Archive: September 2014

Redefining the digital divide

Posted by MIT Sloan Executive Education - 2 years and 8 months and 25 days ago

For most people, the “digital divide” represents the gap between those who have access to information and communications technologies and those who don’t. It deals with socioeconomics, infrastructure, fairness, and opportunity. Although that digital divide is certainly not to be taken lightly, another one is emerging in the world of business. This new digital divide is the widening gap between businesses that understand how to drive true value from new digital technologies, and those that don’t. 

While companies in the technology and software industries certainly understand how to “be digital,” the story is different for the other 90%+ of businesses in the economy. For them, only a relative minority “get” digital.  “Digital mastery matters,” said George Westerman, Research Scientist at the MIT Sloan Initiative on the Digital Economy (IDE).  “It matters in every industry. And any company can build the DNA of digital masters if its leaders have the will to do so.”

Westerman, along with Didier Bonnet, Senior Vice President at Capgemini Consulting, and MIT IDE Principal Research Scientist Andrew McAfee, studied more than four hundred global firms to understand how they transformed their organizations through digital technology. These businesses include some surprising—and some less surprising—names, including Asian Paints, Burberry, Caesars Entertainment, Codelco, Lloyds Banking Group, Nike and Pernod Ricard. Westerman, Bonnet, and McAfee call these companies “digital masters.” They present these visionary organizations, along with an extensive step-by-step transformation playbook, in their forthcoming book, Leading Digital: Turning Technology into Business Transformation.

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Social media professionals need leadership skills

Posted by MIT Sloan Executive Education - 2 years and 9 months ago

The “Twitterverse” is awash in corporate brands publishing inappropriate, insensitive and/or irrelevant tweets. As of this writing, the latest corporate Twitter embarrassment happened to DiGiorno Pizza, a U.S.-based frozen pizza brand owned by Nestlé. Someone on the DiGiorno social media team jumped on the hashtag #WhyIStayed—used in discussions about domestic abuse—responding most unfortunately: “You had pizza.” While the team quickly deleted the tweet and apologized, the error was very public—and, as with most Twitter gaffes, highlighted a recurring problem with Twitter: a corporate brand’s social media team ignoring context.

One common response to any social media gaffe is to assume the brand’s social media team is comprised of interns or millennials—those “digital native” workers who grew up with texting, tweeting, and posting to Facebook walls. In many cases, that assumption is correct. Those newer workers often lack the business experience and leadership skills necessary to maintain and promote an on-brand, relevant, and appropriate social presence. 

The answer? Education. Millennials should learn, adopt, and cultivate key leadership practices in an effort to become savvier business professionals. In the article, “In Praise of the Incomplete Leader,” MIT Sloan Professor Deborah Ancona presents the four leadership capabilities all organizations require: sensemaking, relating, visioning, and inventing. While all these skills are extremely valuable, the skill of sensemaking is the most relevant to those professionals working in social media.

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How should hotels respond to the sharing economy?

Posted by MIT Sloan Executive Education - 2 years and 9 months and 8 days ago

The sharing economy—also known as the collaborative consumption or the peer economy—is disrupting many industries. The sharing economy is one where participants share products or services—such as cars or spare rooms—instead of individual ownership. 

Airbnb is the one of the pioneers of the sharing economy and seems to be a major disruptor in the traditional hotel/hospitality market. (Incidentally, one of the founders of Airbnb was a student of Nelson Repenning, Professor of System Dynamics and Organization Studies at MIT Sloan; Repenning mentions this in his innovation@workTM webinar, “Useful Does Not Always Mean Used”.) Airbnb rents lodgings in more than 34,000 cities in 190 countries and has served more than 17,000,000 guests. What was once thought of as a place to find vacation housing is now frequently used by business travelers as well; as of late July 2014, the company saw 10% of its revenue from business travelers.

One would think the hotel industry would be up in arms, worried, and reacting the way the taxi cab industry is to Uber and Lyft. According to Fast Company, however, the hotel industry is not overly concerned—or so they claim. The magazine quotes Hilton Worldwide EVP Jeff Diskin as saying he “loves what Airbnb is doing … [offering a more] home-like experience.”

It appears the actual revenue impact is minimal; one recent research report found that “every 1% increase in listings [on Airbnb] in a given market would result in a 0.05% decrease in quarterly hotel revenues.” While the revenue Airbnb is siphoning from hotels is having minimal impact, its rapid growth is still worth watching. As noted in Fast Company, “At the current rate of expansion, Airbnb … will soon surpass the InterContinental Group and Hilton Worldwide as the world’s largest hotel chain.”

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The odd man out may make for a better team

Posted by MIT Sloan Executive Education - 2 years and 9 months and 14 days ago

Understanding dispersed team dynamics is a timely consideration, as non-traditional teams are becoming more and more commonplace. Corporations are cutting down on real estate costs, offering employees more flexible work models, and investing in expertise located anywhere and everywhere around the world, resulting in geographically dispersed collaborations. While collocated teams (every team member working on the same site) may have the advantage over dispersed teams in many respects, studies show that more thoughtful configuration of dispersed teams may actually give them the upper hand.

“Within dispersed teams, there is first and foremost a mutual knowledge problem,” says JoAnne Yates, Sloan Distinguished Professor of Management, who teaches in the new, upcoming Executive Education program, Communication and Persuasion in the Digital Age. “When you’re collocated in the same building, you are aware of what your team members know and do not know. And you understand context. When working across distances, this is not necessarily true, and there are all kinds of failures that can come from that. You may not, for example, understand delays in communication. When you don’t get a response right away and you’re expecting one, you make all kinds of assumptions, and most are disparaging about the other party. Then perhaps you find out there was a holiday—like Patriot’s Day, which occurs only in Massachusetts. It’s important to have ways of understanding the specific context your colleagues are working in and of establishing trust and common ground.”

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