Saturday, March 30, 2019
Brexit: The bigger picture—Revitalizing UK exports in the new world of trade
Brexit: The bigger picture—Revitalizing UK exports in the new world of trade
The West of Shetland comes of age
The West of Shetland comes of age
Five trends shaping the future of Medicaid
Five trends shaping the future of Medicaid
OFSE quarterly: Oil price slump slows recovery
OFSE quarterly: Oil price slump slows recovery
Friday, March 29, 2019
Economic Conditions Snapshot, March 2019: McKinsey Global Survey results
Economic Conditions Snapshot, March 2019: McKinsey Global Survey results
Thursday, March 28, 2019
Wednesday, March 27, 2019
Digital India: Technology to transform a connected nation
Digital India: Technology to transform a connected nation
Tuesday, March 26, 2019
Organizational culture in mergers: Addressing the unseen forces
Organizational culture in mergers: Addressing the unseen forces
How to avoid losses and prune projects proactively
How to avoid losses and prune projects proactively
Monday, March 25, 2019
Saturday, March 23, 2019
China Brief: The state of the economy
China Brief: The state of the economy
Friday, March 22, 2019
The future of manufacturing
The future of manufacturing
Improving the management of complex business partnerships
Improving the management of complex business partnerships
The hidden benefits of value-added services in commercial lines insurance
The hidden benefits of value-added services in commercial lines insurance
Reducing lapses in healthcare coverage in the Individual and Medicaid markets
Reducing lapses in healthcare coverage in the Individual and Medicaid markets
Thursday, March 21, 2019
The tougher competitors in emerging markets
The tougher competitors in emerging markets
How residential energy storage could help support the power grid
How residential energy storage could help support the power grid
China’s chemical industry: New strategies for a new era
China’s chemical industry: New strategies for a new era
A winning growth formula for dairy
A winning growth formula for dairy
Wednesday, March 20, 2019
Advanced analytics in asset management: Beyond the buzz
Advanced analytics in asset management: Beyond the buzz
Technology + operations: A flywheel for performance improvement
Technology + operations: A flywheel for performance improvement
How to resist the allure of ‘glamour’ projects
How to resist the allure of ‘glamour’ projects
Tuesday, March 19, 2019
Monday, March 18, 2019
Five Fifty: Discharged
Five Fifty: Discharged
Divestiture in medtech: Are you the natural owner of your businesses?
Divestiture in medtech: Are you the natural owner of your businesses?
Saturday, March 16, 2019
Thomas L. Friedman: Why I’m optimistic
Thomas L. Friedman: Why I’m optimistic
Bancassurance: It’s time to go digital
Bancassurance: It’s time to go digital
Thomas L. Friedman: Lifting people back into the middle class
Thomas L. Friedman: Lifting people back into the middle class
Keys to a sustainable transformation: A conversation with Seth Goldstrom
Keys to a sustainable transformation: A conversation with Seth Goldstrom
Thomas L. Friedman: Why simple fixes don’t work anymore
Thomas L. Friedman: Why simple fixes don’t work anymore
Thomas L. Friedman: An interview with Mother Nature
Thomas L. Friedman: An interview with Mother Nature
Supercharging retail sales through geospatial analytics
Supercharging retail sales through geospatial analytics
Thomas L. Friedman: Technology moves in steps
Thomas L. Friedman: Technology moves in steps
The journey to a new tomorrow: A conversation with Ron Kuerbitz, CEO, agilon health
The journey to a new tomorrow: A conversation with Ron Kuerbitz, CEO, agilon health
Thomas L. Friedman: The three climate changes
Thomas L. Friedman: The three climate changes
Friday, March 15, 2019
Transforming Medical Affairs: Tapping the alchemy of storytellers and digital start-ups
Transforming Medical Affairs: Tapping the alchemy of storytellers and digital start-ups
The public–private imperative in urban mobility: A view from Canada
The public–private imperative in urban mobility: A view from Canada
New carmaker on the block: Byton’s CEO on China’s car of the future
New carmaker on the block: Byton’s CEO on China’s car of the future
Wednesday, March 13, 2019
Snapshots of the global mobility revolution
Snapshots of the global mobility revolution
What makes an organization ‘healthy’?
What makes an organization ‘healthy’?
