Category: Management

Fast fashion: What's the true cost of a bargain?

Posted by MIT Sloan Executive Education - 23 days ago

Fashion waste, photo by Levi Brown/trunkarchive.com

American consumers love a bargain. In fact, consumers will often choose a bargain over ideals; this past spring an Associated Press-GFK poll found that, "when it comes to purchasing clothes, the majority of Americans prefer cheap prices over a Made in the USA label." This, despite decades of political rhetoric about the need to bring manufacturing jobs back to America.

But there's a bigger, hidden cost behind our love of a deal—particularly our love of cheap clothing. In today's market, there's no shortage of options for buying amazingly inexpensive, yet trendy clothing, including big box stores, "fast fashion" stores such as H&M and Primark, and off-shore clothing retailers advertising on Facebook. Some of the messaging inherent in these brands is that the items are so cheap, it's OK to purchase them for only one wear. You can buy that novelty sweater for the "ugly sweater holiday party" or any other frivolous clothing item for a one-time event. After all, it cost less than a night out, or even an entrée at many restaurants.

However, the dirty little secret that these retailers, manufacturers, and their supply chains don't share is the true cost of the disposable clothing industry. According to the Environmental Protection Agency, "15.1 million tons of textile waste was generated in 2013, of which 12.8 million tons were discarded." According to MSNBC, "10 percent of the world's total carbon footprint comes from the fashion industry, and apparel is the second largest polluter of fresh water globally."

The fast fashion industry not only generates textile waste, but the economics behind it demand the clothes be produced using massive amounts of cheap material and cheap labor. This means relying on the laborers at the very lowest end of the wage spectrum in countries with few protections for workers. While the fashion industry on the whole is a job creator, many of those equate to low wages, forced labor, unhealthy and dangerous working conditions, and even child labor, which is now rampant through apparel supply chains.

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Leading in a world of uncertainty

Posted by MIT Sloan Executive Education - 1 month ago

Leadership skills for an uncertain world

Digitization, globalization, political turmoil—most executives today feel like they are leading in a world of uncertainty. The imminent threat that does (or should) keep leaders awake at night is disruption. Uber, Airbnb, and before them, Amazon, all disrupted their industries. Who will be disrupting your industry next? How should you lead amidst all this uncertainty? How do you compete—and win—in a world where change is constant?

Deborah Ancona, Professor of Organization Studies at MIT Sloan, discussed this topic in a recent webinar, "Leading in a World of Uncertainty." Ancona covered several skills leaders should be adopting, one of which is referred to as sense-making. As Ancona previously told Forbes, sens-making is to "make sense of the context in which an organization or a team is operating ... how can we map what is going on out there so we can act in this environment that is changing."

One great example of sensemaking, according to Ancona, is a product development team at Bose. They were working on new technology and recognized the market trend towards smaller speakers. However, this trend was counter to Bose's corporate mentality that smaller products did not have the ability to project the audio quality for which Bose is known. But, through sense-making, the team was able to prove there would be market demand for the product. Yes, they had to fight for their cause, and push against an entrenched corporate philosophy, but in the end, they secured the resources to develop a mini speaker. And that mini speaker is now a best-selling product.

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Success isn't comfortable: Lessons in leadership from the Human Capital Institute

Posted by MIT Sloan Executive Education - 1 month and 29 days ago

confused executive

There is value in discomfort--business value. If you happened to attend the Human Capital Institute's Learning and Leadership Development Conference held in Boston last month (MIT Sloan Executive Education was a sponsor), you heard more than one session speaker tout the benefits of being squarely outside of one's comfort zone. According to speakers like MIT's own Hal Gregersen, who presented a keynote speech at the conference, business leaders need to get uncomfortable to be successful.

Three ways discomfort drives success

We generally think of people who enjoy uncomfortable situations as thrill seekers--or masochists. Most people don't take pleasure in being nervous, humbled, or overly challenged. We are conditioned to appear as confident and competent in front of our peers as humanly possible. And we avoid tasks that are out of our wheelhouse because, frankly, we don’t want to screw up. However, in the context of leadership development and business success, staying comfortable is actually a dangerous game. And, most importantly, a missed opportunity.

Here are three takeaways from the recent HCI conference that remind us of the value in discomfort.

Executives who learn to stretch their comfort levels and ask tough questions make better leaders and innovators.

