This is an MIT Sloan Management Review article. Companies today will have to reinvent themselves to survive, and every large and ambitious company should be trying to figure out how to become a destination for its customers. Consumers are voting with their mobile devices and choosing from a handful of dominant "ecosystem drivers"-businesses such as Amazon and WeChat, which become destinations for their customers'needs by offering complementary or sometimes competing services -for each domain in their lives.
The idea behind Muji was to manufacture and sell beautiful, inexpensive housewares, food, and apparel that every Japanese consumer might need. In the late 1980s Muji sparked interest among British retailers at an exhibition of Japanese products, and a joint venture with Liberty ensued. By 1991 the brand had stand-alone stores in London and Hong Kong, and since then it has grown to 418 stores in Japan and 403 in 27 other countries. Yet the company has moved cautiously, adding stores only when existing ones in the country or region are running profitably, and trusting the intuition of local managers. Operations outside Japan now account for 35% of the business, and the company intends to keep expanding globally. But its aim is to be tenacious in trying to deliver on the Muji promise and to live as part of a community--simply, conscientiously, and in harmony.
Data gathered on the web has vastly enhanced the capabilities of marketers. With people regularly sharing personal details online and internet cookies tracking every click, companies can now gain unprecedented insight into individual consumers and target them with tailored ads. But when this practice feels invasive to people, it can prompt a strong backlash. Marketers today need to understand where to the draw the line. The good news is that psychologists already know a lot about what triggers privacy concerns off-line. These norms--and the authors' research--strongly suggest that firms steer clear of two ad-targeting techniques generally disliked by consumers: using information obtained on a third-party site rather than on the site on which an ad appears, which is akin to talking behind someone's back; and deducing information about people (such as a pregnancy) from analytics when they haven't declared it themselves. If marketers avoid those tactics, use data judiciously, focus on increasing trust and transparency, and offer people control over their personal data, their ads are much more likely to be accepted by consumers and help raise interest in engaging with a company and its products.
Companies say they want their employees to learn and grow, but in practice, they skimp on training. In a recent study of 1,481 employed learners, more than one-third of them said they had received no training from their companies in the previous 12 months. Instead, many acquire work-related skills through MOOCs (massive open online courses)--usually without their employers' knowledge or support. This represents a missed opportunity for companies to harness their employees' efforts in the service of organizational goals. Managers can help team members put their learning into context by providing study time and informal guidance before and during the courses. Having employees pilot courses for one another helps ensure relevance and quality. And tracking completion reinforces the value of learning while increasing the odds that people will stick with their coursework.
Though corporations have been lobbying the government and making campaign donations for a long time now, in recent years a dramatic new trend has emerged in U.S. politics: CEOs are taking very public stands on thorny political issues that have nothing to do with their firms' bottom lines. Business leaders like Tim Cook of Apple, Howard Schultz of Starbucks, and Marc Benioff of Salesforce--among many others--are passionately advocating for a range of causes, including LGBTQ rights, immigration, the environment, and racial equality. Not only are CEOs speaking out, but they're flexing their firms' economic muscles by threatening to move business activities out of states that pass controversial laws. But does CEO activism actually change public opinion and policies? What are its risks and rewards? And what is the playbook for leaders considering speaking out? The authors of this article examine those questions and explain the takeaways of their own research. One finding: Consumers tend to view CEO activism through the lens of their own political affiliations, so it can provoke both negative and positive responses. Nevertheless, in the age of Twitter, silence on an issue can be conspicuous--and consequential.
Most companies approach hiring with faulty assumptions and poor practices. They believe talent is fixed rather than contextual. They fail to create real partnerships between internal recruiters and hiring managers. And they rely too much on salary surveys and rigid compensation formulas. The author shares what she learned about making and keeping great hires during her 14 years as the chief talent officer at Netflix. The process requires probing beneath the surface of people and their resumes; engaging managers in every aspect of hiring; ensuring that recruiters deeply understand the business and are not viewed as support staff; adopting a mindset in which you're always recruiting; and coming up with compensation that suits the performance you need and the future you aspire to. These lessons may be especially relevant to fast-growing tech-based firms, whose rapid innovation means a continual need for new talent. But organizations of all types can benefit from taking a fresh look at their hiring and compensation practices.
