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    Harvard Business Review May 2006

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    © All Rights Reserved
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    Watch What You Say..page 114 Health Care's Innovation Crisis...paze 58 Harvard Business Review KBB yaa 70 Ta] ay “ SE , 104 114 20 43 58 129 141 154 160 wwwhbrorg Second in Command: The Misunderstood Role of the Chief Operating Officer Nathan Bennett and Stephen A. Miles Creating New Growth Platforms: Donald L. Laurie, Wes L. Doz, and Claude P Sheer Are Leaders Portable? Boris Groysberg, Andrew N. McLean, and Nitin Nohria Mapping Your Innovation Strategy Scott D. Anthony, Matt Eyring, and Lib Gibson The Five Messages Leaders Must Manage John Hamm FORETHOUGHT HBR Case STUDY Big Shoes to Fill Michael Beer BIG PICTURE Why Innovation in Health Care Is So Hard Regina E. Herzlinger TooL Kir Winning in the Aftermarket Morris A. Cohen, Narendra Agrawal, and Vipul Agrawal Best PRACTICE Change Management in Government Frank Ostroff EXECUTIVE SUMMARIES PANEL DISCUSSION In 5.2 seconds, STEREOTYPES ARE OBLITERATED. eS LEXUS HYBRD ORVE Arletic mor ardaget ergo ok thar marie Introducing the Lexus GS 450h. Alot can happen in 52 seconds" Like effortiessy reaching 60 miles per hour ‘Which fs exactly hv longi lake you to see Lenus Hybrid Drive as not just better fr the envionment, but 2s, ‘a whole new way fo propel an automobile forward Faster Smoother Silent, Working seamlessly together, an invigorating VO gas engine and 2 dynamic electric motor produce 339 horsepower*-eauivalent to many VBs, * When you inevibly find the need to apply your brakes, he energy created is stored for future powers anelegant olution forthe demands ofthe diver, 2s wal as forthe future ofthe word. Learn more at lexus com/CSHybid oe F IN THEATRES THIS MAY _ Asthe offical shipping and logistics partner for Mission Impossible il, DHL needed the props, uuipment were in place when the cameras it was truly an amazing performance, Its the spirit of can do end the experience of Reo or iC) Poe U ct Coo aaa ere ge 1 POT Ma cam eM OE DIRK RAVENSTEINER, ACCEPTING 3 _ __ IMPOSSIBLE MISSIONS DAILY. Can technology and the environment peacefully coexist? Ecomagination answers yes with the Evolution™ Series locomotive. Who would have dreamed that a 415,000 Ib. diesel locomotive could have an environmental conscience? The Evolution locomotive is designed to be more fuel efficient and more powerful while it exceeds stringent EPA emissions standards, making the air cleaner and clearer for all No small technological feat. This is the “lttle" engine that could. And wil To learn more, visit ge.com/ecomagination. imagination at work 70 80 92 FEATURES May 2006 Second in Command: The Misunderstood Role of the Chief Operating Officer Nathan Bennett and Stephen A. Miles What does a COO do? The short answer is, it depends. New research sheds light on this most mysterious of executives at once so critical and so situational Creating New Growth Platforms Donald L. Laurie, Wes L. Doz, and Claude PR Sheer For most companies, meeting markets’ expectations ‘of growth and delivering growth through new product, development or acquisition are different things entirely. By creating new growth platforms, top managers can identity strategic opportunities to clase the gap. ‘Are Leaders Portable? Boris Groysberg, Andrew N. McLean, and Nitin Nohria ‘Stock prices spike when a company announces @ new CEO froma big talent generator like GE, But how do these executives perform over the long term? Not always a5 well as you might think 104 m4 Mapping Your Innovation Strategy Scott D. Anthony, Matt Eyring, and Lib Gibson Creating innovative growth businesses seems like an ure predictable game, plagued by trade-off in speed, quality, and investment. By recognizing the pattern of successful disruptive innovations and assessing projects against ‘hat pattern, companies can write their own playbooks for growth and throw rivals off balance. The Five Messages Leaders Must Manage John Hamm Clear communication is a leader's best tool fr inspiring the company to create a better future for itself Learn how to ask such questions as,"What vague notion can | clarify or debunk today?" continued on page 10 research. ‘Since 1886, we have focused on bringing new perspectives to our Cents. Understanding the