To cut global emissions in half over the next 40 years, as scientists recommend, clean technologies must be rapidly rolled out on a vast scale-but in the past they have taken up to 30 years to get to the mass market. How can we speed things up and make time-to-market more predictable? For starters, by comparing rates of technology implementation and patenting activity.
Chinese business culture is unique-but not in all the ways outsiders tend to assume. The authors' research reveals three principal myths, kernels of which are true.
Managers often focus on cost and ignore benefits to customers when pricing products. That's a big mistake, because not all components are valued equally.
A look at global bailout and stimulus levels as percentages of GDP helps identify which economies will be stressed and which will have the resources to bounce back.
It's not what you say; it's how you say it, and MIT professor Sandy Pentland has the data to prove it. He has created ingenious devices that record the social signals people send-their tone of voice, length of conversation, gesticulation, proximity to others, and the like. In short, the devices allow Pentland to measure subjects' charisma. Armed with that information, he can predict who will prevail in competitive business situations, such as business plan contests or salary negotiations, without even knowing what they have to say. In this article, he explains his studies to HBR.
For the past 33 years, Prahalad, a professor of strategy at the University of Michigan's Ross School of Business, has ended all his MBA and executive education courses with an exhortation: Managers must remember that they are the custodians of society's most powerful institutions, and as such they must hold themselves to a higher standard. They must strive to achieve success with responsibility. He offers 11 specific pieces of advice intended to spur his listeners to reexamine their values before plunging into everyday routines. Among them are 1) Display a commitment to learning and developing yourself. 2) Put personal performance in perspective. 3) Realize the importance of loyalty to organization, profession, community, society, and, above all, family.
Lots of time in the lab and the Eureka! moment are synonymous with innovation. Often, however, the best and most successful ideas are the result of mere plodding and some prosaic practices. This author describes four such practices and the key steps that can lead to successful innovation.
MBA education has come under heavy criticism in recent years. The author argues that much of the criticism is fair, though superficial, focusing on the extent of ethics training or the lack of real-world experience embedded in MBA programs. The real problem, he says, is that MBA programs fail to prepare graduates to make smart decisions in the face of complexity and ambiguity. At its root, the reason MBA programs fail to produce better thinkers is structural, and it runs across three dimensions: where the curriculum's content should be deep, it is shallow; where it should be broad, it is narrow; and where it should be dynamic, it is static. The author shows how each of the three elements of a '3D' MBA is being developed at the Rotman School of Management at the University of Toronto.
Research in Cognitive Psychology and the newer field of NeuroEconomics consistently demonstrates that people violate the strictures of rationality on a regular basis. This literature has generated a lengthy list of irrational behaviors to which many of us are subject on any given day, whether we like to admit it or not. These well-documented violations of rationality have, in turn, spawned a list of biases that can be used to define 'rational thinking'. That is, we can assess degrees of rational thinking in terms of the number and severity of cognitive biases that an individual displays. The authors describe some of the most common biases that challenge rational thinking, in the hopes that a better understanding of them will foster more bias-free decision making. Topics covered include 'serial associative cognition', 'my-side processing' and 'mindware gaps'.
Research by esteemed academics has uncovered a wide variety of biases that plague decision makers on a regular basis. Thanks to them, we know that predictable errors lead people to commit sub-optimal acts on a regular basis, ranging from undersaving for retirement to engaging in needless conflict and accepting the wrong jobs. Unfortunately, we have yet to uncover systematic strategies to help people overcome these biases and behave more optimally. The authors get started on this path, focusing on strategies that can lead to better decisions, which involve leveraging the human tendency to default to 'Type 1' -- or automatic -- mental processing.
In recent years, designers have been applying their skills to a host of problems that were once the territory of business strategists and approached through analysis. With this shift has come the realization that a design-based approach, or 'design thinking', is well suited to tackling some of the most complex challenges organizations face. The authors, both of whom work for renowned design firm IDEO, argue that the first step is for managers to understand the differences in the ways that they and designers go about solving problems. Managers, they say, tend to follow a very analytical process, making decisions by understanding all of the available options and rigorously determining the best path forward. In contrast, designers prototype and iterate ideas, learning as they go and often developing new ideas and understanding of the problem along the way. They detail the designer's approach - which includes embracing constraints and 'building to decide', showing how this leads to 'evolution through design'.
The author and design practitioner describes how to go about creating new businesses or reinventing existing ones. He argues that the best way to manage the inherent uncertainty of innovation is to look beyond the existing data to find out where value truly resides for your business. One of the most effective methods for doing that, he says, is to create an 'opportunity map' -- a visual representation of the business landscape that guides future strategy by synthesizing met and unmet consumer needs, emerging discontinuities such as cultural and technology trends, both direct and indirect competitive activity, and internal and external competitive competencies. This approach, he says, can help leaders navigate complexity and chart a path to future growth.