Accelerating technological improvements have changed the speed with which new innovations penetrate markets. Graphed over time, the market adoption of innovations now resembles a dramatic shark fin--a dangerously deformed version of the classic bell-curve model of diffusion. Two forces have compressed the bell curve: near-instant market saturation by new products and the rapid obsolescence of digital components. As a result, many companies struggle to find new sources of revenue after a big-bang success. The authors describe seven mistakes that make enterprises--incumbent businesses as well as start-ups--highly vulnerable to such flameouts: (1) The company is too lean. (2) Its capital structure is built to fail. (3) It has lost its founder. (4) It's overserving investors. (5) It "won the lottery" by getting lucky with a big-bang disrupter. (6) It's held captive by regulators. (7) It anticipates customers who don't exist. They offer some tactics for ensuring that your business is a second-act survivor: Abandon the successful product before it runs out of steam. Build a platform, not a product. Turn your initial product into a service. Invest in or acquire nascent disrupters.
Cognitive technologies are increasingly being used to solve business problems; indeed, many executives believe that AI will substantially transform their companies within three years. But many of the most ambitious AI projects encounter setbacks or fail. A survey of 250 executives familiar with their companies' use of cognitive technology and a study of 152 projects show that companies do better by taking an incremental rather than a transformative approach to developing and implementing AI, and by focusing on augmenting rather than replacing human capabilities. Broadly speaking, AI can support three important business needs: automating business processes (typically back-office administrative and financial activities), gaining insight through data analysis, and engaging with customers and employees. To get the most out of AI, firms must understand which technologies perform what types of tasks, create a prioritized portfolio of projects based on business needs, and develop plans to scale up across the company.
Fifty years ago a good blue-collar job was with a large manufacturer such as General Motors or Goodyear. Often unionized, it paid well, offered benefits, and was secure. But manufacturing employment has steadily declined, from about 25% of the U.S. labor force in 1970 to less than 10% today. Now a decent living entails more than a generous wage; it involves sharing the company's success with employees. Some companies offer a direct stake in the company's performance through stock, a share in profits, or both. Companies with employee stock ownership plans report significantly higher sales growth and higher revenue per employee than do conventionally owned companies in the same industry. However, virtually all the gains to be had go to those that create an ownership culture, by building in participative management and helping employees learn to think and act like owners.
More than a billion people in the developing world remain in extreme poverty and outside the formal economy. Traditional CSR programs have done little to alleviate the situation and rarely produce transformative change. Instead of trying to fix local problems, the authors argue, corporations need to reimagine the regional ecosystems in which they participate. They should search for systemic, multisector opportunities; mobilize complementary partners; and obtain seed and scale-up financing from organizations with a mission to alleviate poverty. They should also align the various stakeholders around the new strategy, using proven tools such as a co-created strategy map. These principles are informed by the authors' experience with several successful inclusive-growth projects. An initiative in Uganda is bringing small maize farmers into the mainstream regional economy, while a training program in El Salvador is giving unemployed youths the skills to work in the country's growing service sector.
What do you call a dense, overly lengthy contract that's loaded with legal jargon and virtually impossible for a non-lawyer to understand? The status quo, says Burton, the general counsel for GE Aviation's Business & General Aviation. When Burton was leading the legal team for that division's new digital-services unit, he and his colleagues noticed that customer contract negotiations were dragging on for months, hampering growth. So they set out to replace the unit's seven excruciatingly complicated Contracts with one that even a high schooler could understand. In this article, Burton describes how the team went about achieving that goal and the lessons learned along the way. He also shares the results: Customers were delighted with the new contract, and some even signed it without making a single change. The time it took to negotiate contracts dropped by a whopping 60%. And now plain-language contracts are starting to spread inside GE.