pas but shaped by the future Always looking at opportunities and challenges from a cffeent point of view. Providing you with he information you need to give you a competitive ‘edge. Afterall our future is based on making the most of yours. sce » Tk lon race, CREDIT SUISSE Russia, Iran and Qatar have 58% CMa MMOLE mt ae OR eh So what does that mean for us? a dy 3 ize fclties resPOnsy and safely the vitions of dolas infrastructure reat taken some e of sired tine rest of the wav ceded to bulld ito bring more r suaing UNG terminal: ation these necessaries ackyards. And ene’ ‘hose communities BY sHay must also continue invest re eompex transport ane storage? as to market “4 20 43 58 10 May 2006 COMPANY INDEX FROM THE EDITOR ‘The Health of Business and the Business of Health Noone yet knows ifthe HSN strain of, avian fu will Become the instrument ‘of a global pandemic. But two things are Certain: fits not, some ether pathogen will be, And iftis,no responsible bus ness leader should be caught unaware. FORETHOUGHT Preparing for a Pandemic Ifthe avian flu becomes a human pandemic, we will see once again how socially and economically disruptive Virus cn be. Here are steps thatthe world—and companies in particular— should take to prepare. HBR CASE STUDY Big Shoes to Fill Michael Beer Jack Donelly, CEO of suraical implants manufacturer Innostat, Was 2 colossal figure who commanded 2 lot of respect, ifnot affection. just before he died, the board appointed outsider Stephanie Fortas to head the struggling company, which at one time was the market leader Should Stephanie now go fora total reorganization or follow in Jack’s footsteps? BiG PICTURE Why Innovation in Health Care IsSo Hard Regina E, Herzlinger Before launching the product that promises to revolutionize your industry ‘and make a hefty profit, learn how to identity the barriers and forces that affect innovation so you can turn them toyour advantage. 102 129 ut 49 STRATEGIC HUMOR TOOL KIT Winning in the Aftermarket Mortis A. Cohen, Narendra Agrawal, ‘and Vipul Agrawal Most companies squander the after- market's potential, viewing aer-sales sefvices as a necessary evil, Here's how tormake the most ofthose spare parts ‘and service calls-and triumph in the stlormarkct. BEST PRACTICE ‘Change Management in Government Frank Ostroff Leaders of government agencies face ‘obstacles to change that ae largely Unknown within the private sector. But the best of those organizations have improved performance by applying goals and methods first proven there. LETTERS TO THE EDITOR Some tough-minded bosses relish the cdraos they create. It misguided to call these leaders’ intimidating behavior a form of intelligence worth cultivating? EXECUTIVE SUMMARIES PANEL DISCUSSION Follow the Leader Don Moyer Because anxiety about the path ahead isone of the most powerful work-related universal, people value leaders who provide a clear picture ofthe future MorRE THAN 250 YEARS OF UNINTERRUPTED HISTORY... Pea ee jaugurated in England, Vacheror ... DEDICATED TO PERFECTION Kk VACHERON CONSTANTIN Manufacture Horlogére. Genéve, depuis 1755. call 877-862-7565 ~ wa: COMPANY INDEX = May 2006 ‘rgetzations in this csv ae Indeved tothe et page ofeach ale a uni they ate mention. Subsite ae iste Under har wn ames. Re ae Daye dees artan atin aa. ed Sign: att joao ‘narcan Ca ily ern il zion doen Mi Samira ame mar isi fing... ‘ine en ain Sion Sse rsa sq sunsnck ay Soups Cataitr case wen Cis sis (szospstens chip Crete meat Comat Cre ‘eta (ing welachie oa mings ‘mension Ota ings sey ‘i Ceg ‘hike tai adil Cane tay ny. ean Ende Suge. Econ feats Fat ‘sh Gal estes, Fes. eae eines ex Eiraimart Gow, cet sqie Gene Das Sew Cece (ea ets. 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S181 Goole. 0 ale 70 anand ai Seta, 0, 3,92 ‘hans corn C2 elk Slog 70 Pape ps iis. 52 sit ioe apie M2 heat a Pars sis, 2 italia 6s 20 Pret 52 Aalmbach Paros, a clr ante fie wat a est bags 70 arin cy asia 70 Nate e ena 52 Monson ia false 129 wi a stem 19 Ostet scot. Mm Ss 19 yer teraoea 0 T Santa Cava ia Ley Set oss wm U9 sera roan a ‘pal Opin Fras, Ml Sinaemytome 0 a 52 TPot Patoes a Suns, 52 Unveil ens ito Soon. 20 sShepias. 