Tuesday, March 12, 2019
Zero-based productivity: Going granular and end-to-end across the supply chain
Zero-based productivity: Going granular and end-to-end across the supply chain
Sharing in mobility: An interview with Lyft’s Raj Kapoor
Sharing in mobility: An interview with Lyft’s Raj Kapoor
How the oil and gas industry can improve capital-project performance
How the oil and gas industry can improve capital-project performance
Powering mobility’s future: An interview with WiTricity’s Alex Gruzen
Powering mobility’s future: An interview with WiTricity’s Alex Gruzen
How governments in emerging economies can help boost and sustain growth
How governments in emerging economies can help boost and sustain growth
An Executive Guide to the Spring 2019 Issue
The Only Way Manufacturers Can Survive
Vijay Govindarajan (Tuck School of Business, Dartmouth College) and Jeffrey R. Immelt (Athenahealth, New Enterprise Associates, Desktop Metal)
Although most manufacturers are beginning to flirt with emerging technologies, not one has successfully pulled off a digital transformation. CEOs still have to figure out the art and science of it. This article explores why it’s so difficult for industrial companies in particular and shares key insights from the authors’ deep experience and research. One of the authors (Immelt) spearheaded a digital transformation, among several other major change initiatives, at GE, and the other (Govindarajan) has been studying innovation and change in large companies, including GE, for decades.
GE was probably the first manufacturer to internalize that digital technologies could disrupt its businesses. It faced uphill battles in its efforts to start and sustain its digital transformation, and those experiences provide useful insights for executives wrestling with the challenge. To escape inertia and enable their companies to become digital-industrials, leaders of manufacturers must prevent core competencies from becoming rigidities that inhibit change, integrate digital hires with engineers (who learn, think, and function very differently) to form a new set of capabilities, and champion a shift from a culture of continuous improvement to one of constant innovation.
How Digital Leadership Is(n’t) Different
Gerald C. Kane (Boston College), Anh Nguyen Phillips (Deloitte), Jonathan Copulsky (Northwestern University), and Garth Andrus (Deloitte)
The rapid changes associated with digital disruption can be so disorienting that many of us assume the leadership handbook must be completely rewritten for the digital age. Is this true? Or are greater and greater levels of uncertainty causing us to neglect the essentials? Is it possible that the leadership challenges of the digital world are more the same than different, but we are overly focused on what’s different because we are so alarmed by the threats to the status quo?
There is something to be said for both arguments. Over the past five years, in a joint research project with MIT Sloan Management Review and Deloitte, the authors of this article have studied how business and leadership are changing as a result of digital disruption. They have found that while many core leadership skills remain the same, the particular demands of digital disruption call for certain new skills, as well. Here, they explore which are which and what can be learned from organizations that are digitally maturing — that is, those that have been transformed by digital technologies and capabilities that improve processes, engage talent across the organization, and drive new value-generating business models.
It Pays to Have a Digitally Savvy Board
Peter Weill (MIT Sloan School of Management and MIT Center for Information Systems Research), Thomas Apel (Stewart Information Services Corp.), Stephanie L. Woerner (MIT CISR), and Jennifer S. Banner (Schaad Cos. and BB&T Corp.)
As companies seek to improve their business models, customer experience, operational efficiency, and more through new technologies, their boards must help them move forward at a sufficient pace. Those that do are likely to see better financial results than those that don’t, according to a machine learning analysis of the digital know-how of all the boards of U.S.-listed businesses. After examining data from surveys, interviews, company communications, and the bios of 40,000 directors, the authors of this article found that companies with digitally savvy boards significantly outperformed others on key metrics such as revenue growth, ROA, and market cap growth.
When boards lack digital savvy, they can’t play their critical guiding role. But companies can fix that by understanding what kinds of characteristics to look for in existing and new board members, managing board agendas differently, and cultivating new learning opportunities.
Nondisruptive Creation: Rethinking Innovation and Growth
W. Chan Kim and Renée Mauborgne (INSEAD)
Although disruption is all around us, it isn’t the only way to innovate and grow. Indeed, a single-minded focus on disruption leads companies to overlook another important approach — what the authors call nondisruptive creation. This alternative approach involves creating new markets where none existed before.
Most companies remain stuck in the mindset that in order to create, you must disrupt or destroy, but that’s not the case. Nondisruptive creation breaks our existing frame on innovation and growth and allows us a much broader view of how to generate value. In this article, the authors define the concept, offer a framework to help leaders charged with driving innovation to achieve the kind of growth that best suits their company, explain which strategies trigger nondisruptive creation and which lead to disruption, and examine how managers can identify new problems to solve and new opportunities to seize.
What to Do When Industry Disruption Threatens Your Career
Boris Groysberg (Harvard Business School), Whitney Johnson, and Eric Lin (United States Military Academy)
When industries are disrupted, so are the people who work in them. Companies can shift and enhance their institutional know-how by hiring new people, but it’s difficult for individuals to swap out well-honed skills quickly enough to suit changing markets. Even as they recognize their need to gain new skills, they seldom adapt rapidly, because skills are accumulated slowly through years of formal education, training, and work experience. Learning takes time.
