch display, Apple‘s iPhone 4S held its own admirably against the onslaught of Google Android phablets of yesteryear.

DIGITIMES‘ sources also say that Amazon is beefing up other specs of the device and that the company is targeting a launch during the second quarter. Amazon has reportedly tapped Foxconn as the contract manufacturer, but there have been hiccups with the production schedule.

Of course, Apple is Foxconn’s big fish and new iPhones could also be due out in June or July. That would put Apple’s production ramp right in the same time frame, and Foxconn would obviously be giving the iPhone maker priority when it comes to capacity considering the sheer volume that Apple brings to the table.

Logistics aside, does a Kindle Phone or Phablet have any chance of succeeding?

That’s what he said
First off, let’s go ahead and assume that Amazon is indeed building a smartphone. CEO Jeff Bezos all but confirmed as much in January in an interview with the Harvard Business Review. The executive was discussing speculation of Amazon building physical retail stores, but when directly asked about the prospects of an Amazon smartphone, he added:

Yeah, absolutely. I mean, that’s the kind of thing where you would ask, “What is the idea? How would it be differentiated? Why wouldn’t it be ‘me too’?”

What would the idea of a Kindle Phone be that wouldn’t be “me, too”? That’s a challenging question to answer, especially when you consider the fact that Amazon’s favorite competitive weapon has always been price — a weapon that’s effectively neutered by subsidies in the smartphone market.

The price can’t be right
Unlike in the tablet market, where Amazon has found success by undercutting on price, the smartphone market is chock-full of free smartphones (after carrier subsidies kick in). Assuming that Amazon isn’t willing to pay you to take possession of a smartphone, it can’t go lower than $0.

Every major wireless carrier has numerous devices …read more
Source: FULL ARTICLE at DailyFinance

Why It Pays to Invest in CEOs

By Tamara Rutter, The Motley Fool

Filed under:

There’s no denying that the visionary leadership of Steve Jobs helped make Apple the most valuable company in the world. Forward-thinking CEOs such as Jobs often have far-reaching effects on the success of a company. When Jobs returned to a sinking Apple in 1996, it was his vision that ultimately propelled the company to greatness. In fact, Apple’s annual sales tripled and its stock increased more than 1,300% following his return.

Today, there are plenty of other like-minded leaders currently dominating their industries. Evaluating top CEOs and their respective management teams can be a useful tool in uncovering winning stocks. Let’s look at some of the CEOs that are working to create long-term value for their companies and stockholders. We’ll also uncover two rising stars to keep on your radar.

Taking the long view
Too often, the CEOs of public companies bend to meet short-term goals laid out by analysts and shareholders. This isn’t too surprising considering most CEO compensation plans are closely tied to quarterly earnings and annual performance metrics. Interestingly, historical data has shown that the most successful companies are those whose leaders instead took the long view.

Every year, the Harvard Business Review reveals its selection of the best-performing CEOs in the world. Not surprisingly, Steve Jobs topped the list as the best-performing chief executive officer of the past 17 years. Amazon.com‘s  Jeff Bezos grabbed the No. 2 spot in the 2013 ranking. Since founding the company in 1995, Bezos has proven he isn’t afraid to sacrifice near-term profits for long-term growth — a trait shared by the former Apple founder.

Since launching Amazon, Bezos has grown the company from a modest online seller of books into the world’s top online retailer. With Bezos at the helm, the company’s market value has increased by a whopping $111 billion. Additionally, Bezos ranked in the top 20 highest-rated CEOs for 2013 by Glassdoor, with a 93% employee approval rating. Shares of Amazon are up nearly 3% year to date, trading at around $255 apiece.

On whether or not he cares about Amazon’s share price, Bezos referenced the Benjamin Graham quote: “In the short term, the stock market is a voting machine. In the long term, it’s a weighing machine.” Bezos later said, “We try to build a company that wants to be weighed, not voted on,” according to an interview with Harvard Business Review.

This strategy has worked well for Amazon. In fact, since Bezos started the company it has delivered shareholder returns of 12,266%. The retailer’s offbeat leader has famously said, “I believe you have to be willing to be misunderstood if you’re going to innovate.” It is in this spirit that I introduce what I feel is the new breed of visionary CEOs.