70 Um otc SMe 80 Marshal State Buss a ‘ie Meryeens 7,7 unvertya eos Taree aia Galt... tcc tosessas Rona Stl of nagement a ‘bpln nena 19 umes ote ‘elas. 23 Una toa ark, 0 Team IM ypcaptal nn ‘anybody wants to see me, Hl be crow behind my door, ready to pounce.” ching fy §z oe Cor Pe ade Cor od rei Src sec ae ety rs pari Share the goods. Looking for a vintage chrome bumper? An avocado green blender? You've CRS ie cea REMC raul aM ee atess Cee ere her uae make eBay the world’s online marketplace - and create a serious IT challenge. That's why eBay collaborated with Sun to ensure unrivaled scalability and availability, thanks to a next-generation architecture powered by Java" technology and running on Sun Fire" servers. It helps eBay bring ‘more goods to more people, faster. The engine is the masses, The network is the computer” Share. @ Sun. Ore FROM THE EDITOR The Health of Business and the Business of Health A OF THIS WRITING, there have been 169 laboratory-confirmed human cases of HSNI influenza — ‘avian flu-and 910f those people have died. tisimpossible to know whether this particular strain of fu will mutate insuch away asto be easily transmis- sible between people and whether the virus will remain as lethal as it currently is. But if those things hap- pen and a pandemic ensues, then, “in the best of circumstances,’ the World Health Organization says, it would kill 2 milion to 7.4 milion people. In a worst-ase scenario, ‘more than 100 million would die, several times that number would become seriously il, and several times that number would have their lives disrupted by the ilnesses of families, neighbors, and colleagues. Demand would soar for govern: ment and civil help, including sanitation, police, public health, customs, and military services, while the supply would be curtailed by illness among government workers, Economies worldwide would suffer from the catastrophes visited upon shops, transportation services, factories, and virtually every other business. No one yet knows if HSN will be the instrument ofthat hrror. Two thingsare certain, however: No responsible business leader should be caught Unaware or unprepared if its, and if its not, some other pathogen will be~ some kind of pandemic will visit hu mankind someday. Itis in the service of preparedness that we have devoted all of Forethought this month to the topic of avian fu. To plan it, we imagined a CEO asking his or her team a series ‘of questions: "What do we need to know about this? What should we do-and not do? Are our current crisis manage- ment plans adequate? Can we take preventive measures? How do we know which risks are particularly acute for our company? How can we keep on top ofthe situation?” In the section, you will find a framework to help you answer our imagined CEO's questions: a preparedness checklist; tls to analyze your organization's vulnerabilities; and, equally important, guidance from Nitin Nohria and Warren Bennis, about organizational and leadership issues that have not been discussed elsewhere. Senior editor Gardiner Morse put the section tagether in collaboration with Denise Caruso, Denise, a former technology columnist forthe New York Times, founded the nonprofit Hybrid Vigor Institute in 2000 to help solve complex social and scientific problems, u most recently those presented by {global infectious disease. Her bookon Tisk and biotechnology will be pub- lished later this year. Health and the health care indus- tries are clearly topies of acute impor tance for executives in every industry and every land. The HSNT threat re- veals how vulnerable the world, and in particular emerging economies, are to any health care crisis. Gargan- tuan health care costs endangerthevi- abilty ofsome large American corpo- rations and are undermining Western Europe's social contract. The global pharmaceutical industry ~ “big pharma" is consolidating, as research costs expand and new drug pipelines constrict. Its no wonder we've been publishing extensively in the area, Two years ago, these pages featured Michael E. Porter and Elizabeth Olmsted Teisberg's “Redefining Competition in Health Care” (June 2004), They have developed that article with much new re search into an important book with the same til, just pub- lished by our colleagues at Harvard Business School Press. Steven Spear’ briliant “Fixing Health Care from the In- side, Today" (HBR September 2005) was runner-up for this year’s McKinsey Award, given annually tothe best article in HBR. (Pankaj Ghemawat’s December article, “Regional Strategies for Global Leadership’ was the winner) ‘This month we publish another