Did McDonald's take a step toward the Good Jobs Strategy?

Posted by MIT Sloan Executive Education - 1 month and 17 days ago

After several starts and stops, the U.S. established the modern national minimum wage in 1938, at $0.25 per hour. Since 2009, the national minimum wage in the U.S. has been $7.25 per hour, with 29 states setting the minimum wage higher than that mandated by the government. The issue is a contentious political issue, both on the national and local levels.

But the thing about minimum wage is it's just that: the bare minimum organizations need to pay workers. And some organizations are beginning to realize that the classic model of paying as little as necessary does not lead to higher profits; in fact, some companies--such as Trader Joe's and Costco--have proven that paying higher wages results in greater profits.


McDonald's, one of the top companies in the Fortune 500 ranking, recently announced it would raise wages and offer benefits to 90,000 employees in its corporate-owned stores. The plan is to increase wages to at least $1 more than the local minimum wage, bringing the average worker wage to $9.90 per hour, and, by 2016, to $10 per hour.

“We know that a motivated work force leads to better customer service, so we believe this initial step not only benefits our employees, it will improve McDonald's restaurant experience," said McDonald’s CEO Steve Easterbrook, as reported by The New York Times. Investing in employees is one part of what Zeynep Ton, Adjunct Associate Professor of Operations Management at MIT Sloan refers to as the "The Good Jobs Strategy.”

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Leader-led learning: The great differentiator

Posted by MIT Sloan Executive Education - 2 days ago

Contributed by MIT Sloan Senior Lecturer Steve Spear. Spear teaches in Creating High Velocity Organizations and is author of The High Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition.

Certain organizations "punch above their weight," generating far more value (that accrues to everybody, not just customers or just shareholders, etc.), faster, and more easily. This despite them having access to the same technical, financial, and human resources as all their counterparts--and thereby enjoying the same advantages and suffering the same constraints.1

This becomes a wickedly important differentiator: Either because of having to get more yield out of exactly the same resources available to everyone, or because of having to be on the cutting edge of bringing high value-add products and services to market ahead of rivals.

The difference? They know much better what to do and how to do it, so operate on a frontier of speed, timeliness, efficiency, effectiveness, safety, security, and so forth others barely perceive. As with all knowledge, the source of their profound knowledge is accelerated learning, and that accelerated learning is the consequence of garnering feedback out of experiences across the spectrum of operational, design, and developmental and using that to feed forward into the next cycle of experiences.

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MIT and Cambridge: Working hand-in-hand to foster innovation

Posted by MIT Sloan Executive Education - 7 days ago

Walk down Broadway Street in Kendall Square today and no matter where you turn there is something exciting brewing: a new biotech company, a trendy restaurant, or a venture capital-funded think tank.

Galaxy Sculpture Kendall Square

However, four decades ago that wasn't the case. If you drove down Main Street in the 1970s, you were more likely to find abandoned buildings and empty factories. In contrast, today the area is a hotbed of innovation, entrepreneurship, and cutting-edge technology--as well as home to more than 150 high-tech companies, including global corporate giants like Genzyme, Google, Microsoft, and Biogen Idec. Another "giant" in the city—and one of the main reasons the area is known as an innovation hub--is MIT, the institution that has collaborated with the city to revitalize the area and has played an integral part in the area's resurgence.

"Kendall Square is the epicenter, but the reach is all around the edge of campus, "says MIT Provost Martin Schmidt, who is also Co-Chair of the MIT Building Committee.  According to Schmidt, there’s a plan afoot to create "a gateway and a sense of destination" in Kendall Square. In 2013, the City of Cambridge approved MIT's petition to transform 26 acres of Institute-owned property in the Kendall Square/East Campus area. The new zoning will preserve existing academic development potential and enable the creation of new housing, retail, lab and commercial space, as well as more engaging open space. Schmidt says future plans also include a new home for the MIT Museum, as well as more academic space, graduate dormitories, and a childcare center.

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Is reuse part of your digital strategy?

Posted by MIT Sloan Executive Education - 7 days ago

When most think of digital strategy, assets, and IT work, they think of efforts to develop new and innovative technology, systems, and processes. The focus is on how to build something completely new, or how to get rid of what already exists for something better. As a result, a new project can be compared to cooking from scratch. The end dish is includes a variety of ingredients, none of which were pre-made. It's an entirely new effort.

With that concept in mind, why do technologists and IT departments approach everything from scratch? Why has the idea of digital reuse not bubbled to the surface more? After all, as the illustration above shows, sometimes building on the work of others is a much more efficient approach to a project.