Rising stars
Some up-and-coming CEOs to keep an eye on include Marissa Mayer, the new face of Yahoo! , and Elon Musk of Tesla Motors .

Mayer’s entrance at Yahoo! last year marked the beginning …read more
Source: FULL ARTICLE at DailyFinance

The Power of Place

By Lynda Gratton, Contributor

One of the highlights of the Davos meeting this year was a panel comprising the heads of Harvard, Stanford, and MIT, together with Bill Gates and an unexpected guest… a young Pakistani girl. Her seat on the panel was the result of her extraordinary performance in an online educational program she had registered for from Stanford. Faced with thousands of others from across the world competing for the top place, she had cruised in as one of the highest performing students. Aged 11 and living in Pakistan, this was something of a phenomenon. It was no surprise that the panel discussion put many of the attending business school professors into something of a spin. Was Gates right when he said that online education would trump traditional education within the decade? Certainly my colleagues from London Business School and I rapidly convened a meeting to ask the simple question of what it is that face-to-face education does that could be superior to virtual education. It’s an important question. As Tammy Johns and I argued in a recent Harvard Business Review article ‘The three waves of virtual work”, there is a distinct trend across the world of work becoming more virtual, as workers flee to their homes for peace and quiet, while corporations are only too happy to turf them out of expensive and carbon-hungry offices. However, what we found fascinating was that the third wave was not simply about virtual working, but was more about the re-emergence of co-located work in neighborhood hubs and local coffee shops. It seems that sitting in our pajamas all day does not always trump the cut and thrust of face-to-face office work. Perhaps that is what Marissa Mayer had in mind this week when she banned Yahoo employees from working from home. Faced with a deteriorating stock price and a culture that some have described as caustic, her actions as CEO to bring people back from the bedroom and into the office could be read as an attempt to reestablish the power of place. The challenge of course is that place has many other connotations. I was struck in a visit to Japan recently at the sheer strength of the office as a place of work, defined by a culture of ‘presenteeism’. I heard some marvelous stories of office workers going to great lengths to be sure that their bosses knew that being at the office was the most important part of their working life. The power of place has become something that we have to think about really carefully. A decade or two ago, the question was not so pertinent. When communication systems were slow and unreliable, working from home was never going to be an option. But now it is, and it seems that we have to consider the why and when of place with a great deal more finesse. Otherwise how can Yahoo stop itself becoming an American version of a Japanese bureaucratic company? Here is how. It seems to me that in thinking …read more
Source: FULL ARTICLE at Forbes Latest

Is Jeff Bezos the Next Warren Buffett?

By Austin Smith and Jeremy Phillips, The Motley Fool

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Warren Buffett and Jeff Bezos need no introduction, but investors may be surprised to see how much these two have in common. While Bezos has long been criticized for keeping a tight leash on Amazon.com‘s earnings, opting instead to pour the company’s cash flow back into future growth, Warren Buffett and Charlie Munger have long supported companies with strong capital return to shareholders, whether in the form of dividend payments or share repurchases. 

However, in a recent interview with the Harvard Business Review, Bezos put his investing chops on display, even quoting Buffett directly. He revealed that while Amazon’s stock price may seem expensive, there is a method at work, as he’s directing his company to build wealth for shareholders exactly as investors should hope.

The Fool’s Austin Smith has more in the following video.

If you’re still scared by Amazon’s nosebleed multiple, have no fear. The Motley Fool’s chief investment officer has selected his No. 1 stock for the next year, and it’s far cheaper than Amazon today. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.

The article Is Jeff Bezos the Next Warren Buffett? originally appeared on Fool.com.


Austin Smith has no position in any stocks mentioned. Jeremy Phillips owns shares of Amazon.com. The Motley Fool recommends and owns shares of Amazon.com and Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Don't Just "Think Outside the Building": Think Differently!

