This essay is one of several that supplement the book, The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion, by John Hagel III, John Seely Brown, and Lang Davison. That book is based on the idea that we are undergoing a Big Shift in the global business environment away from... [read more...]

Under the right conditions, organizations can reap the “wisdom of the crowd”. All too often, group dynamics actually hinder good decision-making, forecasting, and—as the authors of this paper argue—creative problem solving. Karan Girotra and Wharton professors Christian Terwiesch and Karl Ulrich compared... [read more...]

This 52-page report finds little change for 2010 compared to the previous five years in terms of the sources of risk. What has changed greatly is the understanding that global risks are now tightly interconnected and shocks and vulnerabilities are truly global. Three themes help to organize all the details... [read more...]

The common view of human memory appears to see memories as essentially internal, mental photographs: You can pull them out of your brain’s filing system, look at the same image as the one you initially formed, and put it away again unchanged. Psychologists have known for decades that the folk view of... [read more...]

Despite the apparent certainty in their positions displayed by most participants in the global warming controversy, the issue is tremendously complex and full of uncertainties. Given that the costs of taking drastic action to reduce projected future warming are heavy and disruptive to the economy (and... [read more...]

Do you plan ahead? No, not for the next quarter. Not even for the next three years. Does your vision of the company’s future extend out—even in outline—as far as 2025? Probably not, since so much can change in 16 years. Some of those changes are more predictable than others. Scenario thinking takes form... [read more...]

How should public policymakers respond to uncertainty? One answer is given by the “precautionary principle” in cases where there is some hypothesized risk. That principle takes uncertainty as a basis for action to impose restrictive rules and regulations. The precautionary principle says, in essence... [read more...]

Executives and policymakers alike may favor—at least some of the time—cost-benefit analysis (CBA) for reaching the best possible conclusion when faced with difficult choices. But is CVA fatally flawed? Should it be replaced with simple moral rules? Eminent decision theorist Max Bazerman (author of Judgment... [read more...]

How do you know the best ways to make your advertisements compelling? You could follow “best practice”, although that might mean little more than following the herd—where the herd have never genuinely looked at the evidence. Or you could opt for evidence-based advertising. Most people who look for persuasive... [read more...]

Performance improvement is entering a new era, raising difficult questions for companies and individuals. Already, millions of people are taking performance-enhancing drugs—not just for athletic performance but to improve cognitive skills. Suppose that a drug company offers a relatively safe and legal... [read more...]

In what direction should we take American health care policy? The current climate seems to favor moving toward top-down rationing, price controls, mandatory coverage and payments, and numerous other controls on the buying of health care services and insurance. The less popular but more promising path... [read more...]

Executive compensation has come under fire for years. Criticism is unlikely to let up, given the contribution it probably made to the current financial crisis. Some critics will never be satisfied since they are offended simply by what they see as excessively high pay. But even those of us not driven... [read more...]

As the Kyoto Protocol’s 2012 expiration date draws near, a general theme dominates the global conversation: leadership and participation by the United States are critical to the success of whatever climate policy regime succeeds the Kyoto Protocol. Two general policy approaches stand out in the current... [read more...]

In tough times, it’s tempting to cut costs without thinking very carefully about unintended consequences. Costs can be squeezed by reducing inputs of factors of production such as labor. But, at some point, the remaining factors will be overworked, resulting in lower productivity and profitability. The... [read more...]

To paraphrase Gordon Gekko, “Goals are good.” At least, most executives would reflexively agree that setting specific, challenging goals can powerfully drive behavior and boost performance. And, as the authors of this critical paper acknowledge, hundreds of studies support that view. How could goals... [read more...]

New information technologies, especially those often loosely grouped together as “Web 2.0,” are changing the actual and potential interactions between companies, customers, and other stakeholders. The authors of this paper focus on retailers and consumer packaged goods companies (CPGs) and the ways in... [read more...]

The more frequently you receive information about a situation, the better your decisions are likely to be. Or so it would seem—at least up until the point that you’re too distracted by incoming data to think about it. Recent studies by the authors suggest that the upper limit for the benefits of increasing... [read more...]

How did securitization allow trillions of dollars of risky assets to be transformed into securities that were widely considered to be safe? Structured finance pools economic assets such as loans, bonds, and mortgages and then issues a prioritized capital structure of claims or “tranches” against these... [read more...]