Innovating innovation: Tesla

Posted by MIT Sloan Executive Education - 16 hours ago

Tesla was recently named to the top of The World's Most Innovative Companies list, produced by Forbes magazine. This is despite the fact that the company will not be turning a profit this year. Of course, there is a strong expectation that the company will become profitable. But in the meantime, its approach to innovation is, in itself, innovative and somewhat counter to the standard operating procedures used by many so-called innovative companies.

Hal Gregersen, Executive Director of the MIT Leadership Center, and co-author Jeff Dyer, recently examined some of the unusual strategies and tactics used within Tesla in "Decoding Tesla's Secret Formula," an article that accompanied the Forbes' list. Here are some of the ways Tesla is defying convention--even the convention of innovation.

Forget the MVP

The Lean Startup methodology recommends companies focus on developing a minimum viable product (MVP) before creating a full-blown product. The idea is that the MVP is the core of a build-measure-learn feedback loop that helps guide a company to building a product that solves a real problem, and one that companies will buy. The measure-learn aspect of the loop addresses the "buy" aspect of developing a product.

According to Gregersen, Tesla takes a completely different approach. "Tesla never pursued the classic route of going after low-end, price-sensitive customers first with cheaper, inferior technology. It doesn't pursue nonconsumption, or customers who don’t currently drive cars," writes Gregersen. "Tesla has instead proved to be different kind of disruptor, a high-end version that can be just as troublesome for the incumbents." 

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Is your lean startup violating labor laws?

Posted by MIT Sloan Executive Education - 9 days ago


Many entrepreneurs today are well familiar with the principles of a lean startup. In a nutshell, they are guiding ideas on how startups can operate with much less waste. But over the years, what was really a theory on how to quickly build products that would be accepted in the marketplace became a practice on how to create entrepreneurial organizations with minimal financial investment. "Bootstrapping" and "working on a shoestring" have become synonymous.

Operating as leanly as possible makes much sense to most entrepreneurs--especially those who have not yet been funded. Many startups will leverage free and inexpensive services and technology to cut costs, and others will forgo hiring employees and instead rely on contractors to perform much of the work. While the latter may seem like a wise approach to building a lean organization, there is growing risk in that model. There are fundamental legal differences between a contractor and an employee, and startups fueled by the work of contractors need to be aware that government (state and federal) are cracking down on organizations that are intentionally or inadvertently violating labor laws.

Workforce magazine refers to the misclassification of employees as independent contractors as "the topic du jour in employment law." According to the U.S. Labor Department's Wage and Hour Division's formal interpretation of the federal Fair Labor Standards Act, “Misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States, in part reflecting larger restructuring of business organizations." The government advisory concludes, "In sum, most workers are employees under the [federal law's] broad definitions."

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A Q&A with executive certificate holder Sidita Hasi

Posted by MIT Sloan Executive Education - 13 days ago

Sidita Hasi

The following Q&A was conducted with Sidita Hasi, a recent recipient of an MIT Sloan Executive Certificate in Management and Leadership and an executive for FedEx Trade Networks. To earn her certificate she completed the following short courses: Neuroscience for LeadershipMaximizing Your Personal ProductivityCommunication and Persuasion in the Digital Age, and Creating High Velocity Organizations.  

What is your role at your company? Are there particular challenges you face that prompted you to enroll in executive education?

I currently work as a Project Leader for FedEx Trade Networks, the freight forwarding and customs brokerage arm of global shipping giant FedEx Corp. At the core of our corporate mission is delivering and exceeding customer expectations, what we call the "Purple Promise." I am responsible for overseeing and leading projects in regard to air/ocean global transportation and acting as the middleman across departments to solve issues that might impact product development and service quality. I also analyze development opportunities and support top management decision-making.

As we continue to grow and change in terms of internal organizational structure, new products and services--as well as the high velocity of industry changes in the recent years--there is a strong focus on continuous process improvement. Change is considered to be a survival competitive strategy rather than luxury or situational.

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MIT Sloan Executive Education Professors named to Thinkers50

Posted by MIT Sloan Executive Education - 16 days ago

We are excited to announce that several of our MIT Sloan Executive Education faculty members have been named to the biennial Thinkers50 awards.


The Thinkers50 was launched in 2001 as the first-ever global ranking of management thinkers. Its goal is to identify and share the best management thinking in the world, and it has been described by the Financial Times as the "Oscars of management thinking." The list offers several categories, including Breakthrough Idea Award, Digital Thinking Award, Ideas into Practice Award, Innovation Award, Leadership Award, Social Enterprise Award, Strategy Award, Talent Award, RADAR Award and Lifetime Achievement Award.

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Why commonality sometimes fails

Posted by MIT Sloan Executive Education - 23 days ago

Commonality, or the reuse and sharing of components, manufacturing processes, architectures, interfaces, and infrastructure across the members of a product family, is a strategy targeted at improving corporate profitability. Companies from Toyota to GE use product platform strategies to deliver more variety to their customers and compete more effectively. For example, Black and Decker uses shared motors and batteries across a range of power tools. Volkswagen models such as the Jett and TT share similar underbody components and other aspects.