By Steve Denning, Contributor

What does it take to come up with value-adding, game-changing innovations? “Thinking outside the box” is not enough, Rosabeth Moss Kanter rightly argues in Harvard Business Review. “Recent major systemic challenges (the financial crisis, health care reform, and climate change, among others) require new ideas significantly bigger than a mere box. The greatest future breakthroughs will come from leaders who encourage thinking outside a whole building full of boxes.” She cites as examples of “outside-the-building thinking”: Technology companies place engineers in customers’ facilities. Santander [SAN] in Brazil mounts crime-reduction and cleanup efforts in bank neighborhoods. Japanese electronics maker Omron [TYO: 6645] and P&G [PG] identify product development opportunities by finding customers’ unsolved problems. IBM [IBM] sends diverse teams to unfamiliar countries to tackle tough challenges. GE’s [GE] sponsors ecomagination. These initiatives send people outside the building on far-afield trips to develop new ideas. Is “outside-the-building thinking” enough? “These initiatives,”  says Professor Kanter, “turn organizations inside out.” …read more
Source: FULL ARTICLE at Forbes Latest

How Big Data is Transforming the Hunt for Talent

By Dorie Clark, Contributor

Big Data is suddenly hot, winning Harvard Business Review’s recent “sexiest job of the 21st century” sweepstakes. It’s been slow to penetrate the world of human resources, however – but all that is changing fast, says Beth Axelrod, Senior Vice President of Human Resources for e-commerce giant eBay Inc., and co-author of The War for Talent. “There’s a lot of value to be created and added through data analytics,” she says, “whether it’s doing a better job spotting talent outside to attract to the company, or doing predictive analysis of who is likely to leave and what are the factors, so you can intervene before that point is reached to try to change the trajectory. There’s a ton of opportunity there.” …read more
Source: FULL ARTICLE at Forbes Latest

Profit From Wall Street Analysts' Blind Spot

By Dan Dzombak, The Motley Fool

Filed under:

A few months ago, some Harvard Business School professors came out with a study on what factors drive analyst buy recommendations. Read on, and I’ll explain the problem with analyst recommendations, what the professors found, and how you can profit from all this.

Wall Street recommendations
Wall Street analysts have a variety of conflicts of interests and are far too positive; as such, their recommendations are known to not be that useful. Being negative is hard for analysts, as there really is no incentive for them to be negative. Negative reports don’t get people excited, don’t drive much business, and often management teams will stop speaking with analysts who are negative. Also, if an analyst makes a small error in a negative report, investor relations departments are not forgiving, whereas in a positive report, IR departments are much more forgiving of small errors.

With no incentive to write negative reports on companies, only 6% of U.S. analyst recommendations are sells. Internationally, the number is slightly higher, with an average of 9% of recommendations as sells around the world.  

Top factors
Given their overly positive bent, what do you think would be analysts’ top factors?

Take a moment to think about it…

The results, which are organized by the location of the analysts, are interesting both for what analysts found very important and what they found least important.

Factors that drive buy recommendations for analysts
(A = Asia, E = Europe, L = Latin America, U = U.S.)

Factors / Importance

Low

Moderate

High

Very High

Well-communicated strategy

ALU

   

E

Ability to execute strategy

AL

U

E

 

Governance strength

AL

 

E

U

Quality of top management

L

   

AEU

Innovativeness

A

U

E

L

Low-price strategy

AL

 

E

U

Superior products or services strategy

AEL

 

U

 

Balance sheet strength

AELU

     

Culture

AEL

 

U

 

High performance compensation

AEL

U

   

Projected industry growth

   

E

ALU

Industry competitiveness

L

AEU

   

Source: Harvard Business Review, “What Makes Analysts Say ‘Buy.'”

Very important
Analysts called out projected industry growth and quality of top management as factors they consider to be very important. While it is good to hear that analysts find management extremely important, it is worrisome that projected industry growth is the other most important factor to them.

Studies have shown that analysts are terrible at estimating growth in both the short and long term, consistently overestimating growth. A study that looked at analyst estimates from 1984 to 2006 by Patrick Cusatis and J. Randall Woolridge of Pennsylvania State University found …read more
Source: FULL ARTICLE at DailyFinance

Startup Weekend's Focus On Women Founders

By My Say, Contributor

According to Women 2.0, private tech companies with female executives achieve a 35% higher return on investment. Further, when these companies are backed by venture, female leaders bring in 12% more revenue than their male counterparts. Fiscal responsibility isn’t the only asset female leaders bring to startups: Based on a 2012 report by Harvard Business Review, survey results show that “at all levels, women are rated higher in 12 of the 16 competencies that go into outstanding leadership.”  While women did exceed their male counterparts in categories related to relationship-building and “developing others,” they also scored highest in areas where men are often presumed to have an edge, such as “taking initiative” and “driving for results.”  Yet, despite these encouraging studies, The Kauffman Foundation finds that just 10% of high-growth tech startup founders are women and Dow Jones VentureSource confirms that only 7% of startup executives are female. …read more
Source: FULL ARTICLE at Forbes Latest

