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This is an MIT Sloan Management Review article. Effective collaboration on logistics can move mountains -and reduce emissions.

This is an MIT Sloan Management Review article. The surge of interest in big data has led to growing demand for analytics teams. Assembling such teams, however, is difficult. For one thing, many companies lack the in-house knowledge and experience needed to put together a world-class analytics team. What's more, the labor market for analytics professionals has grown increasingly tight. The shortage of analysts -particularly those capable of developing and leading world-class teams that can enable a company to create a competitive advantage from its data and analytics -is driving organizations to consider outsourcing their analytics activities. Analytics is the latest in a string of activities companies are outsourcing to business process organizations (BPOs). It draws heavily on mathematics and statistics knowledge, and many analytics-oriented BPOs have operations in India. Although some companies have world-class analytics capabilities in-house, the authors posed the question: Can an analytically naäve company "buy"world-class analytics functions by hiring outside experts? The authors studied both four multinational companies that used one or more offshore analytics BPOs and four analytics BPOs. Two of the client companies had skills that were judged to be "analytically superior"; the other two were judged to be "analytically challenged."The analytically challenged companies saw analytics BPOs as a way to obtain the resources and training needed to manage and execute their analytics and to gain quick access to important insights. By contrast, the analytically superior companies wanted to expand their internal analytic capabilities, in part because they wanted to preserve their ability to develop and protect intellectual property; they tended to use offshore BPOs to perform low-level analytics.

More than half of this year's survey respondents strongly agree that their organization needs to step up the use of analytics to make better business decisions -and that percentage rises to 87% if respondents who agree "somewhat"are included. This finding -that a majority of survey respondents agree strongly about the need to step up analytics use -holds true across a range of industries. Several forces, the authors argue, are helping spur managers'interest in analytics, including increased market complexity (for example, omnichannel retailing that encompasses both digital and brick-and-mortar channels) and the availability of better analytics tools and data. The authors report that some companies are sharing their data and analytics with business partners in order to meet strategic business objectives. For example, WellPoint, a U.S. health insurer based in Indianapolis, Indiana, is using analytics to help forge a payment model with physicians that rewards providers when they reduce overall health-care costs and enhance quality and health outcomes. Specifically, WellPoint is converting administrative claims and authorization data into useful information about populations of patients and sharing that information with physicians and their care teams. The survey data suggests that companies for which analytics has improved the ability to innovate are more likely to share data with partners and suppliers. Half of this year's survey respondents somewhat or strongly agree that analytics is helping their organization innovate -and 16% believe that strongly. Those survey respondents who strongly agree that analytics is helping their organization innovate are much more likely to say they collaborate with partners and suppliers through the use of analytics than respondents who don't think that analytics is helping their company innovate.

Together, the combination of description and advice provide a good primer for executives seeking a better understanding of this emerging era of sophisticated number-crunching. According to Siegel's estimate, we are adding 2.5 quintillion bytes of data every single day. Words have become data; the physical states of our machinery have become data; our physical locations have become data; and even our interactions with each other have become data. "Data can frequently be collected passively, without much effort or even awareness on the part of those being recorded. And because the cost of storage has fallen so much, it is easier to justify keeping data than discarding it,"observe Mayer-Schänberger and Cukier. Indeed, we are awash in information, but what does it all mean? In their book, Mayer-Schänberger and Cukier explain three new imperatives: 1. Use all the data, not just a sample. In the past, businesses did not have the economical means to capture, store and analyze all the data from their operations, so they had to settle for a sample of it. But now a company like Amazon can economically capture and store data from every single customer transaction. 2. Accept messiness. Inaccuracies in measurements are less harmful than they once were because they can often be smoothed over by the sheer quantity of data. In the authors'words, "more trumps better." 3. Embrace correlation. For many purposes, correlation is sufficient and people don't need to know causality. Quantifying the likelihood that a particular person will do something -whether it is defaulting on a loan, upgrading to a higher level of cable service or seeking another job -is at the heart of Siegel's Predictive Analytics. The author describes how quantitative techniques can be deployed to find valuable patterns in data, enabling companies to predict the likely behavior of customers, employees and others. Even a modest increase in the accuracy of predictions can often result in substantial savings.

Rather than encouraging customers to share their views about the company and its products with managers, the authors found, companies tend to focus on encouraging customers to take part in spreading positive word of mouth. Yet word of mouth is only one type of voluntary behavior that customers engage in. Moreover, it indicates only what people on the outside are saying, not how companies can improve their offerings or what customers may be looking for. The authors, who conducted surveys of customers as well as interviews and roundtable discussions with senior executives in a variety of industries, found that both customer word of mouth and customer- to-business interactions are associated with a customer's propensity to buy more of a company's products and services. While not all satisfied customers become repeat buyers, encouraging them to provide feedback and suggestions helps tie them more closely to the business. Companies can even recapture defecting customers simply by contacting them and encouraging them to participate. In addition, customer-to-business interaction is often more malleable than customer-to-customer word of mouth and more readily within the control of management. In a study of customers of a global bank, the authors found that customers who purchased the most were individuals who participated and engaged in much word-of-mouth behavior. High participation/ high word-of-mouth customers were the most loyal and attached to the brand; customers who did not participate tended to be the least valuable, the least loyal and the least attached to the organization regardless of whether they spread positive word of mouth.

