John Bonforte, the owner and president of Monmouth Rubber & Plastics, a small private rubber manufacturing company in Long Branch, New Jersey, needed to decide whether to accept an offer from a potential buyer for the business. Monmouth had been a successful company with a strong family culture since John founded it in 1964, but now in 2008 there were a number of factors that gave him reason for concern and to consider whether it was time to sell. The world economy was showing signs of slowing down. Other rubber manufacturers were forced to close down. The long term sales forecast for Monmouth was not promising. Further, the city of Long Branch, which had been in decline for years, had established a redevelopment zone for the oceanfront and its adjacent neighborhoods in 1996. The city determined that it would invoke eminent domain for properties within the redevelopment zone in need of improvement. The private homeowners and commercial business owners who were located in the designated area, including Monmouth Rubber, were compelled to negotiate with a property developer that had been contracted by the city. Many property owners refused to sell, and the case was on appeal with the New Jersey Superior Court. This created significant uncertainty surrounding Monmouth Rubber's ability to remain in its current location. At 67, John could sell the business and retire. Although his son, John Jr., had been employed by Monmouth for several years and was the firm's sales manager, there was no formal succession plan. John Jr., however, had expressed an interest in taking over the business. With a lucrative offer on the table, John needed to consider the changing competitive landscape for the industry, the weakened economic conditions, and the eminent domain. This case is suitable for courses in family business management, and it can be especially useful as an introductory case or as a second case.

Murphy Stores is a field case involving a major retailer deciding whether to allocate $7 million of its remaining (and limited) capital budget to either an investment in RFID technology to reduce merchandise theft from stores, or to invest in new energy-efficient store lighting to reduce operating costs and be better for the environment, or some combination of the two. The two alternative investments focus on making financial improvements in two different aspects of Murphy Stores' operations: decreasing "shrink" due to theft and saving on electricity costs. The case offers the opportunity to learn about retail industry operations as well as to make multiple full NPV discounted cash flow analyses. This case offers the opportunity to discuss trade-offs between selecting lower-risk capital projects and higher risk projects with higher expected returns but more variability in potential outcomes. The case illustrates the importance of sensitivity and scenario analysis in project evaluation.

This is an MIT Sloan Management Review article. In this article, the author examines agile as a management practice through a case study of ING bank in the Netherlands, which has adopted agile across its headquarters in Amsterdam. The research is based on in-depth interviews with 15 ING executives and many front-line employees. The article highlights key learnings at ING, largely from the point of view of the senior executives of the bank, and explores the challenges of implementing agile in an established organization, focusing on five lessons: 1. Decide how much power you are willing to give up. Agile shifts power away from those at the top and puts ownership in the hands of those closest to the action. Unless top executives are willing to accept that they are surrendering some status and power, agile will not be a good fit. 2. Prepare stakeholders for the leap. ING executives had to sell agile to nervous stakeholders, including board members, employees, and bank regulators. For example, executives assured regulators that finance, compliance, and legal functions would continue to be managed in the traditional way. 3. Build the structure around customers -and keep it fluid. Like other approaches to management, agile is focused on customers. ING in the Netherlands has tried to keep its organizational structure fluid so that it can evolve to do what's best for customers. 4. Give employees the right balance of oversight and autonomy. A quarterly goal-setting process is part of the agile structure at ING in the Netherlands. This has been a learning process. Initially, groups defined goals that were comfortably achievable, and executives had to urge them toward more ambitious targets. 5. Provide employees with development and growth opportunities. The team-based structures used in agile can be scary for employees used to having their personal development and career progression mapped out by HR departments or the mainstream career trajectories of a given industry.

This is an MIT Sloan Management Review article. 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. Some common non-GAAP measures include adjusted earnings before interest, taxes, depreciation, and amortization (known as adjusted EBITDA), free cash flow, funds from operations, adjusted revenues, adjusted earnings, adjusted earnings per share, and net debt. However, as the authors point out, it's not unusual for these alternative measures to lead to problems. Since companies devise their own methods of calculation, it's difficult to compare the metrics from company to company -or, in many cases, from year to year within the same company. According to the authors, alternative measures, once used fairly sparingly and shared mostly with a small group of professional investors, have become more ubiquitous and further and further disconnected from reality. In 2013, McKinsey & Co. found that all of the 25 largest U.S.-based nonfinancial companies reported some form of non-GAAP earnings. Press releases and earnings-call summaries often present non-GAAP measures that are increasingly detached from their GAAP-based equivalents. In addition to creating potential problems for investors, the authors argue, alternative metrics can harm companies themselves by obscuring their financial health, overstating their growth prospects beyond what standard GAAP measures would support, and rewarding executives beyond what is justified. Board members, top executives, compliance officers, and corporate strategists need to make sure that whatever alternative measures companies use improve transparency and reduce bias in financial reports. Although no standard is perfect, the authors note that GAAP and IFRS standards provide a foundation for consistent measurement of corporate performance over time and across businesses.

