Knowledge at Wharton

The recent departures of two chief executives -- Stanley O’Neal of Merrill Lynch and Charles Prince of Citigroup -- in the wake of major financial losses at their firms have focused renewed attention on the issue of succession planning. Published reports speculated that both positions would be filled by outside candidates and on November 14 Merrill Lynch announced that it had chosen John Thain CEO of NYSE Euronext to succeed O’Neal. While such a move is not surprising for a board wanting to signal a fresh start to investors Wharton faculty say that increasingly companies are looking to fill top spots with external candidates while spending less time on grooming future leaders and managing talent in general.

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On October 4 Microsoft launched HealthVault a free web-based service that allows users to store their medical records online and eventually share them with doctors. On October 17 an executive at Google noted the company’s interest in health information services. And on November 19 23andMe announced a program that will allow consumers to pay $999 for the privilege of exploring their own genomes. These efforts could give patients more control over their medical records and let them share information with doctors nutritionists or athletic trainers among others. But the concept also faces serious hurdles such as privacy concerns the absence of an accepted standard for sharing medical information and a health care industry that is reluctant to change according to experts in the field.

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Meet the new consumers of the new media age. They want things to be better faster cheaper and even more important free according to AOL vice chairman emeritus Ted Leonsis who is considered an Internet pioneer and whose business portfolio over the years includes an impressive array of online companies. ”We’re living in a world where consumers have taken control of everything ” he noted. Leonsis a keynote speaker at the recent Wharton Entrepreneurship Conference 2007 offered his thoughts on making money the Internet age contradictions in today’s consumers the global marketplace blogs and philanthropy among other topics.

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Not long ago a global corporation decided it wanted to help children in the southern African nation of Namibia -- and so it spent millions to donate scores of new computers and television sets for the classrooms in a particular region of the country. They should have talked to someone like Jonathan Johnnidis first. The rural aid worker had information the large corporate benefactor apparently did not -- that there is no electricity grid in that area. Johnnidis and others talked about aid initiatives in Africa during a panel discussion on ”New Partnerships in Business and Leadership Development ” part of the recent 15th annual Wharton Africa Business Forum.

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On November 19 Amazon.com CEO Jeff Bezos announced the launch of an e-book device called Kindle. It weighs 10.3 ounces costs $399 and can be used without a computer offering instead a free high-speed wireless data network from Sprint. Users can download books in less than 60 seconds as well as newspapers magazines and blogs (for a fee). The device uses an eye-friendly screen and lets readers increase the type size as needed. Will it be a hit even though most other e-book efforts have been unsuccessful? We asked marketing professor Peter Fader Don Huesman senior director of information technology and management professor Dan Raff to give us their reviews.

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At a time when many barriers to global trade have fallen countries all over the world are taking steps to harmonize their accounting standards and develop a truly global language of business. Under the lead of the International Accounting Standards Board (IASB) more than 100 countries have either implemented International Financial Reporting Standards (IFRS) or plan to do so. Yet while proponents of accounting harmonization say that IFRS will ultimately benefit firms and investors Wharton accounting professor Luzi Hail says that there are reasons to be skeptical about these high hopes. He and three co-authors present their views in a new paper titled ”Mandatory IFRS Reporting Around the World: Early Evidence on the Economic Consequences.”

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When it comes to shopping women are from Nordstrom’s and men are from Sears. Women are happy to meander through sprawling clothing and accessory collections or detour through the shoe department. For men shopping is a mission. They are out to buy a targeted item and flee the store as quickly as possible according to a new study by Wharton’s Jay H. Baker Retail Initiative and the Verde Group a Toronto consulting firm. The study’s findings have implications for retailers that are looking for ways to tailor their goods and services to specific segments of the shopping population.

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At the end of October the Federal Reserve gave the financial markets just what they had been asking for: a 0.25% cut in the federal funds rate. But in early November stocks plunged and the dollar hit a new low. Applause turned into hand-wringing -- then back to applause as the markets rebounded in the middle of the month. Why can’t the experts make up their minds? Is the outlook good or bad? According to Wharton faculty forecasting is particularly hard now because some of the key factors -- such as the credit crunch arising from the subprime mortgage mess spiking oil prices and the plunging dollar -- have little historical precedent. The result: Finance experts including the Fed may not be able to see too far down the road.

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According to Larry Huston managing partner of consulting firm 4INNO future competitive advantage will depend on ”innovation networks” -- individuals and organizations outside a company that can help it solve problems and find new ideas for creating growth. A senior fellow at Wharton’s Mack Center for Technological Innovation Huston was vice president of knowledge and innovation for many years at Procter & Gamble where he was the architect of its Connect + Develop program an approach that helped extend the company’s innovation process to include 1.5 million people outside of P&G. Huston spoke with Knowledge at Wharton about how innovation networks function.

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When Wal-Mart starts its holiday markdowns three weeks before Thanksgiving you know it will be a tough Christmas season. The Arkansas-based discount chain a bellwether for U.S. retailing usually holds off on its ”door buster” sales until the day after Thanksgiving traditionally the year’s busiest shopping day. This year Wal-Mart decided that it couldn’t afford to wait. No wonder say scholars at the Wharton School and retail analysts. A host of economic worries -- plus concerns over toy recalls -- has this year shaping up to be a lump-of-coal shopping experience. Here is what retailers -- and shoppers -- can expect.

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