What makes such partnerships -which the author calls adaptive strategic partnerships -counterintuitive is that they are being used in situations where the two most relevant streams of organizational economics would argue for vertical integration. One company that has pursued adaptive strategic partnerships is Bharti Airtel Ltd., the Indian telecommunications services company. Back in 2004, Bharti Airtel's managers found that negotiating and updating contracts with vendors interfered with their ability to focus on satisfying the company's customers and outsmarting its competition. Contrary to what other telecom operators have done, it negotiated unconventional relationships with some of its leading vendors, including Nokia Siemens Networks (now Nokia Solutions and Networks), Ericsson and IBM. Instead of expanding network infrastructure by purchasing increasing amounts of equipment (such as exchanges and cellular antennas), which often results in unused capacity, Bharti Airtel pays the vendors to operate the network; it compensates them based on telecom volume, paying only when equipment is in use. In addition to rethinking its approach to network capacity, vendors take responsibility for network performance and troubleshooting. Typically, companies with outside partners rely on simple tools such as service-level agreements, which specify what is expected from each party and provide for performance standards to assess compliance. But in managing its partnerships with vendors, Bharti Airtel uses a joint governing structure that encourages people at different levels of the organizations to communicate and address problems as they arise. In some cases, such interactions have led the company and its partners to redraw the scope of their collaborations (for example, assign responsibility for building and maintaining the cell towers to a new company), something that would be more difficult to do in a more traditional partnership.

This is an MIT Sloan Management Review article. Ethnography has often been portrayed as a "fly on the wall"technique, with anthropologists lurking in people's homes to observe consumers'unadulterated lives. The authors argue that this description does not do justice to the way ethnography actually works in the corporate world or to ethnography's increasingly important role in formulating business strategy. The authors'research across a variety of companies suggests that ethnography -artful in situ investigation into what customers do and feel and how they talk about what they do and feel -is a powerful tool to use to gain insights into your market. To arrive at a more in-depth understanding of how corporations use ethnography to their advantage, the authors conducted interviews with executives in various industries worldwide, including Ford and Wells Fargo. Where data analytics and surveys provide flattened snapshots, ethnography contributes an empathic understanding of how consumers live, work and play through gritty and detailed descriptions. Whether conveyed in video format, presentations or reports, these stories describe how people confront and surmount the hurdles they encounter in meeting their responsibilities and fulfilling their hopes in our globalized consumer culture. By delving into the richness of people's life stories, ethnographic research can pivot companies away from less meaningful segmentation parameters, such as demographics or purchase history, and toward those that drive behavior, such as purpose and intent. Quantitative techniques such as factor analysis can subsequently be applied to locate and size market segments.

For the most part, consumers have faith in online ratings and view them as trustworthy. But, the author argues, this trust may be misplaced. The heart of the problem lies with our herd instincts -natural human impulses characterized by a lack of individual decision making -that cause us to think and act in the same way as other people around us. When it comes to online ratings, our herd instincts combine with our susceptibility to positive "social influence."When we see that other people have appreciated a certain book, enjoyed a hotel or restaurant or liked a particular doctor, this can cause us to feel the same positive feelings and to provide a similarly high online rating. The author describes an experiment that he and two colleagues conducted on a social news-aggregation website. On the site, users rate news articles and comments by voting them up or down based on how much they enjoyed them. The researchers randomly manipulated the scores of comments with a single up or down vote and then measured the impact of these small manipulations on subsequent scores. The results were striking. The positive manipulations created a positive social influence bias that persisted over five months and that ultimately increased the comments'final ratings by 25%. Negatively manipulated scores, meanwhile, were offset by a correction effect that neutralized the manipulation: Although viewers of negatively manipulated comments were more likely to vote negative (evidence of negative herding), they were even more likely to positively "correct"what they saw as an undeserved negative score.

As these examples illustrate, MSPs include some of the largest and fastest-growing businesses of the past decade. Why? Successful MSPs create enormous value by reducing search costs or transaction costs (or both) for participants. As a result, MSPs often occupy privileged positions in their respective industries; most other industry participants revolve around and depend on MSPs in important ways. This article begins with a description of how MSPs work and why they can erect such high barriers to entry for new participants. It then offers an analysis of four fundamental strategic decisions and associated trade-offs that set MSPs apart from other types of businesses and that every MSP entrepreneur and investor should carefully consider. These challenges are as follows: •the number of sides to bring on (deciding whether to bring on two or more); •design (ensuring the interests of the different platform sides are not in conflict with each other or the MSP); •pricing structures (determining which platform side or sides should be charged more, based on the groups'relative value from interacting with each other); and •governance rules (regulating the participation and activities undertaken by the various platform sides to ensure a high level of quality, or outsourcing that function to users through ratings systems).