Ram Charan: The Great Economic Power Shift

By Dan Schawbel, Contributor

Ram Charan is a highly sought-after business advisor famous among executives for his uncanny ability to solve their toughest business problems. He has authored 15 books since 1998 that have sold over 2 million copies in more than a dozen languages. One of his more notable works was the New York Times best seller, Execution: The Discipline of Getting Things Done. Dr. Charan’s articles have been published in Fortune, Harvard Business Review and Strategy+Business. Ram was elected a Distinguished Fellow of the National Academy of Human Resources and has served on the Blue Ribbon Commission on Corporate Governance. He has served on the boards of Hindalco in India, Emaar, Austin Industries, Tyco Electronics, and Fischer and Porter. …read more
Source: FULL ARTICLE at Forbes Latest

The Fairness Flaw: Why 'Fair' Managers Often Falter

By Victor Lipman, Contributor

Is it possible that demonstrating too much fairness – one would assume a foundational quality of good management – might be working against business leaders in their careers?   That disturbing thought was the intriguing conclusion of a study I recently happened across in Harvard Business Review. …read more
Source: FULL ARTICLE at Forbes Latest

Are You on Social Overload?

By Peter Himler, Contributor A year ago, I penned a post titled “My Big Messy Social Life” in which I listed the many social media channels and the varied degrees of my engagement thereon. It contrasted with one I had posted two years earlier titled “Socially Engaged” where I described how each channel was distinct and thus required different rules for engagement and inclusion. LinkedIn was (and remains) the most liberal for me in terms of outsider inclusion, with caveats of course, i.e., no PR vendors, headhunters or non-industry strangers. Foursquare was (and is) my most stringent in terms of circle of friends, i.e., no location-sharing with complete randoids. Since then, the list has evolved. Some have fallen by the wayside, while others have emerged as more useful. (My wife questions the value of them all, though she has come to appreciate the organizational charms and serendipity of Pinterest.) Last week, at a Wok+Wine event held at General Assembly in NYC’s Flatiron District, I ran into my friend Dorie Clark who had just penned a thoughtful and related piece for Harvard Business Review titled “It’s Time to Cut Back on Social Media.” She made the point that as social media evolves, it no longer is necessary to be engaged in every shiny new object currently buzzing in the media-pheres. She wrote:
Source: FULL ARTICLE at Forbes Latest

Make Your Sales Vision Come To Life

By Scott Edinger, Contributor In my previous Harvard Business Review blog I have written about sales leadership being the toughest of the functional leadership roles. No other position demands such a disparate set of competencies, ranging from financial management and forecasting, to inspiring and motivating a geographically dispersed team.
Source: FULL ARTICLE at Forbes Latest

Evaluating CEO Performance: Not Everything That Counts Can Be Counted

By Paul Klein, Contributor “Many management thinkers argue that it is no longer enough to do well financially; companies also need to improve the well-being of (or at least not harm) the communities in which they operate, the environment, and their employees,” wrote Morten T. Hansen, Herminia Ibarra, and Urs Peyer in The Best Performing CEOs in the World, the cover story of the most recent issue of Harvard Business Review. “That’s the good news. The bad news is that stellar performance on both dimensions is no common or easy feat.”
Source: FULL ARTICLE at Forbes Latest

The Secret Formula for Corporate Strategy Execution

By John Kotter, Contributor This week my colleague Randy Ottinger discusses an element that’s missing from the execution process used by most organizations. This ingredient, he argues, can make the difference between the success and failure of your corporate strategies. In a cover story for a recent issue of Harvard Business Review, Professor John Kotter […]
Source: FULL ARTICLE at Forbes Latest

Five Things to Start Doing in 2013

By Dorie Clark, Contributor For professional development in 2013, consider reading Jeffrey Pfeffer. (Cover via Amazon) Around this time last year, I was happily surprised when my Harvard Business Review blog Five Things to Stop Doing in 2012 drew an intense response, with nearly 200 reader comments. In retrospect, though, it makes sense: so many […]
Source: Forbes Latest