Some of the toughest decisions in life are so-called 'should vs. want' decisions: you know that you should be exercising at the gym, but you would rather go to the movies with friends. It is not that people don't know what they should be doing, they simply behave in a seemingly irrational manner when faced with tempting consumption opportunities. The authors introduce the Theory of Decision Points, which suggests that external interventions can help individuals curb excessive consumption by providing them with an opportunity to pause and think about consumption. They show that in the case of individuals who are seeking to control consumption, decision points can snap them out of an automatic mode to a more deliberative decision-making mode.
Whether your aim is to lose weight, save for retirement or quit smoking, most of us have a clear idea of the long-term goals that we would like to achieve for ourselves. Unfortunately, most of us also fail to implement the requisite course of action to produce these outcomes. Why don't we simply make the decisions necessary to make our goals a reality? The authors argue that Behavioral Economics can provide solutions to problems that predictably arise from individual behavior. Not only does it acknowledge that human behavior is often far from optimal, but it also identifies a variety of decision errors and biases that contribute to departures from optimality. The authors show that many of the same decision errors that produce self-destructive behavior in the first place can actually be used to people's individual and collective benefit.
A large body of research shows that people prefer 'smaller, sooner' payoffs to 'larger, later' payoffs when the smaller payoffs are imminent, i.e. when the 'sooner' of the 'smaller' is pretty close to 'right now'. However, when both payoffs are distant in the future, people tend to prefer the larger payoff, even though the time lag from the smaller to the larger payoff would be the same as before. In other words, something, somewhere makes people 'flip' their preferences. The author argues that this human tendency - called Hyperbolic Discounting -- is equally prevalent in senior management teams, and that it manifests itself in various types of behavior, including 'itches', addictions, delusions, sellouts and 'Utopian dystopias'.
This case explores recent dynamics of the real estate industry from the point of view of Sussex and Reilly, a Chicago real estate company serving the city market. The case includes national trends related to the use of the Internet; the appearance and growth of new competitors, many of them national firms using the Internet; and changes in the market conditions of residential real estate. The particular period when the case takes place, June 2005 to July 2007, was a time of turmoil in terms of technologies, business models, legal issues, and market conditions. While originally the case concentrated on the effects of the Internet on residential real estate, it became more complicated because of the beginning of a very severe crisis compared by many to the Great Depression. Founded in 2000, Sussex and Reilly was a dynamic, young firm, providing services to developers and commercial and residential clients in Chicago. In 2006, Sussex and Reilly's residential division employed 250 agents and had four offices in some of Chicago's most affluent neighborhoods.
It was June 2008 at Midland Bull Test in south-central Montana. The (A) and (B) cases feature Leo McDonnell, Jr. and his wife "Sam," the owners of Midland Bull Test, a long-time leader in the performance testing of bulls. Leo was a charismatic entrepreneurial leader in the cattle industry. Sam was an astute manager of their business affairs. In 2007, the two invested $700,000 in a feeding and monitoring system to produce feed efficient cattle that consumed less feed and produced less methane, a powerful greenhouse gas. Cattle produced 20% of the methane emissions in the US, and feed efficient cattle produced up to 40% less methane. Leo felt the potential for reducing methane production through increases in feed efficiency and other improvements in ranch practices was huge. He saw the feed efficiency program as environmentally unique. ... sustainable," and "part of a growing movement to reduce greenhouse gases in a socially responsible way." In June 2008, Sam was concerned about meeting their cash flow objectives. Leo said, "I agree, but global warming is important too." The conflicting interests emerge when Sam says, "Show me how 'social responsibility' adds value to Midland Bull Test. Why should we risk our money and reputation on going green?" The (A) case focuses on Leo and Sam's analysis of installing an anaerobic digester to convert the biogases in manure to electricity for use or sale. The (B) case focuses on their marketing strategy and the possibility of positioning Midland as a green business. In addition, Leo and Sam wanted to leverage the emerging relationship with Pfizer who was developing DNA-marker technologies to improve animal health, quality, and productivity.
In August 2009, Petrobras announced a new oil discovery in carbonate reservoirs in the Bacia de Campos (Campos Basin). The discovery well was located nearly 120 km off the coast of Rio de Janeiro, at a depth of 1,000 meters. The discovery would be the object of an Assessment Plan, before exploration could begin. Learning objectives: The task is to evaluate Petrobras proposed investment in the Bacia de Campos oil field. The model must project capital expenditures, operating costs, production volumes and subsequent decline rates, revenues, income taxes, working capital all on an annual basis for a period of more than 30 years.