Innehållsförteckning för Winter 2018 från MIT Sloan Management Review

Things move so fast in our digitized world that it can feel as if there is no safe place to position yourself — or your organization. How do you anticipate where to go next — whether considering your company’s strategy or your own career — when the winds of change sweep from every direction? You can’t know the right move for certain. And even when you do make a good call, you’ll soon face a new threat of obsolescence. We all need to accept that there are no safe havens — for us or our companies. We simply must be prepared to stay on the move. But whatever you do next, wherever you go, don’t head for the middle. Not the middle of a relationship, not the middle of an…

There is no question that artificial intelligence (AI) is presenting huge opportunities for companies to automate business processes. However, as you prepare to insert machine learning applications into your business processes, I recommend that you not fantasize about how a computer that can win at Go or poker can surely help you win in the marketplace. A better reference point will be your experience implementing your enterprise resource planning (ERP) system or another enterprise system. Yes, effective ERP implementations enhanced the competitiveness of many companies, but many other companies found the experience more of a nightmare. The promised opportunity never came to fruition. Why am I raining on the AI parade? Because, as with enterprise systems, AI inserted into businesses drives value by improving processes through automation. But eventually, the…

MANY COMPANIES TODAY understandably focus on workplace diversity — issues such as how to increase diversity, how to foster sensitivity to it, and how to manage a diverse workforce. But, according to MIT Sloan School professor Evan Apfelbaum, managers should also be cognizant of another, related topic: the problems associated with homogeneity. Recent research, including Apfelbaum’s own, has found, for example, that racially homogeneous groups are less rigorous in their decision-making — and make more mistakes — than diverse ones. Apfelbaum, the W. Maurice Young (1961) Career Development Professor of Management and an associate professor of work and organization studies at the MIT Sloan School, spoke with MIT Sloan Management Review editorial director Martha E. Mangelsdorf. What follows is a condensed and edited version of their conversation. MIT Sloan Management…

IN 2011, Groupon Inc. announced plans for a highly anticipated initial public offering. But enthusiasm for the offering waned when the U.S. Securities and Exchange Commission (SEC) issued a comment letter questioning Groupon’s use of a profit metric it called “adjusted consolidated segment operating income.” To our knowledge, no company had ever used that metric before; it was intended to measure operating profit without including marketing expenses, stock-based compensation, and acquisition-related costs. Management argued that a $420 million loss from operations reported on its 2010 income statement should really be considered a $60 million gain. For decades, companies have used custom metrics that don’t conform to generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS) as supplements to their official financial statements. (Although we use the term “non-GAAP”…

A New Approach to Designing Work Nelson P. Repenning (MIT Sloan School), Don Kieffer (MIT Sloan School and ShiftGear Work Design), and James Repenning (ShiftGear Work Design) pp. 29-38 The goal of this article, according to the authors, is to help managers understand several key work design principles that undergird not only agile practices in software but also Toyota Motor Corp.’s well-known production system. Understanding these underlying work design principles — through a framework the authors call dynamic work design — enables managers to create work processes in their own organizations that are both more flexible and more efficient. Traditionally, an academic theory known as contingency theory has suggested that if work consists of well-defined tasks (for example, assembling components), then it is best to organize it serially, like a…

Learning from da Vinci By now, you would think that the contours of Leonardo da Vinci’s genius would be fairly well established. Revered for artistic masterpieces such as the “Mona Lisa” and “The Last Supper,” da Vinci, who died in 1519, was a gifted engineer as well as a student of, among other things, anatomy, birds, optics, and geology. For decades, he recorded his ideas, large and small, in thousands of pages of notebooks. In a new biography, Walter Isaacson, who has also written biographies of Steve Jobs, Albert Einstein, and Benjamin Franklin, calls da Vinci “history’s consummate innovator.” In a Wall Street Journal article titled “The Lessons of Leonardo: How to Be a Creative Genius,” Isaacson offered three lessons for those seeking to learn from da Vinci. The first…