What sets exceptional business leaders apart? One thing, says Sydney Finkelstein, is their ongoing commitment to giving direct reports one-on-one instruction. Finkelstein, a management professor at Dartmouth's Tuck School of Business, has studied world-class leaders for more than a decade. He's found that they make a point of personally imparting memorable lessons that fall into three categories: pointers on professionalism, technical knowledge and skills, and broader life lessons. Finkelstein notes that when and where top leaders teach is almost as important as what they teach. Instead of waiting for formal reviews, great managers stay accessible to their employees and share their wisdom as opportune moments arise, whether that's in the office or outside it. They also create teaching moments--often by taking proteges off-site. How do they make lessons stick? Their techniques include (1) customizing instruction to the needs, personality, and development path of each individual, (2) asking pertinent questions to deepen learning, and (3) modeling the behavior they want others to practice. Finkelstein discusses numerous superstar leaders who are revered as great teachers and suggests that if you follow their example, you can strengthen your staff and drive superior business performance.
An Indian hospital creates a new customer liaison role--the patient care executive--but as its rate of attrition for physicians rises in an extremely tight talent market, leaders begin to wonder whether friction between the PCEs and doctors is the problem. This fictional case study features expert commentary by Rana Awdish, Ashutosh Raghuvanshi.
An Indian hospital creates a new customer liaison role--the patient care executive--but as its rate of attrition for physicians rises in an extremely tight talent market, leaders begin to wonder whether friction between the PCEs and doctors is the problem. This fictional case study features expert commentary by Rana Awdish, Ashutosh Raghuvanshi.
An Indian hospital creates a new customer liaison role--the patient care executive--but as its rate of attrition for physicians rises in an extremely tight talent market, leaders begin to wonder whether friction between the PCEs and doctors is the problem. This fictional case study features expert commentary by Rana Awdish, Ashutosh Raghuvanshi.
Rick Stein gazed out at Propay Ltd's car park where his fifteen-year-old car now languished.A year ago ProPay's previous owner parked his Maserati in the exact same spot - a contrast that seemed oddly symbolic of Rick's current predicament. He had bought the payments gateway business after raising a Search Fund from a number of private investors and with a plan to improve what he perceived to be an 'undermanaged' business. A few months later it had become apparent that more funding was needed. He returned to his financial model to consider his position...
Rick Stein is faced with taking rapid action to both save his business and at the same time take advantage of a surprise exit opportunity. As usual there's a cash squeeze but should the business take more money and if so where from and on what terms?
Facing increased customer service scrutiny in the airline industry, JetBlue, in August 2017, announced a partnership with Gladly, a relatively new entrant in the customer service software market. JetBlue was going beyond simply using Gladly's software. The company decided to invest in Gladly through its venture capital arm, JetBlue Technology Ventures. Frankie Littleford, JetBlue's Vice President of Customer Support, stated, ""We are fortunate enough to be working so closely with Gladly that we are co-creating this [platform]together." Bonny Simi, president of JetBlue Technology Ventures group, was enthusiastic about a potential "onmichannel" approach to communicating with customers. "People just don't want to call in anymore. So we are aiming for omnichannel communication that is on at all hours, that can take advantage of AI (artificial intelligence) to resolve customers' issues as quickly as possible, and that will work with all of the important messenger apps." Picking the right customer-service platform and then rolling it out without disrupting current operations were no small tasks for any airline, but JetBlue was committed to make it simpler for its customers to communicate with the company.
The case examines two major transitions currently taking place in Hong Kong-the transformation into a knowledge-based economy (KBE) and the replacement of the Gen Xers by the Gen Ys in the workplace. It sheds light on the skills that workers require and the strategies that government and industries should adopt to suitably develop a KBE. In doing so, the case elaborates on the policy initiatives Hong Kong has undertaken to create the desired human capital and to leverage innovation and technology across knowledge-based industries. It tabulates the key statistics and trends that enable manpower planning and projections. While the case presents issues arising in the workplace due to intergenerational differences between Gen X and Gen Y, it questions how Gen Ys can effectively replace the retiring baby boomers and aging Gen X workers. It aims to arouse the attention of human resource (HR) managers in coming up with the appropriate strategies to incorporate and motivate the Gen Ys to fill the gap. In the end, can both transitions be successful and sustained? Can the new generation help transform Hong Kong into a KBE?