Companies worldwide spent US$1 trillion on digital technology in 2016. Unfortunately, for many businesses, this investment is not corresponding with financial returns. While some companies excel at adopting innovative digital technologies, many are only achieving incremental business improvements. Organizations need to radically rethink their approaches and develop bold digital strategies to harness technologies and unlock new sources of growth. Only 6 per cent of companies that invested in digital managed to translate those investments into sustained financial gains. We identified these as Digital High Performers. To make the leap from Digital Leaders to Digital High Performers, Digital Leaders must master using digital to drive revenue growth and increase investor confidence. Their overemphasis on efficiency and profitability indicates that Digital Leaders might be making trade-offs they cannot afford, putting their growth potential at risk. Four strategies are critical to organizations that want to get the most out of their digital investments: 1) get immersed in new ecosystems; 2) unlock opportunities to commercialize innovative ideas; 3) move beyond purely transactional customer relationships; and 4) embrace cultural and structural shifts. Digital Leaders must continuously assess the effectiveness of their digital investments and pursue overhauls and organizational designs, even if the initial efforts are risky. Commitment to digital alone does not guarantee financial success. New, bold strategies that leverage digital technology as an enabler and a driver of change in a legacy organization are vital for companies that wish to move beyond the verge of high performance. Digital Leaders don’t need greater investment; they need greater follow-through and the courage to lead transformation with tenacity.

Though some organizations recognize that learning from failure often leads directly to innovative products, processes, and services, discussing failure is often avoided in today’s business world. Failure is not just overlooked; it is routinely covered up. And when organizations are preoccupied with error avoidance, instead of error acceptance, innovation suffers because creative processes are inherently error-prone. Organizations have a choice. Instead of fearing failure, they can create a culture that accepts it, encouraging innovation through prudent risk-taking and exploration. So, how do you create a culture that “fails well”? Firms should: 1) create a culture of experimentation and creativity; 2) encourage risk-taking from the top; 3) celebrate failures like wins; 4) stimulate creativity and experimentation; and 5) hire entrepreneurs who are eager to learn. As innovation leaders, managers and organizations need to build a culture that removes the fear of failure and directs employees to learn, avoid mistakes, and pursue innovation through failing smart (maximizing learning with the expectation that failure will occur) and failing forward (taking the next step forward in the most efficient manner possible).

Is there a place for corporate social responsibility (CSR) in effective executive compensation? This author’s research says “yes.” Compensation for CSR both helps to serve shareholder interests and is a sign of good corporate governance. The author’s research on corporate governance and executive compensation for CSR examined whether incentives for CSR in executive compensation contracts were systematically related to more (or less) shareholder-friendly corporate governance. It found consistent evidence that firms with more shareholder-friendly corporate governance were more likely to observe executive compensation contracts with incentives linked to CSR outcomes. Identifying the types of social responsibility that are important for the firm’s bottom line is the first step in determining whether compensation for CSR might improve executive compensation incentives. If the right performance metrics are chosen, CSR can be an important part of a shareholder value-maximizing executive compensation plan for many firms, where social performance can impact financial performance. Corporate boards that weigh their responsibilities to society and their fiduciary duty to their shareholders can benefit from implementing CSR incentives effectively. Stakeholders who wish to see improved social performance, and shareholders who are concerned about financial return on investment, can both equally reach their goals.

As a small-scale hospital located in the city of Faridabad in northern India, Drishti Eye Center (Drishti) had recently expanded its operations by diversifying into pharmaceutical sales. The founder and managing director of the hospital soon faced conflict among the members of his sales force when a young sales representative received a poor performance evaluation, which he viewed as unfair. In response to this situation, the salesman decided to join a union, a move that was completely unprecedented at Drishti. Facing a high-performing team that now found itself operating in a hostile environment, the hospital’s director had to decide how best to manage the conflict.

In April 2014, the founder of SecureNow met with one of his classmates who was now an angel investor. The two had recently met socially and the founder had briefed his classmate on SecureNow's online business-to-business insurance marketplace. The classmate was now expressing interest in investing in SecureNow but his valuation was much lower than the founder's expectation. The founder was confident of SecureNow's future growth, but he wanted funds to expand. His classmate would provide him with the kind of relationship he was seeking with an investor, but the founder wondered how he and his classmate arrived at such different valuations. He also wondered whether he should accept the funds at a low valuation, consider other options, or just postpone his expansion plans.