major article, by HBS professor Regina Herzlinger (Her seminal uly 2002 HBR ar- ticle,*Les Put Consumers in Charge of Health Care,’helped tobegin the movement for “consumer-driven’ health care.) Her new article explores a conundrum: Why is it that inno vation in technology, in service delivery, and in business ‘models isso difficult to do and at the same time so obvi- ously needed? Years of research inthe health care industry haveenabled Herzlinger to uncover the half-dozen forces that line up to block or encourage innovation. These forces act on ‘every industry-butin healthcare they are particulary strong. Herzlinger also shows what participants in the industry including its customers~can do to break the barriers to in- novation and put the industry back on the road to health. Thomas A. Stewart Leave the BlackBerry” Wharton at home. Usivinsiy of Penwsvivasta Wharton Executive Education. We're all business.” hod Introducing the Wharton Learning Continuum. From the pre-program coursework through post-program Na tolow up, we don't have time for any interruptions. To get more out of executive education call 215,898,1776 or go to executiveeducation.wharton.upenn.edwHBROBS8, MERGERS AND ACQUISITIONS > June 18-23, 06; January 21-26, 07 STRATEGIC THINKING AND MANAGEMENT FOR COMPEMTIVE ADVANTAGE > July 24-28, 06; December 4-8, 08 EXECUTIVE DEVELOPMENT PROGRAM > September 10-2, 06; February 11-23, 07 MANAGING GLOBAL SUPPLY CHAINS: PRODUCTS AND SERVICES > hovember 27-December 1, 06 Harvard Business Review EDITOR AND MANAGING DIRECTOR ‘Thomas A. Stewart ASSISTANT MANAGING DIRECTOR aren Dillon (ae 2 ; EXECUTIVE EDITOR rai f ‘Sarah Clife = ART DIRECTOR Karen Player| y . CCE . SENIOR EDITORS. SENIOR. C rele ale David Champion PRODUCTION Diane L. cout Bronwyn Fryer est) Ben Gerson EorroniaL Paul Hemp nopuctioN Julia Kitty Gating Mose Chifstine Wilder M.Ellen Peebles senioR DESIGNERS Steven Prokesch ~ KagjalS. Asher ‘Anand P, Raman jill Manca senior eprron, Annette Triverte HBR ONLINE. FRODUETION FricHielleg COORDINATORS ASSOCIATE Josette Akresh- DITOR coe ileen Roche ‘Tisha Clisford Manusceipr COMMUNICATIONS Pane DIRECTOR Christina Bortz Cathy Olofson it 1 TC), {isa Burrell EDITORIAL i nl RoberaaA.Fusaro MANAGER Margaret K.Hanshaw Kassandra Duane s ® n ‘Andrew O'Connell EDITORIAL folded ASSISTANT Rs aaa epiton for _SiobhanC. Ford BUSINESS. DEVSPAENT — CONTRISUTING John T Landry ih 7.C.Fondulas execurive tprron Amy L Halliday ‘ao'aon gy A ugien oT eae Annie Noonan: Jane Heit au June aay A oemey EDITORAT-LARGE HARVARD BUSINESS SCHOOL PUBLISHING Waker Kiechel A NOTE TO READERS ‘The views expressed inartiles are the author and noe neces thos of Haron Bosines Revie, Harvard BUSES. School oc Harvard Universi Authors may have consaling or othe business reladonshipe ‘wae companies they dass. SUBMISSIONS ‘We encourage prspectv authors to follow HBR" Guidlines for Author” before submiftng manuscripts To obtain acomy please 00 or Web teat won bong eto ‘he Eos Harvard isies Reve 60 Hawand ‘iy Bester, MA oma; cr end email to or torah, Unsold manus be returod only ascompani by avelfaddresod stamped enelope {6 Harvard Way, Boston, MA 02363 (17783 2005 fo 617837408 intends sone ee VOLUME 84, NUMBER 5 May 2006 Printed inthe DSA. cS RO La OD Ireland, TT tah aeet clavine ir. e Amgen Tt) e Johnson & Johnson ITH 4 STS LLY SECT PAT) choose Ireland? TTC AO Ee © Highly Educated and Skilled Workforce Saree CC Early e Exemplary Compliance Record ORCC MICE AU Cg SUAVE UEC © Suitable Site Availability SE COHN Ireland, the #1 location outside of the U.S. for Biotechnology. &IDA www.idaireland.com [RELAND Dre rare ee rea) re eax eee TEL) Dn aE Pee) -3 innovation, ., AUNT @work se Successful innovation requires effective execution and thoughtful leadership. At MIT Sloan, we provide senior executives and managers with the tools and frameworks to drive innovation and turn today's good ideas into tomorrow's successful products and services. From technology strategy to system dynamics, financial engineering to life sciences, we offer cutting-edge programs that reflect the depth and expertise of our faculty and MIT's research distinction. 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Competitor rates and eligibility may vty at higher marai SIPC, 8 Nasa PREPARING FOR A PANDEMIC 20 ANlew Type of Threat ‘by JEFFREY STAPLES 22 HowaHuman Pandemic Could Start ‘by SCOTT F DOWELL AND JOSEPH S. BRESEE. 