From the editor.

Capital structure says a lot about a company to analysts, lenders and others, and a couple of common goals are maximizing flexibility and enhancing credibility, according to a series of finance executives interviewed for our cover story by writer Paul Sweeney. Indeed, a couple of companies spoke about switching gears, from being heavy on equity to heavy on debt, depending on their strategy at the time.

In a second article, two consultants from Marakon Associates argue for a better linkage between capital management and strategy--achieving a more critical, better-informed and more flexible process that links strategy more closely to long-term value creation.

Our special section on overseas outsourcing covers a blazing-hot topic in business these days. As global companies wrestle with weak economies and slow growth, they have become intensely focused on paring routine costs. What began with outsourcing information technology functions--especially computer programming--has morphed into something far larger that includes everything from call centers and customer service to financial analysis and treasury operations.

While India remains the biggest mecca, other venues have been coming on strong, and companies are now debating the merits of issues such as "twoshoring" and "nearshoring" (the article explains these and other terms.) Writer Gregory Millman looks at the roles played by Accenture, Cap Gemini Ernst & Young, IBM Business Consulting Services and other huge consulting firms in the movement to bring added value to outsourcing.

What remains unclear, however, is the impact on employees and local communities as outsourcing threatens to permanently remove knowledge jobs. As money manager and consultant Peter Cohan observes, "Outsourcing will continue to raise fundamental questions about the role of the corporation in American society [and] may redraw the lines between where the interests of shareholders end and where those of government begin."

Prozac is a household name, but one drug alone can't keep a company thriving forever. Eli Lilly & Co. CFO Charles Golden talks to Ramona Dzinkowski about the drugmaker's efforts to maintain its pipeline, including a global alignment of its research and development programs.

Managing a personal career, as many readers know, can be an enormous challenge in a slow and slippery economy. Recruiter Hank Rennar urges finance executives to be proactive about marketing themselves and their skills.

Noted economist, professor and author Robert Schiller has a reputation for being somewhat bearish on the financial markets, but as he related in an extended talk with Managing Editor Ellen Heffes, economic growth in historic terms generally is slow. His wish is for a new financial order in which better risk management allows individuals to be more comfortable with being "venturesome."

You may note some minor changes in the typography and page headers in this issue, the result of a modest design update by Art Director Laura Avello. Every magazine, I think, needs a little refreshing now and then; the last changes to Financial Executive had been made more than a year ago. Laura's design sense shows up in every page of the magazine and is one of our best features; our goal is to create an attractive, compelling publication that is easy to navigate through, and that means periodically reexamining our presentation and trying to do it even better.