In 2015, Snapdeal, an e-commerce company in India, faced a supply chain situation in reverse logistics. In conforming to the industry trends, the company had a policy on assured product returns, which led to most customers returning to an online merchant for future purchases. However, by the end of 2015, the estimated worth of products returned under the Indian e-commerce platform was $800 million to $1 billion. The rate of returns of online products could add substantial logistics costs to each product return, hampering the industry's growth. Snapdeal had some serious questions to address. Should it reverse its policy and not give customers a chance to return products? Should the company connect organizations and retailers with customers and derive valuable feedback from them? Should Snapdeal alter its product return policy in favour of a "free returns" or "no questions asked" return policy? Would corrective action be required for the e-commerce industry so companies like Snapdeal could create a return policy for customers who had legitimate reasons to return products?

Otis Gates has built a successful affordable housing firm. Along the way, he and his partners have engaged in large amounts of community service in the neighborhoods wherein they own properties. Now 80 and ready to retire, Gates is creating a request for proposal for his firm. In doing so, he has to evaluate his firm's total value and decide whether their social-good mission is helping or harming their bottom line.

In 2019, Fitbit lost its leadership in the wearable sensor market to Apple and to cheaper alternatives. Why did it lose its market position? How will the proposed acquisition affect it and Google?

This case tracks Jerome Chouchan's strategies and execution for a successful turn around of Godiva Japan's operations which was experiencing a decline in sales when he became the managing director of the company in 2010. Through various initiatives and innovations, Godiva Japan had targeted a variety of demographic segments in different sales points, acquired new customers and created a moment of luxurious consumption for all ages. Accordingly, within Godiva's global enterprise, Godiva Japan had become number two in terms of worldwide sales and number one in terms of profits. It exported made-in Japan products and concepts to Godiva's other markets. How could Chouchan keep the momentum and sustain Godiva Japan's top-line and bottom-line growth going forward? Would he be able to keep the balance between aspirational and accessible? How much of the success in Japan might contribute to the growth of Godiva's global sales?

In the spring of 2016, the director of finance and administration for the Calgary Drop-In & Rehab Centre was frustrated with the organization’s legacy donor and volunteer information system. The technology platform was outdated, data integrity was out of control, costs were spiralling, and most importantly, required information was not available on demand. The director was concerned that these issues with the organization’s information systems would interfere with its ability to maintain positive relationships with existing donors and to secure new financial supporters—ultimately, that it could have an impact on the agency’s efforts to achieve more good in the community. He was contemplating three options to solve this problem: build a new in-house system to replace the current Microsoft Access database system; purchase customer relationship management software specifically developed for non-profit fundraising and relationship management and install this on personal computers and servers in the offices; or adopt a cloud-based fundraising solution, where the organization’s data would be stored on a secure, shared platform administered by the vendor.

In October 2013, future prospects for TransCanada’s pipeline project were uncertain, as the company had to find ways to establish and manage relationships with Aboriginal communities along the proposed Energy East pipeline in Canada, particularly in the province of New Brunswick. Following Supreme Court rulings that reinforced the duty to consult and accommodate, Aboriginals came to have a powerful voice in the development of energy infrastructure, creating new requirements for companies wishing to expand into areas subject to Aboriginal title and treaty claims.

In the workplace, the very mention of Millennials can strike fear into the heart of the most seasoned manager. After all, we are talking about the “me” generation of employees who feel entitled and expect their opinion to be valued above all others, while also apparently being unwilling to work as hard as their parents. But, alas, broad generalizations are wrong a great deal of the time. We recognize this, and go out of our way to reject it in most cases. But how do we apply this same sensibility to Millennials? The first step is to recognize three important principles that apply to working with any individual or group: 1) Don’t assume that you know what motivates another person based solely on knowing his or her birthdate. 2) What motivates you is not necessarily what motivates others. 3) There are only two ways to find out what motivates another individual: asking and observing. We need to take this knowledge and incorporate it into our performance management process, aligning the individual’s rewards with their objectives, and with the objectives of the team. The process is simple but not easy. The biggest barrier is the time it takes. Ultimately, it’s much more expensive to have unproductive team members, high turnover on your team, and a demotivated workforce than to invest in how you manage performance.

Gathering the evidence required to back up a corporate claim has always been important, but the case for effective evidence gathering has never been greater than today. Unfortunately, while the data that organizations ordinarily collect can be useful, it is often insufficient to answer relevant questions. In other words, the evidence required typically isn’t ready to be analyzed and often must be developed using real-world experimentation. This paper examines how businesses can perform randomized controlled trials. To help you conduct better testing for your own business, we also address three questions: What if you can’t run a randomized controlled trial in a lab? Which organizations should conduct tests? How should you conduct your testing? The potential for confusing correlation and causation only becomes greater in a world of big data. Determine if an outcome is significant by using a simple statistical test such as the T-test, and specify your required level of significance before running the test. One way to achieve the best of both worlds is to use a field experiment—an experiment run in the real world but with as many confounding influences as possible removed. Although messier than lab tests, field experiments inspire greater confidence that the results will be relevant. Whenever it is feasible to randomize what you offer your customers, you have the potential to gain a better idea of what works best. Testing can save your organization money, make your actions more effective, and improve outcomes for your customers.

