Category: Operations Management

Better banking through IT innovation: A custom programs success story

Posted by MIT Sloan Executive Education - 2 months and 28 days ago

A decade ago, Commonwealth Bank of Australia--the largest retail bank on the continent--had been grappling with an IT operation that was costly, inefficient, and sometimes unreliable. Back then, the bank was determined to transform itself into an operation that was #1 in customer service with the lowest costs in class.

With that goal in mind, Michael Harte, a forward-thinking executive who joined CBA as CIO in 2006, connected with the MIT Center for Information Systems Research (CISR). (CISR develops concepts and frameworks to help executives and their organizations address IT-related challenges.) Soon after, MIT Sloan faculty and program designers from the Executive Education office collaborated to create a custom program that would help transform CBA's IT leaders from functional managers to strategic thinkers.

"We designed a program around what the bank needed to achieve in three to five years. It had three components that today's banks must have to be successful–one was effectively managing digitization or IT; second was strategy options for the company; and the third was organizational change," says Peter Weill, Senior Research Scientist and Chair of CISR. 

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Are mobile payments today's VHS / Betamax battle?

Posted by MIT Sloan Executive Education - 8 months and 12 days ago

People of a certain age likely remember the battle between VHS and Betamax. These were the first two affordable in-home video tape systems, and they were completely different formats, incompatible with each other. Sony’s Betamax hit the market in 1975, but the company had previewed the product to other manufacturers the previous year. The company hoped that the other manufacturers would back their Betamax format, thus enabling competitors to develop and market compatible products to the marketplace. 

Instead, JVC developed a competing format, VHS (Video Home System)—and the home video recorder format war began. The competing platforms battled on the retail cost of the systems and on recording time. JVC licensed the technology to other manufacturers, while Sony was the sole manufacturer of Betamax until the late 1980s. Sony went from owning 100% of the market share in 1975 to just 25% of the U.S. consumer home market.

What does that history have to do with the quickly evolving world of mobile payments? In “Mobile Pay Not Yet Ready for Prime Time,” Boston Globe’s Scott Kirsner writes, “We’ve got smartphone apps and accompanying devices [for mobile payments] that work at one retail chain or a bunch—but nothing yet that’s universal.” Given that, the market is poised for another potential platform battle.

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Managing the seasonality of products

Posted by MIT Sloan Executive Education - 9 months and 13 days ago

The seasonality of products is an issue that manufacturers, distributors, retailers, and consumers are well aware of. We all know back-to-school advertising, products, and sales hit stores in July. Soon after, we see Halloween items. And before Halloween even arrives, we start to see Christmas advertisements and promotions. Getting ahead of the season has become standard operating procedure.

But when is it too early to issue a seasonal product? Many craft beer aficionados are beginning to argue that the practice of "seasonal creep" has gone too far. Simply put, seasonal creep is when a beer specific to a season appears on store shelves way before the season actually hits. The best example is the category of pumpkin beers.

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It’s time to rethink wages

Posted by MIT Sloan Executive Education - 1 year and 1 month and 30 days ago

For the last year or so, there’s been a significant amount of news coverage around the wages paid to low-income earners, such as those working at fast food outlets and in retail stores. There have been public protests, calls for boycotts, and legislation to raise the minimum wage in some states.

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The need for supply chain flexibility

Posted by MIT Sloan Executive Education - 1 year and 3 months and 2 days ago

According to David Simchi-Levi, Professor of Engineering Systems at MIT Sloan, “a growing number of U.S. executives are moving some production operations back from overseas.” While there are a great number of factors driving that trend, one is the need for supply chain flexibility. Today’s global supply chain presents a significant amount of risk, mostly due to the combination of geographically diverse supply chains and Just-in-time (JIT) manufacturing that results in low inventory levels. 

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Clients and their perceptions can prevent successful diversification

Posted by MIT Sloan Executive Education - 1 year and 3 months and 17 days ago

Why is it that some organizations can successfully diversify, while others cannot? Some businesses can increase their complexity by expanding into new markets, creating new products or services for new audiences and succeed, while others seek to do so, and fail.

Ezra Zuckerman, Professor of Technological Innovation, Entrepreneurship, and Strategic Management at MIT Sloan, claims that there are identity-based limits to diversification that have more to do with a client’s perception of the organization than the actual integrity of the services delivered by the organization. In other words, an organization can have superior talent, the best operations, and a delivery of new services or products that is top notch, but if somehow this new direction clashes with a client’s perception of the firm, they may lose the client. These factors should be closely examined prior to a company's diversification. 

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How to manage effectively in the face of risk

Posted by MIT Sloan Executive Education - 1 year and 7 months and 9 days ago

With globalization comes increased risk and uncertainty in nations, environments, communities, and businesses. As growing complexity makes it more difficult to determine the source of risk in these complex systems, it also reveals the interdependent nature of risk within a greater ecosystem. New studies show the best way to manage an organization in the face of risk is to build resiliency—the ability to withstand, recover from, and maintain function through a crisis.  But in order to manage risk effectively, resiliency must be built into the entire interrelated system of an organization.

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How the digital marketplace is redefining customer relationships

Posted by MIT Sloan Executive Education - 1 year and 8 months and 30 days ago

Many people today buy their household telecommunications services—house landlines, Internet access, and digital TV—in bundles. Yet go to the average telecommunications services provider’s website and you have to select which product you are inquiring about or need fixed. From an organization’s perspective, this makes complete sense. There’s a division for phone service, a division for Internet service, and a division for television. Specialists and technicians exist in each department to help you with whatever you need. But you get one bill each month, so why can’t the company recognize you as one customer with multiple products, instead of three separate customers?

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