But focusing on results alone is not enough. Demographic, cultural, and technological changes have led to a workforce that demands a set of operating principles characterized by core values such as transparency, trust, inclusion, and real-time collaboration to help guide behaviors and decision-making in companies. Finally, studies have shown that millennials are deeply motivated by corporate social responsibility and a compelling sense of purpose. Together, these forces make the case that companies that fail to aspire to align purpose, performance, and principles will also fail to attract the best talent. Furthermore, to achieve the kind of transformations that today's fast-moving economy often requires of businesses, executives need engaged, committed employees who have opportunities to contribute their knowledge. Purpose and principles can help engage employees in support of high performance. The authors acknowledge that while it is easy for executives to say they aspire to build companies that are simultaneously purpose-driven, performance-focused, and principles-led, it is a difficult accomplishment to achieve. There are often inherent tensions and conflicting goals associated with trying to achieve all three aims. How can executives align purpose, performance, and principles so that they can lead their organizations through major changes? The authors'research and experience suggest the task requires not only a set of leadership skills that they describe but also five mindsets that encompass the embedded tensions that face leaders of large, complex organizations. Executives must learn to reconcile these tensions by mastering a series of five conflicting yet complementary dualities: urgency and patience; collective and individual accountability; coaching and driving performance; student and teacher; and humility and boldness.
In the 2017 Digital Business Report, MIT SMR and Deloitte find that digitally maturing companies are achieving success by increasing collaboration, scaling innovation, and revamping their approach to talent.
Disruption from artificial intelligence (AI) is here, but many company leaders aren't sure what to expect from AI or how it fits into their business model. Yet with change coming at breakneck speed, the time to identify your company's AI strategy is now. MIT Sloan Management Review has partnered with The Boston Consulting Group to provide baseline information on the strategies used by companies leading in AI, the prospects for its growth, and the steps executives need to take to develop a strategy for their business.
In recent years, "design thinking"has become popular in many industries as established companies have tried to apply designers'problem-solving techniques to corporate innovation processes. Key elements of the design thinking methodology include fast iterations; early and frequent interaction with customers; agile process design with less hierarchy; and a learning-by-doing approach that involves building prototypes and creating mock-ups of any kind as early as possible in the process. Over the past seven years, the authors have helped more than 20 companies pursue more than 50 design thinking initiatives and have found that such initiatives rarely proceed according to the textbook model. Innovation, they note, is an inherently messy process that conflicts in many ways with established companies'processes, structures, and corporate cultures. For example, they note, many established companies punish failure, which discourages the risk-taking design thinking requires. What's more, the design thinking methodology calls for egalitarian, self-organized teams, but this isn't how most large companies work. In fact, the design thinking teams the authors studied tended to have clear process and project owners, usually senior managers who often supervised 12 to 15 design thinking projects at a time. The authors argue that companies need to take five steps to take full advantage of the potential of design thinking. They recommend that companies (1) encourage top managers to champion design thinking initiatives, (2) balance intuitive and analytical thinking on design thinking teams, (3) set ground rules that give design thinking teams the autonomy they need to function well, (4) integrate design thinking into the company's product development processes, and (5) focus on learning rather than on profits as metrics for design thinking projects.
Much as relationships in social networks have been analyzed to understand and influence how ideas flow among people, researchers wondered whether it might be possible to use the structure of product recommendation networks online to understand or influence how demand flows among products. The short answer is yes, and the implications for marketers are important.
Chinese companies are increasingly investing in companies overseas. But to reach advantageous agreements with Chinese direct investors, Western managers need to prepare themselves for differences in negotiating style.
At most companies, innovation is a top managerial priority. Many managers look at successful innovators such as Apple Inc. and Google Inc. with envy, wishing that their companies could be half as innovative. To boost and benchmark innovation, managers often use quantitative performance indicators. Some measure innovation as results or outcomes, such as sales from new products; others measure innovation as a process, using metrics such as the number of innovation projects; some rely on input metrics; and still others focus on the innovation portfolio by looking at factors such as the percentage of investments in breakthrough projects versus line extensions. The key managerial challenge, the authors argue, does not lie in identifying metrics; there is no shortage to choose from. Rather, they say, it is understanding the problem that measurement should solve for the company and, based on that insight, designing and implementing a useful innovation measurement framework that is appropriate to the organization's needs. To do this, managers need to understand the innovation challenges the company faces, how innovation is currently measured, and the extent to which current measurement practices help or hinder efforts to achieve innovation goals. Only then will they be able to steer clear of common innovation measurement mistakes, such as placing too much value on data at the expense of meaning, or getting bogged down with too many measures that provide contradictory advice and incentivize employees to do the wrong things. The article contains a step-by-step framework that allows managers to identify whether their current innovation measurement practices need to change and, if so, how to go about measuring innovation more effectively. The framework is also aimed at companies that do not currently measure innovation but would like to start.