23. Survival ofthe Adaptive Dy NITIN NOHRIA 23 Leading forthe Long Run ‘Dy WARREN G. BENNIS 24 Getting Straight alk Right ‘by BxRUCH FISCHHOFF 25 Pandemic Planning ‘Checkist for Businesses 28 Visualizing Your Vulnerabilities ‘hy BARUCH FISCHHOFF 30 Avian Flu Resources 32, What to Expect from Government ‘Dy LARRY BRILLIANT 34 Limiting Exposure ofthe Legal Kind by PETER susseR 36 APreview of Disruption ‘by SHERRY cooPER 38 Staying Connected An Inierview with WILLIAM MACGOWAN 40 AllEyes on China ‘by WENDY DOBSON AND, BRIAN R. GOLDEN A survey of ideas, trends, people, and practices on the business horizon GRIST JA New Type of Threat... No one knows whether avian flu will evolve into a human pandemic. it ould, possibly, remain largely confined to bird populations and be remembered years hence as a scare that didn’t materialize, But itl stands between the best-and worstcase scenarios. So far,the HSN1 strain of avian flu has Infected millions f birds, mostly in Asia, but now increasingly in Europe and Aca it has spread, with difficulty, to ‘ewer than 200 people~although it has killed more than half of them. And itis evolving in ways that appear to allow it to infect a greater number of species, including pias, wild and domestic cats, ‘and dogs, From its origin in southern China in 2997, HSN has spread to ab ‘most 50 countries (atthe time ofthis \writing) and is nowe circulating through ‘Asia, Europe, the Middle East, and Attica, This advance, coupled with the emer- gence of mutations that may facilitate the infection across species, increases the Fisk ofa global pandemic. lFthe virus does mutate into a form that transmits easily ftom person to per- sen—and this s the pivotal unknown— inthe best case, the World Health Orga nization (WHO) says,2 million people ‘ould die, n the worst case, according to some experts! projections, up to 30% of ‘the world’s population could be stricken ‘over the course of roughly a year, resut- ing in as many as 150 million deaths and perhaps more thana billion people re- ‘quiring medical caret takes litle imagi- nation to envision the impact this could have on global business as employees ‘alll, supply chains fragment, and ser: vices fal. Should a pandemic emerge, it would become the sinale greatest threat to busi- ness continuity and could remain so for Up to-18 months. Companies need to de- velop rigorous contingency plans to slow the progress ofa pandemic and limit its impact on employees, shareholders, part ners, consumers, and communities. This will require more than simply double- checking the soundness of existing busi- nesscontinuty plans. ‘As companies start to address pan demic preparedness, they are discovering that a pandemic is fundamentally difer ent from other, more traditional bus ness continuity threats and is outside the scope of issues typically considered by continuity planers. Plans are usually de- signed to help companies respond to o- «alized threats—like fires, bombs, riots, earthquakes, and hurricanes that affect Infrastructure. Once the event has oc- ‘curred, it ts over and, while the effects may linger, recovery can begin. However, ‘2 pandemic isnt an isolate incident. Its, by definition, an unfolding global event, Because of air travel, many cities ‘around the world could be infected al- most simultaneously Current models suggest that the next pandemic is likely to come in three waves, with each wave sweeping across the globe in a matter of weeks and last- ing as long as three months. Sothere needs to be a shift in the nature of con- tinuty planning, away from strategies that protect infrastructure and toward May 2006 those that protect employees and their ability to conduct business during a sus- tained crisis, When companies ist began to wake up to the threat of avian fu, such strate ies often revolved around trying to stockpile antiviral medication as a stop- ‘gap measure, with the expectation that ina pandemic a vaccine would soon be- ‘come available. tis now clear that ant Virals would be in short supply and that Viral drug resistance would be likely to develop. What's more, an effective vac cine may not be available in appreciable {quantities for many months after a pan- demic is under way, and then shortages ‘and distribution problems could limit Use. Contingency planning by forward- looking companies, therefore is becom- ing more