Today, more than ever, the demands posed by issues of cybersecurity clash with both the need for innovation and the clamor for productivity. Increasingly, cybersecurity risk includes not only the risk of a network data breach but also the risk of the entire enterprise being undermined via business activities that rely on open digital connectivity and accessibility. As a result, learning how to deal with cybersecurity risk is of critical importance to an enterprise, and it must therefore be addressed strategically from the very top. Cybersecurity management can no longer be a concern delegated to the information technology (IT) department. It needs to be everyone’s business — including the board’s. Cybersecurity Enters the Boardroom Network breaches have become so routine that only the most spectacular events, such as the recent…

BUSINESS MODEL INNOVATION has become an increasingly hot topic in management circles, and understandably so. No management activity is more important than having clarity about how the organization creates, delivers, and captures value. It requires, among other things, knowing what customers want, how value can be best delivered, and how to enlist strategic partners to achieve maximum benefit. Although the ability to develop strong value propositions can enable companies to “get by,” in our view many of today’s most successful businesses are those that are able to place themselves in the “sweet spot” of business model scalability. Scalability is about achieving profitable growth and is therefore a fundamental consideration for managers and investors alike. If managers are incapable of factoring scalability attributes into their business model design, they risk being…

In contemporary society, many people, particularly those under the age of 30, rely on their smartphones for a variety of important activities, including waking up in the morning, listening to music, following the news, finding bus schedules, and communicating with friends and family. A 2015 survey by the Pew Research Center found that 15% of Americans between ages 18 and 29 were “heavily dependent” on their smartphones for online access. There is no question that smartphones make our lives easier and more connected. But at what cost? Several studies have warned that excessive phone use can affect cognitive abilities, sleep, the quality of social interactions, and the ability to engage at work. Based on the behavior we observed in our classrooms and the extent to which technology is infiltrating young…

We don’t typically think of the jobs that we perform as commodities. The Merriam-Webster dictionary entry for commodity describes it as “a mass-produced unspecialized product.” But most of us view our jobs as specialized or somehow differentiated. We typically believe that we do them differently, and often better, than anyone else with the same job. In fact, we’d probably argue that no one does exactly the same job we do — that we perform at least a slightly different set of tasks, or perform them in a slightly different way, than any coworker. We may well be right about that, but the world of business and management may feel otherwise. Jobs are increasingly viewed as undifferentiated and interchangeable across humans and machines — the very definition of a commodity. Outsourcing…

MOST RESEARCH ON open innovation has focused on the use of ideas and knowledge from outside the organization in the development of products and services. But openness can be useful for process innovation, too. Our research shows that manufacturers can benefit substantially when they look for ideas beyond the factory gates, especially when their operations are already advanced. We often meet managers in manufacturing companies who keep process innovation activities tightly under wraps. Some see their processes as a source of competitive advantage that should not be shared with anyone. Others consider them organizational knowledge that could be detrimental to expose to outsiders. Some companies have good reasons for keeping process innovations concealed. For example, a combination of process and product innovation often jointly results in competitive advantage for a…

Failure alone does not teach. If there are an infinite number of bad ideas, eliminating one gets us no closer to a good idea. FOR A NEW BUSINESS to succeed, many assumptions have to prove true. Testing assumptions in a logical order gives the team the best chance of making course corrections early — and not wasting time and money. In this essay, I outline a method for (1) identifying the assumptions or unknowns and (2) resolving these assumptions on the basis of three parameters: severity, probability, and cost of resolution. Between stints in academia, I spent more than 20 years in marketing, engineering, and general management in both startups and public companies. Most pertinent to this essay, I served as vice president of engineering for Align Technology Inc. from…

IN A RECENT short essay titled “Survival Skills for a Digital World,” which appeared in our fall 2017 issue, MIT Sloan Management Re v i e w editor in chief Paul Michelman wrote that today’s managers need “to embrace the demands of change.” Given the rate of change and the extent to which business environments are shifting as a result of digital technologies, Michelman noted that it’s helpful for businesspeople to accept change as a constant. “The kind of transformation we are experiencing in business today isn’t easy for anyone,” he wrote. “However, once you accept the truth that change is ongoing, change becomes more about opportunity and less about challenge.” One MIT SMR subscriber had a different view. Responding to Michelman’s essay, reader Tony Pavone, director of process engineering…