Harvard Business Review

A couple of weeks ago I met with GE's CEO Jeff Immelt and we were talking about the financial meltdown, the deep recession, and what it would take to fix America. He was outspoken about how business and government had let down the American people and the need for radical change. That's fine, I said, but if he felt that way, why hadn't he spoken up publicly? Immelt ran from the room and quickly returned with a speech he was working on--one he delivered last week at the Detroit Economic Club. This was his speech and not something he had fobbed off to a speechwriter, he told me. I urge you to watch it, here: Immelt exhorted Americans to give up the notion that the U.S. can make it as a services-led, consumption-based economy, where "a mortgage broker is pulling down $5 million a year while a Ph.D. chemist is... > Read More

Welcome to HBR's Issue Highlights. Each month, this interactive table of contents will highlight some of the magazine's best features, tell you who should read them, why they're relevant, and what you'll take away from them, all in under five minutes. Share this with others by clicking on the "Share" button in the bottom right hand corner. Let us know what you think by commenting below, or by emailing us at issuehighlights@harvardbusiness.org. ... > Read More

As reported in the web-exclusive article "Consumer Credit: The Next Crisis," American consumers are carrying a dangerous, unsustainable amount of debt. Over the next several months, many will default on their loans. The authors of the article, investment banker William Jarvis and Wharton School professor Ian MacMillan, warn we should brace ourselves for record numbers of personal bankruptcies. Still more consumers will not file bankruptcy but will radically slow down on both borrowing and spending. That's exactly what they should do for themselves. But the cumulative effect on the economy of all this deleveraging and defaulting is troubling. The consumer credit crisis will endanger many businesses. Your company's sales, gross margins, and bottom line are probably more exposed than you realize. (To make matters worse, you'll probably never see the rates of growth you came to depend on before the current slowdown--because far too much of that growth was fueled... > Read More

There's a new moon today, and I'm wondering what it will mean for the stock market. Believe it or not, past and current research suggests that returns may actually go up. HBR is still receiving comments from readers about "Market Lunacy," a brief article we published in November 2006 about Ilia Dichev and Troy Janes's study of correlations between stock market activity and lunar cycles. In their review of 25 stock exchanges over the past three decades, they found that annualized mean daily returns for G-7 countries were higher in the days around new moons than in the days around full moons. Source: Ilia D. Dichev and Troy D. Janes, "Lunar Cycle Effects in Stock Returns," Journal of Private Equity (Fall 2003) Although readers' comments range in tone from "This is crazy talk" to "It's true, and my own study confirms it," the findings have struck a responsive chord. When... > Read More

The honeymoon period at my first "real" job lasted about a month. In those early weeks, I basked in the unknown, soaking up what it meant to dress business casual and admitting that my celestial tapestry — while it looked sweet in my dorm room — might not work in my cubicle. With each day, I felt more professional, and after months of interning and waiting tables, a 9-5 job suited me just fine. At least, that is, until the coffee incident. We were a small office, only eight on staff, and required no more than a 12-cup pot. I ordered one from Staples, set it up in the empty cube we'd agreed on, and made sure there were mini moos, sugar, and filters close by. As far as I was concerned, it was a job well done. For a while, it worked. Whoever craved coffee first in the morning... > Read More

The concept of transparency is getting renewed attention with the financial crisis. If, say, Lehman Brothers had allowed a freer flow of information, or made it easier for employees to raise their concerns about risk, the argument goes, they might not have collapsed. But we've heard this all before. The implosion of Enron and WorldCom in 2002 brought similar calls for candor. And in the 1990s, the digital economy was supposed to make transparency mandatory--how else could empowered knowledge workers innovate on Internet time? Why, then, are we still talking about the "mushroom theory of leadership," where executives keep employees in the dark and feed them manure? James O'Toole and Warren Bennis, in an article in the current HBR, blame our all-too-human insecurities. Managers, they say, hoard and control information as a source and perk of power. Some managers may genuinely feel that employees aren't smart or broad-minded enough to... > Read More

Peter L. Bernstein, the economist and author who wrote the landmark book on risk Against the Gods, has died. He was 90. The news came to us at HBR just after our newest issue went to the printer; that issue contains, sadly, the last article he wrote for our pages. Because it is the July-August issue, and will arrive on newsstands two weeks hence, it will seem strange to many readers that the byline makes no note of his passing -- and worse, that the editor's letter is mute on the many accomplishments of his rich and long life. Such are the perils of print publishing, and for that we apologize. But here let it be said that, when work began last January on envisioning the July-August issue -- a special, double-sized issue devoted wholly to exploring how the business landscape would be transformed by the financial crisis and recession --... > Read More

A.G. Lafley's decision to step down as CEO of Procter & Gamble earlier than anticipated pushed the company's stock price down a few pennies yesterday, but as of this writing, it's trending back up. The incremental ups and downs reflect a larger tension. For the most part, observers think that  the maker of Pampers, Tide, and Crest is well-positioned to move on without Lafley. On the other hand, the question nagging at everyone is, Why now? Credit P&G and Lafley for smart succession planning. Heir apparent Robert McDonald is a 29-year P&G veteran who has worked closely with Lafley for years, and appears to share Lafley's vision for the future. They're particularly in synch on stepped-up efforts in emerging markets like India and Brazil. Though the board hasn't officially voted him in, nobody seems terribly surprised at the choice, and reports of his abilities have been generally quite positive. Still,... > Read More

The recession has intensified calls for making management a profession. On top of the threat of global warming, we've seen how narrow-minded, self-serving behavior by executives can grievously damage the financial system. To inject more social responsibility, students and professors at several prominent schools are promoting a version of the Hippocratic Oath for graduating MBAs. Yet professional management involves more than social responsibility. Doctors, for example, are trained to collect facts, analyze them objectively, and make impersonal decisions based on deep expertise. That sort of rational work has many clear benefits, but also dangers for large organizations. General Motors is a prime example. To see why, let's go back to 1964, when HBR published "The Great GM Mystery," by Harold Wolff. GM was at the peak of its success. Longtime leader Alfred Sloan may have retired, but the company was still posting growing profits and market share. And Sloan had... > Read More

As I watched a local production of Jerry Springer: The Opera recently, I thought two things: Ridiculous, meet sublime. Businesses, there may be a takeaway here. Seriously. Jerry Springer is a TV personality many people love to hate because his tabloid-style talk show revels in the base and the trashy. And Jerry Springer: The Opera is just what the title suggests--a high-art take on a lowbrow institution. OK, maybe the "high-art" descriptor is an exaggeration, but the play does (bizarrely, despite its raunchiness) get the audience to sympathize with scandalous, attention-hungry characters society would normally kick to the curb. What does this have to do with business? Well, one could argue that society currently sees  the corporate world, at least parts of it, as base and trashy, too.  Witness the freefalling revenues, share prices, and levels of public trust, largely born of greed and bad corporate behavior. The news tells us of business leaders who seem no... > Read More