coordinated, headed by pan- demic or crisis teams that tap principal functions, including human resources, ‘operations, security legal counsel, and ‘communications. This planning focuses ‘on nonmedicalrskmitigation strategies {to reduce infection and maintain busi- ness continuity. Tracking a Potential Pandemic In doing their planning, businesses should look to the WHO's si-phase andemictracking model, which indi- ‘ates the WHO's assessment ofthe threat. We are now at phase three and have been for more than twoyears. (See "Tracking a Potential Pandemic’ below.) We will probably see larger and more frequent outbreaks and rapid progress ‘through phases four through sixif the virus becomes more easily transmissible among humans. Phase three is the point at which companies should develop risk mitigation plans, testing them with table- ‘top scenarios and site-level drills, which need to be updated regularly. By phase ‘our, the time for planning has passed, since any plans need tobe implemented by then. By phase five, it is far to late to start planning—it is time for intensive strategy execution ‘Any preparedness plan must address human facters, such as employee educa tion, hygiene, staff movement and evacu- ation, sick leave policies, and absenteeism. It must aso focus on operational issues— ‘managing supply chain and distribution- Interpandemic phase Low risk of human cases 1 ‘New virus in animals, no human cases Higher riskof human cases Pandemicalert New virus causes human cases Den cir ces ntand s ‘Source rl Heath Crgaization Now at phase 3 Companies Should develop "akmiteten pins a human transmission a forethought SPECIAL REPORT: PREPARING FOR APANDEM: network disruptions, for instance, and minimizing the interruption of essential services such as electricity, water, tele- ‘communications, transportation, and se curity. In response tothe appearance of avian flu cases in Turkey the government actually called on law enforcement to protect some hospitals in afected areas rom anxious locals who were seeking medical treatment, Such public fear is an underappreciated part ofthe threat, and ‘companies should anticipate that this, type of scenario may occur on a progres- sively larger scale in pandemic phases four five, and six. Ifthe flu becomes a true pandemic, much ofthe impact on business will de rive directly or indirectly from unprece- dented absenteeism, Experts believe that infected people wll be contagious for up totwo days before symptoms develop, ill for fve to eight days (in the absence of complications), and contagious fr seven days or more after symptoms go away. ‘During the peak periods, or waves, of a pandemic, companies could experience absentee rates between 15% and 30%, due tosickness, quarantines, travel restric: ‘tions, family care responsibilities, and fear of contagion. Itis tempting to think of pandemic planning as distinct from traditional con: ‘inuity planning, a one-off exercise re- {uiring one-oFa-kind preparation and response. But because of everexpanding global trade and the ease and speed of International travel, an avian flu pan- demic is one of an emerging class af ‘threats— including those posed by chem- «al, biological, or nudear terrorism—that ould cause sustained, systemic disrup- tion, Many businesses have yet to factor ‘these nontraditional threats into their continuity plans.As they do, they will find that they are framing a broader, more re silient approach to risk management that can better protect employees, operations, {and relationships, even in the face oftr- ditional threats. JEFFREY STAPLES, MD, Gefgstaple® internationals com) is @ senior medical anise fr tnternational SOS, a medical and secu ssitance company. He is ‘based in Singapore THE SCIENCE How a Human Pandemic Could Start Dy SCOTT. DOWELL AND JOSEPH 5. BRESEE lf there is anything predictable about Influenca, its that it has a propensity for change, That's why health officials are so ~ankiously watching the avian influenza A (HSNT) virus. The virus readily infects birds and has spread to some other species but so far has showna limited ability to infect humans. While rare in- stances of HSN1 passing from person to person have been documented, there is no indication that it can doso efficiently. “That could change. Atirregular inter: vals—three times in the past century—a new influenza subtype that is highly in- fectious in