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Sustainability's Next Frontier
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. -
Raising the Bar With 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. -
The Executive's Role in Social Business
This is an MIT Sloan Management Review article. Social technologies are becoming more important to business, according to a survey conducted by MIT Sloan Management Review and Deloitte. However, the adoption of social technologies often means changing the way people work, and that means executives need to invest time and effort in explaining the purpose and value of using the new tools, as well as providing the necessary financial and organizational supports to sustain these work flow changes over time. The authors'research is based on two surveys conducted in 2011 and 2012, as well as dozens of interviews with executives and social business thought leaders. The 2012 survey had more than 2,500 respondents from 25 industries and 99 countries. According to its findings, 52% of managers say their companies are at an early stage of developing social capabilities. For these managers, the top barriers to using social business are a lack of strategy, no business case and a lack of management understanding. The authors explain the importance of three types of senior leadership support for initiatives that rely on social technologies: (1) support for these initiatives over time, not just when they are launched, (2) executives'own use of social technologies as a signal of their importance, and (3) a pragmatic attitude about what to measure and when to measure results from these initiatives. As marketers capitalize on social tools, the relationship between CMOs and CIOs can change, and some organizations are hiring chief digital officers, the authors note. They observe that successful social business initiatives can produce changes in the way executives work together. -
The Benefits of Sustainability-Driven Innovation
This is an MIT Sloan Management Review article. Results from the fourth year of MIT Sloan Management Review's research collaboration with the Boston Consulting Group have found that managers who say sustainability has caused their organization to change its business model are also more likely to say that the organization's sustainability activities have added to profits. Respondents to the survey who not only changed their business model because of sustainability but also generated profits from their sustainability-related activities and decisions -"Sustainability-Driven Innovators"-represented 23% of the survey pool. The survey results suggest that business model change, top management support, collaboration with customers and having a business case are associated with creating economic value from sustainability activities and decisions. Ninety percent of all managers who said their companies have all these characteristics also say that their sustainability activities add to their profits. The authors'research suggests several ways in which companies can become more effective at connecting business model change with sustainability-based profits. Based on the behavior of Sustainability-Driven Innovators, they make three recommendations for how managers can improve their odds of profiting from their sustainability activities. First is to be prepared to change the business model, which may involve extensive corporate change, require significant top management attention and entail setting multiyear goals. Second is to learn how your customers think about sustainability and understand what they are willing to pay for in connection with sustainable products or services. The final recommendation involves increasing collaboration both internally and externally with customers, businesses and groups beyond the boundaries of the organization to improve operations and competitive advantage. -
Innovating With Analytics
This is an MIT Sloan Management Review article. In a recent data and analytics survey conducted by MIT Sloan Management Review in partnership with SAS Institute Inc., the authors found a strong correlation between the value companies say they generate using analytics and the amount of data they use. Combining the responses to several survey questions, they identified five levels of analytics sophistication, with those at Level 5 being most sophisticated and innovative. These analytical innovators in Level 5 had several defining characteristics. First, they tended to use more data than other groups. In fact, they were three times more likely than the 8% of those respondents who fell into the Level 1 category to say they used a great deal or all of their data. Second, there was a strong correlation between driving competitive advantage and innovation with analytics and how effective a company is at managing what the authors term "the information transformation cycle."This cycle refers to the process of capturing data, analyzing information, aggregating and integrating data, using insights to guide future strategy and disseminating information and insights. Respondents who fell into the Level 5 category also had a stronger need for speed than other survey respondents. Eighty-seven percent reported that the ability to process and analyze data more quickly was very important. Utilizing speed fell into three separate areas: customer experience, pricing strategy and innovation. Another intriguing finding from the survey involved the cultural impact on organizations. Some respondents reported that the use of analytics is shifting the power structure within their organizations. Analytical innovators, as a group, tended to be more likely than other groups to say that analytics has started to shift the power structure in their organizations. -
What Managers Really Think About Social Business
This is an MIT Sloan Management Review article. -
Sustainability Nears a Tipping Point
This is an MIT Sloan Management Review article. -
Creating Business Value with Analytics