Identifying the optimal prices for products was once a time-consuming process. That's changing as businesses start to take advantage of advances in machine learning, increases in computing speed, and greater availability of data.
"Megaprojects"-defined as projects with budgets exceeding $1 billion -are important contributors to numerous sectors, including health care, defense, mining, telecommunications, transport, energy and water infrastructure, sporting events, science, and manufacturing. They represent a significant proportion of many nations'economic activity and profoundly affect productivity, social cohesion, and the environment. Yet megaprojects have proved notoriously difficult to deliver on time and on budget; one estimate suggests that 90% of them end up over budget. Based on more than 10 years of research into a number of megaprojects in London, including the infrastructure for the London 2012 Olympics and the construction of two new terminals at Heathrow Airport, the authors conclude that one way to manage the uncertainties inherent in megaprojects is to innovate throughout the course of the project. What's more, they argue that their suggestions are applicable to all large-scale, long-term projects -not just projects with billon-dollar budgets.
The authors analyzed the mathematics of innovation as a search process for viable product designs across a universe of components. They then tested their insights using historical data from four real environments and concluded that companies can have an advantaged innovation strategy by using information about the unfolding process of innovation. But there isn't one superior strategy. The optimal strategy, they found, is both time-dependent and space-dependent. Based on their findings, the authors developed a five-step process for constructing an information-advantaged innovation strategy. Step 1. Choose your space: Where to play? It's not enough to analyze markets or anticipate customers'needs, the authors say. To innovate successfully, you also need to understand the structure of your innovation space. Step 2. Select your strategy: How to play? Measure the evolution of complexity in the space by analyzing the distribution of product sizes in terms of the number of unique components in products. If complexity is low and stable, the authors say, it's an indication that the space is still in its infancy, which argues for an impatient strategy. If complexity is high, then the space is maturing and a patient strategy will be the best approach. Step 3. Apply your strategy: How to execute? If you follow an impatient innovation strategy, the objective is to adopt or develop components that enable the company to bring relatively simple products to market quickly. Managers should ask themselves how they can be first. However, if the characteristics of your chosen innovation space imply that a patient strategy is more appropriate, your objective should instead be to maximize future innovation options. Step 4. Sense shifts and adapt: How to extract a switch signal? You need to monitor the complexity of your innovation space and compete on access to information in order to detect valuable strategy-switching signals before competitors.
If something does go wrong, the hope is that having a comprehensive program will help convince regulators that the company's compliance initiatives were "effective,"the standard used in U.S. sentencing guidelines. Unfortunately, even today's most comprehensive programs won't curtail corporate wrongdoing or the government intervention that follows. Volkswagen AG's compliance program didn't stop its employees from installing "defeat device"software to cheat emissions tests, nor did Wells Fargo & Co.'s policies prevent its employees from opening new customer accounts without authorization. More than 15 years after the Enron Corp. scandal, most companies know very little about how employees make ethical decisions or the psychological mechanisms that cause them to perform unethical and illegal acts. Even fewer have compliance strategies aimed at curbing such behaviors. The goal of this article is to pull together the burgeoning field of behavioral ethics, which provides insight into how individuals make ethical decisions, with the work of criminologists who study individual and corporate criminality. The author seeks to explain why corporate compliance efforts are falling short and how those efforts can be improved. In addition, he offers practical and cost-effective strategies for improving compliance programs that focus on employee behavior, which he says is the best way to make compliance truly effective. Corporate compliance depends on the behavior of individual employees. If employees, officers, and managers always acted in a law-abiding and ethical manner, compliance failures would rarely occur. But that is not realistic. That is why companies need to be aware of how and why employees act the way they do. This starts with understanding how people make decisions generally and how that translates to ethical decision-making.
This is a pretty basic case on financial accounting, with a tricky twist. The organization needs to reconstruct its financial statements, and the retained earnings account needs to be adjusted
Supplement to case TCG051. This is a follow on case to El Conejo (A). The budget has not been achieved, and the manager must figure out why. There are several relevant variances
This is a relatively simple ABC case designed to assist students to master the concept. The company is manufacturing computers and needs to determine prices for different models
The chief of dermatology at a major medical center is attempting to convince senior management to develop an outpatient treatment center for psoriasis. Doing so will require a capital investment, but will free up some inpatient beds for other patients.
An integrated delivery system (IDS) is attempting to develop a clinical pathway for colon cancer. To do so, it must coordinate the activities of several hospital departments, and also manage the relationship between physician practices and the various hospitals in the IDS
This is an ABC case that focuses on Stage 2 of the process. Costs have been allocated to mission centers and the chief gynecology must now determine how to "attach" the department's costs to the various procedures it conducts.