3. Who would you choose to lead the EBO teams—

experienced executives who are successfully managing established divisions or less experienced managers who want to prove themselves? Explain your rationale. (You may want to review Chapter 1, Section 3, “Kinds of Managers.”) Evenings at home are the only time you can look over your management team’s monthly reports without interruptions.

141 Tonight, you’re quietly sipping coffee (decaf, naturally) as you review the reports in the comfort of your favorite chair. You are suddenly jarred, however, by a single line deep in one report, which might have gone unnoticed if you hadn’t carved out this time away from the offi ce. In discussing the prospects for a new opportunity, one of your managers wrote, “Pressures in the current quarter have forced us to cut costs by discontinuing efforts in this promising new area.” Unbelievable! As you continue reading, you can’t get this line out of your head. Why is the company abandoning “promising” avenues of growth and revenue because of external pressures? You fi nish reading the reports and resolve to discuss the issue with all of your managers—not just the one who wrote the report.

The next morning, you ask your senior vice president to investigate, and in short order, he discovers a pattern of nonconversion. In other words, even though your company, IBM, obtains thousands of patents each year, management seems to have tremendous diffi culties turning its basic research into functioning businesses.

The reason apparently stems from the company’s focus on existing markets and short-term results. Rather than focusing on turning new ideas into new products and services, IBM’s most talented and experienced executives are being rewarded based on how much revenue their divisions generate and the number of employees reporting to them. Not surprisingly, they’re more concerned with growing existing products and services than they are with developing new products and services for the future. As a result, IBM has left many innovations on the table for outsiders to scoop up. For example, IBM invented the relational database and the router, but it was Oracle and Cisco that built huge companies around them.

You call your management team together and pose this problem: “How are we going to transform the work of our research scientists into new businesses? We need to fi gure out how to recognize and nurture these emerging business opportunities. IBM has hundreds of thousands of employees and billions of dollars in revenue. Surely, we have enough resources to commercialize our great ideas!”

In response, your VP for strategy says, “I wonder if we could do it with teams.”

For this Management Team Decision, assemble fi ve to six students to act as the management team at IBM.