Typical benefits of a commonality, or a product platform strategy, include:

  • Shared development costs
  • Common testing procedures
  • Production economies of scale
  • Amortized fixed costs
  • Reduced inventory

By definition, commonality seems like an obviously good thing. Why incur the cost of making different parts for different products if the parts do the same thing?  Because as it turns out, commonality is not always the right thing to do. And even when it is right, it can be difficult to achieve.

Dr. Bruce Cameron is a lecturer in MIT's Engineering Systems Division and a consultant on platform strategies. His research at MIT uses a healthy dose of systems thinking to tease out when commonality makes sense and how to get companies to pull it off. Cameron oversaw the MIT Commonality Study, which closely examined 30 firms over eight years. The study was the first work to uncover that many firms fail to achieve their desired commonality targets, showing weaker investment return on their platform investments. "That type of behavior and phenomenon is seen in studies that we did in automotive, consumer products, and transport," says Cameron.

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Social perception in the workplace makes organizations smarter

Posted by MIT Sloan Executive Education - 28 days ago

Job candidates are familiar with being tested during the interview process. True, some interview processes are simply a series of meetings with company personnel, but, in all honesty, that type of candidate screening is largely subjective. Some organizations, or departments within organizations, add empirical skills tests into the mix. Highly advanced organizations may even ask candidates to take personality tests, such as the Myers-Briggs Type Indicator.

At first glance, organizations may view personality testing as something only large organizations do, or something that is too advanced or complex to manage. After all, if any particular candidate demonstrates the hard skills and "feels" like a good fit, does his or her personality traits matter that much? For those organizations looking to capitalize on collective intelligence, those traits do matter—and research shows they are extremely important.

Tom Malone

Collective intelligence, as explained by Thomas Malone, Professor of Information Technology and Director of the MIT Center for Collective Intelligence (CCI), is the idea that people working in teams can achieve more than they can on their own. Add the power of computing and you have the potential for a highly intelligent, highly productive group.

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A 4D experience: Q&A with participant Susan Chesley Fant

Posted by MIT Sloan Executive Education - 1 month and 7 days ago

MIT Sloan Executive Education recently offered a unique, online course that took place in a live, virtual classroom. Essential Law for Entrepreneurs in Innovation-Driven Startups and Growth Companies 4Dx was offered in six two-hour, live online sessions taking place once a week over six weeks. The primary goal of the program was to help participants navigate the distinctive law-sensitive challenges that are critical to the success of new ventures. The course was taught by MIT Sloan Senior Lecturer John Akula.

Susan Chesley Fant

To learn more about the program from a participant's perspective, we interviewed Susan Chesley Fant, an attendee of the recently concluded program. Susan is the Executive Director of the Foresight Education and Research Network, an online network she founded for foresight and long-term strategy professionals with over 3,500+ members worldwide. She is also a digital and social media marketing strategist with Castle Sands LLC and an instructor of digital and social media marketing at the University of Alabama.

What prompted you to enroll in Essential Law for Entrepreneurs in Innovation-Driven Startups and Growth Companies 4Dx?

I really wanted the opportunity to be a student again and learn more about MIT Sloan and entrepreneurship. I'm a fairly young entrepreneur, and I want to be able to guide my decision-making and perspective by learning from a well-known and excellent program. Diversity of ideas is important, and the diverse faculty and student population was a key selling point for me. I enjoyed the class because I was able to learn alongside people from around the world and learn the perspective of faculty and guest speakers, whom I quite possibly would never have had the opportunity to meet otherwise.

I want to further my education without leaving my full time work. I hope to be a lifelong learner, and the MIT Sloan program definitely fits this description for me. In the future, I hope to pursue an Ed.D or Ph.D and focus in on business, technology, and the future of education. Participating in the virtual environment was especially exciting to me. Participating with an institute of learning known for being on the cutting edge of technology was major bonus.

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All the world is China's stage

Posted by MIT Sloan Executive Education - 1 month and 5 days ago

China's slowdown

China's stock market has been on a wild rollercoaster ride in recent weeks. More than $3 trillion in market value has been lost, and roughly half of China's 2,800 listed companies have suspended trading. Unfortunately, this extreme market volatility is also paired with sluggish economic growth. Last week, a key gauge of China's manufacturing activity tumbled to its lowest level in 77 months.

There are several drivers of this chaos. Over the past year, China's central bank had used the Chinese Securities Finance Corporation (CSFC) as a conduit to help Chinese people buy stocks with borrowed funds, helping to prop up stock market prices. Investors poured more and more into Chinese stocks, even though economic growth and company profits were weak. This effort had not stabilized the market as hoped, and recently the CSFC stopped injecting funds into the stock market. A classic bubble had developed, and burst.

And then there is the yuan (also called the Renminbi). Since 2009, rapid growth in the Chinese economy has pushed the value of the yuan up relative to the dollar. But then the slowing Chinese economy started to push the yuan downward. China's central bank intervened in foreign currency markets to maintain the yuan's value, but on August 11 it decided to let the currency drop by about 3 percent. This move may have been China's attempt to improve the credibility of its currency (the International Monetary Fund has been pressing the Chinese government to loosen its control over the exchange rate). For whatever its purpose, this devaluation should have, in theory, provided a boost to the Chinese economy by making Chinese exports more affordable to foreigners. And yet this wasn't enough to prevent further declines in the stock market.

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