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| In this Issue ... |
IVEY BUSINESS JOURNAL
January/February 2002
Volume 66 Number 3 |
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Theme:
Managing Uncertainty
Features
Making difficult decisions in turbulent times
By Michael A. Roberto
In turbulent times, some leaders make tough choices with courage and conviction. Others, however, remain indecisive. But as this Harvard Business School professor points out, most executives find ways to cope with uncertainty, ways that enable them to make sense of a confusing situation. In this article, the author describes seven strategies that leaders can use to cope with ambiguity and complexity when making decisions. He also points out their drawbacks, underlining the need to take great care when deploying these strategies.
Embracing uncertainty: The hidden dimension of growth
By Phillip G. Clampitt, Robert I. deKoch and M. Lee Williams
Cultivating meaningful growth may well be an executive's greatest challenge. Though it's often overlooked, the effective management of uncertainty is one of the most critical dimensions of that growth. Some executives suppress uncertainty, while others simply ignore it. As these three authors argue, neither approach is right. In fact, after carrying out extensive research, they concluded that wise executives learn to create organizations that embrace, rather than suppress, uncertainty. In the article, the authors describe a model for embracing uncertainty and how leaders can create and promote the right mindset in their organizations.
Analyzing and managing country risks
By David W. Conklin
Evaluating country risks is a crucial exercise when deciding where to set up operations in a foreign country. While some risks can be managed with insurance or hedging strategies, others can be measured with a risk-analysis. Though uncertainty will remain in either case, it can be transformed into planned uncertainty, with no surprises in store and contingency plans in place. The author, a professor of international business at Ivey, discusses the analytical frameworks a business should examine as it evaluates risk and creates a strategy to manage the uncertainties.
In Conversation: Orit Gadiesh, Chairman, Bain & Company
By Stephen Bernhut
Not every business leader first learned about strategy by serving beside some of his or her country's military heroes. But then Orit Gadiesh is no ordinary business leader, just as Ezer Weizman and Moshe Dayan, two of Israel's most celebrated soldiers, are no ordinary soldiers. Today, Ms. Gadiesh heads up Bain & Company, the Boston-based, blue-chip consulting firm that works closely with CEOs around the world. Ms. Gadiesh's insights and acumen have never been more crucial, as Bain's clients try to manage in an uncertain economic environment. In this interview, she suggests strategies that leaders should and should not follow, both to achieve business goals and to retain the confidence of various stakeholder groups.
A blueprint for crisis management
By Christine Pearson
Some businesses are better than others, particularly in responding to a crisis. In fact, what separates the leaders from the rest of the pack is planning and preparation. And, as this Ivey professor of organizational development points out, the best-made plans and preparations are those that are versatile. Using real, market-tested examples, the author describes how a company should prepare for and respond to a crisis, including the horrific events of September 11, 2001. In effect, this article is a comprehensive and practical resource that covers everything from preparing for the unthinkable to identifying the challenges leaders will face. The author also includes "Crisis management's Top 10", the ten most important things to do - and not to do - in a crisis.
Uncertainty takes the entrepreneur to the limit
By Susanna Khavul
As established firms know, change creates opportunity, which successful firms exploit by innovating and often reinventing themselves. For entrepreneurial firms, however, the window is very small: they are in the business of inventing themselves. This article, by a professor at the London Business School, looks at how several high-tech entrepreneurs in different countries have adapted to sudden change by adjusting their strategies and redefining themselves in the process. She concludes by delivering a clear and valuable message that will help entrepreneurs of all kinds survive and manage their business in an uncertain environment.
Rapid-growth firms; The challenge of managing information technology
By Chad Saunders and Yolande E. Chan
The CEO of a rapid-growth firm has a particular set of challenges, and as these authors point out, how a CEO manages each challenge will have an impact on a critical component of their firm's growth, information technology. Reporting on the results of a study conducted by the Queen's University Centre for Enterprise Development, the authors identify 12 challenges, from managing cash flow and choosing partners for alliances to fostering an open work environment and obtaining employee buy in. They also recommend tactics that will help managers meet each of the challenges.
Making Six Sigma last (and work)
By George Eckes
Few management philosophies have taken such a strong hold of corporate culture as Six Sigma. Embraced by the likes of General Electric and Allied Signal, Six Sigma has helped numerous companies save billions of dollars, improving customer satisfaction and even their stock price. But as this leading consultant states, misconceptions about Six Sigma have grown as well as its popularity. The philosophy ought to be considered a platform for building a successful strategy; instead too many managers see it - and implement it - as a way of reducing costs and something that can be applied without considering an organization's culture. In this article, the author describes the four key points that will help a manager ensure that Six Sigma is properly understood and implemented.
Departments
Headstart
Managing risk and protecting intellectual property
Ruth M. Corbin
Whether it is a brand, a symbol or even a client list, intellectual property is among a company's most valuable assets. At the same time, any one of those assets, which may have taken years to develop and acquire value, is highly vulnerable. The reason is that in both the public and private sectors, protecting intellectual property is one of the least-appreciated aspects of corporate governance. The issue is of particular importance for directors. In this article, the author analyzes the problem and suggests how corporate directors can avoid, reduce or mitigate the risks to intellectual property.
Cost-effective marketing in an uncertain economy
By Christopher Halsall and Kathleen McLaughlin
In a downturn, a company can sometimes be its own worst enemy. For example, consider marketing, where research suggests that companies that cut their marketing budgets during the last three recessions trailed the growth of their peers by more than 20 per cent once the economy started to improve. These co-authors, consultants with McKinsey & Company, maintain that a focus on improving the effectiveness of marketing spending, and not on the drive for greater efficiency, is the best approach in a recession. Discussing research their firm has done, the authors cite the importance of focusing on what they call the "critical bottlenecks." Such a focus will enable a company to identify 15 to 25 per cent of its marketing spending that can either be deployed more effectively or make its way directly to the bottom line.
Anti-terrorism law forces business to scrutinize all dealings
By Lawrence Herman
Canada's new anti-terrorism law, Bill C-36, will have a significant impact on the business community. While the bill vastly increases the government's powers to investigate and prosecute terrorists, it also puts the onus squarely on business to scrutinize exactly who it is doing business with, paying particularly close attention to who its clients are and the real nature of their business activities. In fact, the bill effectively asks businesses to determine if their clients and the activities they support are legitimate or simply a front or conduit for terrorist activities. As this lawyer and frequent contributor to Ivey Business Journal points out, the costs of complying with the law will be significant for Canadian businesses of all sizes.
Leader's Edge
Leadership with Michael Unseem
By Stephen Bernhut
This new Ivey Business Journal department will feature short interviews with leading management thinkers and practitioners on specific topics. The subject in this inaugural column is Michael Useem, a professor of management and the director of the Centre for Leadership and Change Management at the Wharton School of the University of Pennsylvania. Professor Useem, discusses his thoughts on leadership, especially in an uncertain environment, as well as the concept of leading up, which is the subject and title of his recently published book.
Viewpoint
Managing in the aftermath
By John S. McCallum
Nothing can fully prepare an executive to manage in the aftermath of events as horrifying as those that occurred on September 11. Yet it is incumbent on management to be prepared for such an event, and the thoroughness of their preparations and how they are carried out in the wake of a tragedy can make all the difference in their company's survival. Leaders must be visible, communicate openly and confidently, and generally create an environment that enables employees to get on with the firm's business.
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