Hal Gregersen, Executive Director of the MIT Leadership Center and a Senior Lecturer at MIT Sloan Executive Education, says it's all too easy for senior leaders to isolate themselves in a "good news cocoon" where everyone says things are fine and no one challenges your ideas or asks tough questions. It's comfy, and it's dangerous. Powerful organizational and industrial forces can keep any senior leader from asking (or hearing) uncomfortable questions, creating a perilous, answer-centric environment rife with blind spots. They lose sight of the big picture of how things really are, ultimately missing opportunities for innovation and increasing the risk of disruption.

"Executives who ask and invite probing questions are much better equipped to manage threats and spot opportunities," said Gregersen in his keynote speech, The Leader's Dilemma: Asking Tough Questions (Before Someone Else Does). Having interviewed hundreds of the world's most innovative CEOs as part of his ongoing leadership research, he finds that those who seek out uncomfortable, risky, and challenging situations in search of a line of inquiry have greater success at leading innovative products and process. By becoming better questioners, leaders unlock new solutions, innovations, and processes, ultimately creating greater business value.

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What's your company's rallying cry?

Posted by MIT Sloan Executive Education - 3 months and 8 days ago

get your executive team in synch, like the the U.S. women’s eight

Rowing is, perhaps, the ultimate team sport. Regardless of the number of oarsmen/oarswomen or the size of the boat, the way to win is to row together as a team. A team of weaker individuals rowing as a team will beat out a team of stronger athletes rowing out of synch. Without that commitment to work together, the boat has no "swing."

The world recently saw how a committed rowing team can achieve the nearly unthinkable: the U.S. women's eight, in capturing the Gold medal at the 2016 Olympics in Rio, won their 11th straight world and Olympic title. As Time pointed out, "The Cold War-era Soviet Union hockey team won 14 straight world titles from 1963-1976. No other national team run, really, is comparable."

What makes it even more remarkable is that unlike a sports dynasty that may lose one or two key players a year due to trades or retirement, rowing might only keep one or two team members from year to year. This year's US women's team in Rio consisted of two members who rowed and won the Gold medal at the London Olympics, and seven Olympic rookies. (An "eight" consists of eight oarswomen and one coxswain). When other crews threatened to pull away and win the Olympic gold medal in Rio last week, coxswain Katelin Snyder began her rallying cry: "This is the U.S. women’s eight." That simple phrase, chosen at the most critical moment in the push for gold (the boat was in third at the time), may not sound like much to us, but the women were charged by it. She was reminding her team that a legend was on the course. They were there to capture the gold, and their 11th championship.

The team that rows together, wins together

It takes hundreds of hours of training to row in synch, as a team, and experience the elusive swing of a boat. Somedays, practice can feel like eight individuals rowing one clunky boat. The others are magic. Organizations, in their pursuit of business success, can take insipiration from these Olympic efforts. After all, aren't all companies striving to cultivate a winning team that out performs the rest of the field, despite turnover or inherent weaknesses?

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A leadership skill you can't afford not to perfect

Posted by MIT Sloan Executive Education - 4 months and 25 days ago

Quick. Name the top three leadership skills that define a good executive. If you didn’t mention negotiation, you’re missing a big one. Knowing how to negotiate is not only one of the most important leadership skills, it’s also one of the most empowering, according to MIT Sloan Professor Jared Curhan.

Negotiation

As executives and leaders, we are called upon to negotiate every day. Sometimes a negotiation is necessary to resolve a critical issue like hiring or firing a team member. Other times, it might be as mundane as deciding who will make the coffee run. Regardless of the scope of the negotiation, knowing how to negotiate is a core leadership skill and one that executives can benefit from honing. Professor Curhan says negotiation is “how we achieve things in the world. Negotiation is a potentially powerful and transformative tool. It’s something all of us do all of the time. And for many, it’s a source of control.”

What defines a successful negotiation experience?

Although we negotiate often, it might not be something we enjoy. In fact, for many people negotiating is difficult and uncomfortable. Professor Curhan explains there are several behaviors that can make the difference between a successful or unsuccessful negotiation. One of the first steps in any negotiation process is to ask the right questions. Curhan says the most important question is “What don’t I know?” or, what is it that I am most worried the other person will ask? Preparing answers to these kinds of questions is a good place to start. Furthermore, Professor Curhan says the preparation for a negotiation “is 90% of the determinant of whether you will be successful in the negotiation.”