Peter Weill, Senior Research Scientist at MIT Sloan, and his partners, fellow MIT Sloan Research Scientist Dr. Stephanie L. Warner and Dr. Mark McDonald, Group Vice President at Gartner Executive Programs, designed a study to measure the effect of digital reuse strategies across 1551 firms in over 77 countries. The respondents were enterprise CIOs, business unit CIOs, and senior-most IT executives. In a research article published in the European Business Review, Weill, Warner, and McDonald revealed their findings. 

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Wales selected to participate in MIT's entrepreneurial economic development program

Posted by MIT Sloan Executive Education - 15 days ago

MIT Sloan has added another cohort to its unique multi-year program that helps regions around the world implement an entrepreneurial ecosystem based on innovation. This year, the country of Wales has joined the MIT Regional Entrepreneurship Acceleration Program (REAP), which is a joint effort between MIT Sloan Executive Education and the Martin Trust Center for MIT Entrepreneurship.

Economy Minister Edwina Hart said she was delighted that Wales has been selected to join REAP, adding that "the program builds on the extensive work already carried out in Wales to promote and support entrepreneurship."

Wales is one of eight regions selected from Europe, Asia, and South America to join the third cohort, which launches with the first of four interactive workshops at MIT in October 2015. As part of the program, each region selects a multi-disciplinary team of influential members who represent five key stakeholders--government, finance, academia, industry, and entrepreneurs--that inform and influence regional strategy.

Course participants attend two-and-a-half day workshops twice a year for at least two years. On site, they are exposed to the theory and practice of developing regional clusters of innovation-based entrepreneurship, collaborate by breaking down traditional boundaries, and focus on the common purpose of regional economic development.

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Simple rules to govern complex things

Posted by MIT Sloan Executive Education - 21 days ago

By MIT Sloan Lecturer Steve Spear

A general premise of MIT Sloan's Creating High Velocity Organizations is that if you have simple rules to guide your action--in even the most complex situations--you have huge advantages over complex analogies, anecdotes, and best practices. They have a surprisingly narrow range of application.  

As for the class itself, we focused on managing many people working towards common purpose, in often complex and dynamic situations, trying to understand how some deliver far more value to market, more quickly and easily than others.  

Our "theory" is that performance altitude is a proxy for accumulated knowledge about what to do and how to do it, and accumulated knowledge is the byproduct of active learning dynamics. 

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Can a global consulting giant build a culture of innovation in India?

Posted by MIT Sloan Executive Education - 25 days ago

These days, innovation is one of the main drivers of growth and the market’s confidence in any company's future success. Yet innovation is disruptive and often risky. What if your company's core business is built on the exact opposite--providing clients with services firmly grounded in reliable and standardized practices? How do you combine that legacy with nurturing an environment where creativity and bold ideas can flourish?

Building on a foundation of executional excellence

This is the challenge that the global consulting giant Accenture is tackling in its India Delivery Centers (IDC)--methodically and systematically. Using the Gartner Innovation Maturity Model, which ranks levels of corporate innovation in ascending order as Reactive, Active, Defined, Performing, and Pervasive, Mr. Raghavan Iyer, the managing director charged with fostering innovation at IDC, says that the company currently is at Level 3 (Active), but has its sights set on Level 5, i.e. a world-class leader in new methods and practices where innovation is a core competency in all business activities. This is an impressive ambition and judging by my experience at IDC in Bangalore a couple of weeks ago, they are on the right track.

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An innovative model that combats supply chain disruptions

Posted by MIT Sloan Executive Education - 28 days ago

If the nature of your business is manufacturing, chances are one of your biggest concerns is supply chain disruption. While there are plenty of traditional ways to manage ordinary risks, when dealing with high-impact occurrences like viral epidemics or devastating storms--when the risks are often difficult to quantify and prepare for--a different method can help.

A model developed recently by MIT Sloan Professor David Simchi-Levi and his colleagues William Schmidt and Yehua Wei offers an alternative solution that concentrates on quantifying supply chain risk by using a breakthrough Risk Exposure Index (REI). In essence, says Simchi-Levi, the model "focuses on the impact of potential failures at points along the supply chain (such as the shuttering of a supplier’s factory or a flood at a distribution center), rather than the cause of the disruption."

It's a mathematical depiction of the supply chain that can be computerized and updated by employing a common math technique, called linear optimization, to determine the best response to a disruption. Simchi-Levi says that a key component of the model is "time to recovery (TTR), or the time it takes for a particular node (e.g., a distribution center, supplier facility, or transportation hub) to be restored after a disruption." The model removes one node at a time and determines the supply chain response that would minimize the performance impact of the disruption at that node--allowing the company to identify the nodes that need the most attention. 

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