people has emerged. Up to 50 million people may have died as are sult oF the 1918-1919 influenza, and mi- lions more died inthe pandemics of 957 ‘and 1968, each of which resulted from 1s mutations. A series of mutations or single genetic reassortment event (a {ype of gene swapping among viruses) ‘ould enable HSN1 to spread efficiently ‘among humans, triggering @ pandemic. Human illnesses caused by HN fo! low a particulary aggressive course, often striking children and young adus.In- fluenza symptoms, including high fever, rapidly develop, often progressing to pneumonia. About half ofthe people in- fected withthe virus during the past two yearshave died as a result. The mortality Tate has raised widespread concern, ak though there is no way to know how high the rate would be fa pandemic emerged. For the pandemics mentioned earlier, the mortality rate did not exceed 2%. Should the virus become easily trans- rmissible between people, containing global spread is likely to be extremely dit ficult. Like the severe acute respiratory syndrome (SARS) virus, HSN1 may evolve into something that’ easly spread through coughing, sneezing, or contact with contaminated hands. Unlike SARS, it may be very hard to control by quar- ~antine if patients are infectious before developing symptoms. Inthe event of a pandemic, effective antivirals will cer tainly be in short supply. And because it isnot possible to make a vaccine in ad- vance (we need to have the pandemic version of te virus in hand before begin. ning development), it could be four to eight months after the start of pan ‘demic until the first vaccines are ready for distribution. ‘An important approach to limiting the spread of avian influenza among humans isto provide the public with the inforrma- tion and tools needed to keep it at bay, All things being equa, the difference be- ‘ween a best-and worst-case glabal sco nario may come down to how well gov- ‘emnments organizations, and individuals control people's exposure. A pharmaceu- tical panacea isnot likely to be an option. SCOTT & DOWELL, MD, MPH, i a global l= ease detection afcer and Josep S. BRESEE, Mo, isthe head of influenza epidemiology tthe Centers far Disease Controf ant Pre vention in Atinta, Survival of the Adaptive oy univ noma Much ofthe organizational thinking ‘bout avian flu, and about crisis manage- ment in general, has focused on prepare tion. Many companies, for example, have ‘created risk management teams to de- ‘velop detailed contingency plans for responding to a pandemic, This is neces- sary but not suficient, In the complex ‘and uncertain environment oF a sus tained, evolving crisis, the most robust ‘organizations will not be those that sim ply have plans in place but those that have continuous sensing and response ‘capabilities. As Darwin noted, the most adaptive species are the fitest Consider the organizations described below. Which one would fare better in a sustained crisis such as @ pandemic? ORGANIZATI Hierarchical, Centralized leadership ‘Tightly coupled (oreater interdependence among parts) Concentrated workforce Specialists Palicy and procedure driven Organization 2is clearly better posi- tioned to respond to evolving, unpre- dictable threats. We know from complex. ity theory that following a few basic crisicresponse principles is more effec: tive than having a detailed a priori plan in place. In fires, for instance, its been shown that a single rule - walk slowly toward the exit- saves more lives than complicated escape plans do. 1'm not saying that companies should not have comprehensive risk mitigation plans. They should be asking questions bout their supply chains and internal ‘organization lke, “What's our response if ‘one component goos down? What's our response iftwo components go down? Dowe have redundant computer sys- May 2006 tems?” But just as important, companies need to ask, “What realtime sensing and coordinating mechanism will we use to respond to events we can never fully anticipate?” Companies shouldn't rely solely on a specialized risk management team to see ‘them through a sustained crisis What if the team gets taken out? Instead, they need to develop the ability to rapidly ‘evaluate ongoing changes in the environ- ment and develop responses based on simple principles. This means that com panies need a global network of people

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