After World War II, managers who climbed the corporate ladder often had an expectation of implicitly guaranteed lifetime employment, inducing them to deepen their institutional knowledge and their commitment to the company. But today, people rarely stick with one organization for a lifetime. And so, as industry volatility has increased, the responsibility for career management has shifted from companies to individuals. In this article, the authors discuss how to diagnose the risks that disruptive industry forces pose to your career — and offer advice on how to mitigate the threats.
To stay ahead of developments that may disrupt your professional life, make two evidence-based diagnoses: How volatile is your industry? And what explains the volatility? Answers to those questions will equip you to disrupt your own career preemptively, if warranted. You might seek a new role in your company, deploy your skills with another company in the same industry, or bolster capabilities that make you attractive across industries.
A Structured Approach to Strategic Decisions
Daniel Kahneman (Princeton University), Dan Lovallo (University of Sydney and McKinsey & Co.), and Olivier Sibony (HEC Paris and Saïd Business School, University of Oxford)
Making strategic decisions — whether you’re considering an acquisition, figuring out whether to launch a new product, or choosing a startup to fund — involves boiling down a large amount of complex information so that you can rate competing options or arrive at a yes-no call on a single path. Such decisions are evaluative judgments and thus are highly susceptible to errors that stem from known cognitive biases or from random factors (known as “noise”).
The unreliability of human judgment has long been recognized and studied, particularly in the context of hiring. For instance, a vast amount of evidence indicates that unstructured interviews lead to evaluations that have very little predictive value. That’s because the interviewer forms a mental model (colloquially known as an “impression”) of a candidate, a process that psychologists have shown has three specific limitations: excessive coherence, a “quick and sticky” quality (we form our models rapidly and alter them slowly), and biased weighting.
The authors draw inspiration from that body of research and experience to suggest a practical, broadly applicable approach to reducing similar errors in strategic decision-making. They outline the core elements of that process, which, like the practice of structured interviewing in hiring, includes assessing attributes one at a time before arriving at a final judgment. The authors explain how to apply this approach to both one-off and recurrent decisions. The process is easy to learn, involves little additional work, and (within limits) leaves room for intuition.
Understanding China’s Next Wave of Innovation
Mark J. Greeven (IMD), George S. Yip (Imperial College Business School), and Wei Wei (GSL Innovation)
In recent years, a handful of Chinese companies have emerged as global innovators and have garnered a lot of attention. This group includes online retail giant Alibaba, appliance maker Haier, search and data technology provider Baidu, and Tencent, a provider of a social communication and gaming ecosystem. Although these businesses are challenging the R&D strategies of foreign multinationals and providing valuable lessons on how to make ideas commercially viable, there’s a less obvious force to be reckoned with in China as well. Thousands of innovative companies are quietly disrupting numerous industries, overtaking incumbents, and developing new products and new business models. From electronics startups to manufacturers of hand tools, these emerging innovators are not easy to spot — yet they pose real threats, often in unexpected places.
The authors interviewed hundreds of executives, entrepreneurs, and investors in China and studied more than 200 Chinese companies in an effort to understand how innovation is being practiced there and how it is changing. Through this research, they identified three types of emerging innovators, each of which presents a different set of challenges for rivals. The authors refer to them as hidden champions, tech underdogs, and change makers. They describe each type of innovator in detail so that companies seeking to operate in China or compete globally can see how each one conducts business and understand what multinationals may be up against in the future. To stay in the game, non-Chinese multinationals must look beyond industry borders, be attuned to these potential threats, and rethink their assumptions about how to innovate successfully.
When Patients Become Innovators
Harry DeMonaco (MIT Sloan School of Management), Pedro Oliveira (Copenhagen Business School), Andrew Torrance (University of Kansas School of Law), Christiana von Hippel (University of California, Berkeley), and Eric von Hippel (MIT Sloan School of Management)
Health care consumers are increasingly able to conceive and develop sophisticated medical devices and services to meet their own needs — often without any help from companies that produce or sell medical products. This “free” patient-driven innovation process enables people to benefit from important advances that are not commercially available. Commercial producers of medical devices and services can benefit, too. For them, patient do-it-yourself efforts can be free R&D that informs and amplifies in-house development efforts.
In this article, the authors examine two examples of free innovation in the medical field: one for managing type 1 diabetes and the other for managing Crohn’s disease. They set these cases within the broader context of the “free innovation” movement that has been gaining momentum in an array of industries and apply the general lessons of free innovation to the specific circumstances of medical innovation by patients. They also explore some of the nuanced questions surrounding patient innovation, such as safety concerns and the legal implications of DIY designs. Even in cases where there are significant safety risks, the authors think it would be a mistake to limit patient innovation. When it addresses medical problems unserved by commercial solutions, they argue, we may well see a net gain in safety and quality of life for the whole population of affected patients. And we can expect safety to improve as low-cost clinical trial methods are developed to enable patient communities to test their own innovations.