This is an MIT Sloan Management Review article. How can managers reduce the number of "unknown unknowns" a project faces? Even projects that employ sophisticated techniques for risk management can encounter surprising derailments. But new research shows that modeling a project's subsystems helps expose risk areas. So, too, can scenario analysis, the use of checklists and data mining. "Directed recognition, which can entail both project design and behavioral approaches, can convert knowable unk-unks [unknown unknowns] to known unknowns,"write the authors.

This is an MIT Sloan Management Review article. Collaborations between companies and universities are critical drivers of the innovation economy. These relationships have long been a mainstay of corporate R&D -from creating the knowledge foundations for the next generation of solutions, to serving as an extended "workbench" to solve short-term, incremental problems, to providing a flow of newly minted talent. As corporations look to open innovation to augment their internal R&D efforts, many of them are turning to universities to anchor an increasingly broad set of activities, especially those grounded in engaging with regional innovation ecosystems such as Silicon Valley, Kendall Square in Cambridge, Massachusetts, and Block 71 in Singapore. Universities are essential stakeholders in innovation communities that also include corporations, government entities, venture investors, and entrepreneurs. In addition to being sources of people and ideas for corporations, university collaborations assist corporations in opening up new avenues of engagement with a broader innovation ecosystem. While the aspirations of university-industry partnerships can be easily described, many companies are finding that establishing and running partnerships effectively can be difficult, even when key financial resources and human capital are available. A core reason for the difficulty, the authors write, "is that university culture -characterized by high autonomy and distributed governance -maps poorly to corporate culture." The authors provide a set of six questions for managers, which make up the basis of a form they call the "university partnership canvas."They designed a form (which is downloadable from the digital version of the article) to help corporations assess and develop strategic approaches to their university partnerships. By working through the six questions, companies can develop a strategic perspective on what types of partnerships are best suited to their needs.

This is an MIT Sloan Management Review article. Business model innovation has become a 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, "the authors argue that many of today's most successful businesses are those that can place themselves in the "sweet spot" of business model scalability. If managers are incapable of factoring scalability attributes into their business model design, they risk being left behind, much the way bookstores owned by Borders Group Inc. were eclipsed by Amazon.com Inc. In the course of their research, the authors identified five patterns by which companies can achieve scalability. The first pattern involves adding new distribution channels. The second entails freeing the business from traditional capacity constraints. The third involves outsourcing capital investments to partners that, in effect, became participants in the business model. The fourth is having customers and other partners assume multiple roles in the business model. And the fifth pattern is to establish platform models in which even competitors may become customers. Based on these patterns, the authors developed a framework for identifying potential levers for business model scalability along with a road map that managers can use to improve their business models. Over and above the need to create value propositions that are difficult for competitors to replicate, managers need to develop business models that are capable of achieving positive returns and accelerating returns on the investments made.

This is an MIT Sloan Management Review article. Businesses develop strategies to address complex, multi-layered business environments and challenges -but to execute a strategy in a meaningful way, it must produce a set of specific priorities focused on achieving clear goals. Rather than trying to boil the strategy down to a pithy statement, executives will get better results if they develop a small set of actions that everyone gets behind.

This is an MIT Sloan Management Review article. The successful use of analytics in sports, both on the field and off, comes down to integrating analytics within an organization. Three strategies -collaborative analytics, a common language, and accessible technology -are key.

This is an MIT Sloan Management Review article. Most of us view our jobs as specialized or somehow differentiated, but the world of business and management increasingly feels otherwise. For many organizations today, the next big driver of job commoditization is automation driven by smart machines. Simply put, if a job is viewed as a commodity, it won't be long before it's automated. The key for workers whose jobs have traditionally seemed safe: Highlight the tasks that require a human touch.

This is an MIT Sloan Management Review article. Executives often look at the network effects of digital platforms as a key source of competitive advantage -without understanding that platforms need to also leverage other factors at play in the local markets and among preferred customers. Network effects can help, but on their own, they offer very limited competitive value.

