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| View this issue online http://knowledge.insead.edu/contents/sep07news.htm | September 2007 |
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In search of blue oceans First came the book and now there is an institute in the making. The international bestseller, ‘Blue Ocean Strategy’ written by INSEAD professors W. Chan Kim and Renée Mauborgne, sold more than a million copies in its first year of publication and is being published in a record-breaking 39 languages. Although there are no plans for a follow-up book at this stage, INSEAD is currently setting up the INSEAD Blue Ocean Strategy Institute. In a rare interview, Kim and Mauborgne told Knowledge they knew there would be an audience for their research as their articles in the Harvard Business Review had sold half a million reprints.
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The new deal at the top Companies, under the so-called ‘old deal’, have managers reporting directly to the CEO on a one-to-one basis, with responsibility for their units or regions,” says Yves Doz, who holds the Timken chair in Global Technology and Innovation at INSEAD. The Professor of Business Policy says the result is that “the businesses or regions behave in an autonomous fashion similar to the way a baron would manage his fiefdom.” “This makes it more difficult to create integrated value creation logic,” Doz says. “Often the old deal is where the company has a sort of sub unit or divisional autonomy that leads to rivalry and the development of turf battles with well-defined areas of responsibility.” |
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Talent Management: Building and sustaining a strong talent pipeline Best practices only work in a given context, says Günter Stahl, INSEAD Associate Professor of Organisational Behaviour. “So what works for one company may not work for another.” That’s one of the key findings of The Global Human Resource Research Alliance, a study of best practices in talent management on which Stahl was a lead researcher. It investigated the processes and practices of 37 multinational companies, selected on the basis of their international scope, long-term performance and reputation. |
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Credit crunch: Did the Fed do the right thing? The US Federal Reserve cut short-term interest rates half a percentage point this week to make it cheaper for banks to provide loans and keep the crisis in the subprime mortgage market from spreading to other sectors of the economy. The cut was bigger than many market analysts had expected and was designed to have an immediate impact on interest rates for home loans, credit cards and business borrowing. The credit crunch is the first major test for Fed Chairman Ben Bernanke and not all the experts agree on whether Bernanke has got it right. |
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CEO View: John Mullen of DHL The credit crunch is a cause of concern for DHL CEO John Mullen. He says he’s concerned about the current uncertainty in the US economy, and the possibility that the US market could go into recession. “We see it in our trading results,” he says. “We’re up one month, we feel positive and then we have a bad month and everyone’s full of doom and gloom, and then the next month’s good again.” “It’s hard to discern clear trends but our view is that it’s got to be 50-50 that the US has a recession next year, and 50-50 is not a good percentage to be modeling around,” Mullen adds. |
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Healthcare2020: Women and leadership – the next decade Technology is presenting an opportunity for women to progress in the healthcare sector, even though they are currently underrepresented in the industry. “The digital world is changing healthcare with the new technology system that currently is underleveraged,” says Lynn O’Connor Vos, the CEO and president of Grey Healthcare Group. She told a plenary session at the healthcare2020 forum which was recently held at INSEAD’s Europe campus in Fontainebleau that nowadays patients are better informed and that there’s also a spotlight on the industry “from customers distrusting us. All these factors make supplying healthcare increasingly more challenging.”
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Organizational learning and innovation: How the leadership team’s experience can enhance entrepreneurial firms’ strategy and performance Hakan Ener, a PhD candidate in strategy at INSEAD, comes from Turkey where there is an abundance of entrepreneurial firms. “My family runs an entrepreneurial business in textiles, so I drew on personal experience when looking at research that would interest me.” “What I noticed from my family’s firm is that it is difficult to give up executive power. Decisions have to be made about who should join the leadership team to make, and execute strategy. Wrong choices can lead to major problems in performance, especially for young entrepreneurial firms.”
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