An Executive Guide to the Spring 2019 Issue
Growth Is Not a Zero-Sum Game
My fifth-grade daughter is learning some basic laws of physical science in school this year, and I’ve been thinking about one of them in relation to a few articles in the spring 2019 issue of MIT SMR. Here’s the law, paraphrased somewhat: In a closed system, energy can neither be created nor destroyed. It’s just rearranged.
Could something similar be said about businesses and the value they generate? Companies are destroyed all the time — whether by their own hand, by macro forces, or by competitors they underestimated or didn’t see coming. But each time a new player emerges, is it always at the expense of something else? Should we view growth and destruction as simply value rearranged?
Far from it, argue INSEAD professors W. Chan Kim and Renée Mauborgne. They coin the term nondisruptive creation to describe how lots of new markets have come into being without negative consequences for existing industries and businesses. The authors walk us through a range of examples (life coaching, microfinance, online dating) and provide a framework for defining new problems to solve and seizing new opportunities. They remind us that companies needn’t destroy in order to create and grow.
Still, many do, and organizations that are behind the curve digitally are especially vulnerable to disruptive threats. No one knows this better than leaders of industrial companies. Dartmouth innovation expert Vijay Govindarajan and former GE CEO Jeffrey R. Immelt explain how tech giants, digital natives, and startups swooped in to create a market for studying machines’ performance data and helping manufacturers’ customers get more out of what they’ve bought. That’s an opportunity the manufacturers might have carved out for themselves if they’d been further along in their digital transformation efforts.
Through their research and experience, Govindarajan and Immelt have come to believe that survival in the fourth industrial revolution requires full-on commitment to going digital. That’s tough to manage in companies that are geared for continuous improvement rather than constant innovation, the authors say. But not doing it is no longer an option, and they provide hard-earned insights about fighting the inertia that inevitably sets in.
Of course, when industries are at risk, so are their people. Harvard Business School professor Boris Groysberg and his coauthors Whitney Johnson and Eric Lin share what they’ve learned about managing careers in volatile settings. Drawing on their analysis of the professional services industry and on existing research across sectors, they offer useful advice on how to preempt your own disruption by spotting early signs of volatility at your company, transferring your skills within your industry, and making yourself an attractive candidate in other industries.
How can we think about all this in light of the energy-conservation law? I suppose the difference for business is that it’s not bound by a closed system. When companies create something that doesn’t eat into anyone else’s share of market, mind, or wallet, they open up a new world of possibility for themselves and for the people who lead and operate them. And new laws may apply.
Growth Is Not a Zero-Sum Game
Monday, March 11, 2019
Friday, March 8, 2019
Spending reviews: A more powerful approach to ensuring value in public finances
Spending reviews: A more powerful approach to ensuring value in public finances
A practical approach to supply-chain risk management
A practical approach to supply-chain risk management
The trends transforming mobility’s future
The trends transforming mobility’s future
Solving the rate puzzle: The future of electricity rate design
Solving the rate puzzle: The future of electricity rate design
Making electric vehicles profitable
Making electric vehicles profitable
Thursday, March 7, 2019
Driving the automotive customer experience toward the age of mobility
Driving the automotive customer experience toward the age of mobility
The B2B analytics playbook: Capturing unrealized potential in telcos
The B2B analytics playbook: Capturing unrealized potential in telcos
Most of AI’s business uses will be in two areas
Most of AI’s business uses will be in two areas
AI in production: A game changer for manufacturers with heavy assets
AI in production: A game changer for manufacturers with heavy assets
How to be objective about budgets
How to be objective about budgets
Wednesday, March 6, 2019
Dozens of countries are in talks to regulate cross-border e-commerce
Dozens of countries are in talks to regulate cross-border e-commerce
How to take the ‘outside view’
How to take the ‘outside view’
Five Fifty: The silo syndrome
Five Fifty: The silo syndrome
Putting people at the heart of public-sector transformations
Putting people at the heart of public-sector transformations
Monday, March 4, 2019
Sunday, March 3, 2019
Australia’s automation opportunity: Reigniting productivity and inclusive income growth
Australia’s automation opportunity: Reigniting productivity and inclusive income growth
Saturday, March 2, 2019
Thomas L. Friedman and James Manyika: The world’s gone from flat, to fast, to deep
Thomas L. Friedman and James Manyika: The world’s gone from flat, to fast, to deep
Maximize the lifetime value of your sales force
Maximize the lifetime value of your sales force
Friday, March 1, 2019
The platform play: How to operate like a tech company
The platform play: How to operate like a tech company
The ‘digital land grab’ in fashion
The ‘digital land grab’ in fashion
Why corporate-center efficiency matters
Why corporate-center efficiency matters
Leadership beyond the C-suite
Leadership beyond the C-suite
The difference between good and bad sales training: A closer look at certification
The difference between good and bad sales training: A closer look at certification