This is an MIT Sloan Management Review article. Research on social species shows that hierarchies are important for group functioning. Human beings also have a tendency to think and act hierarchically. In fact, hierarchies -distinct differences in group members' power and status -can be found in virtually every human group, from children on the playground to executives in the boardroom. Although many people have argued that flat organizations promote innovative thinking, the authors maintain that a properly deployed hierarchy can help teams engage in and get the most out of their efforts to learn and innovate. Specifically, the authors observe that hierarchies help teams generate, identify, and select new ideas by performing three critical functions: bounding solutions, converging ideas, and structuring processes. "A paradox of creativity, "the authors write, "is that people are more innovative when they have clear constraints (such as time, budget, customer requirements, etc.) within which their solutions must fit." Early on, teams tend to come up with an array of ideas and possibilities. Hierarchies, the authors explain, can help sort through which ideas should be pursued and which ones are less promising. The authors provide three recommendations for leaders seeking to leverage the power of hierarchy on teams and avoid its pitfalls. First, organizations should have a clear chain of command. In one study, teams with a clear chain of command were less likely to get bogged down in conflicts and stalemates than other teams. Second, organizations need to create performance-based cultures in which performance gets measured, publicized, and celebrated. Hierarchies in performance-based cultures are more likely to be based on expertise, and that can counteract unconscious biases against women and minorities. Third, people at the top of the organization should act in ways that support group goals as opposed to promoting their own interests.

This is an MIT Sloan Management Review article. 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. The authors' research shows that manufacturers can benefit substantially when they look for ideas beyond the factory gates, especially when their operations are already advanced. In this article, the authors analyzed nine years of survey responses from 1,000 Swiss manufacturers, as well as 200 interviews with personnel at the Volvo Group (AB Volvo), a manufacturer of trucks, buses, construction equipment, and marine and industrial engines that is based in Gothenburg, Sweden. Although the authors concede that some companies have good reasons for keeping process innovations concealed, they found that for many manufacturers, such defensiveness deprives companies of a valuable source of ideas for productivity improvement. The authors present six ideas to help manufacturing companies open up their innovation process. The first idea is to encourage factories within a large company to share innovative practices and success stories with one another. Companies that already do this informally, the authors say, can extend their activities with a systematic effort inside their factory networks and lay the groundwork for other open information sharing about processes. The second idea is to focus on the pace of process improvement. The third idea is to recognize that increased use of data access systems leads to greater production cost reductions. Customer relationship management, supply chain management, and enterprise resource planning software systems all require codification of tacit knowledge, which enhances a company's capacity to spread external process ideas and technology to the people who need it. As a fourth step, the authors recommend improving the organization's ability to absorb and implement ideas from

This is an MIT Sloan Management Review article. Composing valuable strategies requires seeing the world in new and unique ways. It requires asking novel questions that prompt fresh insight. Even the most sophisticated, deep learning-enhanced computers or algorithms simply cannot generate such an outlook. Innovative strategies depend more on novel, well-reasoned theories than on well-crunched numbers.

This is an MIT Sloan Management Review article. There are four different pathways that businesses can take to become top performers in the digital economy. Leadership's role is to determine which pathway the company should pursue -and how aggressively to move.

This is an MIT Sloan Management Review article. For young adults accustomed to continually checking their cellphones, even a single day without access to them can be anxiety-producing. What are the implications for executives about managing this constantly connected generation -and their devices -in the workplace?

This is an MIT Sloan Management Review article. Responding to a recently published essay, a reader pushed back against the view that managers must prepare for radical and rapid change in a digital world; he argued that this position may be overly alarmist. The discussion continues.

This is an MIT Sloan Management Review article. When developing strategy for execution, managers often want to start by setting their strategic priorities, but that's a mistake. Management teams should start by identifying the corporate vision and critical vulnerabilities -both of which help clarify and shape priorities.

This is an MIT Sloan Management Review article. 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 factory assembly line. Conversely, if work is highly ambiguous and requires ongoing interaction (for example, designing new products), then it is best organized collaboratively. The authors argue that this approach to work design is not entirely satisfying for two reasons. First, it describes an unpalatable trade-off: Work done using a serial factory design isn't very flexible, making it hard to adapt to changes in external conditions, and work done using the collaborative approach often isn't very efficient. Second, few types of work perfectly fit the archetype of well-defined or ambiguous work. The authors instead advocate a dynamic approach to process and organizational design that transcends the serial versus collaborative work framework by creating mechanisms for moving between the two basic ways of organizing work at appropriate intervals. By identifying mechanisms to cycle back and forth between well-defined factory-style tasks and collaborative modes when appropriate, managers can considerably reduce the trade-off between efficiency and adaptability. For example, work on Toyota assembly lines is the epitome of the serial, mechanistic work design, and tasks are precisely specified. But sometimes things go awry.

This is an MIT Sloan Management Review article. Organizations often struggle with corporate strategy because executives lack clarity on how parts of the business fit together to create and capture economic value. A simple framework can help leaders understand the relationship between corporate and business unit strategies.