This is an MIT Sloan Management Review Article. South Africa's Nedbank is a leader in its market - but to stay in that position, it needed to identify new ways to serve its existing business clientele as well as attract new customers. Its solution: use the extensive transaction data the bank collects to help customers improve their service.

This is an MIT Sloan Management Review Article. Organizations across the business spectrum are awakening to the transformative power of data and analytics. They are also coming to grips with the daunting difficulty of the task that lies before them. It's tough enough for many organizations to catalog and categorize the data at their disposal and devise the rules and processes for using it. It's even tougher to translate that data into tangible value. But it's not impossible, and many organizations, in both the private and public sectors, are learning how.

This is an MIT Sloan Management Review Article. Emerging markets such as China and India have become the growth drivers of corporate research and development initiatives from all around the world. Although there is growing evidence that Chinese companies are shifting their innovation focus from cost saving to knowledge-based research, the view by many in the West remains that companies based in emerging markets are not ready to take over the role of leading innovators from their Western competitors. As a result, Chinese multinationals have been at a competitive disadvantage, particularly in strategic technology industries. What can Chinese multinationals do to overcome Western barriers to entry in strategically important technology industries in which "Made in China" or "Designed in China" are viewed as negatives? What dynamic innovation capabilities - or, put another way, what culturally specific processes - should companies focus on to gain acceptance in the competitive global marketplace? To answer these questions, the author studied Huawei Technologies Co. Ltd., the Chinese telecommunications company that has recently made significant inroads in Europe's mature and strategically important telecommunications industry, making it a potential role model for companies in China and other parts of Asia hoping to make a similar transition. In Europe, the author notes, Huawei has typically relied on the same strategy it used to build its market position in China. It has (1) offered customized technologies that meet the practical needs and resource constraints of target customers; (2) built customer loyalty by enhancing practical innovation with longer-term joint innovation partnerships; and (3) enlisted the support of governments, universities, and other industry stakeholders by customizing further innovation investments to their priorities.

This is an MIT Sloan Management Review Article. For large global companies, forging effective partnerships with high-potential startups is easier said than done. The very traits that make such startups potentially complementary as partners also make it difficult for large companies to engage with them in the first place. Multinational corporations often struggle even to identify promising potential startup partners; startups, for their part, find it difficult to identify and reach the relevant decision makers within the often-confusing hierarchies of gigantic multinational companies. The challenge, for both sides, is all the more vexing in emerging markets. Furthermore, most academic studies of the challenges that large companies and entrepreneurial ventures face in partnering - and the solutions the studies suggest - focus on mature markets, such as the United States and Europe. Far less is known about how multinational corporations should engage with startups in emerging markets such as China and India. To understand how multinational companies have partnered successfully with startups in emerging markets, the authors undertook a study in three major emerging market economies: India, China, and South Africa. Their research uncovered four key factors, and they suggest a strategy for addressing each factor. The first key factor, the authors say, is the immaturity of the entrepreneurial ecosystem. Specifically, most emerging markets are afflicted by constraints and "voids" in their institutions. The authors recommend that multinational companies address this factor through programs that compensate for the immaturity of the entrepreneurial ecosystem, and they provide examples such as an IBM Corp. program that provides training, mentoring, and events for startups in China.

This is an MIT Sloan Management Review Article. Blockchain technology has the potential to transform how businesses are organized and managed. It allows companies to eliminate transaction costs and use outside resources as easily as internal resources. The implications for areas such as accounting, contract negotiation and enforcement, sales and marketing, and capital investment are myriad. Companies should start exploring how this technology could impact their industry and processes.

This is an MIT Sloan Management Review Article. As companies recognize how important a digital strategy has become, they find themselves torn between different strategic options. The first decision is to choose between a customer engagement or a digital solutions strategy. Which to pursue depends on existing capabilities and competitive direction - but companies should avoid trying to do both.

This is an MIT Sloan Management Review Article. Companies have yet to apply analytics to human resources - but that's about to change. And lessons learned in applying analytics to customer-focused areas can help avoid mistakes in strategic workforce decisions.