This is an MIT Sloan Management Review article. A study by MIT Sloan Management Review and Capgemini Consulting finds that companies now face a digital imperative: adopt new technologies effectively or face competitive obsolescence. While there is consensus on the importance of adopting digital technology, most employees find the process complex and slow. Many say their leaders lack urgency and fail to share a vision for how technology can change the business. Companies that succeed tend to have leaders who share their vision and define a road map, create cross-organizational authority for adoption and reward employees for working towards it.

This is an MIT Sloan Management Review article. In this 2013 report, new research by MIT Sloan Management Review and The Boston Consulting Group looks at companies that "walk the talk"in addressing significant sustainability concerns. So-called "Walkers"focus heavily on five fronts: sustainability strategy, business case, measurement, business model innovation and leadership commitment. For them, addressing significant sustainability issues has become a core strategic imperative and a way to mitigate threats and identify new opportunities.

Peter Drucker once said that the most effective executives disregard conventional wisdom about reaching consensus and instead work to create disagreement and dissention. As Drucker hints, opposing models are only a problem if we choose to treat them as such. The authors describe the four phases of Integrative Thinking, an approach to model creation developed at the Rotman School of Management that has evolved through research and practice. Even once you reach your 'integrative solution', the authors note that the challenge isn't over: all solutions will eventually be made obsolete, and as a result, integrative thinkers treat their solutions as 'provisional': as new information emerges in opposition to the 'solution', the process begins anew. However, when applied thoughtfully, they show that integrative thinking can give executives a fighting chance at tackling the wicked problems they face.

When most people think of the word, 'creativity', their mind immediately leaps to artistic endeavours like sculpture, drawing or music. You may believe that architects and designers are paid to be creative, but CEOs, lawyers and doctors are not. The authors-brothers who have worked for 30 years at the forefront of innovation at IDEO-call this misconception 'the creativity myth.' They describe two strategies (there are six more in their latest book) to help you get from 'blank page' to insight, and show that by embracing this challenge yourself, you will influence those around you to do the same. The article is excerpted from Creative Confidence: Unleashing the Creative Potential Within Us All (Crown Business, 2013) by Tom Kelley and David Kelley.

Have you been 'nudged' recently, to behave in a more environmentally or economically-sustainable way? While you might not know it, chances are, you have. A nudge is any aspect of the 'choice architecture' that alters people's behaviour in a predictable way, without removing any options or changing economic consequences. The authors complement the existing literature on Nudging-based on seminal research by Richard Thaler and Cass Sunstein-by providing practitioners with several guidelines for developing nudges of their own. They describe 12 possible types of nudges-a 'taxonomy' of nudging-and show that developing nudges is an interdisciplinary process that is project-based and experimental in nature. As they indicate, nudging is a powerful approach that is now being applied effectively in both for-profit and individual welfare domains.

In an excerpt from their book, Thinking in New Boxes: A New Paradigm for Business Creativity (Random House, 2013), the authors describe the power of embracing doubt to move beyond the status quo to value-added solutions. Both leaders at the Boston Consulting Group, they describe a process for innovation that begins with questioning your 'boxes'-the mental models you are currently operating with. In the end, they show that embracing doubt is a critical element of a new paradigm for creativity that recognizes that no idea is good forever. In the end, surviving success can be just as challenging as succeeding in the first place.

No matter what your circumstances or goals, the authors assure us of one thing: we will be better off if we are skilled thinkers. Critical thinking, they say, is the disciplined art of ensuring that you use the best thinking you are capable of in any set of circumstances; but to maximize the quality of your thinking, you have to make learning about thinking a priority. They present four recommendations which, when applied, result in a mind practicing skilled thinking. These include 'clarify your thinking' and 'question questions'. In the end, they say the best thinkers are those who understand the development of thinking as a process occurring throughout many years of practice.

Mental models-beliefs about causality and what is true-are passed down to each and every one of us through education, work and family life. Some of them seep deep into our core to become an established foundation for our thinking. The author argues that we spend too much of our lives asking finalistic questions -what is right and wrong, what is true? It is time to ask different questions, she says: knowing that truth is an elusive destination, how can we be effective? How can we build ever better models without getting overly attached - even when one seems just right? In the end, she shows that we're stuck with the incomplete mental models we learned through education and experience - unless we keep testing the models we're using and exploring alternatives.

Based on their research on information-sharing processes at 20 multinational firms from a broad range of sectors, the authors describe some of the hidden barriers to innovation. These fall under three headings, they argue: knowing what's going on in the market; understanding the market; and using market information. Along the way, they propose some practical ideas for managers to innovate more successfully.

If you spend some time studying the kinds of decisions people make and the outcomes of those decisions, you'll find that humanity does not have a particularly impressive track record. In an excerpt from their book, Decisive, the authors describe four 'villains' of good decision making, including 'narrow framing' and 'overconfidence'; then then provide a four-step model for overcoming these biases and making better decisions.

In an excerpt from his book of the same title, the author urges readers to address the problematic tendencies of a happy brain, which include many automatic reactions and biases that do little to spur effective action. Elevating our awareness of these reactions and biases, he argues, is the key to more productive behaviour. Pointing to findings from Cognitive Science and Neuroscience, he presents 15 rules of thumb gleaned from that can help us think in more productive ways.