Next, says Professor Curhan, it’s important to find some common ground from which you can both begin. If there are areas where you and the other person are in agreement, you’ll be starting from a positive position and also conveying a cooperative attitude. Balance is key. “The challenge is to balance the tension between empathy and assertiveness … there are certain things you want to accomplish, but you also want to maintain the relationship.”

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Is your online persona projecting the right image?

Posted by MIT Sloan Executive Education - 5 months and 12 days ago

"In our digital age, it's no surprise that the use of video is increasing in all industries, whether it is in a business setting to encourage employees to take action, teaching videos to train employees, or videos to boost morale," says MIT Professor Edward Schiappa. "Videos are a powerful medium and if we want to encourage people about certain behaviors, it is more powerful to show and not just tell through a visual channel."


profile

The expression "a picture is worth a thousand words" may have started as an advertising slogan, but there is no question that visual images are just as powerful in today's digital age as they were in predigital society. In fact, in a society where people often meet for the first time via LinkedIn, Twitter, Facebook, YouTube, or Instagram, visual elements are an important part of an online profile, professional or otherwise. The question to ask is, "Are you the master of the visual messages that you are sending personally, professionally, or on behalf of your organization?"

As a society, we innately make inferences based on images and often make snap judgements from those inferences. In turn, those judgements affect how we are perceived by the people we want to influence in our daily lives, whether they are friends, family, or potential employers. According to Edward Schiappa, MIT Professor and expert in the field of digital communications, there are three things to think about when it comes to visual persuasion in the digital age and identifying who you are online.

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Price optimization: Q&A with Professor Simchi-Levi

Posted by MIT Sloan Executive Education - 5 months and 9 days ago

MIT Sloan Executive Education recently hosted the latest in its INNOVATION@WORKTM webinar series, entitled “The New Frontier in Price Optimization," with MIT Professor David Simchi-Levi. The webinar, now available on demand, which drew hundreds of attendees from across the world, presented recent breakthroughs in the development of models that combine machine learning and optimization for pricing that significantly improve revenue and reduce inventory risks

During the webinar, Simchi-Levi presented a case study on Rue La La—an online retailer with whom he worked that offers invitation-only flash sales—to answer the question: “How can we generate an effective forecast for a product we’ve never sold before?” His second example, Groupon, a daily deal website and mobile application offering things to do, see, eat, and buy, focused on how to combine forecasting with learning on the fly to understand the probability that a customer will purchase a product at a specific price. Simchi-Levi’s third case-in-point was the story of B2W Digital, the leading e-commerce company in Latin America, which took price optimization even further by leveraging forecasting, learning on the fly, and optimization.

The event included a live question and answer session and was immediately followed by a Facebook chat with the webinar audience. Recently we spoke with Professor Simch-Levi to dig deeper into the topic of pricing optimization.

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Could a scandal like Volkswagen's happen to your organization?

Posted by MIT Sloan Executive Education - 5 months and 16 days ago

Volkswagen

Just over seven months ago, MIT Sloan Senior Lecturer Otto Scharmer wrote in the Huffington Post about one of the top headline-grabbing stories: Volkswagen's diesel deception scandal. Unfortunately for Volkswagen, the scandal shows no signs of going away any time soon. It was only recently that a federal court in San Francisco announced a settlement where Volkswagon would fix or buy back nearly 500,000 diesel cars in the U.S.

There are still more components to settling the issue. According to the New York Times, "Lawyers in the case are still negotiating the fines that Volkswagen must pay, as well as the compensation that owners will receive." The same article cites Kelley Blue Book as estimating the "cost of buying back all the cars in the U.S. at $7 billion." Then, of course, Volkswagen has to address the same diesel emissions issue in Europe.

One might wonder how a highly respected automobile manufacturer and global brand could intentionally deceive its customers and the public to this extent. According to Scharmer, "The VW disaster is a leadership failure of epic proportion. It's connected to a leadership style and culture that, until now, was the source of incredible pride and success." As Scharmer points out in his Huffington Post article, that culture "prevented leaders from reading and recognizing information that, in a culture of fear and control, no one ever wants to communicate upwards--thereby preventing the company from learning as a system."

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