This is an MIT Sloan Management Review article. As the data deluge continues to grow, more companies are under increasing pressure to develop systems that create both business value and competitive advantage. According to a survey conducted by MIT Sloan Management Review, in partnership with IBM Institute for Business Value, more than 58% of the more than 4,500 respondents said their companies were gaining competitive value from analytics -up from just 37% who thought this last year. The authors found that rather than having the right tools, technology and people, organizational factors are one of the most important predictors of the ability to create competitive advantage. Managers who responded to the survey cite management support for analytics, including top-down mandates, and having analytics sponsors and champions as key, in addition to practices such as using analytics to identify and address strategic threats and opportunities. Data-oriented organizational cultures have three key characteristics: (1) analytics is used as a strategic asset, (2) management supports analytics throughout the organizations and (3) insights are widely available to those who need them. In addition, organizations that excel at using analytics are sophisticated in their information management, and possess real analytics expertise. The path to developing these competencies takes time and has distinct challenges. The authors summarize each, and propose ways to assess current organizational culture and choose the approach with the best likelihood of success. -
Ganesh Natarajan: Leading Innovation and Organizational Change at Zensar (A)
In 2005, Ganesh Natarajan, CEO of Zensar, a Pune, India-based software company, and his senior management team are considering consolidating staff and resources at the firms. Natarajan proposes an additional, possible controversial business unit to the proposed new structure. The additional unit would explore new markets for the firm's promising innovation-Solution BluePrint (SBP). While he knew that some on his team would resist his proposal, he was eager to get the new technology into the field, and felt he had the right manager to lead the proposed group. Natarajan felt sure a group dedicated to SBP led by one of the firm's most respected technologists would help spur adoption. -
Ganesh Natarajan: Leading Innovation and Organizational Change at Zensar (B)
After Proposing a fourth business unit to help grow the market for zensar's innovative technology, to be led by Dilip Ittyera, CEO Natarajan adopted a new organizational structure focused on industry verticals. -
Gene Patents (A)
In March 2010, U.S. District Court Judge Robert Sweet overturned 30 years of legal precedent and ruled that unaltered human genes could not be patented. This case reviews patent law and how it relates to our increasing knowledge of the Human Genome. The case issues deal with the potential implications of Judge Sweet's decision for biotechnology entrepreneurs and investors. -
1366 Technologies: Scaling the Venture
For some time, 1366's co-founders, Frank van Mierlo and Ely Sachs, had faced a choice, which was now made all the more stark: 1366 could expand to produce silicon wafers itself, raising the required capital from "friendly" investors and building shipment volume slowly, or 1366 could accelerate its market entry dramatically by partnering with the Asian manufacturers that had begun to dominate the world-wide solar industry. While accelerated growth was attractive to 1366 and its current investors, the company believed that it would face considerable risks if it were to expose its intellectual property to the "wrong" partners. 1366 had no intention of losing control of its technology, but given the pace of innovation and the active role of governments in the solar industry, van Mierlo and Sachs feared this might not be a race that could be won by the cautious. -
Aquion Energy
Leaders at Aquion Energy, a Pittsburgh-based battery start-up, are deciding on a market entry strategy. Should they pursue the large but unproven grid utility market or a smaller, but higher margin market? -
Predictive Biosciences
A small cancer diagnostics start-up is deciding whether to acquire a laboratory to make and sell its bladder cancer test or build its own manufacturing and sales team. -
Google and Earnings Guidance
The case explores Google's communication strategy with Wall Street analysts. In particular, the case focuses on Google's commitment to a no-guidance policy and provides an overview of guidance practice among major U.S. companies. -
Dubai Duty Free
In mid-February 2009, Dubai Duty Free Managing Director Colm McLoughlin received the January sales report. He left the report lying on his desk unopened and went to walk around the shops as he did every morning. When he returned, he sat down at his desk, looked at the cover of the report, then called his wife, Breeda, to confirm that they were hosting a dinner party that weekend for some friends from Ireland who were in town for a golf tournament Dubai Duty Free was supporting. -
Family Corporate Governance: A Brief Literature Review
This note discusses competing theories of governance in family-owned firms and focuses on agency theory, stewardship theory and the sociological concept of embeddedness. -
Highland Capital Partners: Investing in Cleantech
One day during the summer of 2008, Paul Maeder, co-founder and general partner of Highland Capital Partners (HCP), was walking with his wife around Reykjavik, Iceland, marveling at how clean the city felt and at the widespread use of naturally occurring geothermal energy to power everything from trams to buildings. "They don't treat their air and water like an open sewer," Maeder thought. "This is the way people need to live and this is the way people are going to have to start living in 10 or 20 years." To his wife, Maeder said aloud: "I think Highland should revisit the idea of investing in cleantech." -
Hema Hattangady and Conzerv (B)
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Cambridge NanoTech
Cambridge NanoTech (CNT) is an interesting example of how a successful university research project was used to build a small scale business which designs and manufactures research equipment for a new class of chemical reactions called Atomic Layer Deposition (ALD). CNT's business model is particularly interesting since the university researchers/founders developed a product that was specifically meant to serve other university researchers rather than trying to immediately jump to commercial, high volume manufacturing applications. Their product was specifically designed to be low cost, easy to use, flexible, and to have very short delivery times which made it very attractive to university researchers operating large research projects (typically on the order of millions of dollars/year). A large profit margin was possible due to the lack of competition and the perceived high value associated with having these technical capabilities since commercial machines of this type were typically a significant fraction of a million dollars. After a successful launch in 2005, the company experiences serious friction between the co-founders which is resolved when one of the co-founders buys out the other. In 2010, the company is profitable but is facing increased competition and the need to grow its business. The company is considering several different strategies.